# EDGAR Filing Document

**Accession Number:** 0000811522
**File Stem:** 0001654954-25-013545
**Filing Date:** 2025-12
**Character Count:** 527265
**Document Hash:** 916db35168d517df9fbeade7d9428159
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001654954-25-013545.hdr.sgml**: 20251201

**ACCESSION NUMBER**: 0001654954-25-013545

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 111

**CONFORMED PERIOD OF REPORT**: 20250731

**FILED AS OF DATE**: 20251201

**DATE AS OF CHANGE**: 20251201

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** QUARTZ MOUNTAIN RESOURCES LTD
- **CENTRAL INDEX KEY:** 0000811522
- **STANDARD INDUSTRIAL CLASSIFICATION:** GOLD & SILVER ORES [1040]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A1
- **FISCAL YEAR END:** 0731

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-15490
- **FILM NUMBER:** 251537453

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 15TH FLOOR
- **STREET 2:** 1040 WEST GEORGIA STREET
- **CITY:** VANCOUVER
- **NON US STATE TERRITORY:** CANADA
- **PROVINCE COUNTRY:** A1
- **ZIP:** V5C 6N5
- **BUSINESS PHONE:** 604-684-6365

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 15TH FLOOR
- **STREET 2:** 1040 WEST GEORGIA STREET
- **CITY:** VANCOUVER
- **NON US STATE TERRITORY:** CANADA
- **PROVINCE COUNTRY:** A1
- **ZIP:** V5C 6N5

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** QUARTZ MOUNTAIN GOLD CORP
- **DATE OF NAME CHANGE:** 19940426

?xml version='1.0' encoding='ASCII'? qzm_20f.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION** 

**WASHINGTON, D.C. 20549**

**FORM 20-F**

☐&nbsp;&nbsp;&nbsp;&nbsp; REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒&nbsp;&nbsp;&nbsp;&nbsp; ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 31, 2025

OR

☐&nbsp;&nbsp;&nbsp;&nbsp; TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐&nbsp;&nbsp;&nbsp;&nbsp; SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-15490

---

| |
|:---|
| **QUARTZ MOUNTAIN RESOURCES LTD.** |
| (Exact name of Registrant as specified in its charter) |
| <br>**<u>BRITISH COLUMBIA, Canada</u>** |
| (Jurisdiction of incorporation or organization) |
| <br>**14th Floor, 1040 West Georgia Street** <br>**<u>Vancouver, British Columbia, Canada, V6E 4H1</u>** |
| (Address of principal executive offices) |
| <br>**Sebastian Tang, Chief Financial Officer** <br>**Facsimile No.: 604-639-9209**<br>**14th Floor, 1040 West Georgia Street**<br>**<u>Vancouver, British Columbia, Canada, V6E 4H1</u>** |
| (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |

---

Securities registered or to be registered pursuant to Section 12(b) of the Act.

---

| | |
|:---|:---|
| Title of Each Class: | Name of each exchange on which registered |
| Not applicable | Not applicable |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act

Common shares, no par value

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

69,648,030 common shares as of July 31, 2025

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐ No ☒

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or non-accelerated filer. See definition of "accelerated filer" and "large accelerated filer" in Rule 126-2 of the Exchange Act.

---

| | | |
|:---|:---|:---|
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Non-Accelerated Filer ☒ |

---

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

---

| | | |
|:---|:---|:---|
| U.S. GAAP ☐ | International Financial Reporting Standards as issued by the International Accounting Standards Board ☒ | Other ☐ |

---

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ☐ No ☒

---

| | | | |
|:---|:---|:---|:---|
| [GENERAL](#general) | [GENERAL](#general) | [GENERAL](#general) | 4 |
|  | [CURRENCY AND MEASUREMENT](#currency) | [CURRENCY AND MEASUREMENT](#currency) | 5 |
|  | [NOTE ON FORWARD LOOKING STATEMENTS](#note) | [NOTE ON FORWARD LOOKING STATEMENTS](#note) | 5 |
| [ITEM 1](#i1) |  | [IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS](#i1) | 5 |
| [ITEM 2](#i2) |  | [OFFER STATISTICS AND EXPECTED TIMETABLE](#i2) | 6 |
| [ITEM 3](#i3) |  | [KEY INFORMATION](#i3) | 6 |
|  | [A.](#i3a) | [SELECTED FINANCIAL DATA](#i3a) | 6 |
|  | [B.](#i3b) | [CAPITALIZATION AND INDEBTEDNESS](#i3b) | 7 |
|  | [C.](#i3c) | [REASONS FOR THE OFFER AND USE OF PROCEEDS](#i3c) | 7 |
|  | [D.](#i3d) | [RISK FACTORS](#i3d) | 7 |
| [ITEM 4](#i4) |  | [INFORMATION ON THE COMPANY](#i4) | 13 |
|  | [A.](#i4aa) | [HISTORY AND DEVELOPMENT OF THE COMPANY](#i4aa) | 13 |
|  | [B.](#i4b) | [BUSINESS OVERVIEW](#i4b) | 13 |
|  | [C.](#i4c) | [MINERAL PROPERTIES AND EXPLORATION ACTIVITIES AND PLANS](#i4c) | 15 |
|  | [D.](#i4d) | [ORGANIZATIONAL STRUCTURE](#i4d) | 30 |
|  | [E.](#i4e) | [PROPERTY, PLANT AND EQUIPMENT](#i4e) | 30 |
|  | [F.](#i4f) | [CURRENCY](#i4f) | 30 |
| [ITEM 4A](#i4a) |  | [UNRESOLVED STAFF COMMENTS](#i4a) | 30 |
| [ITEM 5](#i5) |  | [OPERATING AND FINANCIAL REVIEW AND PROSPECTS](#i5) | 30 |
|  | [OVERVIEW](#overview) | [OVERVIEW](#overview) | 30 |
|  | [A.](#i5a) | [OPERATING RESULTS](#i5a) | 31 |
|  | [B.](#i5b) | [LIQUIDITY AND CAPITAL RESOURCES](#i5b) | 32 |
|  | [C.](#i5c) | [RESEARCH EXPENDITURES](#i5c) | 33 |
|  | [D.](#i5d) | [TREND INFORMATION](#i5d) | 33 |
|  | [E.](#i5e) | [OFF – BALANCE SHEET ARRANGEMENTS](#i5e) | 33 |
|  | [F.](#i5f) | [TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS](#i5f) | 33 |
|  | [G.](#i5g) | [SAFE HARBOR](#i5g) | 34 |
| [ITEM 6](#i6) |  | [DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](#i6) | 34 |
|  | [A.](#i6a) | [DIRECTORS AND SENIOR MANAGEMENT](#i6a) | 34 |
|  | [B.](#i6b) | [COMPENSATION](#i6b) | 36 |
|  | [C.](#i6c) | [BOARD PRACTICES](#i6c) | 37 |
|  | [D.](#i6d) | [EMPLOYEES](#i6d) | 40 |
|  | [E.](#i6e) | [SHARE OWNERSHIP](#i6e) | 40 |
| [ITEM 7](#i7) |  | [MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](#i7) | 41 |
|  | [A.](#i7a) | [MAJOR SHAREHOLDERS](#i7a) | 41 |
|  | [B.](#i7b) | [RELATED PARTY TRANSACTIONS](#i7b) | 42 |
|  | [C.](#i7c) | [INTERESTS OF EXPERTS AND COUNSEL](#i7c) | 43 |
| [ITEM 8](#i8) |  | [FINANCIAL INFORMATION](#i8) | 44 |
|  | [A.](#i8a) | [CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION](#i8a) | 44 |
|  | [B.](#i8b) | [SIGNIFICANT CHANGES](#i8b) | 44 |
| [ITEM 9](#i9) |  | [THE OFFER AND LISTING](#i9) | 44 |
|  | [A.](#i9a) | [OFFER AND LISTING DETAILS](#i9a) | 44 |
|  | [B.](#i9b) | [PLAN OF DISTRIBUTION](#i9b) | 45 |
|  | [C.](#i9c) | [MARKETS](#i9c) | 45 |
|  | [D.](#i9d) | [SELLING SHAREHOLDERS](#i9d) | 45 |
|  | [E.](#i9e) | [DILUTION](#i9e) | 45 |
|  | [F.](#i9f) | [EXPENSES OF THE ISSUE](#i9f) | 45 |

---

---

| |
|:---|
| 2 |
| *[**Table of Contents**](#toc)* |

---

---

| | | | |
|:---|:---|:---|:---|
| [ITEM 10](#i10) |  | [ADDITIONAL INFORMATION](#i10) | 46 |
|  | [A.](#i10a) | [SHARE CAPITAL](#i10a) | 46 |
|  | [B.](#i10b) | [MEMORANDUM AND ARTICLES OF ASSOCIATION](#i10b) | 46 |
|  | [C.](#i10c) | [MATERIAL CONTRACTS](#i10c) | 48 |
|  | [D.](#i10d) | [EXCHANGE CONTROLS](#i10d) | 48 |
|  | [E.](#i10e) | [TAXATION](#i10e) | 48 |
|  | [F.](#i10f) | [DIVIDENDS AND PAYING AGENTS](#i10f) | 56 |
|  | [G.](#i10g) | [STATEMENT BY EXPERTS](#i10g) | 57 |
|  | [H.](#i10h) | [DOCUMENTS ON DISPLAY](#i10h) | 57 |
|  | [I.](#i10i) | [SUBSIDIARY INFORMATION](#i10i) | 57 |
| [ITEM 11](#i11) |  | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#i11) | 57 |
|  | [A.](#i11a) | [TRANSACTION RISK AND CURRENCY RISK MANAGEMENT](#i11a) | 57 |
|  | [B.](#i11b) | [EXCHANGE RATE SENSITIVITY](#i11b) | 57 |
|  | [C.](#i11c) | [INTEREST RATE RISK AND EQUITY PRICE RISK](#i11c) | 57 |
|  | [D.](#i11d) | [COMMODITY PRICE RISK](#i11d) | 57 |
| [ITEM 12](#i12) |  | [DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](#i12) | 57 |
| [ITEM 13](#i13) |  | [DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES](#i13) | 57 |
| [ITEM 14](#i14) |  | [MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS](#i14) | 58 |
| [ITEM 15](#i15) |  | [CONTROLS AND PROCEDURES](#i15) | 58 |
|  | [A.](#adisc) | [DISCLOSURE CONTROLS AND PROCEDURES](#adisc) | 58 |
|  | [B.](#bmanage) | [MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING](#bmanage) | 58 |
|  | [CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING](#changes) | [CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING](#changes) | 58 |
|  | [LIMITATIONS OF CONTROLS AND PROCEDURES](#limit) | [LIMITATIONS OF CONTROLS AND PROCEDURES](#limit) | 59 |
| [ITEM 16](#i16) |  | [\[RESERVED\]](#i16) | 59 |
| [ITEM 16A](#i16a) |  | [AUDIT COMMITTEE FINANCIAL EXPERT](#i16a) | 59 |
| [ITEM 16B](#i16b) |  | [CODE OF ETHICS](#i16b) | 59 |
| [ITEM 16C](#i16c) |  | [PRINCIPAL ACCOUNTANT FEES AND SERVICES](#i16c) | 60 |
| [ITEM 16D](#i16d) |  | [EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES](#i16d) | 60 |
| [ITEM 16E](#i16e) |  | [PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS](#i16e) | 60 |
| [ITEM 16F](#i16f) |  | [CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT](#i16f) | 60 |
| [ITEM 16G](#i16g) |  | [CORPORATE GOVERNANCE](#i16g) | 60 |
| [ITEM 16H](#i16h) |  | [MINE SAFETY DISCLOSURE](#i16h) | 61 |
| [ITEM 17](#i17) |  | [FINANCIAL STATEMENTS](#i17) | 61 |
| [ITEM 18](#i18) |  | [FINANCIAL STATEMENTS](#i18) | 61 |
| [ITEM 19](#i19) |  | [EXHIBITS](#i19) | 61 |

---

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| 3 |
| *[**Table of Contents**](#toc)* |

---

**GENERAL**

In this Annual Report on Form 20-F, all references to "we", the "Company", or "Quartz Mountain" refer to Quartz Mountain Resources Ltd. and its consolidated subsidiaries.

The Company uses the Canadian dollar as its reporting currency. All references in this document to "dollars" or "$" are expressed in Canadian dollars, unless otherwise indicated. See also Item 3 – "Key Information" for more detailed currency and conversion information.

Except as noted, the information set forth in this Annual Report is as of November 26, 2025 and all information included in this document should only be considered correct as of such date.

This annual report includes certain statements that may be deemed "forward-looking-statements". All statements in this release, other than statements of historical facts are forward-looking-statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Assumptions used by the Company to develop forward-looking statements include the following: the Company's projects will obtain all required environmental and other permits and all land use and other licenses, and no geological or technical problems will occur. Though the Company believes the expectations expressed in its forward-looking-statements are based on reasonable assumptions, such statements are subject to future events and third party discretion such as regulatory personnel. Factors that could cause actual results to differ materially from those in forward-looking statements include variations in market prices, continuity of mineralization and exploration success, and potential environmental issues or liabilities associated with exploration, development and mining activities, uncertainties related to the ability to obtain necessary permits, licenses and tenure and delays due to third party opposition, changes in and the effect of government policies regarding mining and natural resource exploration and exploitation, and exploration and development of properties located within Aboriginal groups asserted territories that may affect or be perceived to affect asserted aboriginal rights and title, and which may cause permitting delays or opposition by Aboriginal groups, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, and the risks and uncertainties connected with its business, investors should review the Company's home jurisdiction filings as <u>www.sedarplus.ca</u> and its filings with the United States Securities and Exchange Commission.<br>

**GLOSSARY OF TERMS**

Certain terms used herein are defined as follows:

---

| | |
|:---|:---|
| Epithermal Deposit | Deposits formed when the fluids are directed through a structure where the temperature, pressure and chemical conditions are favourable for the deposition of ore minerals, including native gold. |
| Induced Polarization ("IP") Survey | A geophysical survey used to identify a feature that appears to be different from the typical or background survey results when tested for levels of electro-conductivity; IP detects both chargeable, pyrite-bearing rock and non-conductive rock that has a high content of quartz. |
| Mineral Symbols | Au – gold; Ag – silver; Cu – copper; Mo – molybdenum. |
| Net Smelter Return (NSR) Royalty | Monies received for concentrate delivered to a smelter net of metallurgical recovery losses, transportation costs, smelter treatment-refining charges and penalty charges. |
| Porphyry Deposit | Mineral deposit characterized by widespread disseminated or veinlet-hosted sulphide mineralization, characterized by large tonnage and moderate to low grade. |
| Sulphide | Comprise a group of minerals in which the inorganic anion sulphide (S<sup>-2</sup>) is typically bound to a metal and are a major source of a wide range of metals. |
| Vein | A tabular or sheet-like mineral deposit with identifiable walls, often filling a fracture or fissure. |

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| *[**Table of Contents**](#toc)* |

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CURRENCY AND MEASUREMENT

All currency amounts in this Annual Report are stated in Canadian dollars unless otherwise indicated. Conversion of metric units into imperial equivalents is as follows:

---

| | | |
|:---|:---|:---|
| Metric Units | Multiply by | Imperial Units |
| Hectares | 2.471 | = acres |
| Meters | 3.281 | = feet |
| kilometers | 0.621 | = miles (5,280 feet) |
| Grams | 0.032 | = troy ounces |
| Tons | 1.102 | = short tons (2,000 lbs.) |
| grams per ton | 0.029 | = troy ounces per ton |

---

**NOTE ON FORWARD LOOKING STATEMENTS**

This Annual Report on Form 20-F contains statements that constitute "forward-looking statements". Any statements that are not statements of historical facts may be deemed forward-looking statements. These statements appear in a number of different places in this Annual Report and, in some cases, can be identified by words such as "anticipates", "estimates", "projects", "expects", "intends", "believes", "plans", or their negatives or other comparable words. The forward-looking statements, including the statements contained in Item 3D "Risk Factors", Item 4B "Business Overview",Item 5 "Operating and Financial Review and Prospects" and <u>Item 11 "Quantitative and</u> <u>Qualitative Disclosures About Market Risk"</u>, involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such statements. Forward-looking statements include statements regarding the outlook for the Company's future operations, plans and timing for the Company's exploration programs, statements about future market conditions, supply and demand conditions, forecasts of future costs and expenditures, the outcome of legal proceedings, and other expectations, intentions and plans that are not historical facts.

You are cautioned that forward-looking statements are not guarantees. The risks and uncertainties that could cause the Company's actual results to differ materially from those expressed or implied by the forward-looking statements include:

· changes in general economic and business conditions, including commodity prices, costs associated with mineral exploration and development, changes in interest rates and the availability of financing on reasonable terms;

· natural phenomena, including geological and meteorological phenomena;

· actions by government authorities, including changes in government regulation and permitting requirements;

· uncertainties associated with legal proceedings;

· future decisions by management in response to changing conditions;

· the Company's ability to execute prospective business plans; and

· misjudgments in the course of preparing forward-looking statements.

The Company advises you that these cautionary remarks expressly qualify, in their entirety, all forward-looking statements attributable to Quartz Mountain or persons acting on the Company's behalf. The Company assumes no obligation to update the Company's forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements. You should carefully review the cautionary statements and risk factors contained in this and other documents that the Company files from time to time with the Securities and Exchange Commission.

**ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable for an annual report.

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**ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable for an annual report.

**ITEM 3 KEY INFORMATION**

**A. SELECTED FINANCIAL DATA**

The following tables summarize selected financial data for the Company (stated in Canadian dollars) prepared, in respect of the years ended July 31, 2025 and July 31, 2024, in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") ("IFRS-IASB").

As permitted by SEC Release No. 33-8879 "Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with International Reporting Standards without Reconciliation to U.S. GAAP", the Company includes selected financial data prepared in compliance with IFRS-IASB without reconciliation to U.S. GAAP.

The selected financial data of the Company for the fiscal years presented was derived from the consolidated financial statements of the Company that have been audited by DeVisser Gray LLP, independent Registered Public Accountants, as indicated in their audit report which is included at Exhibit 99.1 in this Annual Report.

The auditors conducted their audits in accordance with United States and Canadian generally accepted auditing standards, and the standards of the Public Company Accounting Oversight Board (United States).

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | Year ended <br>July 31, 2025 | Year ended <br>July 31, 2024 | Year ended <br>July 31, 2023 | Year ended <br>July 31, 2022 | Year ended <br>July 31, 2021 |
| Sales revenue | $– | $– | $– | $– | $– |
| Loss from operating expenses | $3560819 | $2542646 | $927916 | $1132515 | $254168 |
| Loss (income) and comprehensive loss (income) | $3473539 | $2436802 | $910427 | $995066 | $116419 |
| Basic loss (earnings) per common share | $0.06 | $0.05 | $0.02 | $0.03 | $0.00 |
| Diluted loss (earnings) per common share | $0.06 | $0.05 | $0.02 | $0.02 | $0.00 |
| Dividends per share | $- | $- | $– | $– | $– |
| Working capital | $2881768 | $1694797 | $71389 | $40912 | $117847 |
| Total assets | $4194982 | $3014035 | $863601 | $842553 | $598556 |
| Shareholder's deficiency (equity) | $(3910539) | $(2680994) | $(790698) | $(510265) | $(463515) |
| Share capital | $37607312 | $33312270 | $28995261 | $28445261 | $27599806 |
| Shares outstanding | 69648030 | 58868030 | 43864141 | 41114141 | 31205049 |

---

**Currency and Exchange Rates**

On November 27, 2025 the rate of exchange of the Canadian dollar, based on the daily noon rate in Canada as published by the Bank of Canada, was US$1 = Canadian $1.4034.

The following tables set out the exchange rates, based on the daily noon rates in Canada as published by Bank of Canada for the conversion of Canadian dollars per U.S. dollar.

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|:---|:---|:---|:---|:---|:---|
|  | For the fiscal year ended July 31,<br>(Canadian Dollars per U.S. Dollar) | For the fiscal year ended July 31,<br>(Canadian Dollars per U.S. Dollar) | For the fiscal year ended July 31,<br>(Canadian Dollars per U.S. Dollar) | For the fiscal year ended July 31,<br>(Canadian Dollars per U.S. Dollar) | For the fiscal year ended July 31,<br>(Canadian Dollars per U.S. Dollar) |
|  | 2025 | 2024 | 2023 | 2022 | 2021 |
| End of Period | 1.3844 | 1.3809 | 1.3177 | 1.2824 | 1.2462 |
| Average for the Period <sup>(1)</sup> | 1.3952 | 1.3593 | 1.3419 | 1.2691 | 1.2741 |
| High for the Period | 1.4603 | 1.3875 | 1.3856 | 1.3138 | 1.3404 |
| Low for the Period | 1.3460 | 1.3205 | 1.2753 | 1.2329 | 1.2040 |

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(1) The average rate for each period is the average of the daily noon rates on the last day of each month during the period.

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| | | |
|:---|:---|:---|
| Monthly High and Low Exchange Rate (Canadian Dollars per U.S. Dollar) | Monthly High and Low Exchange Rate (Canadian Dollars per U.S. Dollar) | Monthly High and Low Exchange Rate (Canadian Dollars per U.S. Dollar) |
| Month | High | Low |
| October 2025 | 1.4048 | 1.3916 |
| September 2025 | 1.3941 | 1.3748 |
| August 2025 | 1.3897 | 1.3742 |
| July 2025 | 1.3844 | 1.3575 |
| June 2025 | 1.3707 | 1.3558 |

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**B. CAPITALIZATION AND INDEBTEDNESS**

Not applicable.

**C. REASONS FOR THE OFFER AND USE OF PROCEEDS**

Not applicable.

**D. RISK FACTORS**

The risk factors associated with the principal business of the Company are discussed below. The Company is subject to the highly speculative nature of the resource industry characterized by the requirement for large capital investments from an early stage and a very small probability of finding economic mineral deposits. In addition to the general risks of mining, there are country-specific risks, including currency, political, social, permitting and legal risk. An investor should carefully consider the risks described below and the other information that Quartz Mountain furnishes to, or files with, the Securities and Exchange Commission and with Canadian securities regulators before investing in Quartz Mountain's common shares, and should not consider an investment in Quartz Mountain unless the investor is capable of sustaining an economic loss of the entire investment. The Company's actual exploration and operating results may be very different from those expected as at the date of this document.

**Going Concern Assumption**

The Company's financial statements have been prepared assuming the Company will continue on a going concern basis. However, unless additional funding is obtained, this assumption will have to change. The Company has positive working capital, and incurred losses since inception. Failure to continue as a going concern would require that Quartz Mountain's assets and liabilities be restated on a liquidation basis, which could differ significantly from the going concern basis.

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**Additional Funding Requirements**

Further development of the Company's continued operations will require additional capital. The Company currently does not have sufficient funds to explore the properties it holds. It is possible that the financing required by the Company will not be available, or, if available, will not be available on acceptable terms. If the Company does issue treasury shares to finance its operations or expansion plans, shareholders will suffer dilution of their investment and control of the Company may change. If adequate funds are not available, or are not available on acceptable terms, the Company will not be able to remain in business. In addition, a positive production decision at any of the Company's current projects or any other development projects acquired in the future will require significant resources and funding for project engineering and construction. Accordingly, any development of the Company's properties depends upon the Company's ability to obtain financing through debt financing, equity financing, the joint venturing, or disposition of its current projects, or other means. There is no assurance that the Company will be successful in obtaining financing for these or other purposes, including for general working capital.

**Future Profits/Losses and Production Revenues/Expenses**

The Company has no history of mining operations or earnings, and expects that its losses and negative cash flow will continue for the foreseeable future. No deposit that has been shown to be economic has yet been found on the Company's projects. There can be no assurance that the Company will be able to acquire any additional properties. There can be no assurance that the Company will ever be profitable in the future. The Company's operating expenses and capital expenditures may increase in subsequent years as consultants, personnel and equipment associated with advancing exploration, development and commercial production of any properties that the Company may acquire are added. The amounts and timing of expenditures will depend on the progress of on-going exploration, the results of consultants' analyses and recommendations, the rate at which operating losses are incurred, the execution of any joint venture agreements with strategic partners, and the Company's acquisition of a property(s) and other factors, many of which are beyond the Company's control. The Company does not expect to receive revenues from operations in the foreseeable future, and expects to incur losses unless and until such time as it acquires a property(s), commence commercial production, and generate sufficient revenues to fund its continuing operations. The development of any properties the Company may acquire will require the commitment of substantial resources to conduct the time-consuming exploration and development of properties. The Company anticipates that it would retain any cash resources and potential future earnings for the future operation and development of the Company's business. The Company has not paid dividends since incorporation and the Company does not anticipate paying any dividends in the foreseeable future. There can be no assurance that the Company will generate any revenues or achieve profitability. There can be no assurance that the underlying assumed levels of expenses will prove to be accurate. To the extent that such expenses do not result in the creation of appropriate revenues, the Company's business will be materially adversely affected. It is not possible to forecast how the business of the Company will develop.

**Exploration, Development and Mining Risks**

Resource exploration, development, and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not reduce, including among other things, unsuccessful efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. Few properties that are explored are ultimately developed into producing mines. Unusual or unexpected formations, formation pressures, fires, power outages, labor disruptions, flooding, explosions, cave-ins, landslides, and the inability to obtain suitable or adequate machinery, equipment, or labor are other risks involved in the operation of mines and the conduct of exploration programs. The Company will rely upon consultants and others for exploration, development, construction, and operating expertise. Substantial expenditures are required to establish mineral resources and mineral reserves through drilling, to develop metallurgical processes to extract the metal from mineral resources, and in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.

No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection. The exact effect of these factors cannot accurately be predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.

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**Permits and Licenses and Title**

Although the Company has exercised reasonable due diligence with respect to determining title to properties it owns or leases, there is no guarantee that title to such properties and other tenure will not be challenged or impugned. No assurances can be given that there are no title defects affecting the properties. There may be valid challenges to the title of the Company's properties which, if successful, could make the Company unable to operate its properties as planned or permitted, or unable to enforce its rights with respect to its properties. In British Columbia the rights of aboriginal peoples and their claims to much of the Province are not settled.

**Changes in Local Legislation or Regulation**

Any mining and processing operations that may be acquired and any exploration activities that might be conducted would be subject to extensive laws and regulations governing the protection of the environment, exploration, development, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine and worker safety, protection of endangered and other special status species and other matters. The Company's ability to obtain permits and approvals and to successfully operate in particular communities may be adversely impacted by real or perceived detrimental events associated with the Company's activities or those of other mining companies affecting the environment, human health and safety of the surrounding communities. Delays in obtaining or failure to obtain government permits and approvals may adversely affect the Company's operations, including its ability to explore or develop properties, commence production or continue operations. Failure to comply with applicable environmental and health and safety laws and regulations may result in injunctions, fines, suspension, or revocation of permits and other penalties. The costs and delays associated with compliance with these laws, regulations and permits could prevent the Company from proceeding with the development of a project or the operation or further development of a mine or increase the costs of development or production and may materially adversely affect the Company's business, results of operations or financial condition. The Company may also be held responsible for the costs of addressing contamination at the site of current or former activities or at third party sites. The Company could also be held liable for exposure to hazardous substances. The government currently has in place or may in the future implement laws, regulations, policies or agreement that may affect the Company's ownership rights with respect to its mineral properties or its access to the properties. These may restrain or block the Company's ability to advance the exploration and development of its mineral properties or significantly increase the costs and timeframe to advance the properties.

**Environmental Matters**

All of the operations that the Company might acquire would be subject to environmental regulations, which can make operations expensive or prohibit them altogether. The Company may be subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products that could occur because of its mineral exploration, development, and production. In addition, environmental hazards may exist on a property in which the Company directly or indirectly holds an interest, which are unknown to the Company at present and have been caused by previous or existing owners or operators of the Company's projects. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations that would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties, or the requirement to remedy environmental pollution, which would reduce funds otherwise available to the Company and could have a material adverse effect on the Company. If the Company is unable to remedy an environmental problem, it could be required to suspend operations or undertake interim compliance measures pending completion of the required remedy, which could have a material adverse effect on the Company.

There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company's operations. There is also a risk that the environmental laws and regulations may become more onerous, making the Company's operations more expensive. Many of the environmental laws and regulations will require the Company to obtain permits for its activities. The Company will be required to update and review its permits from time to time, and may be subject to environmental impact analyses and public review processes prior to approval of the additional activities. It is possible that future changes in applicable laws, regulations, and permits or changes in their enforcement or regulatory interpretation could have a significant impact on some portion of the Company's business, causing those activities to be economically re-evaluated at that time.

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**Groups Opposed to Mining May Interfere with the Company's Efforts to Explore and Develop its Properties**

Organizations opposed to mining may be active in the regions in which the Company conducts its exploration activities. Although the Company intends to comply with all environmental laws and maintain good relations with local communities, there is still the possibility that those opposed to mining will attempt to interfere with the development of any property(s) the Company might acquire. Such interference could have an impact on the Company's ability to explore and develop its properties in a manner that is most efficient or appropriate, or at all and any such impact could have a material adverse effect on the Company's financial condition and the results of its operations.

**Market for Securities and Volatility of Share Price**

There can be no assurance that an active trading market in the Company's securities will be established or sustained. The market price for the Company's securities is subject to wide fluctuations. Factors such as announcements of exploration results, as well as market conditions in the industry or the economy as a whole, may have a significant adverse impact on the market price of the securities of the Company.

The stock market has from time to time experienced extreme price and volume fluctuations that have often been unrelated to the operating performance of particular companies.

**Conflicts of Interest**

The Company's directors and officers may serve as directors or officers of other companies, joint venture partners, or companies providing services to the Company or they may have significant shareholdings in other companies. Situations may arise where the directors and/or officers of the Company may be in competition with the Company. Any conflicts of interest will be subject to and governed by the law applicable to directors' and officers' conflicts of interest. In the event that such a conflict of interest arises at a meeting of the Company's directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In accordance with applicable laws, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company.

**General Economic Conditions**

Global financial markets have experienced a sharp increase in volatility during the last few years. Market conditions and unexpected volatility or illiquidity in financial markets may adversely affect the prospects of the Company and the value of the Company's shares.

**Reliance on Key Personnel**

The Company is dependent on the continued services of its senior management team, and its ability to retain other key personnel. The loss of such key personnel could have a material adverse effect on the Company. There can be no assurance that any of the Company's employees will remain with the Company or that, in the future, the employees will not organize competitive businesses or accept employment with companies competitive with the Company.

There can be no assurance that the Company will be able to attract, train, or retain qualified personnel in the future, which would adversely affect its business.

**Competition**

The resources industry is highly competitive in all its phases, and the Company will compete with other mining companies, many of which have greater financial, technical, and other resources. Competition in the mining industry is primarily for attractive mineral rich properties capable of being developed and producing economically; the technical expertise to find, develop, and operate such properties; the labor to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for and mine certain minerals, but also conduct production and marketing operations on a worldwide basis. Such competition may result in the Company being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop any property(s) the Company might acquire. The Company's inability to compete with other mining companies for these resources could have a materially adverse effect on the Company's results of operation and its business.

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**Information Systems and Cyber Security**

The Company's operations depend on information technology ("IT") systems. These IT systems include the IT systems of HDSI who provides technical, management and administrative services to the Company under the Services Agreement. These IT systems are used by us to store sensitive data in the ordinary course of our business, including personal information of our employees, as well as proprietary and confidential business information relating to ourselves and in some cases, our service providers, investors and other stakeholders. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company's operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures and to address the threat of attacks. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company's reputation and results of operations. There is a risk that the Company or HDSI may be subject to cyber-attacks or other information security breaches which could result in material loss to the Company and could severely damage our reputation, compromise our IT systems and result in a loss or escape of sensitive information, a misappropriation of assets or incidents of fraud, disrupt our normal operations, and cause us to incur additional time and expense to remediate and improve our information systems. While we employ security measures in respect of our information and data, we cannot be certain that we will be successful in securing this information and data and there may be instances where we are exposed to malware, cyber-attacks or other unauthorized access or use of our information and data. The Company's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature and sophistication of these cyber-attacks and potential security breaches. In addition, the Company is dependent on the efforts of HDSI to mitigate its IT systems from cyber-attacks and other information breaches. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority but may not ultimately defeat all potential attacks. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

**The Company may enter into agreements with Indigenous groups, inclusive of First Nations, in relation to its current and future exploration activities, and any potential future production, which could impact any expected earnings.**

Our properties are located within First Nations asserted traditional territories, and the exploration and development of these properties may affect, or be perceived to affect, asserted aboriginal rights and title, which has the potential to manifest permitting delays or opposition by First Nations communities.

The Company is working to establish positive relationships with First Nations. As part of this process the Company may enter into agreements, commensurate with the stage of activity, with First Nations in relation to current and future exploration and any potential future production. This could impact any expected earnings.

**Uninsurable Risks**

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks because of high premiums or other reasons.

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**Likely PFIC status has consequences for United States investors**

Potential investors who are U.S. taxpayers should be aware that the Company expects to be classified for U.S. tax purposes as a passive foreign investment company ("PFIC") for the current fiscal year, and may also have been a PFIC in prior years and may be a PFIC in future years. If the Company is a PFIC for any year during a U.S. taxpayer's holding period, then such U.S. taxpayer generally will be required to treat any so-called "excess distribution" on its common shares, or any gain realized upon a disposition of common shares, as ordinary income which would be taxed at the shareholder's highest marginal rates and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer has made a timely qualified electing fund ("QEF") election or a mark-to-market election with respect to the shares of the Company. In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Company's net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer's tax basis therein. See also <u>Item 10E – "Passive Foreign Investment Company</u>".

Potential investors should also note that recently enacted legislation may require U.S. shareholders to report their interest in a PFIC on an annual basis. US shareholders of the Company should consult their tax advisors as to these reporting requirements as well as the consequences of investing in the Company.

**Penny stock classification**

Penny stock classification could affect the marketability of the Company's common stock and shareholders could find it difficult to sell their stock

The penny stock rules in the United States require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation.

Further, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These additional broker-dealer practice and disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Company's common shares in the U.S., and shareholders may find it more difficult to sell their shares.

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**ITEM 4 INFORMATION ON THE COMPANY**

**A. HISTORY AND DEVELOPMENT OF THE COMPANY**

**Incorporation**

The legal name of the Company is "Quartz Mountain Resources Ltd."

Quartz Mountain Resources Ltd. was incorporated on August 3, 1982, in British Columbia, Canada, and it continues to subsist under the laws of the Province of British Columbia.

The Company was originally incorporated as Wavecrest Resources Ltd. but changed its name to Quartz Mountain Gold Corp. on June 18, 1986. On November 5, 1997, the name of the Company was changed from Quartz Mountain Gold Corp. to Quartz Mountain Resources Ltd., and the common shares were consolidated on a ten-old-for-one-new share basis.

**Market for the Company's Securities**

The Company's common shares were quoted on NASDAQ SmallCap Market in the United States from September 17, 1987 until May 12, 1994. The Company's common shares were also listed on the Toronto Stock Exchange until November 10, 1994.

In 2000, the Company listed on a newly created Tier 3 of the Canadian Venture Exchange (now renamed the TSX Venture Exchange ("TSX-V")). In December 2003, the Company was reclassified as a Tier 2 company on the TSX-V. On February 17, 2005, the Company transferred its listing to NEX, a separate board of the TSX-V established in 2003 to provide a new trading forum for listed companies that had fallen below the TSX-V's continued listing standards, due to low levels of business activity.

The Company was relisted on the TSX-V on December 30, 2011.

Currently, the Company's common shares trade on the TSX-V under the symbol QZM. On August 20, 2025, the Company announced that its common shares have been uplisted from OTC Pink market to the OTCQB® Venture Market ("OTCQB") under the symbol QZMRF.

**Offices**

The Company's business office is located at 14th Floor, 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1; telephone (604) 684-6365. The Company's registered office is Suite 1500 – 1055 West Georgia Street, Vancouver, British Columbia V6E 4N7, telephone (604) 689-9111.

**B. BUSINESS OVERVIEW**

**The Company's Business Strategy and Principal Activities**

Quartz Mountain has been in the business of exploring and advancing mineral properties. The Company's activities on the properties have been primarily focused on ascertaining whether the properties host commercially viable mineral deposits.

In the first three years of its existence, the Company was active in the exploration of small gold and silver prospects in Canada, but none of these prospects warranted further exploration or development. In 1986, the Company acquired the Quartz Mountain gold property, located in south central Oregon, and until January 2002, most of the Company's efforts were expended on the exploration and maintenance of these claims. The Company's interests in the Quartz Mountain gold property, and in its other properties, were acquired by direct purchase, lease, and option, or through joint ventures.

The Company sold the Quartz Mountain gold property during 2002, to Seabridge Resources Ltd. and Seabridge Resources Inc. (collectively "Seabridge"). Seabridge subsequently changed its name to Seabridge Gold Inc. At closing, Quartz Mountain received 300,000 Seabridge common shares, 200,000 Seabridge common share purchase warrants, US$100,000, and a 1% NSR from any future production on the Quartz Mountain gold property. The Seabridge warrants were exercised and all Seabridge common shares held by the Company have been sold. The Company sold its interest in the 1% NSR to Gold Royalty U.S. Corp. in February 2021.

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Following the sale of the Quartz Mountain gold property, the Company continued in its efforts to find a suitable mineral property for potential acquisition and exploration during the period of 2002 to 2011.

In December 2011, the Company acquired an option to earn a 100% interest in the Buck gold-silver property (the "Buck Project") near the town of Houston in central British Columbia ("BC"). Concurrently with the Buck Project acquisition, the Company completed a $4.2 million private placement financing and began trading on the TSX-V. Exploration programs were carried out at Buck in 2011 and 2012, confirming targets. Difficult financing conditions for junior companies in 2013 necessitated that the Company limit its exploration expenditures and prioritize its property holdings. As a result, Quartz Mountain terminated its option on the Buck Project in July 2013.

In August 2012, the Company acquired 100% of the Galaxie copper-gold property (the "Galaxie Project") in northwestern BC, and in 2012 carried out exploration programs within the property at five new prospects within the property as well as at the Gnat porphyry copper deposit.

Quartz Mountain acquired the ZNT Project by utilizing British Columbia's on-line mineral tenure system in 2012. The ZNT Project is located 15 kilometers southeast of the town of Smithers, British Columbia. Exploration in 2012 and 2013 has identified potential for the discovery of a bulk tonnage silver deposit at ZNT.

In November 2012, Quartz Mountain entered into an option and joint venture agreement with Amarc Resources Ltd. ("Amarc") pursuant to which Amarc could earn a 40% ownership interest, with an option to acquire an additional 10% ownership interest, in the Galaxie and ZNT Projects in BC. Amarc gained an initial 40% interest in the Galaxie and ZNT Projects by funding a drilling program at Gnat porphyry copper deposit at the Galaxie Project in late 2012. In June 2013, Quartz Mountain and Amarc entered into an amendment agreement through which Amarc had an option until October 31, 2013 to earn a 60% interest in each of the ZNT and Galaxie properties, by making certain property expenditures. Amarc earned a 60% interest in the ZNT Project but earned only a 40% interest in the Galaxie Project. In April 2014, Amarc terminated joint ventures with the Company and returned earned interests in the Galaxie and ZNT Projects and Quartz Mountain owned 100% of the Galaxie and ZNT Projects.

After carrying out exploration in 2012 and 2013, the ZNT Project did not warrant further work. The mineral claims comprising the property were allowed to lapse subsequent to the year ended July 31, 2016.

Work was also conducted at the Galaxie Project in 2012 and 2013 but, largely because of the prevailing difficult market conditions for mineral exploration companies, the Company was unable to secure a joint venture or option agreement to further advance exploration. As a result, during the year ended July 31, 2016, three mineral claims were returned to a vendor and the remaining mineral claims comprising the property were allowed to lapse subsequent to year-end.

The Company continued to investigate new opportunities, and currently holds three mineral properties located in BC:

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| on June 8, 2021, the Company entered into a mineral claims purchase agreement to purchase nine mineral claims located near Houston, BC comprising the Maestro property; and |
| on November 5, 2021, the Company entered into a mineral claims purchase agreement to acquire 100% interest in four staked claims from United Mineral Services ("UMS") and obtained an additional option to purchase 100% of five adjacent claims ("Electrum Option") owned by an arm's length third party. These nine mineral claims, located 160 kilometers north of Smithers, BC, are called the Jake Property; |
| on April 7, 2023, one newly acquired claim Jake East was added to the claims block by staking; |
| The Company has completed the purchase of 100% of the Jake Property from UMS by reimbursing UMS $200,000 for its costs to assemble the Property. UMS is a private company owned by Robert Dickinson, a controlling shareholder of Quartz Mountain and a non-arms-length vendor. The Electrum option was fulfilled by Quartz Mountain with a final payment of $75,000 in July 2023. The Electrum claims are now owned 100% by Quartz Mountain, subject to a 2% net smelter return royalty which is capped at $3 million. |
| In April 2022, the Company acquired the Troy property by staking one mineral claim. |
| On March 19, 2024, the Company announced it has agreed under two separate transactions, to purchase a 100% interest in each of the Lone Pine Claim and the North Claim. These two mineral claims are located within the Company's 100% owned Maestro Property. |

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The Company does not have any operating revenue and anticipates that it will rely on sales of its equity securities in order to finance its acquisition and exploration activities.

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**C. MINERAL PROPERTIES** 

The following information has been summarized from company files. The disclosure has been reviewed by Farshad Shirmohammad, P.Geo., a qualified person.

<u>Introduction</u>

In British Columbia, the holder of a mineral claim is granted ownership of all subsurface minerals. A Free Miners Certificate is required to stake a new claim or to receive ownership or an interest in an existing claim.

Mineral Titles in British Columbia are acquired and maintained via the Provincial Government's "Mineral Titles Online" web site, which allows online, map-based claim staking. When a claimholder stakes a new claim, they have ownership of the claim for one year.

To continue to hold the claims after one year, a claimholder must perform technical or physical assessment work on the claims and file a report detailing the work and the results or pay cash in lieu of performing assessment work. The cost of the work performed and reported is applied to extend the expiry dates of the claims. The exploration expenditure required to maintain claims is $5/ha per year for years 1 and 2, $10/ha per year for years 3 and 4, $15/ha per year for years 5 and 6, and thereafter $20 per year. If a claimholder elects to pay cash in lieu, the cost is twice that of required exploration expenditures.

**Jake Property**

<u>Property Description</u>

On November 5, 2021, the Company entered into a mineral claims purchase agreement with United Mineral Services Ltd. ("UMS") to acquire 100% interest in the Jake mineral property consisting of four staked claims (the "Jake Property") and obtained an additional option to purchase 100% of five adjacent claims owned by Electrum Resource Corporation ("Electrum"), an arm's length third party.

The Property consists of a block of 14 contiguous mineral claims that cover an area of approximately 6,731 ha. 12 primary mineral claims within the Jake claim block currently have Good To Date (Expiry Date) of December 31, 2034; two recently staked mineral claims (JTC1 and JTC2) have Good To Date of April 30, 2027. All claims' information are listed in the Table below.

UMS is a private company owned by Robert Dickinson, a controlling shareholder of Quartz Mountain and a non-arm's-length vendor.

The total cash consideration that the Company was required to pay UMS was $200,000, according to the following schedule: $50,000 immediately on the date of receipt of TSX Venture Exchange conditional approval of this transaction ("TSX-V Approval Date"); $50,000 on or before the date that is six months after the TSX-V Approval Date; $50,000 on or before the date that is twelve months after the TSX-V Approval Date and $50,000 on or before the date that is eighteen months after the TSX-V Approval Date.

The Company was also required to make payments of $125,000 to Electrum in connection with the acquisition of Jake Property. In May 2022, the Company obtained the TSX Venture Exchange approval for this acquisition.

During the year ended July 31, 2023, the Company made all cash payments required and earned 100% interest in Jake Property.

The five mineral claims previously owned by Electrum are subject to a 2% net smelter return royalty which is capped at $3 million.

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![qzm_20fimg19.jpg](qzm_20fimg19.jpg)

**Property Claims Map**

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![qzm_20fimg20.jpg](qzm_20fimg20.jpg)

**Jake Property Claims List.**

<u>Location and Access</u>

The Jake Property is located 160 km north of Smithers in northwestern BC. Smithers is a hub location for BC Provincial Government services.

The Property, currently only accessible by helicopter, is situated about 14 km southwest of the Suskeena Lodge, located on the Sustut River.

![qzm_20fimg21.jpg](qzm_20fimg21.jpg)

**Access, Infrastructure, and Other Mine & Development Projects in the Region.**

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<u>History</u> 

Historically, mineral exploration work on the Jake Property has occurred since 1965 and includes mapping, sampling, geophysics, trenching, backpack and diamond drilling, and road building. To date, two deposit target areas – Jake North and Jake South – have been identified. Noteworthy historical exploration work includes:

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| Kennco Exploration (Western) Ltd. (1965): two backpack drill holes totaling 55 m at Jake South. |
| Canadian Superior Exploration Ltd. (1968, 1971-1976): 12 diamond drill holes totaling 1,207 m at Jake North. |
| Cities Services Minerals Corporation (1977): two diamond drill holes totaling 436 m at Jake North, intersected grades of 0.19% Cu and 13-27.43 g/t Ag over 40 m. |
| QPX Minerals Inc. (1987): geological mapping and extensive property wide soil sampling confirmed copper, gold, molybdenum, silver, lead, zinc mineralization at Jake North and Jake South. |
| Teck Corporation (1997-1999): six diamond drill holes totaling 696 m at Jake North, intersecting high-grade silver and gold veins and copper-gold stockworks near intrusive/sediment contacts. |

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In the period 2016 through 2020, UMS conducted an aerial magnetic survey and reinterpreted historical geochemical data over the entire Property and conducted geological mapping and sampling over Jake South.

The magnetic target survey was flown at 200 m line spacing and provides excellent detail for interpreting the property geology. Results from the survey show several large magnetic highs, one associated with Cu+Au mineralization intersected in 1999 core drilling at Jake North by Teck Corporation ("Teck").

At the request of Quartz Mountain Resources Ltd., a Report on the Jake Property was prepared for the Company by Charles J. Greig (C.J. Greig & Associates Ltd.) and published in 2022 (the "2022 report") by Charles J. Greig, P.Geo., who conducted an independent evaluation of the Jake Property, including a site inspection in October 2021.

The 2022 report concluded that "the Jake Property has been shown to host broad areas of alteration and precious and base metals mineralization characteristic of Cu + Au porphyry-type, as well as low-sulphidation epithermal type and Ag-rich polymetallic vein systems". Further phased exploration programs, comprising geological mapping, geochemical sampling, IP surveys, and diamond drilling was recommended by the author.

The Company completed approximately 8.5 line-km of Induced Polarization ("IP") survey on Jake's high-priority targets during in 2022 and has received government approval for a total of 50 core drilling sites, to be developed within the next five years. Positive IP survey results, indicating the presence of a large-scale, near surface sulphide system, open and expanding to depth, were obtained from surveying the Jake porphyry Cu-Au target area.

In 1973 and 1999, historical drill holes, of which the most westerly ones (73-3 and 99-04) ended in porphyry Cu-Au style mineralization, were drilled shallow and outboard from the newly established targets. The Company completed 7 holes totalling 3,418 meters in 2024.

<u>Geology</u> 

The geology of Jake consists of Upper Jurassic Bowser Lake Group sedimentary rocks that are intersected by a series of north to northeast-trending monzonite dykes of the Tertiary Babine Plutonic Suite. Mineralization at the Jake Property is situated within a prominent gossan measuring 3.75 km long by 1.5 km wide.

Within the gossan is a series of north-northeast trending dyke swarms that intrude into sedimentary rocks. The combination of results from historical and recent work has outlined a broadly altered and mineralized area comprising porphyry-style sulphide disseminations, and quartz-sulphide stockwork veins hosting Cu-Au±Mo mineralization.

Positive IP survey results, indicating the presence of a large-scale, near surface sulphide system, open and expanding to depth, were obtained from surveying the Jake North porphyry Cu-Au target area. In 1973 and 1999, historical drill holes, of which the most westerly ones (73-3 and 99-04) ended in porphyry Cu-Au style mineralization, were drilled shallow and outboard from the newly established targets.

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![qzm_20fimg22.jpg](qzm_20fimg22.jpg)

**Pronounced Jake Gossan Indicates the Presence of a Large Mineral System.**

<u>Recent Work</u> 

On January 14, 2025, the Company announced the results of a seven-hole, 3,418-meter scout core drilling program, and the discovery of a new copper-gold silver porphyry system.

Drill holes JK24-01 to JK24-04, and JK24-06 were drilled on an angle to vector into the vicinity of a possible concealed copper-gold porphyry system, along with testing epithermal mineralization potentially related to a porphyry centre. Both drillholes JK24-05 and JK24-07 were drilled at a subvertical orientation testing the potential for a concealed copper-gold porphyry system in the centre of concentrically zoned alteration and mineralization.

The discovery of a new copper-gold porphyry system at Jake was highlighted by drill hole JK24-05, shown in the table below:

![qzm_20fimg23.jpg](qzm_20fimg23.jpg)

Notes to the table:

1. Widths reported are drill widths, such that true thicknesses are unknown.

2. All assay intervals represent length-weighted averages.

3. Some figures may not sum exactly due to rounding.

4. Copper equivalent (CuEQ) calculations use metal process prices of: Cu US$4.00/lb, Au US$2000/oz., Ag US$25/oz, and Mo US$15.00/lb, and conceptual recoveries of: Cu 85%, Au 75%, Ag 70% and Mo 82%. Conversion of metals to an equivalent copper grade based on these metal prices is relative to the copper price per unit mass factored by conceptual recoveries for those metals normalized to the conceptualized copper recovery. The metal equivalencies for each metal are added to the copper grade. The general formula for this is: CuEQ% = Cu% + ((Au g/t \\* (Au recovery / Cu recovery) \\* (Au $ per oz./31.1034768 / Cu $ per lb. \\* 22.04623)) + ((Ag g/t \\* (Ag recovery / Cu recovery) \\* (Ag $ per oz./ 31.1034768 / Cu $ per lb. \\* 22.04623)) + ((Mo% \\* (Mo recovery / Cu recovery) \\* (Mo $ per lb.) / Cu $ per lb.)).

Based on its successful drilling program, **Quartz** has also acquired a 100% interest in mineral claims capturing an entire new potential BC porphyry copper-gold district surrounding the **Jake** discovery.

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![qzm_20fimg24.jpg](qzm_20fimg24.jpg)

**Maestro Property**

<u>Property Description</u>

On June 8, 2021, the Company entered into a mineral claims purchase agreement with a third party vendor to purchase nine mineral claims located near Houston, British Columbia, for $105,000 in cash and 1,000,000 shares in the capital of the Company.

These claims are subject to a 2.5% NSR which can be bought down to 1% for $1.5 million, and this NSR is subject to an annual advance payment of $25,000. There are no required work commitments for these claims as this transaction is a purchase of the mineral claims and not an option.

Another claim was purchased outright from another third party vendor by the Company for $2,000.

On March 19, 2024, the Company announced it has agreed under two separate transactions, to purchase a 100% interest in each of the Lone Pine Claim (Tenure Number 1106400) and the North Claim (Tenure Number 1047568) (the "Acquisitions"). These two mineral claims total 169 hectares and are located within the Company's 100% owned Maestro Property located 15km north of the town of Houston, British Columbia.

The Lone Pine mineral claim was purchased from Eagle Plains Resources Ltd., an arms-length vendor, for 750,000 common shares of the Company and a 2% NSR royalty, of which 1.5% can be purchased at any time by payment of $5 million. The shares are subject to a 24-month contractual resale restriction and a further right for the Company to arrange purchasers of the shares in the case of resales after that period. The Lone Pine transaction has been approved by TSX Venture Exchange and closed with the 750,000 common shares of the Company issued on March 20, 2024.

The NORTH mineral claim was purchased from Shawn Merkley, an arms-length vendor, for $24,000, 45,000 common shares of the Company, and a 2% NSR royalty which can be purchased at any time by a payment of $2 million. The transaction has been approved by TSX Venture Exchange and the cash and common shares were settled in three equal installments ($8,000 and 15,000 common shares) over two years with the first installment due upon closing ($8,000 cash payment was paid and 15,000 common shares were issued on March 22, 2024). On March 6, 2025, the cash payments of $16,000 for the second and third instalment were paid and 30,000 common shares were issued on March 12, 2025.

The Maestro Property consists of a block of 13 contiguous mineral claims. The 13 claims that comprise the Maestro Property cover an area of 2,309.4 ha. All claims are 100% owned by the Company and they are all in good standing.

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![qzm_20fimg25.jpg](qzm_20fimg25.jpg)

**Maestro Property Claims Map.**

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![qzm_20fimg26.jpg](qzm_20fimg26.jpg)

**Maestro Property Claims List.**

<u>Location and Infrastructure</u>

The Maestro Property is located in central British Columbia, 15 km north of Houston and 50 km south of Smithers. Highway 16 intersects the western edge of the Property, enabling easy access to nearby infrastructure including airports, railways, and power. The central region of the Property is accessible by numerous drill roads constructed by past operators.

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![qzm_20fimg27.jpg](qzm_20fimg27.jpg)

**Maestro Property location, access, and infrastructure.**

<u>History</u>

The Maestro Property and surrounding area has over 100 years of mineral exploration history dating back to 1914; however, work has only been accurately recorded from the 1960's onwards and includes mapping, sampling, geophysics, trenching, percussion, and diamond drilling. Most of this work in and surrounding the Property focused on porphyry Mo±Cu mineralization for the Lone Pine Molybdenum Deposit, which lies internal to the Maestro claims. Because of the focus on the Lone Pine porphyry, the precious metal potential of the surrounding area has not been systematically explored.

Notable historical drilling includes:

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| Molymines Exploration Ltd. (1965-1969): 128 percussion and diamond drill holes totaling 6,381 m at the Lone Pine Deposit and, to a lesser extent, the Prodigy Zone. |
| Granby Mining Corp. (1976-1978): 22 drill holes totaling 2,160 m at the Prodigy Zone, Granby Zone, and Mineral Hill Zone. |
| Dafrey Resources Inc. (1985): 12 percussions drill holes at the Lone Pine Deposit and the Prodigy Zone. |
| Southern Cross Gold (1987): Eight diamond drill holes totaling 521 m at the Lone Pine Deposit and the Prodigy Zone. |
| Bard Ventures Ltd. (2007-2011): 77 diamond drill holes totaling 35,334 m at the Lone Pine Deposit, Prodigy Zone, Granby Zone, and Mineral Hill Zone. |

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<u>Geology</u>

The geology of Maestro consists mainly of Lower to Middle Jurassic volcanic and volcaniclastic rocks from the Hazelton Group and, to a lesser amount, Upper Jurassic sedimentary rocks from the Bowser Lake Group. Both Groups are intruded by stocks and dikes belonging to the Late Cretaceous Bulkley and Tertiary Goosly suites. The Maestro Property covers three known precious and base metal mineralized zones, named Prodigy, Granby and Mineral Hill. These zones are outbound of the Lone Pine Molybdenum Deposit which is internal to the property.

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![qzm_20fimg28.jpg](qzm_20fimg28.jpg)

**Maestro Property 1st Vertical Derivative of Total Magnetic Intensity**

During October 2021, the Company contracted Hardline Exploration Corp. ("HEC") of Smithers, BC, to conduct a geochemical soil-sampling program on the Company's 100%-owned Maestro Property. The 614-sample geochemical soil survey (100m x 100m grid) was implemented based on the extensive review and compilation of historical data and covered all three mineralized zones within the Maestro Property.

![qzm_20fimg29.jpg](qzm_20fimg29.jpg)

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**Area Covered by Grid Soil Sampling (dashed outline).**

Analyses of 614 grid-based soil samples collected on the Maestro Property delineated several base metal and pathfinder element anomalies. Geochemical modeling of the soil sample results, and historical drill data shows distinctive metal zonation, indicative of a potentially large hydrothermal mineralizing system.

In 2023, Equity Exploration Consultants Ltd. was contracted by Quartz to conduct a detailed stream sediment sampling program, and reconnaissance surface mapping and prospecting review of key prospects at the Maestro project. The contemplated work was completed within the budget and timeframe; 53 silt samples and 12 rock samples were collected from prospective areas and were shipped to ALS Global in North Vancouver for geochemical analysis.

Reviewing the results showed that the Maestro property boasts indications for numerous robust mineral systems. The geochemical footprint of the Prodigy, Lone Pine, Mineral Hill and Granby mineralized centres is widespread approximately 1.5 km by 1.3 km across.

Initial results from one of the newly identified mineralized zones, Road Zone, corroborate historical samples with highly anomalous silver and widespread quartz veins. The Road Zone may host an underexplored opportunity for additional intrusion-related precious metal mineralization and should be followed up with surface geological, geochemical, and geophysical work.

**Sequential Phases of Diamond Drilling at Prodigy Target**

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| During late November and early December 2023, the Company completed 1,445 metres of Phase 1 core drilling in two holes at the Prodigy Au-Ag-Mo-Cu epithermal target on its Maestro Property, located 15 kilometres north of Houston, BC. |
| The Prodigy epithermal deposit target is hosted within an extensive porphyry-type mineral system and is thought by Management to have some geological similarities to that of the Blackwater-Davidson gold-silver deposit of Artemis Gold Inc., located near Vanderhoof, BC. |
| The drill program was completed by Apex Diamond Drilling Ltd. from nearby Smithers, and some 482 core samples were sent to and received by ALS Global in North Vancouver, BC, for analysis. |
| Results from Quartz's first two drill holes at the Prodigy Zone on the **Maestro** Property intersected a high-grade gold-silver lode deposit within multi-generation precious metal mineralization all hosted within a Mo-Cu porphyry environment. |
| Core hole PR23-02 intersected 102 m grading 2.22 g/t Au and 104 g/t Ag, including 12 m grading 1.23 g/t Au and 586 g/t Ag and 36 m of 5.73 g/t Au and 87 g/t Ag. Notably, green sericite alteration reminiscent of deposits such as Blackwater Gold-Silver Mine, which is currently being placed into production, plays a significant role at Prodigy. The discovery is open in multiple directions and at depth, promising significant further potential. |

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![qzm_20fimg30.jpg](qzm_20fimg30.jpg)

**Hole PR23-02 Intersects High Grade Gold-Silver Lodes Within an Extensive Precious Metals System**

Immediately after the completion of the drilling program, a downhole geophysical survey was conducted over the discovery hole PR23-02, to test the geophysical signature of the intercepted mineralization.

The second geophysical survey after the 2023 drilling program was carried out during October and November 2024. All newly and historically drilled areas of the Maestro Property were tested by approximately 30 line-kilometer of geophysical survey, to define the mineralization trend and provide delineation drill targets.

<u>Recent Work</u>

A Phase 2 drill program was completed at the Prodigy gold-silver discovery on its Maestro Property during early 2025. All four holes, PR25-03 through PR25-06, returned broad intervals of precious and base metals mineralization, starting from a shallow depth. The results represent a successful follow-up to previously announced discovery drilling and the initial start to delineation of a substantial new epithermal Au-Ag system at Maestro.

Drill intersections indicate strong potential for both bulk tonnage and high-grade mineralization. The Prodigy Au-Ag system remains open in all directions promising signiﬁcant upside and expansion potential. The Phase 3 drilling program was completed during June through August, 2025 and comprised seven holes (PR25-07 through PR25-13) totalling 3,885 meters. Quartz's sequential drill programs (Phases 1 through 3) at Prodigy now total 8,346 meters across 13 holes (PR23-01 through PR25-13). This drilling has intersected three distinct types of mineralization which are closely integrated. Quartz plans to mobilize Phase 4 drilling in early February, 2026 to continue further systematic delineation of Prodigy

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![qzm_20fimg31.jpg](qzm_20fimg31.jpg)

**Table 1. Quartz Phase One and Phase Two Prodigy "Eye" Assay Results, Represent the Discovery of a Substantial New Au-Ag System at Maestro.**

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![qzm_20fimg32.jpg](qzm_20fimg32.jpg)

**Table 2. Quartz Phase One and Phase Three Prodigy Assay Results.**

*Footnotes to Tables 1 and 2:*

*1.* *Width reported are drill widths, such that true thicknesses are unknown.*

*2.* *All assay intervals represent length-weighted averages.*

*3.* *Some figures may not sum exactly due to rounding.*

*4.* *Gold equivalent (AuEQ) calculations use metal prices of: Au US\$1,800.00/oz, Ag US\$22.00/oz, Mo US\$17.00/lb and Cu US\$4.00/lb. and conceptual recoveries of: Au 80%, Ag 80%, Mo 75%, and Cu 75%. Conversion of metals to an equivalent gold grade based on these metal prices is relative to the gold price per unit mass factored by conceptual recoveries for those metals normalized to the conceptualized gold recovery. The metal equivalencies for each metal are added to the gold grade. The general formula is: AuEQ g/t NMV = (Au g/t) + (Ag recovery / Au recovery) \\* (Ag \$ per oz. / Au \$ per oz. \\* Ag g/t)) + ((Mo recovery / Au recovery) \\* (Mo % \\* Mo \$ per lb. \\* 22.0462) / (Au \$ per oz. / 31.10348)) + (Cu recovery / Au recovery) \\* (Cu % \\* Cu \$ per lb. \\* 22.0462) / (Au \$ per oz. / 31.10348)).*

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![qzm_20fimg33.jpg](qzm_20fimg33.jpg)

**Prodigy "Eye" Drill Hole Plan Map, showing historical, and Quartz's Phase 1 and 2 drill collar locations.** 

<u>Sale of Geological Data</u>

On November 2, 2021 the Company entered into a binding Agreement with Torr Resources Corp. ("Torr") whereby Torr agreed to purchase historical project data the Company had collected on the Galaxie Property for $150,000. The transaction was closed and cash payment was received on December 10, 2021.

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**D. ORGANIZATIONAL STRUCTURE**

The Company operates in a single reportable operating segment – the acquisition, exploration, and development of mineral property interests. The Company is currently focused on the acquisition and exploration of mineral property interests in Canada, and conducts most of its business affairs through its Canadian parent entity.

On March 2, 2023, the Company dissolved its two inactive wholly owned subsidiaries, QZMG Resources Ltd., a Nevada corporation who owns 100% interest in Wavecrest Resources Inc., a Delaware corporation.

**E. PROPERTY, PLANT AND EQUIPMENT**

The Company has no material tangible fixed assets, such as mining equipment or plant facilities.

**F. CURRENCY**

All currency amounts in this Annual Report are stated in Canadian dollars unless otherwise indicated (see <u>Item 3</u> for exchange rate information).

**ITEM 4A UNRESOLVED STAFF COMMENTS**

Not applicable.

**ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS** 

**OVERVIEW**

Effective May 27, 2020, the Company completed a forward share split (the "Share Split") on the basis of two additional common shares for every common share outstanding prior to the Share Split. Outstanding warrants were adjusted by the same share split ratio. All references to shares and per share amounts have been retroactively restated to give effect to the Share Split.

On March 2, 2023, the Company's only wholly owned subsidiaries, QZMG Resources Ltd. and Wavecrest Resources Inc. were dissolved.

The Company's financial statements are prepared on the basis that it will continue as a going concern. The Company has incurred losses since inception, and the ability of the Company to continue as a going concern depends upon its ability to continue to raise adequate financing and to develop profitable operations. Quartz Mountain's financial statements do not reflect adjustments, which could be material, to the carrying values of assets and liabilities, which may be required should the Company not be able to continue as a going concern.

The following discussion should be read in conjunction with the audited annual consolidated financial statements for the years ended July 31, 2025, 2024 and 2023 and the related notes accompanying this Annual Report. The Company prepares its financial statements in accordance with IFRS. The Company includes selected financial data prepared in compliance with IFRS without reconciliation to U.S. GAAP.

**CRITICAL ACCOUNTING POLICIES AND ESTIMATES**

The required disclosure is provided in note 2 of the accompanying audited financial statements as of and for the year ended July 31, 2024, which are presented in Exhibit 99.1 of this Annual Report on Form 20-F.

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**A. OPERATING RESULTS**

**Comprehensive income (loss) for the year ended July 31, 2025 vs. 2024**

The Company recorded loss from its operations of $3,560,819 during the current fiscal year (2024 – $2,542,646). The loss incurred in fiscal 2025 was higher compared to the loss incurred in fiscal 2024 due to the commencement of the delineation drilling program for the Maestro Project in British Columbia in late February 2025.

The total amount of exploration and evaluation expenditures incurred in the current fiscal year was $2,616,260 (2024 – 2,285,511). The Company commenced its 1,445 metres of core drilling in two holes of its Maestro property and the Jake Properties during the year ended July 31, 2024. As such, the total costs of exploration and evaluation were higher in the current fiscal year compared with the prior year.

The following table provides a breakdown of the exploration and evaluation expenses incurred:

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| | | |
|:---|:---|:---|
| Exploration and evaluation expenses | 2025 | 2024 |
| Assay and analysis | $212497 | $225954 |
| Drilling | 1487489 | 907694 |
| Engineering |  | 562 |
| Environmental | 8096 | 466 |
| Geological | 441570 | 284834 |
| Helicopter and fuel |  | 447828 |
| Property costs and assessments | 15669 | 1732 |
| Site activities | 406947 | 393350 |
| Socioeconomic |  | 2330 |
| Travel and accommodation | 43992 | 20761 |
| Total | $2616260 | $2285511 |

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The following table provides a breakdown of the administration costs incurred:

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| | | |
|:---|:---|:---|
| General and Administration costs | 2025 | 2024 |
| Administrative fees | $57934 | $52700 |
| Conference and travel | 405 | 705 |
| Insurance | 24929 | 23481 |
| IT Services | 33640 | 21120 |
| Legal, accounting and audit | 144183 | 58023 |
| Office and miscellaneous | 181072 | 37167 |
| Regulatory, trust and filing | 85654 | 63939 |
| Total | $527817 | $257135 |

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The total amount of general and administrative expenses increased in fiscal 2025 compared to that of fiscal 2024 due to all the related costs revolving around financing and increased field operations to explore the substantial Prodigy Discovery on the Maestro Project in British Columbia in April 2024.

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| Equity-settled share-based compensation | 2025 | 2024 |
| Total | $416742 | $- |

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The equity-settled share-based compensation incurred during the year ended July 31, 2025 was related to the two stock option grants to the consultants of the Company:

(1) the recognition of the share-based compensation for the grant of 500,000 stock options issued on January 15, 2025 with an exercise price of $0.435 and the expiry date on January 15, 2030;

(2) the recognition of the share-based compensation for the grant of 500,000 stock options issued on April 24, 2025 with an exercise price of $0.77 and the expiry date on April 24, 2028;

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**Comprehensive income (loss) for the year ended July 31, 2024 vs. 2023**

The Company recorded a loss from operations of $2,542,646 during the current fiscal year (2023 – income of $927,916). The loss incurred in fiscal 2024 was significantly higher compared to the loss incurred in fiscal 2023 was mainly due to increase level of exploration activities in the Maestro and Jake Properties.

The total amount of exploration and evaluation expenditures incurred in the current fiscal year was $2,285,511 (2023 - $96,479). As the Company has commenced exploration projects on the Maestro and Jake Properties during fiscal 2024, the total exploration and evaluation expenditures increased from prior year.

The following table provides a breakdown of the exploration and evaluation expenditures for the current and prior years:

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| | | |
|:---|:---|:---|
| Exploration and evaluation expenses | 2024 | 2023 |
| Assay and analysis | $225954 | $11845 |
| Drilling | 907694 |  |
| Engineering | 562 |  |
| Environmental | 466 | 4410 |
| Geological | 284834 | 70470 |
| Helicopter and fuel | 447828 | 6390 |
| Property costs and assessments | 1732 | 1646 |
| Site activities | 393350 | (10700) |
| Socioeconomic | 2330 | 12128 |
| Travel and accommodation | 20761 | 290 |
| Total | $2285511 | $96479 |

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The total amount of general and administrative expenses increased in fiscal 2024 compared to that of fiscal 2023 due to increased level of corporate development activities.

The following table provides a breakdown of the administration costs incurred:

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| | | |
|:---|:---|:---|
| General and Administration costs | 2024 | 2023 |
| Administrative fees | $52700 | $46359 |
| Conference and travel | 705 |  |
| Insurance | 23481 | 23968 |
| IT Services | 21120 | 12000 |
| Legal, accounting and audit | 58023 | 51818 |
| Office and miscellaneous | 37167 | 23920 |
| Regulatory, trust and filing | 63939 | 32512 |
| Total | $257135 | $190577 |

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**B. LIQUIDITY AND CAPITAL RESOURCES**

Historically, the Company's source of funding has been the issuance of equity securities for cash, primarily through private placements to mainly sophisticated investors and institutions. The Company continues evaluating mineral prospects for potential acquisition and exploration in British Columbia. The Company's continuing operations are dependent upon new projects, the ability of the Company to obtain the necessary financing to complete exploration of any new projects, the ability to obtain the necessary permits to explore, develop, and mine new projects, and the future profitable production of any mine. These material uncertainties raise substantial doubt on the ability of the Company to continue as a going concern.

At July 31, 2025, the Company had an accumulated deficit of $35,546,915 and has a working capital of $2,881,768.

In January 2016, the Company arranged with Hunter Dickinson Services Inc. ("HDSI") to settle debt owing for services provided by HDSI whereby HDSI would forgive debt in the net amount owing at that time of $3,086,089, if the Company made a cash payment of $180,207 and issued 1,800,000 shares (pre- forward split basis of 600,000 shares) to HDSI. The TSX Venture Exchange approved the transaction with HDSI, the cash payment has been made, and issuance of the shares to HDSI was executed in December 2019. Additional debt or equity financing will be required to fund exploration or development programs. However, there can be no assurance that the Company will continue to obtain additional financial resources or that it will be able to achieve positive cash flows.

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Financial market conditions for junior exploration companies have resulted in very depressed equity prices. A further and continued deterioration in market conditions will increase the cost of obtaining capital and significantly limit the availability of funds to the Company in the future. Accordingly, management is actively monitoring the effects of the current economic and financing conditions on the Company's business and reviewing discretionary spending, capital projects and operating expenditures, and implementing cash and cash management strategies.

**Capital Resources**

The Company had no material commitments for capital expenditures as at July 31, 2025.

The Company has no lines of credit or other sources of financing which have been arranged but are as of yet, unused.

At July 31, 2025, there were no externally imposed capital requirements to which the Company is subject and with which the Company has not complied.

**Requirement of Financing**

The Company is in the process of assessing mineral property interests held by third parties for potential acquisition. The Company's continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of these projects, obtaining the necessary permits to mine, on future profitable production of any mine and the proceeds from the disposition of the mineral property interests.

Additional debt or equity financing will be required to fund additional exploration or development programs. The Company has a reasonable expectation that additional funds will be available when necessary to meet ongoing exploration and development costs. However, there can be no assurance that the Company will continue to obtain additional financial resources and/or achieve profitability or positive cash flows, which raises substantial doubt on the ability of the Company to continue as a growing concern. If the Company is unable to obtain adequate additional financing, the Company will be required to re-evaluate its planned expenditures until additional funds can be raised through financing activities.

The Company has no "Purchase Obligations" defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

**C. RESEARCH EXPENDITURES**

Quartz Mountain does not carry out any research or development activities. Please refer to <u>Item 5A</u> and <u>Item 5B</u> above for a discussion of the expenditures that the Company has incurred in connection with its business activities.

**D. TREND INFORMATION**

The Company does not currently hold any properties.

**E. OFF – BALANCE SHEET ARRANGEMENTS**

Quartz Mountain has no off-balance sheet arrangements.

**F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS**

The following obligations existed at July 31, 2025:

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|  | Payments due by period | Payments due by period | Payments due by period | Payments due by period |
|  | Total | Less than 1 year | 1-5 years | After 5 years |
| Amounts payable and other liabilities | $266815 | $266815 | $– | $– |
| Due to a related party | 4459 | 4459 |  |  |
| Lease liability | 10169 | 10169 | – | – |
| Total | $281443 | $281443 | $– | $– |

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The Company has no material capital lease or operating lease obligations. The Company has no "Purchase Obligations", defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

**G. SAFE HARBOR**

The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act applies to forward-looking information provided pursuant to <u>Item 5E</u> and <u>Item 5F</u> above.

**ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

**A. DIRECTORS AND SENIOR MANAGEMENT** 

**Robert Dickinson, B.Sc., M.Sc. – Chairman**

Robert Dickinson is a mining executive who serves as a member of management of several mineral exploration companies, primarily those for whom Hunter Dickinson Services Inc. provides services. He holds a Bachelor of Science degree (Hons. Geology) and a Master of Science degree (Business Administration - Finance) from the University of British Columbia. Mr. Dickinson has been active in mineral exploration for over 45 years and was inducted into the Canadian Mining Hall of Fame in 2012. He is a director of Hunter Dickinson Services Inc. He is also President and Director of United Mineral Services Ltd., a private resource company. He is a former a Director of the BC Mining Museum and a former Trustee of the BC Mineral Resources Education Program.

Mr. Dickinson is, or was within the past five years, an officer and/or director of the following public companies:

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| | | | |
|:---|:---|:---|:---|
| Company | Positions Held | From | To |
| Amarc Resources Ltd.  | Director  | April 1993  | Present  |
| Amarc Resources Ltd.  | Chairman  | April 2004  | Present  |
| Heatherdale Resources Ltd.  | Director  | November 2009  | August 2020  |
| Northcliff Resources Ltd.  | Director  | June 2011  | May 2023  |
| Northern Dynasty Minerals Ltd.  | Director  | June 1994  | Present  |
| Northern Dynasty Minerals Ltd.  | Chairman  | April 2004  | Present  |
| Quartz Mountain Resources Ltd. | Director and Non-Executive Chairman  | May 2022  | Present  |
| Quartz Mountain Resources Ltd. | CEO  | May 2022  | April 2023  |
| Quartz Mountain Resources Ltd. | President and CEO  | December 2017  | February 2019  |
| Taseko Mines Limited  | Director  | January 1991  | Present  |

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**Albert Basile (1943) - Director**

Albert Basile graduated from the University of British Columbia with a Bachelor of Arts followed by a Juris Doctor degree. Over his career he practiced law, specializing in the areas of corporate commercial, civil litigation, and administrative law. He also was active as an officer and director of several private companies and served as a Commissioner on two former provincial commissions-the British Columbia Motor Carrier Commission and the British Columbia Horse Racing Commission.

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Mr. Basile is, or was within the past five years, a director of the following public companies:

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| | | | |
|:---|:---|:---|:---|
| Company | Positions Held | From | To |
| Quartz Mountain Resources Ltd. | Director | October 2022 | Present |

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**Michael Clark (1971) - Director**

Michael Clark is a corporate leader with strong communications, renewable energy, natural resource and capital markets experience. He is currently the CEO and Director of a TSX Venture Exchange-listed solar energy company and brings more than 20 years of experience to the Quartz Mountain team. Prior to his current role, he held positions as SVP Business Development for Finavera Wind Energy, public affairs professional for several Hunter Dickinson Inc.-associated public mining companies and a decade as a journalist. Myke holds an MBA from Simon Fraser University, British Columbia.

Mr. Clark is, or was within the past five years, a director and officer of the following public companies:

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| | | | |
|:---|:---|:---|:---|
| Company | Positions Held | From | To |
| Quartz Mountain Resources Ltd. | Director | June 2023 | Present |
| Solar Alliance Energy Inc | Director | February 2019 | Present |
| Solar Alliance Energy Inc | Officer | September 2015 | Present |
| Venzee Technologies | Director | December 2017 | October 2019 |

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**Matthew Dickinson (1997) – Director**

Matthew Dickinson is a McGill University graduate, where he studied Management of Information Systems and Computer Science. He is currently working as a Software Developer for Genesis Advanced Technology, a development stage industrial hardware company, and is consulting for Genesis Robotics where he builds software to support the firms commercialization efforts. Additionally he has background in early-stage venture financing and product strategy.

Mr. Dickinson is, or was within the past five years, a director of the following public companies:

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| | | | |
|:---|:---|:---|:---|
| Company | Positions Held | From | To |
| Quartz Mountain Resources Ltd. | Director | February 2019 | Present |

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**Trevor Thomas, LLB (1967), Corporate Secretary**

Trevor Thomas has practiced in the areas of corporate commercial, corporate finance, securities and mining law since 1995, both in a private practice environment as well as in in-house positions and is currently general counsel for Hunter Dickinson Inc. ("HDI"). Prior to joining HDI, he served as in- house legal counsel with Placer Dome Inc. Mr. Thomas is, or was within the past five years, an officer or director of the following public companies:

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| | | | |
|:---|:---|:---|:---|
| Company | Positions Held | From | To |
| Amarc Resources Ltd. | Secretary | February 2008 | Present |
| Electric Royalties Ltd. | Secretary | June 2020 | November 2021 |
| Heatherdale Resources Ltd. | Secretary | June 2013 | August 2020 |
| Badlands Resources Inc. (formerly Mineral Mountain Resources Ltd.) | Director | September 2016 | Present |
| Northcliff Resources Ltd. | Secretary | June 2011 | Present |
| Northern Dynasty Minerals Ltd. | Secretary | February 2008 | Present |
| Quadro Resources Ltd. | Director | July 2017 | Present |
| Quartz Mountain Resources Ltd. | Secretary | June 2013 | Present |
| Quartz Mountain Resources Ltd. | Chairman and CEO | February 2019 | May 2022 |
| Quartz Mountain Resources Ltd. | CEO | May 2023 | Present |
| Rathdowney Resources Ltd. | Secretary | March 2011 | Present |
| Re Royalties Ltd. | Secretary | November 2018 | October 2022 |
| Taseko Mines Limited | Secretary | July 2008 | Present |

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**Sebastian Tang, CPA CA (1976) – Chief Financial Officer**

Sebastian Tang is Chartered Professional Accountant (CPA CA) with more than 15 years of professional experience in accountancy and financial reporting. He previously held positions with professional services firms Ernst & Young providing financial auditing services to companies in Asia and the Americas.

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| | | | |
|:---|:---|:---|:---|
| Company | Positions Held | From | To |
| Amarc Resources Ltd. | Chief Financial Officer | July 2020 | September 2021 |
| CAT Strategic Metals Corp. | Chief Financial Officer | September 2021 | May 2024 |
| Quartz Mountain Resources Ltd. | Chief Financial Officer | August 2020 | Present |
| Lucky Minerals Inc. | Chief Financial Officer | May 2019 | March 2020 |
| Global Hemp Group | Chief Financial Officer | May 2020 | May 2022 |

---

**B. COMPENSATION**

During the Company's financial year ended July 31, 2025, the aggregate cash compensation paid or payable by the Company to its directors and senior officers was $1,050.

Trevor Thomas, Chairman and CEO, and Sebastian Tang, CFO, are each "Named Executive Officers" of the Company for the purposes of the following disclosure.

The compensation paid to the Named Executive Officers during the Company's most recently completed financial year is as set out below:

During the fiscal year ended July 31, 2025, the above named NEOs did not serve the Company solely on a full-time basis, and their compensation from the Company is allocated based on the estimated amount of time spent providing services to the Company.

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| | | | |
|:---|:---|:---|:---|
| Name and principal position | Fiscal year | Salary<br>($) | Total <br>compensation<br>($) |
| Trevor Thomas, CEO (1) | 2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12215 <br> Nil | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12215  |
| Trevor Thomas, CEO (1) | 2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7245 <br> Nil | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7245  |
| Trevor Thomas, CEO (1) | 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4139 <br> Nil | &nbsp;&nbsp;&nbsp;&nbsp; 4139  |
| Sebastian Tang, CFO (2) | 2025 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12000 <br> Nil | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12000  |
| Sebastian Tang, CFO (2) | 2024 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12000 <br> Nil | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12000  |
| Sebastian Tang, CFO (2) | 2023 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12000 <br> Nil | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12000  |

---

Note (1) Mr. Thomas replaced Mr. Dickinson as CEO on April 24, 2023

**Director Compensation**

The compensation provided to the directors, excluding a director who is already set out in disclosure for a NEO for the Company's most recently audited financial year ended July 31, 2025, is as set out below:

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| | | |
|:---|:---|:---|
| Name | Fees <br>earned(1)<br>($) | Total <br>($) |
| Albert Basile<sup>(1)</sup> | Nil | Nil |
| Michael Clark<sup>(1)</sup> | 10505<br> Nil | 10505 |
| Matthew Dickinson | Nil | Nil |
| Robert Dickinson<sup>(1)</sup> | Nil | Nil |

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Notes:

(1) These directors are members of the Audit Committee.

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**Pension and Retirement Benefits**

Neither the Company nor its subsidiary provides any pension, retirement, or similar benefits.

**C. BOARD PRACTICES**

On February 15, 2019, Robert Dickinson resigned as Executive Chairman and Trevor Thomas was appointed Chairman, President, and CEO, and Matthew Dickinson was appointed director. All directors have a term of office expiring at the next annual general meeting of the Company's shareholders. All officers have a term of office lasting until their removal or replacement by the Board of Directors. On May 31, 2022, Robert Dickinson replaced Trevor Thomas as Chairman and CEO, and Leonie Tomlinson replaced Trevor Thomas as President. In addition, on October 21, 2022 Albert Basile was appointed as a director (independent). On May 30, 2023, Trevor Thomas replaced Robert Dickinson as CEO and Leonie Tomlinson resigned as director and president. On June 28, 2023, Michael Clark was appointed as a director of the Company.

**Directors Service Contracts**

There is no written employment contract between the Company and any director.

There is no service contract between any director of the Company and the Company which provides for any benefits upon termination of employment.

**Audit Committee**

<u>Composition of Audit Committee</u>

The members of the Audit Committee are Albert Basile, Robert Dickinson and Michael Clark (Chair).

<u>Relevant Education and Experience</u>

As a result of their education and experience, each member of the Audit has familiarity with, an understanding of, or experience in the accounting principles used by the Company to prepare its financial statements, and the ability to assess the general application of those principles in connection with estimates, accruals and reserves; reviewing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company's financial statements; and an understanding of internal controls and procedures for financial reporting.

All members are experienced businesspersons with corporate finance experience. See disclosure under "A. Directors and Senior Management" above.

<u>Audit Committee's Charter</u>

The function of the Audit Committee is to oversee the employment and compensation of the Company's independent auditor, and other matters under the authority of the Committee. The Committee also assists the Board of Directors in carrying out its oversight responsibilities relating to the Company's financial, accounting, and reporting processes, the Company's system of internal accounting and financial controls, the Company's compliance with related legal and regulatory requirements, and the fairness of transactions between the Company and related parties.

The Audit Committee has a charter that sets out its mandate and responsibilities, which is contained in Appendix 6 of the Corporate Governance Policies and Procedures Manual (available for download from the Company's website under Corporate Governance at <u>www.quartzmountainresources.com</u>). The Audit Committee has the following responsibilities and authority:

<u>Relationship with Independent Auditor</u>

Subject to the law of British Columbia as to the role of the Shareholders in the appointment of independent auditors, the Committee shall have the sole authority to appoint or replace the independent auditor.

The Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.

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The independent auditor shall report directly to the Committee.

The Committee shall approve in advance all audit and permitted non-audit services with the independent auditor, including the terms of the engagements and the fees payable; provided that the Committee Chairman may approve services to be performed by the independent auditor between Committee meetings if the amount of the fee does not exceed $50,000, provided that any such approval shall be reported to the Committee at the next meeting thereof. The Committee may delegate to a subcommittee the authority to grant pre-approvals of audit and permitted non-audit services, provided that the decision of any such subcommittee shall be presented to the full Committee at its next scheduled meeting.

At least annually, the Committee shall review and evaluate the experience and qualifications of the lead partner and senior members of the independent auditor team.

At least annually, the Committee shall obtain and review a report from the independent auditor regarding:

· the independent auditor's internal quality-control procedures;

· any material issues raised by the most recent internal quality-control review, or peer review, of the auditor, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm;

· any steps taken to deal with any such issues; and

· all relationships between the independent auditor and the Company.

At least annually, the Committee shall evaluate the qualifications, performance, and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence.

The Committee shall ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit, the concurring partner responsible for reviewing the audit, and other audit partners as required by law.

The Committee shall consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.

The Committee shall recommend to the Board policies for the Company's hiring of employees or former employees of the independent auditor who were engaged on the Company's account or participated in any capacity in the audit of the Company.

The Committee shall oversee the implementation by management of appropriate information technology systems for the Company, including as required for proper financial reporting and compliance.

<u>Financial Statement and Disclosure Review</u>

The Committee shall review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be filed with applicable securities regulatory authorities and included in the Company's annual reports.

The Committee shall review and discuss with management (and, to the extent the Committee deems it necessary or appropriate, the independent auditor) the Company's quarterly financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether such financial statements should be filed with applicable securities regulatory authorities.

The Committee shall review and discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including the independent auditor's assessment of the quality of the Company's accounting principles, any significant changes in the Company's selection or application of accounting principles, any major issues as to the adequacy of the Company's internal controls over financial reporting, and any special steps adopted in light of material control deficiencies.

At least annually and prior to the publication of annual audited financial statements, the Committee shall review and discuss with management and the independent auditor a report from the independent auditor on:

· all critical accounting policies and practices used by the Company;

· all alternative accounting treatments of financial information that have been discussed with management since the prior report, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by the independent auditor, and an explanation of why the independent auditor's preferred method was not adopted; and,

· other material written communications between the independent auditor and management since the prior report, such as any management letter or schedule of unadjusted differences, the development, selection and disclosure of critical accounting estimates, and analyses of the effect of alternative assumptions, estimates or GAAP methods on the Company's financial statements.

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Prior to their filing or issuance, the Committee shall review the Company's Annual Information Form/Form 20-F, quarterly and annual earnings press releases, and other financial press releases, including the use of "pro forma" or "adjusted" non-GAAP information.

The Committee shall review and discuss with management the financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be specific or it may be in general regarding the types of information to be disclosed and the types of presentations to be made.

<u>Conduct of the Annual Audit</u>

The Committee shall oversee the annual audit, and in the course of such oversight, the Committee shall have the following responsibilities and authority:

The Committee shall meet with the independent auditor prior to the audit to discuss the planning and conduct of the annual audit, and shall meet with the independent auditor as may be necessary or appropriate in connection with the audit.

The Committee shall ascertain that the independent auditor is registered and in good standing with the Canadian Public Accounting Board and that the independent auditor satisfies all applicable independence standards. The Committee shall obtain from the auditor a written statement delineating all relationships between the auditor and the Company as per applicable independence standards, and review relationships that may impact the objectivity and independence of the auditor.

The Committee shall discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including:

· the adoption of, or changes to, the Company's significant auditing and accounting principles and practices as suggested by the independent auditor, internal auditors or management;

· the management letter provided by the independent auditor and the Company's response to that letter; and

· any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.

The Committee shall make such inquiries to the management and the independent auditor as the Committee members deem necessary or appropriate to satisfy themselves regarding the efficacy of the Company's financial and internal controls and procedures and the auditing process.

<u>Compliance and Oversight</u>

The Committee shall meet periodically with management and the independent auditor in separate executive sessions. The Committee may also, to the extent it deems necessary or appropriate, meet with the Company's investment bankers and financial analysts who follow the Company.

The Committee shall discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.

The Committee shall discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies, and regularly review the top risks identified by management and the policies and practices adopted by the Company to mitigate those risks.

If required, the Committee shall annually review with management and the independent auditor the disclosure controls and procedures and confirm that the Company (with CEO and CFO participation) has evaluated the effectiveness of the design and operation of the controls within 90 days prior to the date of filing of the AIF/Form 20-F. The Committee also shall review with management and the independent auditor any deficiencies in the design and operation of internal controls and significant deficiencies or material weaknesses therein, and any fraud involving management or other employees who have a significant role in the Company's internal controls. As a part of that review, the Committee shall review the process followed in preparing and verifying the accuracy of the required CEO and CFO annual certifications.

If required, the Committee shall annually review management's internal control report and the independent auditor's assessment of the internal controls and procedures prior to the filing of the AIF/Form 20-F.

The Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

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The Committee shall discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or reports that raise material issues regarding the Company's financial statements or accounting policies.

At least annually, the Committee shall meet with the Company's legal counsel and discuss any legal matters that may have a material impact on the financial statements or the Company's compliance policies.

The Committee shall oversee the preparation of reports relating to the Audit Committee as required under applicable laws, regulations, and stock exchange requirements.

The Committee shall exercise oversight with respect to anti-fraud programs and controls.

<u>Related Party Transactions</u>

The Committee shall review for fairness to the Company proposed transactions, contracts and other arrangements between the Company and its subsidiaries and any related party or affiliate, and make recommendations to the Board whether any such transactions, contracts and other arrangements should be approved or continued. The foregoing shall not include any compensation payable pursuant to any plan, program, contract, or arrangement subject to the authority of the Company's Compensation Committee.

As used herein the term "related party" means any officer or director of the Company or any subsidiary, or any shareholder holding a greater than 10% direct or indirect financial or voting interest in the Company, and the term "affiliate" means any person, whether acting alone or in concert with others, that has the power to exercise a controlling influence over the Company and its subsidiaries. "Related party" includes HDSI.

**D. EMPLOYEES**

At November 27, 2025, the Company had no employees and had contracted staff on an as-needed basis. The directors of the Company primarily administer the Company's functions through the employees of HDSI, a private company with certain directors in common with the Company (see <u>Item</u> <u>7 – "Major Shareholders and Related Party Transactions</u>").

**E. SHARE OWNERSHIP**

**Security Holdings of Directors and Senior Management**

As at November 27, 2025, the directors and officers of Quartz Mountain and their respective affiliates, directly and indirectly, own or control as a group an aggregate of 29,841,040 common shares or 42.61%.

As at November 27, 2025, the Company's directors and officers beneficially own the following number of the Company's common shares:

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| | | |
|:---|:---|:---|
| Name of Insider | Securities Beneficially Owned | As a % of outstanding common shares |
| Robert Dickinson | 22,968,185(Common Shares owned directly), 750,000 (Common Shares held by United<br>Mineral Services Ltd.), 2,100,000 Share purchase options) | 33.66% |
| Matthew Dickinson | 7,085,689(Common Shares), 2,100,000 (Share purchase options) | 10.12% |
| Michael Clark | 10,000 (Common Shares), 200,000 (Share purchase options) | 0.01% |
| Sebastian Tang | 200,000 (Share purchase options) | Nil |
| Trevor Thomas | 200,500 (Common Shares | Nil |
| Albert Basile | 10,000 (Common Shares), 200,000 (Share purchase options) | 0.01% |

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**ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

**A. MAJOR SHAREHOLDERS**

Quartz Mountain is a publicly held corporation, with its shares held by residents of Canada, the United States of America and other countries. To the best of Quartz Mountain's knowledge, person, corporation, or other entity beneficially owns, directly or indirectly, or controls more than 5% of the common shares of Quartz Mountain, the only class of securities with voting rights are disclosed in the table below. For these purposes, "beneficial ownership" means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security.

As of November 27, 2025, Quartz Mountain had authorized unlimited common shares without par value, of which 70,463,915 were issued and outstanding. The following table sets forth certain information with respect to beneficial ownership of the Company's common stock as of November 27, 2025, by each shareholder known to be the beneficial owner of more than 5% of the common stock.

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| | | |
|:---|:---|:---|
| Identity of Person or Group | Shares | Percentage Beneficially Owned of Class |
| Robert Dickinson | 22968185 | 32.60% |
| Matthew Dickinson | 7085689 | 10.06% |
| The Sutton Group, Inc. | 18700000 | 26.54% |

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All of the common shares have the same voting rights and no major shareholders of the Company have different voting rights.

**Geographic Breakdown of Shareholders**

As of July 31, 2025, Quartz Mountain's register of shareholders indicates that Quartz Mountain's common shares are held as follows:

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| | | | |
|:---|:---|:---|:---|
| Location | Number of registered <br>shareholders of record | Number of shares | Percentage of total shares |
| Canada | 161 | 64694194 | 92.89% |
| United States | 1476 | 2481457 | 3,56% |
| Other | 16 | 2472379 | 3.55% |
| Total | 1653 | 69648030 | 100% |

---

Shares registered in the names of intermediaries, were assumed to be held by residents of the same country in which the intermediary is located.

**Transfer Agent**

The Company's common shares are recorded on the books of its transfer agent, Computershare Investor Services Inc., located at 4<sup>th</sup> Floor, 510 Burrard Street, Vancouver, B.C. V6C 3B9; telephone (604) 661-9400 in registered form. However, the majority of the Company's common shares are registered in the name of intermediaries such as brokerage houses and clearinghouses (on behalf of their respective brokerage clients). Quartz Mountain does not have knowledge or access to the identities of the beneficial owners of such shares registered through intermediaries.

**Control**

To the best of its knowledge, the Company is not owned or controlled, directly or indirectly, by any other corporation, by any foreign government or by any other natural or legal person, severally or jointly, other than as noted above under Major Shareholders. There are no arrangements known to Quartz Mountain, which, at a subsequent date, may result in a change in control of the Company.

**Insider Reports under the Securities Acts of British Columbia, Alberta and Ontario**

Since the Company is a reporting issuer under the Securities Acts of British Columbia, Alberta and Ontario, certain "insiders" of the Company (including its directors, certain executive officers, and persons who directly or indirectly beneficially own, control or direct more than 10% of its common shares) are generally required to file insider reports of changes in their ownership of Quartz Mountain's common shares within five days following the trade under National Instrument 55-104 – Insider Reporting Requirements and Exemptions, as adopted by the CSA, and the Securities Act (Ontario). Copies of such reports are available for public inspection at the offices of the British Columbia Securities Commission, ninth Floor, 701 West Georgia Street, Vancouver, British Columbia V7Y 1L2, (604) 899-6500 or at the British Columbia Securities Commission web site, <u>www.bcsc.bc.ca</u>. In British Columbia, all insider reports must be filed electronically five days following the date of the trade at <u>www.sedi.ca</u>. The public is able to access these reports at <u>www.sedi.ca</u>.

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**B. RELATED PARTY TRANSACTIONS**

Except as disclosed herein, since the beginning of its last fiscal year ended July 31, 2025, Quartz Mountain has not:

(1) entered into any transactions which are material to Quartz Mountain, or a related party or any transactions unusual in their nature or conditions involving goods, services or tangible or intangible assets to which Quartz Mountain or any of its former subsidiaries was a party;

(2) entered into any transactions or loans between the Company and:

(a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, Quartz Mountain;

(b) associates of Quartz Mountain (unconsolidated enterprises in which Quartz Mountain has significant influence or which has significant influence over Quartz Mountain) including shareholders beneficially owning 10% or more of the outstanding shares of Quartz Mountain;

(c) individuals owning, directly or indirectly, an interest in the common shares of Quartz Mountain that gives them significant influence over Quartz Mountain, and close members of any such individual's family;

(d) key management personnel (persons having authority in responsibility for planning, directing and controlling the activities of Quartz Mountain including directors and senior management and close members of such individuals' families); or

(e) enterprises in which a substantial voting interest is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person is able to exercise significant influence.

**HDSI**

HDI and its wholly-owned subsidiary HDSI are private companies established by a group of mining professionals. HDSI provides contract services for a number of mineral exploration and development companies, and also to companies that are outside of the mining and mineral development space. The Company acquires services from a number of related and arms-length contractors, and it is at the Company's discretion that HDSI provides certain contract services.

The Company's Chief Executive Officer and Chairman, and Corporate Secretary are employees of HDSI and are contracted to work for the Company under an employee secondment agreement between the Company and HDSI.

The Company is not obligated to acquire any minimum amount of services from HDSI. The monetary amount of the services received from HDSI in a given period of time is a function of annually set and agreed charge-out rates for and the time spent by each HDSI employee engaged by the Company.

HDSI also incurs third-party costs on behalf of the Company. Such third party costs include, for example, directors and officers' insurance, travel, conferences, and communication services. Third- party costs are billed at cost, without markup.

There are no ongoing contractual or other commitments resulting from the Company's transactions with HDSI, other than the payment for services already rendered and billed. The agreement may be terminated upon 60 days' notice by either the Company or HDSI.

During the fiscal year ended July 31, 2025, the Company had transactions totaling $177,633 (2024 - $119,240; 2023 - $83,215) to HDSI for services and reimbursements of third party disbursements pursuant to this agreement.

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In January 2016, the Company and HDSI reached a settlement agreement whereby HDSI agreed to forgive the balance due to HDSI in the net amount of $3,086,089 if the Company completes the following:

· makes a cash payment of $180,207; and

· issues 1,800,000 shares (pre-forward split basis of 600,000 shares) valued at $126,000.

The cash payment of $180,207 was paid during the year ended July 31, 2018 and the shares were issued to HDSI during the year ended July 31, 2020, completing the settlement and resulting in a gain on settlement of debt of $2,779,882.

**United Mineral Services Inc. ("UMS")**

In December 2018, the Company entered into a loan agreement with United Mineral Services Ltd. (the "Lender"), a company owned by a former director, pursuant to which the Lender advanced to the Company a principal sum of $100,000 with a six-month term, at an interest rate of 10% per annum calculated monthly and payable quarterly. The principal amount and related interest were repaid during the year ended July 31, 2020.

The Company has entered into an agreement with UMS dated November 5, 2021 in connection with the acquisition of the Jake Property. UMS is controlled by Robert Dickinson, who is a significant shareholder of the Company. See Item 4 (c) Mineral Properties above.

During the year ended July 31, 2025, the Company paid $11,140 (2024 - $16,701) of service fees to UMS.

**C. INTERESTS OF EXPERTS AND COUNSEL**

Not applicable.

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**ITEM 8 FINANCIAL INFORMATION**

**A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION**

Quartz Mountain's audited consolidated annual financial statements as at and for the year ended July 31, 2025, 2024 and 2023 are attached in Exhibit 99.1 to this Annual Report.

**Legal Proceedings**

The Company is not, and has not been in the recent past, involved in any legal or arbitration proceedings, including governmental proceedings and those relating to bankruptcy, receivership, or similar proceedings.

**Dividend Policy**

The Company has not paid any dividends on its outstanding common shares since its incorporation and does not anticipate that it will do so in the foreseeable future. All funds of the Company are being retained for administration expenses and mineral property investigations.

**B. SIGNIFICANT CHANGES**

There have been no significant changes to the accompanying financial statements, except as disclosed in this Annual Report on Form 20-F.

**ITEM 9 THE OFFER AND LISTING**

**A. OFFER AND LISTING DETAILS** 

**Trading Markets**

The following tables set forth for the periods indicated the price history, rounded to nearest cent, of the Company's common shares on the TSX-V and on the OTC Grey Market:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | TSX-V | TSX-V | OTC | OTC |
| Fiscal year ended July 31 | High (CDN$) | Low (CDN$) | High (US$) | Low (US$) |
| 2025 | 0.80 | 0.34 | 0.41 | 0.03 |
| 2024 | 0.62 | 0.14 | 0.41 | 0.03 |
| 2023 | 0.30 | 0.20 | 0.21 | 0.015 |
| 2022 | 0.39 | 0.18 | 0.29 | 0.00 |
| 2021 | 0.31 | 0.12 | 0.19 | 0.10 |
| 2020 | 0.45 | 0.05 | 0.23 | 0.04 |
| 2019 | 0.27 | 0.09 | 0.23 | 0.08 |
| 2018 | 0.50 | 0.22 | 0.40 | 0.00 |
| 2017 | 0.04 | 0.13 | 0.23 | 0.07 |

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|  | TSX-V | TSX-V | OTC | OTC |
| Fiscal Quarter | High (CDN$) | Low (CDN$) | High (US$) | Low (US$) |
| Q4, 2025 | 0.80 | 0.58 | 0.70 | 0.35 |
| Q3, 2025 | 0.80 | 0.45 | 0.57 | 0.04 |
| Q2, 2025 | 0.52 | 0.34 | 0.40 | 0.04 |
| Q1, 2025 | 0.52 | 0.35 | 0.56 | 0.17 |
| Q4, 2024 | 0.59 | 0.40 | 0.41 | 0.15 |
| Q3, 2024 | 0.62 | 0.18 | 0.16 | 0.15 |
| Q2, 2024 | 0.26 | 0.14 | 0.16 | 0.06 |
| Q1, 2024 | 0.28 | 0.17 | 0.20 | 0.03 |

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|  | TSX-V | TSX-V | OTC | OTC |
| Month | High (CDN$) | Low (CDN$) | High (US$) | Low (US$) |
| October 2025 | 0.85 | 0.53 | 0.65 | 0.37 |
| September 2025 | 0.94 | 0.64 | 0.72 | 0.47 |
| August 2025 | 0.70 | 0.56 | 0.50 | 0.41 |
| July 2025 | 0.77 | 0.58 | 0.70 | 0.39 |
| June 2025 | 0.79 | 0.63 | 0.59 | 0.39 |
| May 2025 | 0.80 | 0.61 | 0.59 | 0.35 |

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**B. PLAN OF DISTRIBUTION**

Not applicable.

**C. MARKETS**

On December 30, 2011, the Company acquired a qualifying property and was relisted on the main board of the TSX Venture Exchange, trading under the symbol QZM. On August 20, 2025, the Company announced that its common shares have been uplisted from OTC Pink market to the OTCQB® Venture Market ("OTCQB") under the symbol QZMRF.

On February 17, 2005, the Company transferred its listing to NEX, a separate board of TSX-V and the Company's common shares traded on NEX under the symbol QZM.H.

Prior to February 17, 2005, the Company's common shares were listed and traded in Canada on Tier 2 on the TSX-V, under the symbol QZM.V. The transition to Tier 2 became effective December 23, 2003. Prior to this, the Company traded on Tier 3 on the TSX-V.

**D. SELLING SHAREHOLDERS**

Not applicable.

**E. DILUTION**

Not applicable.

**F. EXPENSES OF THE ISSUE**

Not applicable.

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**ITEM 10 ADDITIONAL INFORMATION**

**A. SHARE CAPITAL**

Not applicable.

**B. MEMORANDUM AND ARTICLES OF ASSOCIATION** 

**Articles of Association**

Quartz Mountain's original corporate constituting documents comprised of the Memorandum and Articles of Association were registered with the British Columbia Registrar of Companies under Corporation No. BC0253743. The Company's Memorandum and Articles have subsequently been replaced by a Notice of Articles and Articles under the Business Corporations Act (British Columbia) ("BCA"), and the Articles were last amended by shareholder resolution at the Company's Annual General Meeting, held on February 24, 2014. The Company's articles of incorporation do not contain a description or place any restrictions on the Company's objects and purposes. For more information, see the Articles of Amalgamation filed as Exhibit 10.1 to this Form 20-F.

<u>Certain Powers of Directors</u>

The Company's articles require that a director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the BCA.

The BCA requires that every director or senior officer who is a party to, or who is a director or officer of, or has a material interest in, any person who is a party to, a material contract or transaction or a proposed material contract or transaction with the Company, must disclose in writing to the Company or request to have entered in the minutes of a meeting or a consent resolution of directors, the nature and extent of his or her interest, and must refrain from voting in respect of the contract or transaction, unless the contract or transaction is: (a) one relating primarily to his or her remuneration as a director of the corporation or an affiliate; (b) one for indemnity of or insurance for directors as contemplated under the BCA; or (c) one with an affiliate of the Company. However, a director who is prohibited by the BCA from voting on a material contract or proposed material contract may be counted in determining whether a quorum is present for the purpose of the resolution, if the director disclosed his or her interest in accordance with the BCA and the contract or transaction was reasonable and fair to the corporation at the time it was approved.

The Company's Articles provide that the Board will from time to time determine the remuneration to be paid to the directors. The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company. The Board may also, by resolution, award special remuneration to any director for undertaking any professional or other services on the Company's behalf, outside than the ordinary duties of a director of the Company.

The Company's Articles provide that the directors may: (a) borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate; (b) issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as the directors consider appropriate; (c) guarantee the repayment of money by any other person or the performance of any obligation of any other person; and (d) mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

The directors may, by resolution, amend or repeal any articles that regulate the business or affairs of the Company. The BCA requires the directors to submit any such amendment or repeal to the Company's shareholders at the next meeting of shareholders, and the shareholders may confirm, reject, or amend the amendment or repeal.

The Board does not have a mandatory retirement policy for directors based solely on age. The Company has a practice of conducting annual Board, Committee, and individual director evaluations, pursuant to which each director's performance is evaluated annually. There is no minimum share ownership requirement for director's qualification.

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**Authorized Share Capital**

The Company's authorized share capital consists of an unlimited number of common shares without par value, and an unlimited number of preferred shares without par value.

All outstanding common shares of the Company are fully paid and non-assessable. The holders of the common shares are entitled to one vote per share at meetings of shareholders and to receive dividends if, as, and when declared by the directors of the Company. In the event of voluntary or involuntary liquidation, dissolution or winding-up of the Company, after payment of all outstanding debts, the remaining assets of the Company available for distribution would be distributed ratably to the holders of the common shares. Holders of the common shares of the Company have no pre- emptive, redemption, exchange, or conversion rights.

The preferred shares may be issued in series on such terms as determined by the Company's directors in accordance with the class rights and restrictions. The special rights and restrictions attaching to the preferred shares are set forth in Part 26 of the Articles, and provide the directors with wide latitude to create a series of preferred shares which may be convertible into common shares, and have attached to them rights that rank ahead of common shares in respect of entitlement to dividends. The directors may, by resolution, create, define, and attach special rights and restrictions to the shares of each series, subject to the special rights and restrictions attached to the preferred shares.

Except as described above, the Company may not create any class or series of shares or make any modification to the provisions attaching to the Company's shares without the affirmative vote of a majority of the votes cast by the holders of the common shares.

**Majority Voting Policy**

Under the Company's Corporate Governance Manual, in an uncontested director election, if the votes "for" the election of a director nominee at a meeting of shareholders are fewer than the number voted "withhold", the nominee is expected to submit his or her resignation promptly after the meeting for the consideration of the Nominating and Governance Committee. The Nominating and Governance Committee will make a recommendation to the Board of Directors after reviewing the matter, and the Board of Directors will then decide whether to accept or reject the resignation. The Board's decision to accept or reject the resignation will be disclosed to shareholders. The nominee will not participate in any Nominating and Governance Committee deliberations whether to accept or reject the resignation.

**Meetings of Shareholders**

The BCA requires the Company to call an annual shareholders' meeting not later than 15 months after holding the last preceding annual meeting and permits the Company to call a special shareholders' meeting at any time. In addition, in accordance with the BCA, the holders of not less than 5% of the Company's shares carrying the right to vote at a meeting sought to be held may requisition the directors to call a special shareholders' meeting for the purposes stated in the requisition. The Company is required to mail a notice of meeting and management information circular to registered shareholders not less than 21 days and not more than 2 months prior to the date of any annual or special shareholders' meeting. These materials are also filed with Canadian securities regulatory authorities and furnished to the SEC. The Company's articles provide that a quorum of two shareholders in person or represented by proxy holding or representing by proxy at least 10% of the Company's issued shares carrying the right to vote at the meeting is required to transact business at a shareholders' meeting. In addition to shareholders and their duly appointed proxies and corporate representatives, the Company's directors, president, secretary, lawyers, auditors, and invitees of the directors or chairperson, are entitled to be admitted to the Company's annual and special shareholders' meetings; provided that any such person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

**Disclosure of Share Ownership**

The Securities Act (British Columbia) and related regulations and policies currently provide that the directors and certain officers of an issuer and its subsidiaries and any person or company that beneficially owns, directly or indirectly, voting securities of an issuer or that exercises control or direction over voting securities of an issuer or a combination of both, carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities (a "significant shareholder"), as well as the directors and officers of any significant shareholder, (each an "insider") must, within 10 days of becoming an insider, file a report in the required form effective the date on which the person became an insider, disclosing any direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer. The Securities Act (British Columbia) and related regulations and policies also provide for the filing of a report by an insider of a reporting issuer who acquires or transfers securities of the issuer or who enters into, materially amends or terminates an arrangement the effect of which is to alter the insider's economic interest in a security of the issuer or the insider's economic exposure to the issuer. These reports must be filed within five days after the reportable event. The Securities Act (British Columbia) and related regulations and policies also require these reports to be filed by reporting insiders within five days after the applicable event, though are only required by the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, directors, any person or company responsible for a principal business unit and significant shareholders of the Company.

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The Securities Act (British Columbia) and related regulations and policies also provide that a person or company that acquires (whether or not by way of a take-over bid, offer to acquire or subscription from treasury) beneficial ownership of voting or equity securities or securities convertible into voting or equity securities of a reporting issuer that, together with previously held securities brings the total holdings of such holder to 10% or more of the outstanding securities of that class, must (a) issue and file forthwith a news release containing certain prescribed information and (b) file a report within two business days containing the same information set out in the news release. The acquiring person or company must also issue a news release and file a report each time it acquires, in the aggregate, an additional 2% or more of the outstanding securities of the same class and every time there is a change to any material fact in the news release and report previously issued and filed.

The rules in the United States governing the ownership threshold above which shareholder ownership must be disclosed are more stringent than those discussed above. Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), imposes reporting requirements on persons who acquire beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act) of more than 5% of a class of an equity security registered under Section 12 of the Exchange Act. In general, such persons must file, within ten days after such acquisition, a report of beneficial ownership with the SEC containing the information prescribed by the regulations under Section 13(d) of the Exchange Act and promptly file an amendment to such report to disclose any material change to the information reported, including any acquisition or disposition of 1% or more of the outstanding securities of the registered class. Certain institutional investors that acquire shares in the ordinary course of business and not with the purpose or with the effect of changing or influencing the control of the issuer are subject to lesser disclosure obligations.

**C. MATERIAL CONTRACTS**

Quartz Mountain's material contracts as of November 27, 2025, are:

· Corporate Services Agreement with HDSI, dated for reference July 2, 2010. <u>See Item 7B</u>;

**D. EXCHANGE CONTROLS**

Quartz Mountain is incorporated pursuant to the laws of the Province of British Columbia, Canada. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest, or other payments to a non-resident holder of common shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See <u>"Taxation"</u>, below.

There is no limitation imposed by Canadian law or by the charter or other constituent documents of the Company on the right of a non-resident to hold or vote Common Shares of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of "control" is generally defined as being one-third or more of the voting shares of the Company. "Non-Canadian" generally means an individual who is not a Canadian citizen or a permanent resident of Canada, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

**E. TAXATION**

**Certain Canadian Federal Income Tax Information for United States Residents**

The following summarizes the principal Canadian federal income tax considerations generally applicable to the holding and disposition of common shares of the Company by a holder (a) who, for the purposes of the Income Tax Act (Canada) the ("Tax Act"), is not resident in Canada or deemed to be resident in Canada, deals at arm's length and is not affiliated with the Company, holds the common shares as capital property and does not use or hold the common shares in the course of carrying on, or otherwise in connection with, a business in Canada, and (b) who, for the purposes of the Canada- United States Income Tax Convention (the "Treaty"), is a resident of the United States, has never been a resident of Canada, has not held or used (and does not hold or use) common shares in connection with a permanent establishment or fixed base in Canada, and who qualifies for the full benefits of the Treaty. The Canada Revenue Agency has recently introduced special forms to be used in order to substantiate eligibility for Treaty benefits, and affected holders should consult with their own advisors with respect to these forms and all relevant compliance matters.

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Holders who meet all such criteria in clauses (a) and (b) above are referred to herein as a "U.S. Holder" or "U.S. Holders", and this summary only addresses such U.S. Holders. The summary does not deal with special situations, such as particular circumstances of traders or dealers, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark- to-market provisions of the Tax Act apply), or entities considered fiscally transparent under applicable law, or otherwise.

This summary is based on the current provisions of the Tax Act and the regulations thereunder, all proposed amendments to the Tax Act and regulations publicly announced by the Minister of Finance (Canada) to the date hereof, the current provisions of the Treaty and our understanding of the current administrative practices of the Canada Revenue Agency. It has been assumed that all currently proposed amendments to the Tax Act and regulations will be enacted as proposed and that there will be no other relevant change in any governing law, the Treaty or administrative policy, although no assurance can be given in these respects. This summary does not take into account provincial, U.S., or other foreign income tax considerations, which may differ significantly from those discussed herein.

This summary is not exhaustive of all possible Canadian income tax consequences. It is not intended as legal or tax advice to any particular U.S. Holder and should not be so construed. The tax consequences to a U.S. Holder will depend on that U.S. Holder's particular circumstances. Accordingly, all U.S. Holders or prospective U.S. Holders should consult their own tax advisors with respect to the tax consequences applicable to them having regard to their own particular circumstances. The discussion below is qualified accordingly.

<u>Dividends</u>

Dividends paid or deemed to be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross dividend (or 5% in the case of a U.S. holder that is a corporate shareholder owning at least 10% of the Company's voting shares), provided the U.S. Holder can establish entitlement to the benefits of the Treaty.

<u>Disposition</u>

A U.S. Holder is generally not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a common share in the open market, unless the share is "taxable Canadian property" to the holder thereof and the U.S. Holder is not entitled to relief under the Treaty.

Provided that the Company's common shares are listed on a "designated stock exchange" for purposes of the Tax Act (which currently includes the TSX Venture) at the time of disposition, a common share will generally not constitute taxable Canadian property to a U.S. Holder unless, at any time during the 60 month period ending at the time of disposition, (i) the U.S. Holder or persons with whom the U.S. Holder did not deal at arm's length (or the U.S. Holder together with such persons) owned 25% or more of the issued shares of any class or series of the Company AND (ii) more than 50% of the fair market value of the share was derived directly or indirectly from certain types of assets, including real or immoveable property situated in Canada, Canadian resource properties or timber resource properties, and options, interests or rights in respect of any of the foregoing. Common shares may also be deemed taxable Canadian property under the Tax Act in certain specific circumstances. A U.S. Holder holding Common shares as taxable Canadian property should consult with the U.S. Holder's own tax advisors in advance of any disposition of Common shares or deemed disposition under the Tax Act in order to determine whether any relief from tax under the Tax Act may be available by virtue of the Treaty, and any related compliance procedures.

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**United States Federal Income Tax Consequences**

The Company believes it is likely a "passive foreign investment company" which may have adverse U.S. federal income tax consequences for U.S. shareholders.

U.S. shareholders should be aware that the Company believes it was classified as a passive foreign investment company ("PFIC") during the tax year ended July 31, 2024, and may be a PFIC in future tax years. If the Company is a PFIC for any year during a U.S. shareholder's holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of common shares, or any so-called "excess distribution" received on its common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective "qualified electing fund" election ("QEF Election") or a "mark-to-market" election with respect to the common shares. A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of the Company's net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. However, U.S. shareholders should be aware that there can be no assurance that the Company will satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. shareholders with information that such U.S. shareholders require to report under the QEF Election rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, U.S. shareholders may not be able to make a QEF Election with respect to their common shares. A U.S. shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer's basis therein. This paragraph is qualified in its entirety by the discussion below under the heading "Certain United States Federal Income Tax Considerations." Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

**Certain United States Federal Income Tax Considerations**

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares. Each prospective U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local and foreign tax consequences relating to the acquisition, ownership, and disposition of common shares.

No legal opinion from U.S. legal counsel or ruling from the Internal Revenue Service (the "IRS") has been requested, or will be obtained, regarding the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and the U.S. courts could disagree with one or more of the conclusions described in this summary.

<u>Scope of this Summary</u>

*Authorities*

This summary is based on the Internal Revenue Code of 1986, as amended (the "Code""), Treasury Regulations (whether final, temporary, or proposed), published rulings of the IRS, published administrative positions of the IRS, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the "Canada-U.S. Tax Convention"), and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document. Any of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change could be applied on a retroactive or prospective basis, which could affect the U.S. federal income tax considerations described in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive or prospective basis.

*U.S. Holders*

For purposes of this summary, the term "U.S. Holder" means a beneficial owner of common shares that is for U.S. federal income tax purposes:

· an individual who is a citizen or resident of the U.S.;

· a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia;

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an estate whose income is subject to U.S. federal income taxation regardless of its source; or

· a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

*Non-U.S. Holders*

For purposes of this summary, a "non-U.S. Holder" is a beneficial owner of common shares that is not a U.S. Holder. This summary does not address the U.S. federal income tax consequences to non-U.S. Holders arising from and relating to the acquisition, ownership, and disposition of common shares. Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences (including the potential application of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.

*U.S. Holders Subject to Special U.S. Federal Income Tax Rules Not Addressed*

This summary does not address the U.S. federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including, but not limited to, the following: (a) U.S. Holders that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are financial institutions, underwriters, insurance companies, real estate investment trusts, or regulated investment companies; (c) U.S. Holders that are broker-dealers, dealers, or traders in securities or currencies that elect to apply a mark-to-market accounting method; (d) U.S. Holders that have a "functional currency"" other than the U.S. Dollar; (e) U.S. Holders that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement involving more than one position; (f) U.S. Holders that acquired common shares in connection with the exercise of employee stock options or otherwise as compensation for services; (g) U.S. Holders that hold common shares other than as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment purposes); or (h) U.S. Holders that own or have owned (directly, indirectly, or by attribution) 10% or more of the total combined voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income tax considerations applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term residents of the U.S.; (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes of the Income Tax Act (Canada) (the "Tax Act"); (c) persons that use or hold, will use or hold, or that are or will be deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute "taxable Canadian property" under the Tax Act; or (e) persons that have a permanent establishment in Canada for the purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including, but not limited to, U.S. Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local and foreign tax consequences relating to the acquisition, ownership, and disposition of common shares.

If an entity or arrangement that is classified as a partnership (or other "pass-through" entity) for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such entity and the partners (or other owners) of such entity generally will depend on the activities of the entity and the status of such partners (or owners). This summary does not address the tax consequences to any such owner. Partners (or other owners) of entities or arrangements that are classified as partnerships or as "pass-through" entities for U.S. federal income tax purposes should consult their own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and disposition of common shares.

*Passive Foreign Investment Company Rules*

If the Company were to constitute a "passive foreign investment company" under the meaning of Section 1297 of the Code (a "PFI"", as defined below) for any year during a U.S. Holder's holding period, then certain potentially adverse rules will affect the U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition, ownership and disposition of common shares. The Company believes that it was classified as a PFIC during the tax year ended July 31, 2020, and may be a PFIC in future tax years. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition, whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status. Each U.S. Holder should consult its own tax advisor regarding the PFIC status of the Company and any subsidiary of the Company.

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In addition, in any year in which the Company is classified as a PFIC, such holder would be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. U.S. Holders should consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file an IRS Form 8621.

*PFIC Status of the Company*

The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the "income test") or (b) 50% or more of the value of the Company's assets either produce passive income or are held for the production of passive income, based on the quarterly average of the fair market value of such assets (the "asset test").""Gross income" generally includes all sales revenues less the cost of goods sold, and income from investments and from incidental or outside operations or sources, and "passive income" generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation's commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies regularly used or consumed in a trade or business and certain other requirements are satisfied.

For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and asset test described above, and assuming certain other requirements are met, "passive income" does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain "related person" (as defined in Section 954(d) (3) of the Code), to the extent such items are properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company's direct or indirect equity interest in any company that is also a PFIC (a ''Subsidiary PFI''), and will be subject to U.S. federal income tax on their proportionate share of (a) any "excess distributions"" as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on the sale or disposition of common shares. Accordingly, U.S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of common shares are made.

*Default PFIC Rules under Section 1291 of the Code*

If the Company is a PFIC for any tax year during which a U.S. Holder owns common shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether and when such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a "qualified electing fund"" or "QE"" under Section 1295 of the Code (a "QEF Election") or makes a mark-to-market election under Section 1296 of the Code (a "Mark-to-Market Election"). A U.S. Holder that does not make either a QEF Election or a Mark-to- Market Election will be referred to in this summary as a "Non-Electing U.S. Holder""

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the Code (described below) with respect to (a) any gain recognized on the sale or other taxable disposition of common shares and (b) any excess distribution received on the common shares. A distribution generally will be an "excess distribution" to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the average distributions received during the three preceding tax years (or during a U.S. Holder's holding period for the common shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any "excess distribution" received on common shares or with respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder's holding period for the respective common shares. The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as "personal interest"" which is not deductible.

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If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such common shares were sold on the last day of the last tax year for which the Company was a PFIC.

*QEF Election*

A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which its holding period of its common shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its common shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder's pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, "net capital gain" is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and "ordinary earning"" are the excess of (a)""earnings and profit"" over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will be treated as "personal interest"" which is not deductible.

A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents "earnings and profit"" of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder's tax basis in the common shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF Election will be treated as "timely" if such QEF Election is made for the first year in the U.S. Holder's holding period for the common shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder's holding period for the common shares, the U.S. Holder may still be able to make a timely and effective QEF Election in a subsequent year if such U.S. Holder meets certain requirements and makes a timely and effective election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold for their fair market value on the day the QEF Election is effective. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC for the QEF rules to apply to both PFICs.

A QEF Election will apply to the tax year for which such QEF Election is timely made and to subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.

U.S. Holders should be aware that there can be no assurances that the Company will satisfy the record keeping requirements that apply to a QEF, or that the Company will supply U.S. Holders with information that such U.S. Holders are required to report under the QEF rules, in the event that the Company is a PFIC. Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares. Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a QEF Election.

A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Company cannot provide the required information with regard to the Company or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules discussed above that apply to Non-Electing U.S. Holders with respect to the taxation of gains and excess distributions.

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*Mark-to-Market Election*

A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock. The common shares generally will be "marketable stock" if the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be "regularly trade"" for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar quarter.

A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax year of such U.S. Holder's holding period for the common shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common shares.

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holder's tax basis in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder's adjusted tax basis in the common shares, over (b) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust such U.S. Holder's tax basis in the common shares to reflect the amount included in gross income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over (b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years). Losses that exceed this limitation are subject to the rules generally applicable to losses provided in the Code and Treasury Regulations.

A Mark-to-Market Election applies to the tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares cease to be "marketable stock" or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisor regarding the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election will not be effective to eliminate the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC.

*Other PFIC Rules*

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are transferred.

Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

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Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

*Ownership and Disposition of Common Shares*

The following discussion is subject to the rules described above under the heading "Passive Foreign Investment Company Rules""

*Distributions on Common Shares*

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a common share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld from such distribution) to the extent of the current or accumulated earnings and profit of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC. To the extent that a distribution exceeds the current and accumulated earnings and profit of the Company, such distribution will be treated first as a tax- free return of capital to the extent of a U.S. Holder's tax basis in the common shares and thereafter as gain from the sale or exchange of such common shares. (See "Sale or Other Taxable Disposition of common share" below). However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will constitute ordinary dividend income. Dividends received on common shares generally will not be eligible for the "dividends" received deduction". In addition, the Company does not anticipate that its distributions will constitute qualified dividend income eligible for the preferential tax rates applicable to long-term capital gains. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor regarding the application of such rules.

*Sale or Other Taxable Disposition of Common Shares*

Upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the U.S. Dollar value of cash received plus the fair market value of any property received and such U.S. Holder's tax basis in such common shares sold or otherwise disposed of. A U.S. Holder's tax basis in common shares generally will be such holder's U.S. Dollar cost for such common shares. Gain or loss recognized on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the common shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under the Code.

*Additional Tax on Passive Income*

For tax years beginning after December 31, 2012, certain individuals, estates and trusts whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on net investment income including, among other things, dividends and net gain from dispositions of property (other than property held in a trade or business). U.S. Holders should consult with their own tax advisors regarding the effect, if any, of this tax on their ownership and disposition of common shares.

*Receipt of Foreign Currency*

The amount of any distribution paid to a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal to the U.S. Dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether such foreign currency is converted into U.S. Dollars at that time). A U.S. Holder will have a basis in the foreign currency equal to its U.S. Dollar value on the date of receipt. Any U.S. Holder who converts or otherwise disposes of the foreign currency after the date of receipt may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and generally will be U.S. source income or loss for foreign tax credit purposes. Each U.S. Holder should consult its own U.S. tax advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.

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*Foreign Tax Credit*

Subject to the PFIC rules discussed above, a U.S. Holder that pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the common shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian income tax. Generally, a credit will reduce a U.S. Holder's U.S. federal income tax liability on a Dollar-for-Dollar basis, whereas a deduction will reduce a U.S. Holder's income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder's U.S. federal income tax liability that such U.S. Holder's foreign source taxable income bears to such U.S. Holder's worldwide taxable income. In applying this limitation, a U.S. Holder's various items of income and deduction must be classified, under complex rules, as either foreign source or U.S. source. Generally, dividends paid by a foreign corporation should be treated as foreign source for this purpose, and gains recognized on the sale of stock of a foreign corporation by a U.S. Holder should be treated as U.S. source for this purpose, except as otherwise provided in an applicable income tax treaty, and if an election is properly made under the Code. However, the amount of a distribution with respect to the common shares that is treated as a dividend may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. The foreign tax credit rules are complex, and each U.S. Holder should consult its own U.S. tax advisor regarding the foreign tax credit rules.

*Backup Withholding and Information Reporting*

Under U.S. federal income tax law and Treasury Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement in, a foreign corporation. For example, recently enacted legislation generally imposes new U.S. return disclosure obligations (and related penalties) on individuals who are U.S. Holders that hold certain specified foreign financial assets in excess of $50,000. The definition of specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign entity. U.S. Holders may be subject to these reporting requirements unless their common shares are held in an account at a domestic financial institution. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares will generally be subject to information reporting and backup withholding tax, at the rate of 28% (and increasing to 31% for payments made after December 31, 2012), if a U.S. Holder (a) fails to furnish such U.S. Holder's correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax. However, certain exempt persons generally are excluded from these information reporting and backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder's U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in a timely manner. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding rules.

**F. DIVIDENDS AND PAYING AGENTS**

Not applicable.

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**G. STATEMENT BY EXPERTS**

Not applicable.

**H. DOCUMENTS ON DISPLAY**

Exhibits attached to this Form 20-F are also available for viewing on EDGAR at <u>http://www.sec.gov/</u>, or at the offices of the Company, 14<sup>th</sup> Floor–- 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1 or on request of the Company at 604-684-6365, attention: Investor Relations Department. Copies of the Company's IFRS financial statements and other continuous disclosure documents required under the British Columbia Securities Act are available for viewing on the internet at <u>www.sedar.com</u>.

**I. SUBSIDIARY INFORMATION**

Not applicable.

**ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**A. TRANSACTION RISK AND CURRENCY RISK MANAGEMENT**

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, inclusive of documented treasury policies, counterparty limits, and controlling and reporting structures.

**B. EXCHANGE RATE SENSITIVITY**

The Company incurs substantially all of its expenditures in Canada and substantially all of its cash is denominated in Canadian dollars. Consequently, the Company is not subject to material foreign exchange risk.

**C. INTEREST RATE RISK AND EQUITY PRICE RISK**

The Company is subject to interest rate risk with respect to its investments in cash. The Company's policy is to invest cash at fixed rates of interest and cash reserves are to be maintained in cash and cash equivalents in order to maintain liquidity, while achieving a satisfactory return for shareholders. Fluctuations in interest rates when the cash and cash equivalents mature impact interest income earned.

**D. COMMODITY PRICE RISK**

While the value of the Company's resource properties, if any, can always be said to relate to the price of precious metals and the outlook for same, the Company does not have any resource properties or operating mines and hence does not have any hedging or other commodity based operational risks respecting to its business activities.

**ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

Not applicable.

**ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

Not applicable.

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**ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

Not applicable.

**ITEM 15 CONTROLS AND PROCEDURES**

**A. DISCLOSURE CONTROLS AND PROCEDURES**

At the end of the period covered by this annual report on Form 20-F, an evaluation was carried out with the participation of the Company's management, including the Chief Executive Officer "CEO") and the Chief Financial Officer "CFO"), of the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a – 15(e) and 15d –15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Based on that evaluation, the CEO and the CFO have concluded that as of the end of the period covered by this annual report on Form 20-F, the Company's disclosure controls and procedures were effective in providing reasonable assurance that: (i) information required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) material information required to be disclosed in the Company's reports filed under the Exchange Act was accumulated and communicated to the Company's management, including the CEO and the CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

**B. MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING**

The Company's management, including the CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with IFRS. The Company's internal control over financial reporting includes those policies and procedures that:

· pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

· provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

· provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

With the participation of the CEO and CFO, management conducted an evaluation of the design and operation of the Company's internal control over financial reporting as of July 31, 2023, based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded in its report that the Company's internal control over financial reporting was effective as of July 31, 2025.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules that permit the Company to provide only management's report in this annual report.

**CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING**

During the period covered by this Annual Report on Form 20-F, no changes occurred in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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**LIMITATIONS OF CONTROLS AND PROCEDURES**

The Company's management, including its CEO and CFO, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

**ITEM 16 [RESERVED]**

**ITEM 16A AUDIT COMMITTEE FINANCIAL EXPERT**

The members of the Audit Committee are Albert Basile, Robert Dickinson and Michael Clark. The Board of Directors has determined that Mr. Clark qualifies as a "financial expert" under the rules of the Securities and Exchange Commission, based on his education and experience. Mr. Clark and Mr. Basile are "independent", as that term is defined in section 803 of the NYSE MKT Company Guide.

Each Audit Committee member is able to read and understand fundamental financial statements.

**ITEM 16B CODE OF ETHICS**

The Company's board of directors has adopted a written Code of Ethics governing directors, officers, and employees. The Code of Ethics sets forth written standards that are designed to deter wrongdoing and to meet the Company's core vision: to become a successful and innovative mining and mineral exploration corporation.

In order to achieve the Company's vision the following values are to be included in all activities:

· Responsibly explore for and develop mineral resources;

· Be respectful of the environment;

· Be an industry leader and participate in industry organizations devoted to improving the industry;

· Be a strong and honest competitor;

· Be a responsible corporate citizen and contribute to the community;

· Deal fairly with our customers, suppliers and joint venture participants;

· Provide a safe and rewarding work environment; and

· Deliver value to shareholders.

The board of directors monitors compliance with the Code of Ethics by ensuring that all Company personnel have read and understood the Code of Ethics, and by charging management with bringing to the attention of the board of directors any issues that arise with respect to the Code of Ethics.

A copy of the Code of Ethics will be filed with the Securities and Exchange Commission as an exhibit to the Company's Annual Report on this Form 20-F for the fiscal year ended July 31, 2025 and will be available at <u>www.sec.gov</u>. The Company will also provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent by mail to: 14th Floor, 1040 West Georgia Street, Vancouver, British Columbia, Canada, V6E 4H8; or submitted by telephone at 604-684-6365, attention: Investor Relations Department.

During the most recently completed fiscal year, the Company has neither: (a) amended its Code of Ethics; nor (b) granted any waiver (including any implicit waiver) form any provision of its Code of Ethics.

---

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**ITEM 16C PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table discloses the aggregate fees billed for each of the last fiscal year for professional services rendered by the Company's former audit firm, Davidson & Company LLP for various services and estimate audit fee for the newly appointed audit firm, DeVisser Gray LLP.

---

| | | |
|:---|:---|:---|
| Services: | Year ended | Year ended |
|  | July 31, 2025 | July 31, 2024 |
| Audit Fees <sup>(1)</sup> | $40,000(estimate) | $41000 |
| Audit Related Fees <sup>(2)</sup> | – | – |
| Tax Fees <sup>(3)</sup> | – | – |
| All Other Fees <sup>(4)</sup> | – | – |
| Total | $40,000(estimate) | $20000 |

---

Notes:

(1) "Audit Fees" include fees necessary to perform the annual audit and quarterly reviews of the Company's consolidated financial statements. Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits.

(2) "Audit-Related Fees" include services that are traditionally performed by the auditor. These audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation.

(3) "Tax Fees" include fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

(4) "All Other Fees" include fees billed for products and services provided by the principal accountant, other than the services reported in (1), (2), or (3) above.

From time to time, management of the Company recommends to and requests approval from the Audit Committee for non-audit services to be provided by the Company's auditors. The Audit Committee routinely considers such requests at committee meetings, and if acceptable to a majority of the Audit Committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company's auditors for such non-audit services, with set maximum dollar amounts for each itemized service. During such deliberations, the Audit Committee assesses, among other factors, whether the services requested would be considered "prohibited services" as contemplated by the SEC, and whether the services requested and the fees related to such services could impair the independence of the auditors. No material non-audit services were provided by the Company's auditors during the year ended July 31, 2024.

**ITEM 16D EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES**

Not applicable.

**ITEM 16E PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

During the year ended July 31, 2025, the Company did not purchase any of its issued and outstanding common shares pursuant to any repurchase program or otherwise.

**ITEM 16F CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**

None.

**ITEM 16G CORPORATE GOVERNANCE**

Not applicable.

---

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**ITEM 16H MINE SAFETY DISCLOSURE**

Not applicable.

**ITEM 17 FINANCIAL STATEMENTS**

Not applicable. See <u>Item 18</u>.

**ITEM 18 FINANCIAL STATEMENTS**

See Exhibit 99.1.

**ITEM 19 EXHIBITS**

The following Exhibits have been filed with the Company's Annual Report on Form 20-F in previous years:

---

| | | |
|:---|:---|:---|
| Exhibit Number | Description of Exhibit | Note |
| [1.1](http://www.sec.gov/Archives/edgar/data/811522/000106299306000061/exhibit1-1.htm) | [Transition Application dated October 11, 2005](http://www.sec.gov/Archives/edgar/data/811522/000106299306000061/exhibit1-1.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2005, filed on January 10, 2006. |
| [1.2](http://www.sec.gov/Archives/edgar/data/811522/000106299306000061/exhibit1-2.htm) | [Notice of Articles dated October 11, 2005](http://www.sec.gov/Archives/edgar/data/811522/000106299306000061/exhibit1-2.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2005, filed on January 10, 2006. |
| [1.3](http://www.sec.gov/Archives/edgar/data/811522/000106299306000061/exhibit1-3.htm) | [Notice of Alteration of Articles dated October 11, 2005](http://www.sec.gov/Archives/edgar/data/811522/000106299306000061/exhibit1-3.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2005, filed on January 10, 2006. |
| [1.4](http://www.sec.gov/Archives/edgar/data/811522/000106299307000320/exhibit1-1.htm) | [Notice of Alteration dated February 17, 2006](http://www.sec.gov/Archives/edgar/data/811522/000106299307000320/exhibit1-1.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2006, filed on January 29, 2007. |
| [1.5](http://www.sec.gov/Archives/edgar/data/811522/000106299307000320/exhibit1-2.htm) | [Notice of Articles dated February 17, 2006](http://www.sec.gov/Archives/edgar/data/811522/000106299307000320/exhibit1-2.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2006, filed on January 29, 2007. |
| [1.7](http://www.sec.gov/Archives/edgar/data/811522/000106299314006013/exhibit1-7.htm) | [Articles, as amended the Company's Annual General Meeting, held on February 24, 2014.](http://www.sec.gov/Archives/edgar/data/811522/000106299314006013/exhibit1-7.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2014, filed on October 17, 2014. |
| [4.2](http://www.sec.gov/Archives/edgar/data/811522/000106299310003459/exhibit4-5.htm) | [Services Agreement between HDI and the Company dated July 2, 2010](http://www.sec.gov/Archives/edgar/data/811522/000106299310003459/exhibit4-5.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2010, filed on October 29, 2010. |
| [6.1](http://www.sec.gov/Archives/edgar/data/811522/000106299312005201/exhibit6-1.htm) | [Stock Option Plan approved by Shareholders on March 15, 2012](http://www.sec.gov/Archives/edgar/data/811522/000106299312005201/exhibit6-1.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2012, filed on November 30, 2012. |
| [6.2](http://www.sec.gov/Archives/edgar/data/811522/000106299312005201/exhibit6-2.htm) | [Audit Committee Charter](http://www.sec.gov/Archives/edgar/data/811522/000106299312005201/exhibit6-2.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2012, filed on November 30, 2012. |
| [10.1](http://www.sec.gov/Archives/edgar/data/811522/000106299312005201/exhibit10-1.htm) | [Articles approved by Shareholders on March 15, 2012](http://www.sec.gov/Archives/edgar/data/811522/000106299312005201/exhibit10-1.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2012, filed on November 30, 2012. |
| [10.2](http://www.sec.gov/Archives/edgar/data/811522/000106299316011615/exhibit10-2.htm) | [Articles approved by Shareholders on February 24, 2014](http://www.sec.gov/Archives/edgar/data/811522/000106299316011615/exhibit10-2.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2016, filed on October 4, 2016. |

---

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---

---

| | | |
|:---|:---|:---|
| Exhibit Number | Description of Exhibit | Note |
| [11.1](http://www.sec.gov/Archives/edgar/data/811522/000106299316011615/exhibit11-1.htm) | [Settlement agreement between Bearclaw and HDSI dated January 15, 2016](http://www.sec.gov/Archives/edgar/data/811522/000106299316011615/exhibit11-1.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2016, filed on October 4, 2016. |
| [16B.](qzm_ex16b.htm) | [Code of Ethics and Trading Restrictions](qzm_ex16b.htm) | Incorporated by reference from our Annual Report on Form 20-F for the year ended July 31, 2025, to be filed with this Form 20-F. |

---

The following exhibits are filed with this Annual Report on Form 20-F:

---

| | |
|:---|:---|
| Exhibit Number | Description of Exhibit |
| [12.1](qzm_ex121.htm) | [Section 302 Certification of the Chief Executive Officer](qzm_ex121.htm) |
| [12.2](qzm_ex122.htm) | [Section 302 Certification of the Chief Financial Officer](qzm_ex122.htm) |
| [13.1](qzm_ex131.htm) | [Section 906 Certification of the Chief Executive Officer](qzm_ex131.htm) |
| [13.2](qzm_ex132.htm) | [Section 906 Certification of the Chief Financial Officer](qzm_ex132.htm) |
| [99.1](qzm_ex991.htm) | [Independent Auditor's Report, dated November 26, 2025;](qzm_ex991.htm)<br>Statements of financial position as at July 31, 2025, and July 31, 2024;<br>Statements of income (loss) and comprehensive income (loss) for the years ended July 31, 2025, July 31, 2024, and July 31, 2023; <br>Statements of cash flows for the years ended July 31, 2025, July 31, 2024, and July 31, 2023; and <br>Statements of changes in shareholders' equity (deficiency) for the years ended July 31, 2025, July 31, 2024, and July 31, 2023; <br>Notes to audited annual financial statements |

---

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**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

---

| |
|:---|
| QUARTZ MOUNTAIN RESOURCES LTD. |
| */s/ Trevor Thomas* |
| Trevor Thomas |
| Chief Executive Officer |

---

Dated: November 27, 2025

## Exhibit 12.1

**EXHIBIT 12.1**

SARBANES-OXLEY CEO CERTIFICATION

I, Trevor Thomas, Chief Executive Officer of Quartz Mountain Resources Ltd., certify that:

1. I have reviewed this Annual Report on Form 20-F of Quartz Mountain Resources Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting 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 generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and

5. The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the issuer's auditors and the audit committee of issuer's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.

Date: November 27, 2025

---

| | |
|:---|:---|
|  | */s/ Trevor Thomas* |
| By: | Trevor Thomas |
| Title: | Chief Executive Officer |

---

## Exhibit 12.2

**EXHIBIT 12.2**

SARBANES-OXLEY CEO CERTIFICATION

I, Sebastian Tang, Chief Financial Officer of Quartz Mountain Resources Ltd., certify that:

1. I have reviewed this Annual Report on Form 20-F of Quartz Mountain Resources Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting 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 generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer's internal control over financial reporting; and

5. The issuer's other certifying officer and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the issuer's auditors and the audit committee of issuer's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal control over financial reporting.

Date: November 27, 2025

---

| | |
|:---|:---|
|  | */s/ Sebastian Tang* |
| By: | Sebastian Tang |
| Title: | Chief Financial Officer |

---

## Exhibit 13.1

**EXHIBIT 13.1**

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Dickinson, Chief Executive Officer of Quartz Mountain Resources Ltd. (the "Company"), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Annual Report on Form 20-F of the Company for the fiscal year ended July 31, 2025 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 27, 2025

---

| | |
|:---|:---|
|  | */s/ Trevor Thomas* |
| By: | Trevor Thomas |
| Title: | Chief Executive Officer |

---

*This written statement is being furnished to the Securities and Exchange Commission as an exhibit to the Company's Annual Report on Form 20-F. A signed original of this statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.*

*This certification accompanies this Annual Report on Form 20-F pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.*

## Exhibit 13.2

**EXHIBIT 13.2**

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350, AS

ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Sebastian Tang, Chief Financial Officer of Quartz Mountain Resources Ltd. (the "Company"), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Annual Report on Form 20-F of the Company for the fiscal year ended July 31, 2025 (the "Annual Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 27, 2025

---

| | |
|:---|:---|
|  | */s/ Sebastian Tang* |
| By:  | Sebastian Tang |
| Title:  | Chief Financial Officer |

---

## Ex-16.B

**EXHIBIT 16B**

**CORPORATE GOVERNANCE POLICIES** 

**AND PROCEDURES MANUAL**

**March 19, 2018**

**QUARTZ MOUNTAIN RESOURCES LTD.** 

**(the "Company")**

**Corporate Governance Policies and Procedures Manual (the "Manual")**

**Amended Effective March 19, 2018**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **CORPORATE GOVERNANCE OVERVIEW AND GUIDELINES.**  | **CORPORATE GOVERNANCE OVERVIEW AND GUIDELINES.**  | **1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  | INTRODUCTION.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  | DIRECTOR RESPONSIBILITIES.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  | DIRECTOR QUALIFICATION STANDARDS.  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  | BOARD MEETINGS.  | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  | BOARD COMMITTEES.  | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  | DIRECTOR'S ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS.  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  | DIRECTOR COMPENSATION, STOCK OWNERSHIP AND STOCK TRADING.  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.  | DIRECTOR ORIENTATION AND CONTINUING EDUCATION.  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.  | MANAGEMENT EVALUATION AND SUCCESSION AND EXECUTIVE COMPENSATION.  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.  | CODE OF ETHICS.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.  | ANNUAL PERFORMANCE EVALUATION OF THE BOARD.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.  | BOARD INTERACTION WITH SHAREHOLDERS, INSTITUTIONAL INVESTORS, THE PRESS, CUSTOMERS, ETC.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.  | PERIODIC REVIEW OF THE CORPORATE GOVERNANCE GUIDELINES.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.  | ENHANCED SHAREHOLDER ENGAGEMENT.  | 8 |
| **APPENDIX 1 MATTERS REQUIRING BOARD APPROVAL (NON-DELEGATION POLICY).** | **APPENDIX 1 MATTERS REQUIRING BOARD APPROVAL (NON-DELEGATION POLICY).** | **1** |
| **APPENDIX 2 DIRECTOR INDEPENDENCE STANDARDS.**  | **APPENDIX 2 DIRECTOR INDEPENDENCE STANDARDS.**  | **1** |
| **APPENDIX 3 OUR COMMITMENTS.** | **APPENDIX 3 OUR COMMITMENTS.** | **1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  | HUMAN RESOURCES. | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  | HEALTH AND SAFETY. | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  | ENVIRONMENT.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  | COMMUNITY AND OTHER STAKEHOLDERS.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  | ETHICAL CONDUCT AND COMPLIANCE WITH LAW. | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  | WHAT TO DO.  | 3 |
| **APPENDIX 4 CODE OF ETHICS AND TRADING RESTRICTIONS.** | **APPENDIX 4 CODE OF ETHICS AND TRADING RESTRICTIONS.** | **1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  | AVOIDING QUESTIONABLE OR ILLEGAL PRACTICES.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  | HONESTY AND FAIR DEALING.  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  | POLICY TO PREVENT THE CORRUPTION OF PUBLIC OFFICIALS.  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  | CORPORATE OPPORTUNITIES AND DUTY OF LOYALTY.  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  | AVOIDING CONFLICTS OF INTEREST.  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  | GIVING OR ACCEPTING GIFTS.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.  | OUTSIDE ACTIVITIES.  | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.  | ACCOUNTING AND RECORDKEEPING, INTERNAL ACCOUNTING CONTROLS AND AUDITING MATTERS.  | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.  | USE OF COMPANY PROPERTY.  | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.  | PROPRIETARY INFORMATION. | 11 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.  | OUTSIDE IDEAS. | 12 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.  | DISCLOSURE POLICY. | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.  | SECURITIES TRANSACTIONS. | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.  | ADMINISTRATION AND DISTRIBUTION. | 17 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.  | REPORTING OF POSSIBLE VIOLATIONS OR OTHER QUESTIONABLE PRACTICES. | 17 |

---

---

| | | |
|:---|:---|:---|
| **APPENDIX 5 DISCLOSURE CONTROLS AND PROCEDURES POLICY.**  | **APPENDIX 5 DISCLOSURE CONTROLS AND PROCEDURES POLICY.**  | **1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  | INTRODUCTION.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  | APPLICATION.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  | SUPPLEMENT TO INTERNAL CONTROLS AND PROCEDURES.  | 2 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  | STATEMENT OF RESPONSIBILITY.  | 2 |
| **APPENDIX 6 AUDIT COMMITTEE CHARTER.**  | **APPENDIX 6 AUDIT COMMITTEE CHARTER.**  | **1** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.  | PURPOSE: RESPONSIBILITIES AND AUTHORITY.  | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.  | STRUCTURE AND MEMBERSHIP.  | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.  | PROCEDURES AND ADMINISTRATION.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.  | ADDITIONAL POWERS.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.  | LIMITATION OF COMMITTEE'S ROLE.  | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.  | COMMITTEE MEMBER INDEPENDENCE, FINANCIAL LITERACY AND FINANCIAL EXPERT REQUIREMENTS.  | 8 |
| **APPENDIX 7 POLICY ON ENGAGEMENT WITH SHAREHOLDERS ON GOVERNANCE MATTERS.**  | **APPENDIX 7 POLICY ON ENGAGEMENT WITH SHAREHOLDERS ON GOVERNANCE MATTERS.**  | **1** |

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**CORPORATE GOVERNANCE OVERVIEW AND GUIDELINES**

**1. Introduction**

The Board of Directors of the Company has adopted these Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities. The Board may modify or make exceptions to the Guidelines from time to time in its discretion and consistent with the duties and responsibilities owed to the Company and its shareholders.

**2. Director Responsibilities**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Oversee Management of the Company. The principal responsibility of the directors is to oversee the management of the Company in the best interests of the Company and its shareholders. This responsibility requires that the directors attend to the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. review and approve on a regular basis, and as the need arises, fundamental operating, financial, and other strategic corporate plans which take into account, among other things, the opportunities and risks of the business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. evaluate the performance of the Company, including the appropriate use of corporate resources;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. evaluate the performance of, and oversee the progress and development of, senior management and take appropriate action, such as promotion, change in responsibility and termination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. implement senior management succession plans;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. evaluate the Company's compensation programs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. establish a corporate environment that promotes timely and effective disclosure (including appropriate controls), fiscal accountability, high ethical standards and compliance with applicable laws and industry and community standards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. oversee the Company's auditing and financial reporting functions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. evaluate the Company's systems and business to identify and manage the risks faced by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. review and decide upon material transactions and commitments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. develop a corporate governance structure that allows and encourages the Board to fulfill its responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. provide assistance to the Company's senior management, including guidance on those matters that require Board involvement; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. evaluate the overall effectiveness of the Board and its committees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Exercise Business Judgment. In discharging their fiduciary duties of care, loyalty and candour, directors are expected to exercise their business judgment to act in what they reasonably and honestly believe to be the best interests of the Company and its shareholders free from personal interests. In discharging their duties, the directors normally are entitled to rely on the Company's senior executives, other employees believed to be responsible, and its outside advisors, auditors and legal counsel, but also should consider second opinions where circumstances warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Understand the Company and its Business. With the assistance of the Company, directors are expected to become and remain informed about the Company and its business, properties, risks and prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Establish Effective Systems. Directors are responsible for determining that effective systems are in place for the periodic and timely reporting to the Board on important matters concerning the Company. Directors should also provide for periodic reviews of the integrity of the Company's internal controls and management information systems.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Protect Confidentiality and Proprietary Information. Directors are responsible for establishing policies that are intended to protect the Company's confidential and proprietary information from unauthorized or inappropriate disclosure. Likewise, all discussions and proceedings of the Board of Directors must be treated as strictly confidential and privileged to preserve open discussions between directors and to protect the confidentiality of Board discussions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Board, Committee and Shareholder Meetings. Directors are responsible for adequately preparing for and attending Board meetings and meetings of committees on which they serve. They must devote the time needed, and meet as frequently as necessary, to properly discharge their responsibilities. Directors who reside in or near the city where the Company holds a shareholders' meeting are expected to make a reasonable effort to attend such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Indemnification. The directors are entitled to Company-provided indemnification through corporate articles and by-laws, corporate statutes, indemnity agreements and, when available on reasonable terms, directors' and officers' liability insurance.

**3. Director Qualification Standards**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Independence. The Board will ensure that it has at all times at least the minimum number of directors who meet applicable standards of director independence. For members of the Audit and Risk Committee, director independence is to be determined in accordance with those legal and stock exchange independence standards applicable to the Company's Audit and Risk Committee. For other purposes, the Board will, from time to time, establish independence standards that (i) comply with applicable legal and stock exchange requirements and (ii) are designed to ensure that the director does not have, directly or indirectly, a financial, legal or other relationship that, in the Board's judgment, would reasonably interfere with the exercise of independent judgment in carrying out the responsibilities of the director. The standards currently in effect are contained in Appendix 2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Size and Skills of Board. The Board believes that a Board comprised of 5 to 12 members is an appropriate size given the Company's present circumstances. The Board also will consider the competencies and skills that the Board, as a whole, should possess and the competencies and skills of each director.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Other Directorships. The Board does not believe that its members should be prohibited or discouraged from serving on boards of other organizations, and the Board does not propose any specific policies limiting such activities, providing they do not reduce a director's effectiveness or result in a continuing conflict of interest. However, the Board should take into account the nature of and time involved in a director's service on other boards in evaluating the suitability of individual directors in making its recommendations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Tenure. The Board does not believe it should establish director term or age limits. Such limits could result in the loss of directors who have been able to develop, over a period of time, significant insight into the Company and its operations and an institutional memory that benefits the Board as well as management. As an alternative to term and age limits, the Board will review each director's continuation on the Board annually. This will allow each director the opportunity to confirm his or her desire to continue as a member of the Board and allow the Company to replace directors where the Board makes a determination in that regard.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Selection of New Director Candidates. Except where the Company is legally required by contract, law or otherwise to provide third parties with the right to nominate directors, the Board will be responsible for identifying individuals qualified to become Board members, consistent with criteria approved by the Board,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Extending the Invitation to a New Director Candidate to Join the Board. An invitation to join the Board will be extended by the Chair of the Board when authorized by the Board.

**4. Board Meetings**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Selection of Agenda Items. The Chair of the Board shall propose an agenda for each Board meeting. Each Board member is free to request the inclusion of other agenda items and is generally free to request at any Board meeting the consideration of subjects that are not on the agenda for that meeting, although voting on matters so raised may be deferred to another meeting to permit proper preparation for a vote on an unscheduled matter (emergencies excepted).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Frequency and Length of Meetings. The Chair of the Board, in consultation with the members of the Board, will normally determine the frequency and length of Board meetings; however, the ultimate power in this regard rests with the plenary Board. Special meetings may be called from time to time as required to address the needs of the Company's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Advance Distribution of Materials. Information that is important to the Board's understanding of the business to be conducted at a Board or committee meeting will normally be distributed in writing to the directors reasonably before the meeting (with a goal of 7 calendar days) and directors should review these materials in advance of the meeting. Certain items to be discussed at a Board or committee meeting may be of a time-sensitive nature and the distribution of materials on these matters before the meeting may not be practicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Executive Session of Independent Directors**. An executive session of independent directors may be held following each meeting of the Board of Directors, at the discretion of the Independent Directors.

**5. Board Committees**

Committees. The Board will at all times have an Audit Committee. The Board may, from time to time, establish or maintain additional committees or subcommittees as it deems necessary. The Board may delegate any of its powers to committees of the Board, except that it may not delegate the powers to fill Board vacancies, remove a director, change the membership or fill vacancies in a Board Committee, or remove or appoint officers who are appointed by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Committee Charters. Each standing committee will have a charter that has been approved by the Board. The committee charters will set forth the purposes, goals and responsibilities of the committees. The Board will, from time to time as it deems appropriate, but at least annually, review and reassess the adequacy of each charter and make appropriate changes. Each charter must address those matters required by applicable laws and stock exchange rules. The Audit Committee charter is included in the appendix 6 to this Manual.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Assignment of Committee Members. The Board will be responsible for recommending persons to be appointed to the Audit Committee. The Audit Committee will have a minimum of three directors. Other committees shall have at least one member or the minimum number of members required by applicable law and the Company's charter documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Selection of Agenda Items. Each committee Chair, in consultation with the other committee members, will develop the committee's agenda.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Frequency of Committee Meetings. The Chair of each committee, in consultation with the other committee members, will determine the frequency of the committee meetings consistent with any requirements set forth in the committee's charter. Special meetings may be called by any member from time to time as required to address the needs of the Company's business and fulfill the responsibilities of the committees.

**6. Director's Access to Management and Independent Advisors**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Access to Officers and Employees. All directors have, at all reasonable times and on reasonable notice, full and free access to officers and employees of the Company. Any meetings or contacts that a director wishes to initiate should normally be arranged through the CEO or the CFO. The directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Company. The directors are normally expected to provide a copy or otherwise inform the CEO or CFO of any communication between a director and an officer or employee of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Access to Independent Advisors. The Board and each committee shall have the power to hire and consult with independent legal, financial or other advisors for the benefit of the Board or such committee, as they may deem necessary, without consulting or obtaining the approval of any officer of the Company. Such independent advisors may be the regular advisors to the Company. The Board or any such committee is empowered, without further action by the Company, to cause the Company to pay the appropriate compensation of such advisors as established by the Board or any such committee.

**7. Director Compensation, Stock Ownership and Stock Trading**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Role of Board. The form and amount of director compensation will be decided on and approved by the Board in accordance with the general principles set forth herein. The Board will also conduct an annual review of the compensation of the Company's directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Form of Compensation. The Board believes that directors should be provided with incentives to focus on long-term shareholder value. The Board believes that including equity options as part of director compensation helps align the interests of directors with those of the Company's shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Amount of Compensation. The Company seeks to attract exceptional talent to its Board. Therefore, the Company's policy is to compensate directors competitively relative to comparable companies. The Company's management will, from time to time, present a report to the Board comparing the Company's director compensation with that of comparable companies. The Board believes that it is appropriate for the Chair of the Board and the chair of the Audit Committee , if not members of management, to receive additional compensation for their additional duties in these positions. Directors who are also employees of the Company may receive additional compensation for Board or committee service if they are not already compensated at full industry rates in their capacities as employees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Compensation for Director Service by **Company Employee** While Serving on Other Boards of Directors. When any employee of the Company serves as a director of another company at the request of the Company or as the representative of the Company, that employee may not accept compensation from that other company for such service. If any such compensation is nonetheless received, it shall be received on behalf of and paid over to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Director Stock Ownership. The Board believes that each director should acquire and hold shares of Company stock in an amount that is meaningful to shareholders and appropriate to each such director. Therefore, the Board, in consultation with each director, will establish a target for stock ownership, including deferred share units, by each director and a time period during which this target is to be met. In general, stock and deferred share units having a value (measured by purchase price or basis of stock and value of deferred share units at the time credited or market value, whichever is greater) equal to three times annual base cash compensation is an appropriate level of ownership, to be acquired over a period of not more than five years. The Board will periodically review the targets to take into account market circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Stock Trading**. Prior to purchasing or selling shares of Company stock, directors must advise the CEO, CFO or counsel for the Company so as to avoid trading at a time when there may be undisclosed material information and so that Company Spokespersons will be aware of such transactions and be able to respond to questions regarding changes in share ownership from shareholders and others.

**8. Director Orientation and Continuing Education**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Director Orientation. The Board and the Company's senior management will conduct orientation programs for new directors as soon as possible after their appointment as directors. The orientation programs will include presentations by management to familiarize new directors with the Company's projects and strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its code of business conduct and ethics, its principal officers, its internal and independent auditors and its outside legal advisors. In addition, the orientation programs will include a review of the Company's expectations of its directors in terms of time and effort, a review of the directors' fiduciary duties and visits to Company headquarters and, to the extent practical, the Company's principal properties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Continuing Education. To enable each director to better perform his or her duties and to recognize and deal appropriately with issues that arise, the Company will provide the directors with suggestions to undertake continuing director education, the cost of which will be borne by the Company. The Company will periodically schedule site visits by directors to the Company's principal properties.

**9. Management Evaluation and Succession and Executive Compensation**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Selection of CEO. The Board selects the Company's CEO in the manner that it determines to be in the best interests of the Company. The Board, together with the CEO, will develop a clear position description for the CEO. The board will also develop the corporate goals and objectives that the CEO is responsible for meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Evaluation of Senior Management. The Board will be responsible for overseeing the evaluation of the performance of the CEO and other members of senior management. The Board will determine the nature and frequency of the evaluation, supervise the conduct of the evaluation and prepare an assessment of the performance of the CEO.. The Board will review the assessment to ensure that the CEO is providing the best leadership for the Company over the long- and short-term. The Board will also discuss the recommendations of the CEO with regards to the compensation of the other members of senior management.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Succession of Senior Management. The Board will be responsible for overseeing an annual evaluation of senior management succession planning.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Expectations of Senior Management. The Board will establish, and review on an annual basis, its expectations for senior management generally.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Executive Compensation. Compensation of the CEO must be determined by the Board. The CEO must not be present during voting or deliberations. Compensation for all other members of senior management must be determined by the Board.

**10. Code of Ethics**

The Board of Directors, will adopt and maintain a Code of Ethics that will apply to the employees, officers and directors of the Company.

**11. Annual Performance Evaluation of the Board**

The Board will oversee an annual self-evaluation of the Board to determine whether it and its committee are functioning effectively. The Board will determine the nature of the evaluation, supervise the conduct of the evaluation, prepare an assessment to be discussed by the Board.

**12. Board Interaction with Shareholders, Institutional Investors, the Press, Customers, etc.**

The Board believes that the CEO and his or her designees should normally speak for the Company. Individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company. However, it is expected that Board members would do so with the knowledge of and, absent unusual circumstances, only at the request of the CEO.

The Board will give appropriate attention to written communications that are submitted by shareholders and other interested parties, and will respond if and as appropriate. Absent unusual circumstances, the Chair of the Board monitors communications from shareholders and other interested parties, and will provide copies or summaries of such communications to the other directors as he or she considers appropriate.

**13. Periodic Review of the Corporate Governance Guidelines**

The Board will, from time to time, review and reassess the adequacy of these Guidelines and consider any proposed changes.

**14. Enhanced Shareholder Engagement**

The Board of directors believes that regular and constructive engagement between the Board and the Company's shareholders on governance matters is of primary importance. Accordingly, the Board has adopted a Policy On Engagement With Shareholders On Governance Matters reflecting the foregoing, a copy of which is attached as Appendix 7.

General: The Company will ensure that a current version of the Governance Manual, inclusive of the Index, is posted on the Company's website.

**APPENDIX 1**

**MATTERS REQUIRING BOARD APPROVAL (NON-DELEGATION POLICY)**

This Policy identifies items that must be approved by the Board or a committee of the Board and are not delegated to management without Board approval. A general overriding consideration is that the directors are required under law to manage, or supervise the management of, the business and affairs of the Company. Accordingly, even if an action might fall outside these guidelines, management should consider whether the matter, nevertheless, should be referred to the Board for consideration.

The following is a list of items that officers must refer to the Board, or an appropriate committee thereof, for consideration. Under these guidelines, the "Threshold Amount" is equal to $1,500,000 and an "Out of Budget Transaction" is a transaction that exceeds the Threshold Amount and that is not otherwise already part of the Company's approved operating budget.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The approval of annual corporate budgets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The approval of all financial information and other disclosure documents that are required by law to be approved by the Board before they are released to the public.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Allotment of any securities. This includes shares, options, warrants or other convertible or debt securities, and the payment of a commission to any person as consideration for purchasing securities of the Company or providing purchasers for any such securities. Securities may be issued by executive officers where previously allotted by the Board (e.g. exercise of previously allotted options and warrants).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Entering into transactions of a fundamental nature such as amalgamations, mergers and material acquisitions or dispositions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Agreeing to redeem, purchase or otherwise acquire any of the Company's shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Entering into any agreement or commitment to acquire or dispose of assets that are material to the Company including, but not limited to, those that are an Out of Budget Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Entering into, or making a material modification of, any agreement or commitment to become liable for any indebtedness, including the granting of a guarantee or similar standby obligation, if (a) the amount of such indebtedness is an Out of Budget Transaction or (b) any assets of the Company are made subject to a security interest in an Out of Budget Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Committing to making any capital expenditure which is an Out of Budget Transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Entering into any contract, agreement or commitment out of the ordinary course of business if such agreement involves a commitment of financial resources which exceeds the Threshold Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Adoption of hedging policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11. Entering into any agreement with an officer, director or 10% shareholder of the Company or any parent or subsidiary of the Company outside of the ordinary course of business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12. Entering into or amending any agreement with Hunter Dickinson Services Inc. ("HDSI"), and entering into a transaction with any "related party" or any entity in which HDSI and/or its principals is a "related party", as such term is defined in MI 61-101 Protection of Minority Security Holders in Special Transactions, in addition to any requirements imposed by applicable securities laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13. Terminating, suspending or significantly modifying any material business activity or business strategy of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14. Undertaking a new business activity that requires an allocation of resources that exceed the Threshold Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15. Making any material change to a business or strategic plan that has been approved by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16. Initiating or settling any legal proceeding involving a payment that may exceed the Threshold Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17. Employing or terminating the Company's independent auditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18. Hiring or terminating the employment, or determining the compensation, of any person who is an executive officer of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19. Offering any material employment or consulting terms to any individual or entity which are not customary for the Company. This determination is to be made by reference to terms of employment or consultancy that have generally been offered to other employees or consultants in similar positions or with similar status.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20. The approval of a request by the CEO or the CFO of the Company to serve on the board of another entity, other than not-for-profit entities or family businesses that in no material way compete with the Company or do any material business with the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21. Any other matter specified by the Board as requiring its prior approval.

**APPENDIX 2**

**DIRECTOR INDEPENDENCE STANDARDS**

The following standards are to be used in determining whether a director is "independent" for purposes of determining independence from Management, including for determination of independence in selecting members of Board committees. These standards have been prepared by Canadian Securities Regulators and the Toronto Stock Exchange. To be independent, a director must meet the requirements of all of the standards. Notwithstanding the foregoing, no director qualifies as an independent director unless the Board of Directors affirmatively determines that the director does not have a relationship with the Company that would interfere with the exercise of independent judgment.

This governance manual also uses the term "outside" director. An outside director is a director who is not independent under the applicable standards but who does not have full-time (or substantially full-time) employment with the Company or a remunerated consulting services relationship of a similar nature. For greater certainty, an outside director may be classified as outside but may not be independent where, for instance, that person owns (or represents a shareholder who owns) more than 10% of the Company's shares.

**Sections 1.4 and 1.5 of National Instrument 52-110**

**1.4 Meaning of Independence**

(1) An audit committee member is independent if he or she has no direct or indirect material relationship with the issuer.

(2) For the purposes of subsection (1), a "material relationship" is a relationship which could, in the view of the issuer's board of directors, be reasonably expected to interfere with the exercise of a member's independent judgment.

(3) Despite subsection (2), the following individuals are considered to have a material relationship with an issuer:

(a) an individual who is, or has been within the last three years, an employee or executive officer of the issuer;

(b) an individual whose immediate family member is, or has been within the last three years, an executive officer of the issuer;

(c) an individual who:

(i) is a partner of a firm that is the issuer's internal or external auditor,

(ii) is an employee of that firm, or

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| | | |
|:---|:---|:---|
|  | (iii) | was within the last three years a partner or employee of that firm and personally worked on the issuer's audit within that time; |
| (d)  | an individual whose spouse, minor child or stepchild, or child or stepchild who shares a home with the individual: | an individual whose spouse, minor child or stepchild, or child or stepchild who shares a home with the individual: |
|  | (i)  | is a partner of a firm that is the issuer's internal or external auditor, |
|  | (ii) | is an employee of that firm and participates in its audit, assurance or tax compliance (but not tax planning) practice, or |
|  | (iii)  | was within the last three years a partner or employee of that firm and personally worked on the issuer's audit within that time; |
| (e)  | an individual who, or whose immediate family member, is or has been within the last three years, an executive officer of an entity if any of the issuer's current executive officers serves or served at that same time on the entity's compensation committee; and | an individual who, or whose immediate family member, is or has been within the last three years, an executive officer of an entity if any of the issuer's current executive officers serves or served at that same time on the entity's compensation committee; and |
| (f)  | an individual who received, or whose immediate family member who is employed as an executive officer of the issuer received, more than $75,000 in direct compensation from the issuer during any 12 month period within the last three years. | an individual who received, or whose immediate family member who is employed as an executive officer of the issuer received, more than $75,000 in direct compensation from the issuer during any 12 month period within the last three years. |
| (4)  | Despite subsection (3), an individual will not be considered to have a material relationship with the issuer solely because: | Despite subsection (3), an individual will not be considered to have a material relationship with the issuer solely because: |
| (a)  | he or she had a relationship identified in subsection (3) if that relationship ended before March 30, 2004; or | he or she had a relationship identified in subsection (3) if that relationship ended before March 30, 2004; or |
| (b)  | he or she had a relationship identified in subsection (3) by virtue of subsection (8) if that relationship ended before June 30, 2005. | he or she had a relationship identified in subsection (3) by virtue of subsection (8) if that relationship ended before June 30, 2005. |
| (5)  | For the purposes of clauses (3)(c) and (3)(d), a partner does not include a fixed income partner whose interest in the firm that is the internal or external auditor is limited to the receipt of fixed amounts of compensation (including deferred compensation) for prior service with that firm if the compensation is not contingent in any way on continued service. | For the purposes of clauses (3)(c) and (3)(d), a partner does not include a fixed income partner whose interest in the firm that is the internal or external auditor is limited to the receipt of fixed amounts of compensation (including deferred compensation) for prior service with that firm if the compensation is not contingent in any way on continued service. |
| (6)  | For the purposes of clause (3)(f), direct compensation does not include: | For the purposes of clause (3)(f), direct compensation does not include: |
| (a)  | remuneration for acting as a member of the board of directors or of any board committee of the issuer, and | remuneration for acting as a member of the board of directors or of any board committee of the issuer, and |
| (b)  | the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the issuer if the compensation is not contingent in any way on continued service. | the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the issuer if the compensation is not contingent in any way on continued service. |

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| | |
|:---|:---|
| (7)  | Despite subsection (3), an individual will not be considered to have a material relationship with the issuer solely because the individual or his or her immediate family member |
| (a) | has previously acted as an interim chief executive officer of the issuer, or |
| (b) | acts, or has previously acted, as a chair or vice-chair of the board of directors or of any board committee of the issuer on a part-time basis. |
| (8)  | For the purpose of section 1.4, an issuer includes a subsidiary entity of the issuer and a parent of the issuer. |
| **1.5 Additional Independence Requirements**  | **1.5 Additional Independence Requirements**  |
| (1) | Despite any determination made under section 1.4, an individual who |
| (a)  | accepts, directly or indirectly, any consulting, advisory or other compensatory fee from the issuer or any subsidiary entity of the issuer, other than as remuneration for acting in his or her capacity as a member of the board of directors or any board committee, or as a part- time chairperson or vice-chairperson of the board or any board committee; or |
| (b)  | is an affiliated entity of the issuer or any of its subsidiary entities; |
| (c)  | is considered to have a material relationship with the issuer. |
| (2)  | For the purposes of subsection (1), the indirect acceptance by an individual of any consulting, advisory or other compensatory fee includes acceptance of a fee by: |
| (a)  | an individual's spouse, minor child or stepchild, or a child or stepchild who shares the individual's home; or |
| (b)  | an entity in which such individual is a partner, member, an officer such as a managing director occupying a comparable position or executive officer, or occupies a similar position (except limited partners, non-managing members and those occupying similar positions who, in each case, have no active role in providing services to the entity) and which provides accounting, consulting, legal, investment banking or financial advisory services to the issuer or any subsidiary entity of the issuer. |
| (3)  | For the purposes of subsection (1), compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the issuer if the compensation is not contingent in any way on continued service. |

---

**Toronto Stock Exchange Company Manual Section 311**

An independent director is defined as a person who:

a) is not a member of management and is free from any interest and any business or other relationship which in the opinion of the Exchange could reasonably be perceived to materially interfere with the director's ability to act in the best interest of the company; and

b) is a beneficial holder, directly or indirectly, or is a nominee or associate of a beneficial holder, collectively of 10% or less of the votes attaching to all issued and outstanding securities of the company.

The Exchange will consider all relevant factors in assessing the independence of the director. As a general rule, the following persons would not be considered an independent director:

i) a person who is currently, or has been within the past three years, an officer, employee of or service provider to the company or any of its subsidiaries or affiliates; or

ii) a person who is an officer, employee or controlling shareholder of a company that has a material business relationship with the company.

**APPENDIX 3**

**OUR COMMITMENTS**

**1. Human Resources**

We are committed to having an employment environment that is supportive and that demonstrates the value that we place on teamwork and individual contributions. We expect all of our employees to treat their fellow employees with the courtesy, dignity and respect that they would like to receive. An integral part of that policy is that the Company does not practice or permit discrimination against any person because of race, colour, religion, national origin, sex, sexual orientation, age or disability. We are also committed to having a friendly workplace that is free of harassment, intimidation and hostility. Not only is it the law; it is good practice.

We are committed to treating all of our employees fairly. To that end, we encourage our employees to confer with the appropriate person if they have employment related issues that they believe should be addressed.

We want to be known as the employer of choice in every community in which we operate.

**2. Health and Safety**

We are committed to having work sites that are healthy and safe. We expect all of our employees to comply with all applicable health and safety requirements and policies. The health and safety of all of our employees, and all who come in contact with our company locations, is paramount. In addition to following all applicable laws and company safety policies, we expect all of our employees to use common sense in matters involving health and safety. We are committed to the policy that it is always better to be safe than sorry!

**3. Environment**

(i) We are committed to standards of excellence in our environmental practices. We will meet all legal requirements applicable to our activity. Where feasible, we will exceed the legal requirements. Where there are no applicable legal standards, we will apply responsible practices. To this end, we expect our employees to (1) comply with applicable environmental requirements, (2) seek guidance when they are unsure of the standards, (3) consider what extra steps we may follow to enhance our environmental performance, and (4) report violations or suspected violations to the appropriate persons.

**4. Community and Other Stakeholders**

We are committed to maintaining the best possible relationships with the communities in which we operate. We cannot function as a company unless we are accepted in the communities in which we operate, and we cannot be accepted in our communities unless we act responsibly toward our neighbours and those who are impacted by our activity. We must remember that in many instances we are guests in the community and that, if we eventually leave, the community and its members will remain in place. If we are to be welcomed in other communities in the future, it is imperative that we leave a legacy of good will in those places where we have conducted business in the past. The Company's policy is to make positive contributions to the communities in which we operate, including encouragement of local employment in our operations and financial contributions to an appropriate extent, so that the community is enriched by our presence. We also encourage all of our employees to participate in community activity.

Our suppliers and customers are critical to our success in many ways. We are committed to maintaining honest and mutually beneficial relationships with our suppliers and customers. We expect to be treated fairly by our suppliers and customers, and our suppliers and customers are entitled to the same treatment from us. Our reputation for fair dealing will serve to benefit us whenever and wherever we engage in business.

Our relationships with governmental entities can be especially important in our success as a company. We are committed to dealing in an honest and forthright manner with all governmental entities with which we have relationships. While we will exercise and protect our legal rights, we will also cooperate with all governmental entities in recognition of our civic duties.

Our employees make our Company successful in many ways. We recognize their participation and importance through our commitments to human resources and health and safety.

Our shareholders are our most important stakeholders. As the owners of the Company, they have entrusted us with the care of their assets, and they rely on us to manage those assets responsibly, with a view to providing them with a suitable return on their investment. We are committed to managing their assets responsibly and to providing them with timely and complete disclosure.

**5. Ethical Conduct and Compliance with Law**

We are committed to conduct our business in an ethical way and in compliance with applicable laws and regulations. As a part of our commitment, we have established our Code of Ethics and Trading Restrictions. The Code of Ethics and Trading Restrictions contains some specific provisions dealing with such matters as corporate opportunity, conflicts of interest, and securities trading. It also deals with more general matters, such as compliance with law and honesty and fair dealing. The Company strives to operate in an ethical and legal way in all of its activities, and we expect our employees to do the same. A code of ethics cannot cover everything that may come up. For that reason, when one of our employees is confronted with a matter that is not covered by the Code of Ethics and Trading Restrictions, we expect that employee to ask himself or herself two questions before proceeding: (1) does it feel right, and (2) how would I feel if my actions were the subject of a front-page news report?

**6. What to Do**

Our Code of Ethics and Trading Restrictions contains a set of suggested procedures that our employees can use to raise issues that they believe may violate the Company's Code of Ethics and Trading Restrictions. Those procedures are equally available for any employee to report any instances where he or she believes that we or any of our employees are falling down on our commitments. We want to know if we can do better, and we encourage all of our employees to tell us anytime they believe we are not fulfilling our commitments.

**APPENDIX 4**

**CODE OF ETHICS AND TRADING RESTRICTIONS** 

**Introduction**

The Company's policy is to conduct its business in accordance with the highest ethical and legal standards. To assist the Company in achieving this policy, the Board of Directors has adopted this Code of Ethics and Trading Restrictions. The Code is designed to deter wrongdoing and to promote:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Full, fair, accurate, timely and understandable disclosure in reports and documents that the Company submits to regulatory authorities and communicates to the public;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Compliance with applicable governmental laws and regulations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Prompt internal reporting of violations of the Code to appropriate persons identified in the Code; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Accountability for adherence to the Code.

The Code applies to all employees, officers, and directors of the Company and its subsidiaries. Because Hunter Dickinson Services Inc. ("HDSI") employees and officers provide substantial services to the Company, the Code also applies to all employees, officers and directors of HDSI with respect to their activities relating to the Company. Depending on the circumstances, it may also apply to agents and other representatives of the Company. ("You" as used in this Code refers to all such persons, as appropriate.) In addition to your complying with the Code, it is your responsibility to prevent others from violating these standards if you are in a position to do so. If you are not in a position to do so, it is your responsibility to bring the matter to the attention of a member of senior management who is in a position to take appropriate action, or to the attention of an independent member of the Board of Directors.

**1. Avoiding Questionable or Illegal Practices**

The Company's policy is to comply with all laws and regulations that apply to its business, and to avoid any activity that may be regarded as questionable or unethical. Fraudulent, illegal or unethical acts will not be tolerated. No action that would otherwise be questionable is permissible simply because it is customary in a particular location or business.

If you are confronted with a situation that raises an issue under this policy, ask yourself these questions:

· Is the life, health or safety of anyone, or the environment, endangered by the action?

· Is it legal?

· Does it feel honest, fair and ethical?

· Does it compromise anyone's trust or integrity?

· Would the public disclosure of the activity in any way be embarrassing to you, the Company or any other affected employees?

You should be sufficiently familiar with any laws and regulations and Company policies and procedures that apply to your area of work and responsibility. That will permit you to recognize possible breaches and to know when to seek advice. If in doubt, you should discuss the matter with a member of senior management.

**2. Honesty and Fair Dealing**

When representing the Company, it is important that you deal honestly and fairly with the Company's joint venture partners, suppliers, customers, professional advisors, competitors, other employees, and anyone else with whom you have contact in the course of performing your job. You should not take any advantage of anyone through actions such as manipulation, concealment, misappropriation or abuse of confidential information, falsification, and misrepresentation of material facts, undue influence or any other unfair dealing practice. You also should not give any advantage to anyone for reason of personal relationship, personal benefit or other reasons not involving the best interest of the Company.

**3. Policy to Prevent the Corruption of Public Officials**

Both Canada and the United States have laws making it illegal to corrupt officials of foreign governments or to engage in certain related acts. In Canada, the law is entitled Corruption of Foreign Public Officials Act and in the United States the law is entitled Foreign Corrupt Practices Act. In the discussion that follows, we have always adopted the more stringent requirement of the two laws. Because the Canadian law applies to dealings with United States officials and the United States law applies to dealings with Canadian officials, the following policy applies equally to dealings with officials in Canada, the United States, and other countries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Persons to Whom the Laws Apply</u>. Both laws apply to the Company and its subsidiaries; their employees, officers and directors; and their agents and representatives. For these purposes, action by an agent or representative is the equivalent of action by the Company.

The laws may apply in whole or in part to other companies and joint ventures if a U.S. or Canadian company controls the other company or joint venture or otherwise authorizes, directs or participates in activity by the other company or joint venture. Deciding whether activities of a company or joint venture are authorized, directed or participated in by the Company in any particular instance will be an uncertain exercise with uncertain results. In addition, allegations of illegal conduct by any company or joint venture in which the Company has a significant interest can only cause damage to the reputation of the Company. For this reason, you should assume that any action of any company and joint venture in which the Company has a significant interest, including the actions of the employees and agents of such other company and joint venture, will be attributable to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Prohibition</u>. The laws and this policy prohibit offering or providing money or anything of value for the personal benefit of any "Public Official." For purposes of this policy, Public Official means (i) any government official or any official of a public international organization (such as the International Monetary Fund, regional development banks or other multilateral organizations) or (ii) any political party or its officials or any political candidate for the purpose of: influencing that official in the exercise of his or her duties (or non-exercise of those duties); having any such person influence government activity; or otherwise securing an improper advantage for the purpose of aiding the Company in obtaining, retaining or directing business. The laws and this policy may be violated if the Company knows, or if it should have been obvious to the Company, that the payments were made for an illegal purpose.

The laws and this policy also apply to indirect payments, i.e., where the Company offers or provides money or anything of value to any person with the knowledge that the person will make a payment to a Public Official for such a prohibited purpose.

The laws and this policy also prohibit the possession of property or proceeds from property known to have been obtained as a result of the bribery of a Public Official or to "launder" (i.e., deal with intent to conceal) property or proceeds from property obtained as a result of the bribery of a Public Official.

Government-owned corporations and other instrumentalities are generally treated as if they are governments, and their employees, officers and directors are treated as government officials.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Facilitating Payments</u>. "Facilitating payments" are payments made to expedite routine governmental action that does not involve obtaining, retaining or directing business. Example include payments to (i) secure processing of papers such as visas, work orders and permits, (ii) induce customs officials to process legally transmitted goods, (iii) obtain police protection, (iv) obtain installation and maintenance of utility connections, and (v) induce minor government functionaries (government employees without discretionary authority over a project or transaction) to complete their jobs in the manner required and where the situation does not involve the securing of business. Effective in 2013, the law of Canada prohibits facilitating payments to foreign Public Officials. For this reason, the policy of the Company is that no facilitating payments may be made to any Public Official, foreign or domestic.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Exceptions to Prohibitions</u>. There are three exceptions to the laws and this policy:

· It is an affirmative defence if it can be shown that the payment was legal under the written laws and regulations of the country. As an example, in some foreign countries, the Company may be required by law to hire as an agent a national of that country who also is connected to the government of that country in some way or other.

· It also is an affirmative defence if it can be shown that the payment was a reimbursement of travel, lodging and other reasonable and bona fide expenses directly related to the business promotion, demonstration or explanation of the Company's business, or the execution or performance of a contract with the government. As an example, payment of the travel expenses of a government official to visit one of our properties, as a part of an effort to promote the Company in that country, would fit into this category.

· Unconditional gifts having nominal value, when made openly and as a social amenity, or as a token of esteem, regard or gratitude in accordance with local custom, generally will not be regarded as a bribe.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Company Policy</u>. The Company's policy is firm and unconditional. Under no circumstances will the Company ever pay a bribe to a Public Official. If you are ever solicited for such a bribe, or if you become aware of any instance where any Company employee, officer, director, agent or representative of the Company or its subsidiaries or its joint ventures proposes to offer such a bribe or is otherwise involved in such illegal activity, you are to report the matter to your immediate superior, or directly to the CEO or CFO of the Company. Any employee, officer, director, agent or representative who participates in any scheme to pay such an illegal bribe will be terminated immediately.

With respect to payments that fall within the exceptions noted above:

· No payment that would otherwise be an illegal bribe may be made on the basis that it is legal under the written laws and regulations of the foreign country without the prior written approval of the CEO.

· No payment that would otherwise be an illegal bribe may be made on the basis that it is a reimbursement of travel, lodging or other reasonable and bona fide expenses directly related to the business promotion, demonstration or explanation of the Company's business or the execution or performance of a contract with the government without the prior written approval of the CEO.

· With respect to unconditional gifts of nominal value made openly and as a social amenity, or as a token of esteem, regard or gratitude in accordance with local custom, the CEO will establish a monetary limit on the value of any such gift. Any gifts with a value in excess of that limit must be approved in advance by the CEO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Accounting Requirements</u>. The Company and its affiliated companies and joint ventures must:

· Keep financial records which, in reasonable detail, accurately and fairly reflect transactions; and

· Maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management authorization, (ii) transactions are properly recorded as needed to permit preparation of financial statements and to maintain accountability for assets, (iii) all assets are recorded on the books of the Company and access to assets is only permitted in accordance with management authorization, and (iv) periodic auditing is done at reasonable intervals and action is taken to resolve discrepancies.

As an example, the accounting provisions require that the Company properly record all payments and prohibit their characterization in some other form. The accounting provisions also prohibit the Company from maintaining off-record cash "slush" funds or cash that may be accessed without senior management authorization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Things to Look For</u>. The following is a list of "red flags" that may indicate the possible existence of corrupt practices:

· An agent with a poor reputation or with links to the government.

· Unusually large commission payments or commission payments where the agent does not appear to have provided significant services.

· Cash payments, or payments without paper trail or compliance with normal internal controls.

· Unusual bonuses to personnel for which there is little support.

· Payments to third country accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Reporting Requirements</u>. In Canada, the Extractive Sector Transparency Measures Act (the "ESTMA") requires the Company to publicly disclose, on an annual basis, specific payments made to:

(1) any government in Canada or in a foreign state at a national, regional, state/provincial, or local/municipal level;

(2) a body that is established by two or more governments; or

(3) any trust, board, commission, corporation, body or authority that is established to exercise or perform, or that exercises or performs, a power, duty or function of the government for a government referred to in (1) above, or a body referenced to in (2) above.

Payments that must be disclosed include payments to Crown Corporations and other state-owned enterprises that are exercising or performing a power, duty or function of government. Aboriginal and indigenous groups and organizations within Canada and in other jurisdictions may be regarded as governments for purposes of qualifying as a payee under the ESTMA; however, the ESTMA defers the requirement for reporting on payments made to Aboriginal governments in Canada to June 1, 2017. There are seven categories of reportable payments consisting of taxes, royalties, fees, production entitlements, bonuses, dividends and infrastructure improvement payments. All payments made by the Company and any entity controlled by the Company must be reported. The Company's policy is firm and unconditional. All payments made to any governmental entity must be reported, and if you have any knowledge relating to unreported payments, you are to report the matter to your immediate superior, or directly to the CEO or CFO of the Company.

**4. Corporate Opportunities and Duty of Loyalty**

You have a duty of loyalty to the Company, which includes a duty to advance the Company's legitimate interests when the opportunity to do so arises. Accordingly, you may not use your position or the Company's name, property, information or good will for personal gain or for the gain of others. You are further prohibited from taking advantage of an opportunity that is discovered through the use of any corporate property, information, contacts or your position with the Company. All such opportunities, actual or perceived, should be reported to your immediate supervisor.

Business opportunities that come to the employees, officers and directors of HDSI are dealt with in accordance with the Services Agreement between the Company and HDSI. The Audit Committee of the Board of Directors is charged with the responsibility of reviewing relationships with HDSI, and it will consider such matters as a part of its periodic review of the relationship. Directors of the Company who are also directors of HDSI nevertheless have an overriding fiduciary duty to the Company that is governed by Canadian law.

Outside directors of the Company may have a variety of other business relationships involving duties of loyalty. In addition, outside directors do not, as a general matter, have the same obligation as officers and employees to bring corporate opportunities to the Company. For these reasons, the Code does not apply to outside directors of the Company with respect to issues involving duties of loyalty or corporate opportunities and such issues, to the extent they arise, are to be resolved directly with the Board of Directors.

**5. Avoiding Conflicts of Interest**

A conflict of interest occurs when your private interests, or the private interests of your family, interfere, or appear to interfere, in any way with the best interests of the Company. For these purposes, "family" would generally include your parents and grandparents, spouse, children and grandchildren, siblings, in-laws and other persons who share a residence with you or another member of your family. You must take care to avoid any direct or indirect involvement or understanding that might result in such a conflict or create the appearance of such a conflict. Whether a situation involves a conflict of interest depends on all of the circumstances. Generally, the Company would not consider it a conflict of interest if an employee's brother or sister were an officer of a competitor. However, the Company would consider it a conflict of interest if a Company employee in charge of procurement were to purchase products or services from a company owned by the employee's brother or sister or from a company owned by a close personal friend of the employee. The following are examples of conflict of interest situations which generally must be avoided or which may raise a question:

· Acting as an employee, officer or director of, or a consultant to, a competitor or potential competitor of the Company;

· Having a financial interest in or loan from a business which is a joint venture partner, optionor or optionee, competitor, customer or supplier of the Company or which otherwise does business with the Company (an investment in the securities of a publicly traded company normally would not be considered to present a conflict of interest unless it represented a material part of your savings);

· Placing of Company business with any other company that is directly or beneficially owned or controlled by you or by members of your family.

Some conflicts are clear-cut; others are less obvious. In addition, there may be circumstances where it is necessary or in the best interests of the Company to have a business relationship with a business or company in which an employee or officer, or his or her family, may have an interest. For example, where Company operations are in a remote location, it may be necessary from time to time to enter into a business relationship with a business controlled by an employee's family members. For these reasons, you must fully disclose to your supervisor, the CEO or the CFO all circumstances that could be perceived as involving a conflict of interest between the Company and you or members of your family. Full disclosure enables the Company to resolve unclear situations and to ethically handle conflicts of interest before any difficulty can arise. To the extent a conflict of interest cannot be avoided in a reasonable fashion, then appropriate procedures will be put in place to ensure that there is full disclosure and to minimize the involvement of the conflicted individuals in the relationship giving rise to the conflict.

The Company recognizes that there is a potential for a conflict of interest inherent in the Company's relationship with HDSI. The Board of Directors believe that the Company derives substantial benefits on a cost-effective basis from its continuing relationship with HDSI.

Outside directors of the Company are not expected to devote their time and effort solely on behalf of the Company, and they may have a variety of other business relationships that could give rise to a conflict of interest. Any such potential conflicts of interest are not subject to the Code and are to be resolved directly with the Board of Directors.

**6. Giving or Accepting Gifts**

The giving or accepting of gifts can adversely affect the Company's reputation for fair dealing and also create conflicts of interest. You should avoid:

· Giving or offering to give any gift, favour, entertainment, reward, or any other thing of value that might influence or appear to influence the judgment or conduct of the recipient in the performance of his or her job. This includes transactions with government personnel, customers and suppliers. Such action may damage the Company's reputation for fair dealing and may be illegal.

· Accepting or soliciting a gift, favour, or other thing of value that is intended to, or might appear to, influence your decision-making or professional conduct. In addition to damaging the Company's reputation for fair dealing, receipt of such gifts could interfere with your ability to make judgments solely in the best interest of the Company, and thus create the appearance of a conflict of interest.

You may give or receive unsolicited gifts or entertainment only in cases where the gifts or entertainment are of nominal value, are customary to the industry, will not violate any laws, and will not influence nor appear to influence the recipient's judgment or conduct.

**7. Outside Activities**

Outside activities must not conflict with the proper performance of your duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Other Business Activity</u>. Full-time employees and officers are expected to devote substantial effort and attention to the furtherance of the Company's business. In the usual case, this would make it difficult for you to properly perform your duties while also being engaged in other business ventures. For this reason, you may not serve as the proprietor, general partner, officer or director of any other business without first obtaining the written consent of the CEO or CFO. In the case of family owned businesses, the CEO or CFO will normally grant such consent if he or she is satisfied that the involvement in the family business will not conflict with your duties and will not involve any conflict with the interests of the Company. In addition, the CEO may grant consent to an officer or employee serving as a member of the board of directors of another company in special circumstances. (The Board of Directors will consider any proposal for the CEO or the CFO of the Company to serve on the board of another entity, other than not-for-profit entities or family businesses that in no material way compete with the Company or do any material business with the Company.)

This policy does not apply to employees or officers who are also employees or officers of HDSI with respect to services performed by them for other companies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Professional Associations and Charitable Organizations</u>. The Company encourages employees and officers to participate in geological, engineering and other professional associations and activities that do not conflict with their duties for the Company and do not involve conflicts of interest. The Company also encourages officers and employees to participate in charitable organizations and activities. However, you should consult with the CEO or CFO before you undertake any such outside activities requiring a substantial amount of time. In addition, you should not accept a position as an officer or director of a professional or charitable organization without prior consultation with the CEO or CFO, so that they can be satisfied that your activity on behalf of such organizations cannot be attributed to the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Political and Government Affairs</u>. No Company contributions may be made, directly or indirectly, to any election or issue campaign in any jurisdiction or circumstance that would be unlawful. Corporate contributions may be made in appropriate cases where and when permitted by applicable law, but only with the approval of the CEO. Use of Company equipment, supplies or facilities to support any political party, candidate or campaign, as well as employee activity during normal business hours, may constitute a political contribution. You may not engage in any such activity where it involves Company equipment, supplies or facilities or activity during normal business hours without the prior approval of the CEO. In addition, no action which presents, or may appear to present, the position of the Company with respect to any political or governmental matter may be taken without the prior approval of the CEO.

The Company encourages employees and officers, as individuals, to take part in political and governmental affairs to the extent that such activity does not interfere with the proper performance of their duties or involve the use of Company assets or a conflict of interest. However, if you wish to run for public office or hold an appointed public position, you must confer with the CEO and counsel for the Company to ensure that the proposed activity is consistent with your duties to the Company and does not involve a conflict of interest.

The outside directors of the Company are not expected to devote their full time and effort solely on behalf of the Company and accordingly this policy does not apply to them.

**8. Accounting and Recordkeeping, Internal Accounting Controls and Auditing Matters.**

Many employees of the Company, not just accountants and controllers, participate in the financial control and reporting processes of the Company. If you have ANY responsibility for any aspect of the Company's financial activities (for example: processing or approval of payments; creation, processing or approval of invoices and credit memos; payroll and benefits decisions; approval of expense reports and other transactions; the estimation of financial reserves or other claims or the amount of any accrual of deferral; or the recording of any of the foregoing in the Company's records) and/or the preparation of the Company's financial statements or other financial reports, you must ensure your involvement complies with complete and accurate procedures as per established Company practice.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Accounting and Recordkeeping. You may not maintain funds or assets for any improper purposes or make false or misleading statements in any Company documents, reports or records. No undisclosed or unrecorded accounts may be established using the Company's funds or other assets. All accounting records and the financial reports produced from those records must be kept and presented in accordance with applicable law, must accurately and fairly reflect in reasonable detail the Company's assets, liabilities, revenue and expenses and, where applicable, must be in accordance with generally accepted accounting principles.

Transactions must be supported by accurate and reasonably detailed documentation and recorded in the proper accounts. Best efforts are to be made to record transactions in the proper accounting time period. To the extent that estimates are necessary, they must be based on your good faith judgment and be supported by appropriate documentation. No payment or the related accounting entry may be approved or made with the intention or understanding that any part of the payment will be used for any purpose other than that described by the document supporting the entry or payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Internal Accounting Controls</u>. Internal accounting controls have been established to provide reasonable assurances that (i) transactions are executed in accordance with management authorization, (ii) transactions are properly recorded as needed to permit preparation of financial statements and to maintain accountability for assets, (iii) all assets are recorded on the books of the Company and access to assets is only permitted in accordance with management authorization, and (iv) periodic auditing is done at reasonable intervals and action is taken to resolve discrepancies. You must comply with all internal control requirements and ensure that no action is taken to avoid the internal controls requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Auditing</u>. The Company employs a firm of independent chartered accountants to audit the Company's annual financial statements. The annual audit has a number of purposes, including (i) compliance with regulatory requirements, (ii) providing an independent assessment of whether the Company's financial statements fairly present the financial condition, results of operations and cash flow of the Company, (iii) assessment of the accounting principles used and significant estimates made by the Company in preparing its financial statements, and (iv) assessment of the Company's system of internal controls over financial reporting as required by applicable law and regulatory policies. Each employee is responsible for providing whatever assistance may be required by the auditors. If you receive inquiries from the Company's independent accountants, you must respond promptly, fully and accurately.

If you have any concerns as to weaknesses in the Company's accounting system or in the Company's internal controls; or if you believe that any instances of fraud,\* or incorrect or questionable accounting practices may have occurred; or if you believe that any instances of fraudulent, incorrect or questionable practices may have occurred in connection with the annual audit of the Company's financial statements, you should consult with your immediate supervisor or with the Company's CEO or CFO. Alternatively, you may contact the Audit Committee of the Board of Directors using the procedures outlined below under the heading "Reporting of Possible Violations or Other Questionable Practices - Procedures to Submit a Report." Those procedures include a procedure for confidential, anonymous submission of concerns.

**9. Use of Company Property**

You are entrusted with the care, management and cost-effective use of the Company's property and you are not to make use of these resources for your own personal benefit or for the personal benefit of anyone else. Passwords are to be kept confidential and use of the computer systems is limited to authorized business purposes, although occasional personal use of the internet, e-mail and voice mail will normally be permitted unless your supervisor believes that this privilege is being abused.

However, in order to protect the Company's interests - including for example, to ensure that the Company's computers and voice mail are not being used for improper purposes, such as sexual harassment - the Company reserves the right to review the contents of the Company's computers, its e-mail system, and its voice mail system. No employee has a right of personal privacy with respect to information that is placed in the Company's computers, the e-mail system, or the voice mail system.

You are responsible to ensure that all Company property assigned to you is maintained in good condition, and you should be able to account for such equipment. Any disposition of Company property should be for the benefit of the Company and not for personal benefit.

Company letterhead stationery is to be used only for correspondence related to the Company's business. Do not use it for personal correspondence or charitable solicitation.

You are to return all documents and property in your possession upon termination of your employment for any reason.

__________

\*For purposes of the Code, "fraud" includes any deliberate misstatements or omissions in connection with preparation or reporting (internal or external) of financial and/or operating information about the Company, whether or not material and without regard to whether the employee receives any personal benefit.

**10. Proprietary Information**

We want our employees to be well informed about our business, our plans for the future, and the successes and challenges we have along the way. In return for this openness, the Company places trust in its employees to maintain the confidentiality of our proprietary information without need for court orders or other legal requirement.

To provide the Company with reasonable protection against unauthorized disclosure or unauthorized use of its proprietary information, all employees are required to sign an employment agreement prior to their start with the Company that includes provisions addressing confidentiality. These agreements state in part that the Company retains exclusive ownership of all project information and opportunities arising out of employment or consulting relationships and any information pertaining to the exploration plans of the Company.

For these purposes, "proprietary information" means information developed or secured for use of the Company in its business, where that information is not generally known to or otherwise readily available to the public and members of our industry. Proprietary information includes, without limitation:

· The Company's ideas, discoveries, projects, data, contact information and production processes.

· Information concerning actual or projected expenditures, corporate transactions, earnings or operating results or business transactions that has not been disclosed by the Company.

· Investor lists, relationships with consultants, contracts, business plans and strategies.

· Personnel information.

It is your responsibility to know what information is proprietary and ensure that you use and disclose it only in the performance of your duties with the Company. If you are unsure, consider the information to be confidential until you obtain clarification.

If your employment terminates, you will continue to be bound to your obligations of confidentiality to the maximum extent permitted by law.

**11. Outside Ideas**

The purpose of this policy is to avoid the risk of allegation of unauthorized use or disclosure of another person's proprietary rights, ideas or information.

When an idea, prospect, opportunity, or other confidential or proprietary information is submitted to the Company by an outsider, care must be taken to ensure that the outsider signs an agreement defining the Company's rights and obligations before the idea or prospect or information is disclosed to employees qualified to evaluate it or use it. Outsiders who propose to submit information should be told to submit the information in writing. Outsiders should also be told that any submission constitutes their agreement that the Company's brief review to determine possible interest will not create any non-use, confidentiality or area of interest agreement or obligation of the Company. If they do not so agree, they should be told not to submit their information.

On its receipt, any such information should be sent to the CEO or CFO or persons authorized by them to evaluate outside submissions. No one other than the CEO or CFO and persons authorized by them are to evaluate any outside submission.

Each written submission will first be reviewed to see if it purports to impose non-use, confidentiality or area of interest obligations. If it does, no further review should be made and, unless the CEO upon being notified otherwise directs, the material should be returned without further review. If the material does not purport to impose such an obligation, it should be reviewed briefly to see if it might be of interest. If it is not of interest, it is to be returned with a letter stating that the information was briefly reviewed to determine possible interest, that the information is not of interest, and that the Company has no non-use, confidentiality or area of interest agreement or obligation to the sender. If the sender was previously so informed, the letter should also refer to that prior advice. If the material appears to be of interest, then the Company will need to enter into an appropriate confidentiality agreement setting out the parties' rights and obligations before any further review or use of the information.

Third party data subject to confidentiality obligations should be so marked, all confidentiality obligations should be noted on the relevant document or file, and all such obligations must be strictly adhered to.

**12. Disclosure Policy**

The Company has both legal and ethical obligations to provide appropriate disclosure of material information, and to ensure that employees and others do not benefit from having and using undisclosed material information. "Material information" is any information that reasonably could be expected to affect the market for the Company's stock or to influence an investor's decision to buy, sell or hold the stock. The wrongful use of undisclosed material information may make both the Company and the individual involved liable for criminal and/or civil penalties and damage awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Control of Confidential Information. All employees have the responsibility to inform senior management on a timely basis of events or developments that might have a material effect on the Company. Such information should be communicated to your superior or to members of senior management.

Strict confidentiality must be maintained with regard to disclosure of confidential information to persons within the Company who have no need to know, and to anyone outside of the Company. Care must be taken when handling confidential correspondence, assay results, reports, documents, memos and facsimiles. Documents containing confidential information should be shredded or otherwise destroyed, and not placed in rubbish bins. Visitors to the offices or work sites of the Company are not to be left unattended at any time, except in designated "safe" locations, e.g. reception area and conference rooms. Discussions by Company personnel concerning Company business should be confined to Company personnel only and on a "need to know" basis, and should never occur in public places such as elevators or airplanes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Public Disclosure Responsibilities</u>. The Company has a variety of disclosure obligations under laws and stock exchange rules. The Company fulfills those obligations through regulatory filings, periodic reports to shareholders, press releases, and web site disclosure. The Company also provides information to shareholders and others through communications with the media, analysts and others in the financial community, by way of industry presentations, and in response to inquiries. In carrying out the Company's disclosure responsibilities:

· The CEO, the CFO, and other members of senior management, as appropriate, have the sole responsibility to determine (i) whether a particular matter is sufficiently material to the Company to require disclosure, and (ii) the content, time and manner of disclosure.

· Company Spokespersons have the exclusive authority to speak for the Company with respect to matters of public disclosure. The Company Spokespersons consist of the CEO and any other persons who are authorized by the CEO, generally or in a specific instance, to speak for the Company. NO OTHER PERSONS ARE AUTHORIZED TO COMMUNICATE AS TO MATTERS OF PUBLIC DISCLOSURE ON BEHALF OF THE COMPANY.

· It is the responsibility of the Company to ensure that undisclosed material information is disseminated in such a way that all members of the public have equal access to the information. Substantial security holders and analysts in particular MUST NOT receive preferential treatment in the matter of information disclosure. For example, previously undisclosed material information is not to be disseminated by way of communications with analysts, in earnings telephone conferences, or in industry conference presentations. If material undisclosed information is to be communicated through such means, it must first be communicated to the public generally by way of a press release or regulatory filing such as a material change report Persons given early access to undisclosed material information may not use that information to trade in the Company's securities, and they, the Company and the individual who causes the early disclosure may be liable for civil and criminal penalties and damage awards if there is trading on undisclosed material information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>External Communications and Inquiries from Analysts, Media and Other Outsiders</u>. Communications intended for dissemination outside of the Company and concerning the Company's business must be referred to the CEO or to one of the designated Company Spokespersons prior to dissemination. This includes presentations to analysts and papers or presentations to professional groups and others.

All inquiries from the press, securities analysts, investors and other outsiders concerning the Company's business and affairs must be referred to one of the designated Company Spokespersons. This will ensure that information is disclosed consistently and equitably. Unless specifically authorized, no one is authorized to respond to such inquiries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Comments on and Dissemination of Analysts' Reports and Other Media Stories</u>. From time to time, the Company may be asked to review or comment on analysts' reports or other media stories about the Company. No employee, officer or director is to review or comment on analysts' reports or media stories except an authorized Company Spokesperson, and any such inquiry should be forwarded to such an authorized person without any comments. If a Company Spokesperson does review such a report or story, the Company Spokesperson should review the report or story ONLY for factual information and limit his/her comments to discussion or correction of facts. Furthermore, no undisclosed material information is to be communicated in the course of such a review and comment. If factual correction would result in the disclosure of undisclosed material information, the Company Spokesperson must take the necessary steps to ensure that such information is communicated to the public generally before it is communicated to the particular analyst or other person making the inquiry.

Employees, officers or directors of the Company may be asked to forward or recommend analysts' reports or may consider forwarding analysts' reports or media stories about the Company. The forwarding or recommending of such reports or stories may be regarded as verifying or validating the information contained in the reports or stories. If any of the information in the report or story is not accurate, the act of forwarding or recommending the report or story may constitute the dissemination of false or misleading information in violation of securities laws. In addition, if any of the information in the report or story is accurate but has not been generally disseminated by the Company, the forwarding or recommending of the report or story may constitute selective disclosure in violation of securities laws. Finally, copying and dissemination of analysts' reports and media stories may violate copyright laws or the proprietary rights of the authors of the reports or stories. For these reasons, no employee, officer or director should reproduce and distribute or otherwise disseminate such reports and stories unless specifically approved by the CEO. Persons requesting such materials should be referred to the author or organization that published the material. In addition, employees, officers and directors should not recommend particular analysts' reports on the Company to any person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Comments on Rumours and Correction of Selective Disclosure</u>. Employees, officers and directors must not comment, whether positively or negatively, on rumours about the Company's business. Information about such rumours should be reported to the Company Spokespersons. In general, the Company's policy is not to comment on rumours. If a stock exchange or securities regulatory authority requests the Company to make a definitive statement in response to rumours, a Company Spokesperson will consider the matter in consultation with legal counsel.

If any employee, officer or director makes an unauthorized or premature disclosure of undisclosed material information (inadvertently or otherwise), the person responsible for the disclosure, and any other employee, officer or director learning of it, must contact the CEO or other Company Spokesperson as soon as possible, and the CEO and other Company Spokespersons will consider the Company's responsibilities under applicable law.

**13. Securities Transactions**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Restrictions on Trading. In general, employees, officers and directors, and their family members, may trade in Company securities unless:

· A Blackout Period (see below) is in place, or

· The person has knowledge of undisclosed material information.

If a Blackout Period exists, or if you have knowledge of undisclosed material information, neither you nor your family members may trade in Company securities. This prohibition includes the exercise of any stock options, warrants or other convertible securities during the existence of the Blackout Period. For purposes of this policy, "family member" means your spouse, your minor children, any person substantially dependent on you for support, and other persons who share a residence with you. There is one exception to this policy: you may sell securities pursuant to a previously existing Trading Plan entered into with a qualifying broker under Section 57.4 to the Securities Act of British Columbia, provided that you were not in possession of undisclosed material information (unless it has since been disclosed) at the time you established the Trading Plan.

In addition, while you are in possession of undisclosed material information, you and your family members must not trade in the securities of companies that have a significant legal or financial business relationship, direct or indirect, with the Company (generally joint venture partners) if the undisclosed material information relates to the subject matter of that business relationship.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Blackout Period</u>. From time to time, the CEO or other Company Spokesperson may institute a Blackout Period because of the existence of undisclosed material information. If a Blackout Period is instituted, you will be notified, generally by e-mail. Once notified of the existence of a Blackout Period, except as noted above, you and your family members may not trade in the Company's securities until you have been notified that the Blackout Period has been terminated. The existence of a Blackout Period is itself an item of confidential information that is not to be disclosed to persons outside of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Special Considerations in Investing in Company Securities</u>. You and your family members are urged not to purchase securities of the Company using borrowed funds in an amount or on terms and conditions which are not prudent in light of your financial condition. In addition, careful consideration should be given before pledging Company securities for a loan because of the potential insider trading liability that could arise if the lender should seek to sell the securities at a time when there is undisclosed material information about the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Certain Additional Policies</u>. These additional policies apply to officers and directors and in regards to short sales, employees, of the Company.

· No employee, officer or director shall engage in short sales of securities of the Company or sales of borrowed securities of the Company. For purposes hereof, the short sale of Company shares as a method of facilitating the exercise of a valid option granted by the Company shall be deemed not to be a short sale for purposes of the aforementioned restriction notwithstanding any such sale-against-an-option may be treated as a short sale under Canadian securities legislation. Before selling short against an option, the holder of the option should bring the proposed transaction to the attention of the Company's CEO or CFO so as to ensure the transaction is treated properly, unless the transaction is through the use of an option exercise and sale facility established by the Company.

· No officer or director shall acquire financial instruments, including for greater certainty, prepaid variable forward contracts, equity swaps, collars or units of exchange funds, that are designed to hedge or offset a decrease in market value of options or equity securities granted as compensation or held directly or indirectly by the officer or director.

· No officer or director shall place automatic buy or sell orders with brokers except for a Trading Plan entered into with a qualifying broker under Section 57.4 of the Securities Act of British Columbia, provided that you were not in possession of undisclosed material information (unless it has since been disclosed) at the time you established the Trading Plan.

· No officer or director of the Company shall buy or sell equity securities of the Company during the period that begins five trading days before and ends one trading day after the public release of quarterly and annual results of operation of the Company.

**14. Administration and Distribution**

The Company's Board of Directors, and the Audit Committee have established the standards of business ethics and conduct contained in the Code, and it is their responsibility to oversee compliance with the Code. Any change in or waiver of any provision of the Code shall require approval of the Board, as applicable, and shall be publicly disclosed in the time period and manner as required by law or regulation.

The Code is to be distributed to each employee, officer and director of the Company and to the employees, officers and directors of HDSI. It will also be made available via the Company's Internet site.

Strict adherence to the Code is vital. Directors will confirm on an annual basis in connection with the preparation of the Management Information Circular that they have read and understand the Code of Ethics. Management will adopt appropriate policies to ensure that officers and employees are provided with and have read the Code of Ethics. All managers are responsible for ensuring that employees under their supervision are aware of and understand the provisions of the Code. For clarification or guidance on any point in the Code, please consult the CEO or CFO.

**15. Reporting of Possible Violations or Other Questionable Practices**

The following procedures govern the reporting and treatment of reports of possible violations of the Code. The Company's Audit Committee Charter provides that the Audit Committee is to establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The Audit Committee has adopted these procedures as to complaints and submissions regarding accounting, internal accounting controls or auditing matters, and the Board has adopted these procedures as to all other complaints and submissions regarding the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>When to Make a Report</u>. You should make a report if you believe that any employee, officer or director of the Company or HDSI, or any agent or representative of the Company, may have or is about to engage in any conduct which you believe may be:

· A violation of the Code or any internal policy or code of practice,

· A violation or otherwise involve questionable practices in connection with accounting, internal accounting controls or auditing matters,

· A violation of any law or regulation,

· Corruption, mismanagement or fraud, or

· A danger to the public or danger to worker health and safety or the environment.

If you are unsure about the matter but concerned about the possibility of a violation or questionable practice, you should nonetheless report the matter. Delays in bringing the information to the attention of senior management, the Audit Committee, or the Board may cause damage, complications, and irreversible consequences for the Company. Following the steps outlined below will allow the Company to address the issues and ensure that timely remedial action is taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Procedures to Submit a Report. You may make a report under this procedure in one of the following ways:

· Bring the matter to the attention of your immediate supervisor. Any supervisor receiving such a report is to immediately bring the matter to the attention of the CEO, the CFO, or other member of senior management.

· Bring the matter to the attention of the CEO, the CFO, or other member of senior management.

· Bring the matter to the attention of an independent director of the Company. Matters relating to accounting, internal accounting controls or auditing matters should be reported to the Chair of the Audit Committee. All other matters should be reported to the Chair of the Board. You may make the report orally, in writing, or by e-mail. All reports will be treated as confidential to the extent possible, and only revealed on a need-to-know basis or as required by law or court order.

· If you prefer to report on an anonymous basis, call on the Company's hotline at 1-877-874-8416 or file a report online at <u>www.alertline.com</u>. Any reports will be forwarded to the chairperson of the Audit Committee.

With respect to matters involving the possible violation of laws or regulations, you also may choose to bring such concerns to an outside regulatory authority. However, the Company is committed to taking internal action in response to employee concerns, and would appreciate the opportunity to do so, if appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Follow-up and Outcome</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) On receipt of a complaint, the complaint will be reported promptly to the Chair of the Audit Committee if it relates to accounting, internal accounting controls or auditing matters, and to the Chair of the Board if it relates to other matters under the Code. In the case of an oral complaint, the party receiving the complaint is to report it orally and also to prepare a written summary for the Chair of the Audit Committee or the Chair of the Board, as applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The appropriate Chair will promptly commission the conduct of an investigation. At the election of said Chair, the investigation may be conducted by Company personnel, or by outside counsel, accountants or other persons employed by the Committee or Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The identity of a person filing a complaint will be treated as confidential to the extent possible, and only revealed on a need-to-know basis or as required by law or court order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) On completion of the investigation, an oral and/or written investigative report will be provided to management and the Audit Committee. If any unlawful, violative or other questionable conduct is discovered, the Committee or Board will cause to be taken such remedial action as the deemed appropriate under the circumstances to achieve compliance with the applicable law, regulation or policy and to otherwise remedy the unlawful, violative or other questionable conduct. The Chair of the Committee or the Chair of the Board will prepare, or cause to be prepared, a written summary of the remedial action taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) In each case, the written investigative report (or summary of any oral report), and a written summary of the remedial action taken in response to the investigative report will be retained along with the original complaint by or under the authority of the Committee Chair or Board Chair for a period of four years after the resolution of the matter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Prohibition Against Retaliation</u>. The Company welcomes the courage and honesty of an employee who voices concern over a particular course of action that he or she believes to be unlawful or harmful. Any attempts to intimidate, threaten, harass or retaliate against any employee based upon a good faith report made by an employee pursuant to the Code is strictly prohibited and will result in disciplinary action up to and including termination of the person responsible for any such intimidation, threat, harassment or retaliation.

However, groundless or unwarranted complaints - including those with vindictive intent – are not acceptable. Appropriate disciplinary measures will be taken if allegations are initiated for malicious reasons or in bad faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Governmental or Company Inquiry</u>. If you receive an inquiry from a governmental authority concerning suspected unlawful conduct, you should immediately direct the inquiry to your immediate superior, the CEO, the CFO or other member of senior management. In such circumstances, you should take measures to preserve documents and other items relevant to the investigation. To conceal an offence or to alter or destroy evidence is illegal and may result in criminal prosecution. It also violates the Company's commitment of conducting its business in a legal and ethical manner and is strictly prohibited.

If you receive an inquiry from the Company representative or a Board committee in connection with an investigation under the Code, you are equally obligated to take measures to preserve documents and other items relevant to the investigation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Failure to Comply or File a Report. The Company is committed to complying with all applicable laws, regulations and policies. Such compliance is only possible if all employees, officers and directors ensure that they follow all applicable laws, and Company policies and guidelines. When in doubt, ask the CEO, CFO or other members of senior management. Personnel who violate the law or the Company's compliance policies or knowingly fail to report a violation of law or compliance policy may be subject to disciplinary action, up to and including dismissal. The nature and extent of the action will be determined on a case-by-case basis. In reviewing the situation, the following is a partial list of considerations:

· The nature and severity of the offence.

· Whether the persons involved acted reasonably.

· The efforts by the persons involved to obtain guidance before the offence occurred.

· Whether the persons involved reported themselves.

Personnel are encouraged to report their own wrongdoing or possible wrongdoing. This action will be taken into account when assessing the appropriate discipline, if any. The Company will also recognize situations where a person has made an honest mistake and will take it into account in deciding the course of action to pursue.

**APPENDIX 5**

**DISCLOSURE CONTROLS AND PROCEDURES POLICY**

**1. Introduction**

Canadian laws require the Company to maintain "disclosure controls and procedures" that are designed to ensure that information required to be disclosed by the Company in reports it files or submits to regulatory authorities is recorded, processed, summarized and reported on a timely basis. Disclosure controls and procedures must be designed to ensure that information is accumulated and communicated to the Company's management to allow timely decisions regarding required disclosure. Disclosure controls and procedures should capture information that is relevant to assessment of developments and risks that pertain to the Company's business, as well as other material information about the Company.

The Company's CEO and CFO periodically are required to certify that they (1) are responsible for establishing and maintaining disclosure controls and procedures, (2) have designed such controls and procedures to ensure that material information is made known to them by others within the Company on a timely basis, and (3) have evaluated the effectiveness of the disclosure controls and procedures and presented the conclusions of that evaluation in certain filings.

Also, legislation in at least one Province (Ontario) requires such procedures and controls be in place in order for management to have a defence against litigation arising out of a misstatement in a public filing or arising out of a failure to promptly make a required disclosure.

**2. Application**

This Disclosure Controls and Procedures Policy covers the following:

(a)  ***Periodic Disclosures*** 

· Annual Information Form/Form 20-F.

· Reports to Shareholders, quarterly and other periodic reports, financial statements and related MD&A reports, and related press releases.

· Management Information Circulars.

· Registration statements/prospectuses.

(b)  ***Event-Driven Disclosures*** 

· Anticipated events such as the results from material exploration programs, acquisitions, divestitures, and initiation of legal proceedings by the Company.

· Unanticipated events such as early or unexpected receipt of surprising exploration results, correction of misstatements in previously publicly-filed information, lawsuits against the Company, severe accidents causing harm to personnel or significant loss of property, material regulatory investigations, and discovery of fraud or illegal conduct.

**3. Supplement to Internal Controls and Procedures**

The Company's other internal controls and procedures are not affected by these disclosure controls and procedures, and they will continue to operate independent of the disclosure controls and procedures set out in this Policy.

**4. Statement of Responsibility**

Design, maintenance and implementation of this Policy is the responsibility of the CEO and CFO.

**APPENDIX 6**

**AUDIT COMMITTEE CHARTER**

**1. Purpose: Responsibilities and Authority**

The Audit Committee (the "Audit Committee" or "Committee") shall carry out its responsibilities under applicable laws, regulations and stock exchange requirements with respect to the employment, compensation and oversight of the Company's independent auditor, and other matters under the authority of the Committee. The Committee also shall assist the Board of Directors in carrying out its oversight responsibilities relating to the Company's financial, accounting and reporting processes, the Company's system of internal accounting and financial controls, the Company's compliance with related legal and regulatory requirements, and the fairness of transactions between the Company and related parties. In furtherance of this purpose, the Committee shall have the following responsibilities and authority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) ***Relationship with Independent Auditor.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subject to the law of British Columbia as to the role of the Shareholders in the appointment of independent auditors, the Committee shall have the sole authority to appoint or replace the independent auditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The independent auditor shall report directly to the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Committee shall approve in advance all audit and permitted non-audit services with the independent auditor, including the terms of the engagements and the fees payable; provided that the Committee Chair may approve services to be performed by the independent auditors and the fee therefor between Committee meetings if the amount of the fee does not exceed $50,000, provided that any such approval shall be reported to the Committee at the next meeting thereof. The Committee may delegate to a subcommittee the authority to grant pre-approvals of audit and permitted non-audit services, provided that the decision of any such subcommittee shall be presented to the full Committee at its next scheduled meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) At least annually, the Committee shall review and evaluate the experience and qualifications of the lead partner and senior members of the independent auditor team.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) At least annually, the Committee shall obtain and review a report from the independent auditor regarding:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the independent auditor's internal quality-control procedures;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) any material issues raised by the most recent internal quality-control review, or peer review, of the auditor, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any steps taken to deal with any such issues; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) all relationships between the independent auditor and the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) At least annually, the Committee shall evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditor's independence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) The Committee shall ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit, the concurring partner responsible for reviewing the audit, and other audit partners as required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) The Committee shall consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) The Committee shall recommend to the Board policies for the Company's hiring of employees or former employees of the independent auditor who were engaged on the Company's account or participated in any capacity in the audit of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) The Committee shall oversee the implementation by management of appropriate information technology systems for the Company, including as required for proper financial reporting and compliance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) ***Financial Statement and Disclosure Review.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Committee shall review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be filed with applicable securities regulatory authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Committee shall review and discuss with management (and, to the extent the Committee deems it necessary or appropriate, the independent auditor) the Company's quarterly financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether such financial statements should be filed with applicable securities regulatory authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Committee shall review and discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including the independent auditor's assessment of the quality of the Company's accounting principles, any significant changes in the Company's selection or application of accounting principles, any major issues as to the adequacy of the Company's internal controls over financial reporting, and any special steps adopted in light of material control deficiencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) At least annually and prior to the publication of annual audited financial statements, the Committee shall review and discuss with management and the independent auditor a report from the independent auditor on:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) all critical accounting policies and practices used by the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) all alternative accounting treatments of financial information that have been discussed with management since the prior report, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by the independent auditor, and an explanation of why the independent auditor's preferred method was not adopted; and.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) other material written communications between the independent auditor and management since the prior report, such as any management letter or schedule of unadjusted differences, the development, selection and disclosure of critical accounting estimates, and analyses of the effect of alternative assumptions, estimates or GAAP methods on the Company's financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Prior to their filing or issuance, the Committee shall review the Company's Annual Information Form, quarterly and annual earnings press releases, and other financial press releases, including the use of "pro forma" or "adjusted" non-GAAP information.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) The Committee shall review and discuss with management the financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be specific or it may be in general regarding the types of information to be disclosed and the types of presentations to be made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Conduct of the Annual Audit. The Committee shall oversee the annual audit, and in the course of such oversight the Committee shall have the following responsibilities and authority:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Committee shall meet with the independent auditor prior to the audit to discuss the planning and conduct of the annual audit, and shall meet with the independent auditor as may be necessary or appropriate in connection with the audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Committee shall ascertain that the independent auditor is registered and in good standing with the Canadian Public Accountability Board and the Public Company Accounting Oversight Board ("PCAOB") and that the independent auditor satisfies all applicable Canadian independence standards (Canadian Auditing Standard 200), PCAOB Rule 3526. The Committee shall obtain from the auditor a written description of all relationships between the auditor and the Company and persons in a financial reporting oversight role at the Company as per PCAOB Rule 3526 that may reasonably be thought to bear on independence.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Committee shall discuss with the independent auditor the matters required to be discussed by PCAOB Auditing Standard No. 16 and Canadian Auditing Standard 260 relating to the conduct of the audit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Committee shall make such inquiries to the management and the independent auditor as the Committee members deem necessary or appropriate to satisfy themselves regarding the efficacy of the Company's financial and internal controls and procedures and the auditing process.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) ***Compliance and Oversight***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Committee shall meet periodically with management and the independent auditor in separate executive sessions. The Committee may also, to the extent it deems necessary or appropriate, meet with the Company's investment bankers and financial analysts who follow the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Committee shall discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Committee shall discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies, and regularly review the top risks identified by management and the policies and practices adopted by the Company to mitigate those risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) At least annually and prior to the filing of the AIF, the Committee shall review with management and the independent auditor the disclosure controls and procedures and confirm that the Company (with CEO and CFO participation) has evaluated the effectiveness of the design and operation of the controls within 90 days prior to the date of filing of the AIF The Committee also shall review with management and the independent auditor any deficiencies in the design and operation of internal controls and significant deficiencies or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company's internal controls. As a part of that review, the Committee shall review the process followed in preparing and verifying the accuracy of the required CEO and CFO annual certifications.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. At least annually and prior to the filing of the AIF, the Committee shall review with management and the independent auditor management's internal control report and assessment of the internal controls and procedures, and the independent auditor's report on and assessment of the internal controls and procedures. In connection with its review of interim and annual financial statements and related management's discussion and analysis, the Committee shall confirm with management that the Company (with CEO and CFO participation) has taken all actions required in connection with the certifications required by National Instrument NI 52-109, Certification of Disclosure in Issuers' Annual and Interim Filings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The Committee shall establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The Committee shall discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or reports which raise material issues regarding the Company's financial statements or accounting policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. At least annually, the Committee shall meet with the Company's legal counsel and discuss any legal matters that may have a material impact on the financial statements or the Company's compliance policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The Committee shall oversee the preparation of reports relating to the Audit Committee required under applicable laws, regulations and stock exchange requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Committee shall exercise oversight with respect to anti-fraud programs and controls

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) ***Related Party Transactions.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Committee shall review for fairness to the Company proposed transactions, contracts and other arrangements between the Company and its subsidiaries and any related party or affiliate, and make recommendations to the Board whether any such transactions, contracts and other arrangements should be approved or continued. The foregoing shall not include any compensation payable pursuant to any plan, program, contract or arrangement subject to the authority of the Company's Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) As used herein the term "related party" means any officer or director of the Company or any subsidiary, or any shareholder holding a greater than 10% direct or indirect financial or voting interest in the Company, and the term "affiliate" means any person, whether acting alone or in concert with others, that controls, is controlled by or is under common control with another person. "Related party" includes Hunter Dickinson Services Inc., its principals, and their affiliates.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) ***Additional duties***. The Committee shall perform the following additional duties:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) The Committee shall review and recommend dividend policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The Committee shall oversee the Company's insurance program.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Committee shall review the appointment of senior financial personnel and make recommendations to the Board of Directors regarding the appointment of the Chief Financial Officer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Committee shall recommend to the Board the qualifications and criteria for membership on the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) The Committee shall review and discuss with management the requirement for annual public disclosure pursuant to the *Extractive Sector Transparency Measures Act* and shall be responsible for approving such disclosures.

**2. Structure and Membership**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Number and qualification**. The Committee shall consist of three persons unless the Board should from time to time otherwise determine. All members of the Committee shall meet the experience and financial literacy requirements of National Instrument NI 52-110 and the rules of the Toronto Stock Exchange

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Selection and Removal**. Members of the Committee shall be appointed by the Board. The Board may remove members of the Committee at any time with or without cause.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Independence**. The Committee shall be in compliance with the appropriate securities or exchange independence requirements, except in the instance of director transition or resignation where the Committee and/or the board will seek to meet independence requirements at the earliest opportunity. At a minimum, a majority of the members of the Committee shall be "independent" as determined under the Company's Corporate Governance Overview and Guidelines.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Chair**. Unless the Board elects a Chair of the Committee, the Committee shall elect a Chair by majority vote.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Compensation**. The compensation of the Committee shall be as determined by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Term**. Members of the Committee shall be appointed for one-year terms. Each member shall serve until his or her replacement is appointed, or until he or she resigns or is removed from the Board or the Committee.

**3. Procedures and Administration**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) **Meetings**. The Committee shall meet as often as it deems necessary in order to perform its responsibilities, but not less than quarterly. The Committee shall keep minutes of its meetings and any other records as it deems appropriate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) **Subcommittees**. The Committee may form and delegate authority to one or more subcommittees, consisting of at least one member, as it deems appropriate from time to time under the circumstances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) **Reports to the Board**. The Committee shall regularly report to the Board with respect to such matters as are relevant to the Committee's discharge of its responsibilities, and shall report in writing on request of the Chair of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) **Charter**. The Committee shall, at least annually, review and reassess the adequacy of this Charter and recommend any proposed changes to the Board for approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) **Independent Advisors**. The Committee shall have the authority to engage such independent legal and other advisors as it deems necessary or appropriate to carry out its responsibilities. Such independent advisors may be regular advisors to the Company. The Committee is empowered, without further action by the Board, to cause the Company to pay appropriate compensation to advisors engaged by the Committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) **Investigations**. The Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it deems appropriate, including the authority to request any Officer or other person to meet with the Committee and to access all Company records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) **Annual Self-Evaluation**. The Committee shall evaluate its own performance at least annually.

**4. Additional Powers**

The Committee shall have such other duties as may be delegated from time to time by the Board of Directors.

**5. Limitation of Committee's Role**

While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with GAAP and applicable rules and regulations. These are the responsibilities of management and the independent auditor.

**6. Committee Member Independence, Financial Literacy and Financial Expert Requirements**

**A. Independence** 

(a) See Appendix 2 of the Company's Corporate Governance Overview and Guidelines.

**B. Financial Literacy and Financial Expert Requirements**

**NI 52-110**

Section 3.1(4) states that each audit committee member must be financially literate.

Section 1.6 defines the meaning of financial literacy as follows:

"For the purposes of this Instrument, an individual is financially literate if he or she has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the issuer's financial statements."

**APPENDIX 7**

**POLICY ON ENGAGEMENT WITH SHAREHOLDERS**

**ON GOVERNANCE MATTERS**

The board of directors believes that it is important to have regular and constructive engagement directly with its shareholders to allow and encourage shareholders to express their views on governance matters directly to the board outside of the annual meeting. These discussions are intended to be an interchange of views about governance and disclosure matters that are within the public domain and will not include a discussion of undisclosed facts or material changes.

The board will develop practices to increase engagement with its shareholders as is appropriate for its shareholder base and size. Examples of engagement practices include meeting with the company's larger shareholders and organizations representing a group of shareholders, as well as creating conduits for communication with smaller shareholders on an ongoing basis.

The board recognizes that shareholder engagement is an evolving practice in Canada and globally, and will review this policy annual to ensure that it is effective in achieving its objectives.

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'? qzm_ex991.htm

**EXHIBIT 99.1**

![qzm_ex991img8.jpg](qzm_ex991img8.jpg)

**QUARTZ MOUNTAIN RESOURCES LTD.**

**CONSOLIDATED FINANCIAL STATEMENTS**

**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**

(Expressed in Canadian Dollars, unless otherwise stated)

![qzm_ex991img11.jpg](qzm_ex991img11.jpg)

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**To the Board of Directors and Shareholders of Quartz Mountain Resources Ltd.** 

**Opinion on the Consolidated Financial Statements**

We have audited the accompanying consolidated financial statements of Quartz Mountain Resources Ltd. (the "Company"), which comprise the statements of financial position as at July 31, 2025 and 2024 and the statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for each of the years in the three-year period ended July 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at July 31, 2025 and 2024 and the results of its operations and cash flows for each of the years in the three-year period ended July 31, 2025, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

**Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit of $35,546,915 and its continuing operations, in the near term, are dependent upon its ability to obtain financing through debt or equity issuances. These conditions, along with other matters set forth in Note 1, raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. This issue also constitutes, from our perspective, a critical audit matter.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

**Critical Audit Matters**

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgment. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

***Mineral property interests – Assessment of Whether Indicators of Impairment Exist***

As described in Note 4 to the consolidated financial statements, the Company holds the rights to several exploration stage mineral property interests, which are the Company's primary non-current assets. Note 2(f) to the consolidated financial statements explains that the Company expenses exploration and evaluation expenditures and capitalizes initial expenditures associated with the acquisition of mineral property interests. At the end of each reporting period, the carrying amounts of the Company's mineral property interests are reviewed under *IFRS 6 – Exploration and Evaluation of Mineral Resources* to determine whether there is any indication that these assets are impaired.

Management considered the following factors to determine whether or not an indicator of impairment exists: (i) whether the period for which the Company has the right to explore its projects has expired or will expire in the near future; (ii) whether further exploration on its project(s) is either budgeted or planned; (iii) whether exploration activities to date have led to the discovery of commercially viable quantities of mineral resources; and (iv) whether there is sufficient data to indicate that the carrying amount of the Company's exploration and evaluation assets are unlikely to be recovered in full from successful development and/or sale. Of the factors that must be considered, the judgments associated with assessing the Company's ability and options to develop its projects and the impact of the Company's market capitalization relative to the carrying value of its net assets are the most subjective. Auditing these judgments required a high degree of subjectivity in applying audit procedures and in evaluating the results of those procedures. This resulted in an increased extent of audit effort.

The principal considerations for our determination that the assessment of potential impairment is a critical audit matter are:

(i) the materiality of the aggregate amounts involved in respect to quantum; (ii) the degree of judgment required by management when assessing the recoverability of deferred acquisition costs; and (iii) the required extent of auditor judgment, subjectivity, and effort in performing procedures to evaluate management's assessment.

Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures also included, among others, (i) testing the completeness and accuracy of underlying data used in management's assessment and evaluating the reasonableness of the significant estimates and assumptions used by management; and (ii) considering whether the consolidated financial statements fairly disclose the inherent uncertainties applicable to the recoverability of deferred acquisition costs.

***Going Concern***

The principal considerations for our determination that the going concern uncertainty was a critical audit matter were: (i) that the formal reporting of such uncertainty involves a significant disclosure, the absence of which could constitute a material misstatement to a financial statement reader and, (ii) that, at the same time, it involves on our part the use of a high level of subjective judgement as we are required to consider the possible impact of future events that cannot currently be known and which typically cannot be directly linked to any particular current or future financial results and reporting, or the lack thereof.

Addressing this matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures also included, among others, (i) obtaining and evaluating management's assessment of the Company's ability to remain a going concern; (ii) determining, based on all other evidence available to us, whether management's assessment appeared to be fair and reasonable in the circumstances and, (iii) considering whether the resultant disclosure of these matters herein was consistent with the foregoing, in the context of the Company's overall business activities, objectives and financial history.

![qzm_ex991img10.jpg](qzm_ex991img10.jpg)

**CHARTERED PROFESSIONAL ACCOUNTANTS**

We have served as the Company's auditor since 2021.

De Visser Gray LLP

PCAOB ID: 01054

Vancouver, Canada

November 26, 2025

---

| | | | |
|:---|:---|:---|:---|
| **QUARTZ MOUNTAIN RESOURCES LTD.** |  |  |  |
| **STATEMENTS OF FINANCIAL POSITION** |  |  |  |
| (Expressed in Canadian Dollars) |  |  |  |
|  |  | July 31,  | July 31,  |
|  | Note | 2025  | 2024  |
| **Assets** |  |  |  |
| Current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash |  | $3076972 | $1906327 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts receivable and other assets | 3 | 86239 | 103342 |
|  |  | 3163211 | 2009669 |
| Non-current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mineral property interests | 4 | 1021350 | 987050 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use asset | 13 (a) | 7421 | 17316 |
| Total assets |  | $4191982 | $3014035 |
| **Liabilities and Shareholders' Equity** |  |  |  |
| Current liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts payable and other liabilities | 6 | $266815 | $303693 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 7 (c) | 4459 | 6963 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability | 13 (b)  | 10169 | 12216 |
|  |  | 281443 | 322872 |
| Non-current liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability | 13 (b)  | – | 10169 |
| Total liabilities |  | 281443 | 333041 |
| Shareholders' equity |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Share capital | 5 (a) | 37607312 | 33312270 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares to be issued | 4 (a) |  | 8700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Reserves |  | 1850142 | 1433400 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit |  | (35546915) | (32073376) |
| Total shareholders' equity  |  | 3910539 | 2680994 |
| Total liabilities and shareholders' equity |  | $4191982 | $3014035 |
| Nature and continuance of operations (note 1) |  |  |  |
| Events after the reporting period (note 14) |  |  |  |

---

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

---

| | |
|:---|:---|
| */s/ Trevor Thomas* | */s/ Michael Clark* |
| Trevor Thomas | Michael Clark |
| Director | Director |

---

---

| | | | |
|:---|:---|:---|:---|
| **QUARTZ MOUNTAIN RESOURCES LTD.** | **QUARTZ MOUNTAIN RESOURCES LTD.** | **QUARTZ MOUNTAIN RESOURCES LTD.** | **QUARTZ MOUNTAIN RESOURCES LTD.** |
| **STATEMENTS OF LOSS AND COMPREHENSIVE LOSS** | **STATEMENTS OF LOSS AND COMPREHENSIVE LOSS** | **STATEMENTS OF LOSS AND COMPREHENSIVE LOSS** | **STATEMENTS OF LOSS AND COMPREHENSIVE LOSS** |
| (Expressed in Canadian Dollars, except for weighted average number of common shares) | (Expressed in Canadian Dollars, except for weighted average number of common shares) | (Expressed in Canadian Dollars, except for weighted average number of common shares) | (Expressed in Canadian Dollars, except for weighted average number of common shares) |
|  | Years ended July 31, | Years ended July 31, | Years ended July 31, |
|  | 2025 | 2024 | 2023 |
| Exploration and evaluation | $2616260 | $2285511 | $96479 |
| &nbsp;&nbsp;&nbsp;&nbsp;Assays and analysis | 212497 | 225954 | 11845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Drilling | 1487489 | 907694 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Engineering |  | 562 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Environmental | 8096 | 466 | 4410 |
| &nbsp;&nbsp;&nbsp;&nbsp;Geological | 441570 | 284834 | 70470 |
| &nbsp;&nbsp;&nbsp;&nbsp;Helicopter and fuel | - | 447828 | 6390 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property costs and assessments | 15669 | 1732 | 1646 |
| &nbsp;&nbsp;&nbsp;&nbsp;Site activities | 406947 | 393350 | (10700) |
| &nbsp;&nbsp;&nbsp;&nbsp;Socioeconomic |  | 2330 | 12128 |
| &nbsp;&nbsp;&nbsp;&nbsp;Travel and accommodation | 43992 | 20761 | 290 |
|  | 527817 | 257135 | 190577 |
| &nbsp;&nbsp;&nbsp;&nbsp;Administration | 57934 | 52700 | 46359 |
| &nbsp;&nbsp;&nbsp;&nbsp;Conference and travel | 405 | 705 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Insurance | 24929 | 23481 | 23968 |
| &nbsp;&nbsp;&nbsp;&nbsp;IT Services | 33640 | 21120 | 12000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Legal, accounting and audit | 144183 | 58023 | 51818 |
| &nbsp;&nbsp;&nbsp;&nbsp;Office and miscellaneous | 181072 | 37167 | 23920 |
| &nbsp;&nbsp;&nbsp;&nbsp;Regulatory, trust and filing | 85654 | 63939 | 32512 |
| Equity-settled share-based compensation | 416742 |  | 640860 |
| Operating expenses | (3560819) | (2542646) | (927916) |
| **Other items** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion expense - office lease | (1888) | (3244) | (4376) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use asset | (9895) | (9895) | (9895) |
| &nbsp;&nbsp;&nbsp;&nbsp;Recognition of flow-through premium liability |  | 62778 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income | 94679 | 25089 | 12410 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (10) | (2138) | (1107) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign exchange gain (loss) | (1114) | (501) | (315) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 5508 | 33755 | 20735 |
| **(Loss) and comprehensive (loss) before taxes for the year** | $(3473539) | $(2436802) | $(910464) |
| &nbsp;&nbsp;&nbsp;&nbsp;Current income tax expenses (recoveries) | – | – | 37 |
| **(Loss) and comprehensive (loss) for the year** | $(3473539) | $(2436802) | $(910427) |
| **Basic earning (loss) per common share** | $(0.06) | $(0.05) | $(0.02) |
| **Diluted earning (loss) per common share** | $(0.06) | $(0.05) | $(0.02) |
| **Weighted average number of common shares outstanding (note 5(c))** | **Weighted average number of common shares outstanding (note 5(c))** | **Weighted average number of common shares outstanding (note 5(c))** | **Weighted average number of common shares outstanding (note 5(c))** |
| Basic | 62626277 | 48777657 | 43216198 |
| Diluted | 62626277 | 48777657 | 43216198 |

---

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

---

| |
|:---|
| **QUARTZ MOUNTAIN RESOURCES LTD.** |
| **STATEMENTS OF CHANGES IN SHAREOLDERS' EQUITY**  |
| (Expressed in Canadian Dollars, except for share information) |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | |  | Share Capital | Share Capital | Reserves | Reserves | | | |
|  |<br>Note |  | Number of shares | Amount | Warrants | Equity-settled share-based payments | <br>Shares to be issued | <br>Accumulated deficit | <br>Total shareholders' equity  |
| Balance at July 31, 2023 |  |  | 43864141 | $28995261 | $– | $1432011 | $– | $(29636574) | $790698 |
| &nbsp;&nbsp;&nbsp;&nbsp;Private placement of flow-through units |  |  | 4838889 | 1416611 | 15389 |  |  |  | 1432000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Private placement of non flow-through units |  |  | 6000000 | 2100000 |  |  |  |  | 2100000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share issuance costs |  |  |  | (17174) |  |  |  |  | (17174) |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercise of flow-through warrants |  |  | 3400000 | 666000 | (14000) |  |  |  | 652000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Flow-through share premium liability |  |  |  | (62778) |  |  |  |  | (62778) |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares issued for mineral property acquisitions |  |  | 765000 | 214350 |  |  |  |  | 214350 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares to be issued for mineral property acquisitions |  |  |  |  |  |  | 8700 |  | 8700 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss for the year |  |  | – | – | – | – | – | (2436802) | (2436802) |
| Balance at July 31, 2024 |  |  | 58868030 | $33312270 | $1389 | $1432011 | $8700 | $(32073376) | $2680994 |
| Balance at July 31, 2024 |  |  | 58868030 | $33312270 | $1389 | $1432011 | $8700 | $(32073376) | $2680994 |
| &nbsp;&nbsp;&nbsp;&nbsp;Private placement of flow-through units | 5 | (a) | 1700000 | 714000 |  |  |  |  | 714000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Private placement of non flow-through units | 5 | (a) | 8300000 | 3486000 |  |  |  |  | 3486000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share issuance costs | 5 | (a) |  | (72958) |  |  |  |  | (72958) |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercise of flow-through warrants |  |  | 750000 | 150000 |  |  |  |  | 150000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Shares issued for mineral property acquisitions | 4 | (a),5(a) | 30000 | 18000 |  |  | (8700) |  | 9300 |
| &nbsp;&nbsp;&nbsp;&nbsp;Share purchase options | 5 | (c) |  |  |  | 416742 |  |  | 416742 |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss for the year |  |  | – | – | – | – | – | (3473539) | (3473539) |
| Balance at July 31, 2025 |  |  | 69648030 | $37607312 | $1389 | $1848753 | $– | $(35546915) | $3910539 |

---

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **QUARTZ MOUNTAIN RESOURCES LTD.** |  |  |  |  |  |
| **CONSOLIDATED STATEMENTS OF CASH FLOWS** |  |  |  |  |  |
| (Expressed in Canadian Dollars) |  |  |  |  |  |
|  |  |  | Years ended July 31, | Years ended July 31, | Years ended July 31, |
|  | Note |  | 2025 | 2024 | 2023 |
| **Operating activities** |  |  |  |  |  |
| Loss for the year |  |  | $(3473539) | $(2436802) | $(910427) |
| Adjusted for: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accretion expense - office lease | 13 | (b) | 1888 | 3244 | 4376 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use asset | 13 | (a) | 9895 | 9895 | 9895 |
| &nbsp;&nbsp;&nbsp;&nbsp;Recognition of flow-through premium liability |  |  |  | (62778) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income |  |  | (94679) | (25089) | (12410) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity-settled share-based compensation |  |  | 416742 |  | 640860 |
| Changes in working capital items: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts receivable and other assets |  |  | 17103 | (79421) | (5265) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amounts payable and other liabilities |  |  | (20878) | 264572 | (165014) |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | 7 | (a)&7(b) | (2504) | (10066) | (85791) |
| Net cash used in operating activities |  |  | (3145972) | (2336445) | (523776) |
| **Investing activities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mineral property acquisitions |  |  | (41000) | (33000) | (250000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest received |  |  | 94679 | 25089 | 12410 |
| Net cash provided by investing activities |  |  | 53679 | (7911) | (237590) |
| **Financing activities** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Office lease payment (base rent portion capitalized under IFRS 16) | 11 |  | (14104) | (13612) | (12956) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from exercise of warrants and options |  |  | 150000 | 652000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from private placement | 5 |  | 4127042 | 3514826 | 550000 |
| Net cash provided by financing activities |  |  | 4262938 | 4153214 | 537044 |
| **Increase (decrease) in cash** |  |  | 1170645 | 1808858 | (224322) |
| Cash, beginning of the year |  |  | 1906327 | 97469 | 321791 |
| **Cash, end of the year** |  |  | $**3076972** | $**1906327** | $**97469** |
| **Non-cash transactions** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Incremental Fair Value for the shares issued for mineral properties acquisition |  |  | $9300 | $214350 | $– |

---

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

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

**1. NATURE AND CONTINUANCE OF OPERATIONS**

Quartz Mountain Resources Ltd. (the "Company") is a Canadian public company incorporated in British Columbia on August 3, 1982. The Company's common shares trade on the TSX Venture Exchange ("TSX-V") under the symbol QZM, and certain broker-dealers in the United States make market in the Company's common shares on the OTCQB Market under the symbol QZMRF. The Company's corporate office is located at 1040 West Georgia Street, 14th Floor, Vancouver, British Columbia, Canada. The Company most recently focused on evaluating mineral prospects for potential acquisition and exploration in British Columbia. The Company continues to investigate potential opportunities.

The financial statements as at and for the year ended July 31, 2025 include only the accounts of the Company as the Company's wholly-owned subsidiaries, QZMG Resources Ltd. and Wavecrest Resources Inc., were dissolved on March 2, 2023.

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. As at July 31, 2025, the Company had an accumulated deficit of $35,546,915 and net working capital of $2,881,768. The Company's continuing operations are dependent upon its ability to obtain necessary financings to complete exploration of any new and current projects, its ability to obtain necessary permits to explore, develop, and mine new sites, and future profitable production of any mine. These material uncertainties are indicative of significant doubt as to the Company's ability to continue as a going concern.

Additional debt or equity financing will be required to fund acquisition of mineral property interests. There can be no assurance that the Company will be able to obtain additional financial resources or achieve positive cash flows. If the Company is unable to obtain adequate additional financing, it will need to curtail its expenditures further, until additional funds can be raised through financing activities.

The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

Such developments could have a material adverse effect on the Company's business, financial condition, results of operations and cash flow, and exposure to credit risk.

The Company is constantly evaluating the situation and monitoring any impacts or potential impacts to its business.

**2. MATERIAL ACCOUNTING POLICIES**

The principal accounting policies applied in the preparation of these financial statements are described below. These policies have been consistently applied for all years presented, unless otherwise stated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Statement of compliance*

The financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC"), effective for the Company's fiscal year ended July 31, 2025.

The Company's Board of Directors authorized issuance of the financial statements on November 26, 2025.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Basis of presentation and consolidation*

The financial statements have been prepared on a historical cost basis, except for financial instruments measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

The financial statements for the year ended July 31, 2025 include only the accounts of the Company and the financial statements for the years ended July 31, 2024 and 2023 include the accounts of the Company and the subsidiaries that it had control.

Control is achieved when the Company is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Intercompany balances and transactions including any unrealized income and expenses arising from intercompany transactions are eliminated upon consolidation.

As at July 31, 2025 and 2024, the Company held a 0% interest in QZMG Resources Ltd. and Wavecrest Resources Inc. as they were dissolved on March 2, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c) Significant accounting estimates and judgments*

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses. Actual results may differ from these estimates. The impact of such estimates is pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic condition, and other factors, including expectations of future events that management believes are reasonable under the circumstances. Changes in the subjective inputs and assumptions can materially affect fair value estimates.

Specific areas where significant estimates or judgments exist are:

· Management has applied judgment on settlement of debt with related parties as to whether they were acting in the capacity as creditor or shareholder.

· Assessment of the Company's ability to continue as a going concern.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d) Foreign currency*

The functional and presentational currency of the Company and its subsidiaries dissolved is the Canadian Dollar ("CAD").

Transactions in currencies other than the functional currency of the Company are recorded at the rates of exchange prevailing on the dates of transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates of exchange prevailing at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated. Gains and losses arising on translation are included in profit or loss for the year.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e) Financial instruments*

Financial assets and liabilities are recognized when the Company becomes party to the contracts that give rise to them. The Company determines the classification of its financial assets and liabilities at initial recognition, and, where allowed and appropriate, re-evaluates such classification at each financial year-end. The Company does not have any derivative financial instruments.

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not measured at fair value through profit or loss ("FVTPL"), transaction costs that are directly attributable to its acquisition. The directly attributable transaction costs of a financial asset classified at FVTPL are expensed in the period in which they are incurred.

**Measurement**

<u>Financial assets and liabilities measured at amortized cost</u>

A financial asset is measured at amortized cost if it meets both the following conditions and is not designated as FVTPL:

· it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

· its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets and liabilities are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses.

Interest income, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Any gain or loss on the derecognition of the financial asset is recognized in profit or loss.

<u>Financial assets measured at fair value through other comprehensive income ("FVTOCI")</u>

A receivable investment is measured at FVTOCI if it meets both the following conditions and is not designated as FVTPL:

· it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

· its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On the initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment's fair value in other comprehensive income ("OCI"). This election is made on an investment-by-investment basis.

Receivable investments measured at FVTOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment are recognized in profit or loss. Other net gains and losses are measured in OCI. On de- recognition, gains and losses accumulated in OCI are reclassified to profit or loss.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

Equity investments measured at FVTOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.

<u>Financial assets and liabilities measured at fair value through profit or loss</u>

All financial assets not classified as measured at amortized cost or measured at FVTOCI, as described above, are measured at FVTPL; this includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or measured at FVTOCI as FVTPL if doing so eliminates, or significantly reduces, an accounting mismatch that would otherwise arise.

Financial assets and liabilities are subsequently measured at fair value and transaction costs are expensed in profit or loss. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

<u>Impairment of financial assets at amortized cost</u>

An 'expected credit loss' impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset's original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

**Derecognition**

<u>Financial assets</u>

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(f) Exploration and evaluation expenditures*

Exploration and evaluation expenditures are expenditures incurred by the Company in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

Exploration and evaluation expenditures are expensed as incurred, except for initial expenditures associated with the acquisition of exploration and evaluation assets through a business combination or an asset acquisition.

Exploration and evaluation expenditures include the cash consideration and the estimated fair market value of common shares on the date of issue or as otherwise provided under the relevant agreements for exploration costs.

Administrative expenditures related to exploration activities are expensed in the period incurred.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(g) Mineral property interests*

Expenditures incurred by the Company in connection with a mineral property after the technical feasibility and commercial viability of extracting a mineral resource are demonstrable are capitalized. Such amounts are then amortized over the estimated life of the property following the commencement of commercial production, or are written off if the property is sold, allowed to lapse, or abandoned, or when impairment has been determined to have occurred.

Mineral property interests, if any, are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Mineral property interests attributable to an area of interest are tested for impairment and then reclassified to mineral property and development assets within property, plant, and equipment once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable.

Recoverability of the carrying amount of mineral property interests is dependent on successful development and commercial exploitation, or alternatively, a sale of the respective areas of interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(h) Impairment of non-financial assets*

At the end of each reporting period, the carrying amounts of the Company's assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the greater of (i) fair value less costs to sell, and (ii) value in use. Fair value is estimated as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current assessments of the Company's cost of capital and the risks specific to the asset.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash- generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

&nbsp;&nbsp;&nbsp;&nbsp;

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i) Share capital*

Common shares of the Company are classified as equity. Transaction costs directly attributable to the issuance of common shares and share purchase options are recognized as a deduction from equity, net of any tax effects.

When the Company issues common shares for consideration other than cash, the transaction is measured at fair value based on the quoted market price of the Company's common shares on the date of issuance.

The Company will from time-to-time issue flow-through common shares, pursuant to which it transfers the tax deductibility of the related resource expenditures to shareholders. On issuance, the Company bifurcates the proceeds received into i) a flow-through share premium, equal to the estimated premium, if any, investors pay for the flow-through feature, which is recognized as a liability, and ii) share capital. Upon expenses being incurred, the Company derecognizes this liability and recognizes this premium as other income, offsetting any expense associated with the Company's expenditure of the flow-through proceeds.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(j) Earnings (loss) per share*

Basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share is determined by the same way that basic earnings (loss) per share except that the weighted average common shares outstanding are increased to include additional common shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional common shares is calculated by assuming that outstanding stock options and warrants were exercised and that proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. For the years ended July 31, 2025 and 2024, basic and diluted loss per share are the same as the effect of issuance of additional common shares is anti-dilutive.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(k) Share-based payments*

Share-based payments to employees and others providing similar services are measured at the fair value of equity instruments at the grant date. The fair value determined at the grant date is charged to share-based compensation over the vesting period, based on the Company's estimate of the equity instruments that will eventually vest.

Share-based payment transactions with other parties are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(l) Rehabilitation provision*

An obligation to incur rehabilitation and site restoration costs arises when environmental disturbance is caused by the exploration, development, or ongoing production of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for, and capitalized, at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged against earnings over the life of the operation.

The Company has no known rehabilitation and site restoration costs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(m) Income taxes*

Income tax on the profit or loss for the years presented comprises of current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at year-end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is calculated by providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The following temporary differences are not provided for:

· goodwill not deductible for tax purposes;

· the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and,

· differences relating to investments in subsidiaries, associates, and joint ventures to the extent that they will probably not reverse in the foreseeable future.

The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the financial position reporting date applicable to the period of expected realization or settlement.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they relate to income taxes levied by the same

taxation authority, and the Company intends to settle its current tax assets and liabilities on a net basis.

&nbsp;&nbsp;&nbsp;&nbsp;

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(n) Leases*

IFRS 16 provides a single lessee accounting model and requires the lessee to recognize assets and liabilities for all leases on its statement of financial position in order to present an entity's lease obligations.

At lease commencement date, the Company recognizes a right-of-use asset and a lease liability on the balance sheet. The Company depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available. If the interest rate implicit in the lease is not readily available, the Company discounts using the Company's incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Company has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term. On the consolidated statement of financial position, the right-of-use asset has been included under non-current assets and the lease liability has been included under current and non-current liabilities.

**3. AMOUNTS RECEIVABLE AND OTHER ASSETS**

---

| | | |
|:---|:---|:---|
|  | July 31, 2025 | July 31, 2024 |
| Sales tax receivable | $47746 | $83451 |
| Prepayments | 19393 | 791 |
| Reclamation deposit | 19100 | 19100 |
|  | $**86239** | $**103342** |

---

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

**4. MINERAL PROPERTY INTERESTS**

---

| | | | |
|:---|:---|:---|:---|
|  | **Maestro Property (formerly Lone Pine)** | **Jake Property** | **Total** |
| **Balance, July 31, 2022** | $**365000** | $**100000** | $**465000** |
| Additions – option payments |  | 225000 | 225000 |
| Acquisition – royalty payments | 25000 | - | 25000 |
| **Balance, July 31, 2023** | $**390000** | $**325000** | $**715000** |
| Acquisition – cash payments | 24000 | **-** | **24000** |
| Acquisition – share issuance | 223050 | **-** | **223050** |
| Acquisition – royalty payments | **25000** | **-** | **25000** |
| **Balance, July 31, 2024** | $**662050** | $**325000** | $**987050** |
| Acquisition – share issuance | **9300** | **-** | **9300** |
| Acquisition – royalty payments | **25000** | **-** | **25000** |
| **Balance, July 31, 2025** | $**696350** | $**325000** | $**1021350** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Maestro (formerly Lone Pine) Property, British Columbia*

Under a mineral claims purchase agreement (the "Agreement") dated June 8, 2021 between the Company and Impala Capital Corp. (the "Vendor"), an arm's length party, the Company acquired a 100% interest in nine mineral claims located near Houston, British Columbia (the "Maestro Property").

Under the terms of the Agreement, the Company made $105,000 in cash payments and issued 1,000,000 common shares to the Vendor (valued at $210,000).

The Maestro Property is subject to a pre-existing 2.5% net smelter returns (NSR) royalty held by an arm's length third party, of which 1.5% can be purchased for $1.5 million by the Company. This NSR is subject to an annual advance payment of $25,000 (paid for the year ended July 31, 2025).

In March 2024, the Company entered into two separate agreements to purchase a 100% interest in each of the Lone Pine Claim and the North Claim. These two mineral claims total 169 hectares and are located contiguous to the Company's 100% owned Maestro Property located approximately 15km north of the town of Houston, British Columbia.

The Lone Pine mineral claim was purchased from Eagle Plains Resources Ltd., an arms-length vendor, for 750,000 common shares of the Company, and it is subject to a 2% NSR royalty, of which 1.5% can be purchased at any time for $5 million. The shares are subject to a 24-month contractual resale restriction and the Company has a further right to arrange purchasers of these shares in the case of desired resales after that period. The Lone Pine transaction was closed with the 750,000 common shares of the Company issued on March 20, 2024 (Note 5 (a)).

The North mineral claim was purchased from Shawn Merkley, an arms-length vendor, for $24,000 cash and 45,000 common shares of the Company, which will be paid as follows:

i. $8,000 cash and 15,000 common shares on or before the Closing Date (completed)

ii. $8,000 cash and 15,000 common shares on or before the first anniversary of the Closing Date (completed)

iii. $8,000 cash and 15,000 common shares on or before the second anniversary of the Closing Date (completed)

&nbsp;&nbsp;&nbsp;&nbsp;

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

The North mineral claim is subject to a 2% NSR royalty, which can be purchased at any time for $2 million.

As at July 31, 2025, the Company held a 100% interest in the Maestro Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Jake Property, British Columbia*

On November 5, 2021, the Company entered into a mineral claims purchase agreement (the "Agreement") with United Mineral Services Ltd. ("UMS"), a non-arm's length party, to purchase a 100% interest in four mineral claims acquired through staking by UMS and to obtain an option to purchase a 100% interest in five adjacent claims (the "Underlying Claims") owned by Electrum Resource Corporation ("Electrum"), an arm's length third party (the "Jake Property"). The Jake Property is located approximately 162 km north of Smithers, British Columbia. The Underlying Claims are subject to a 2% NSR royalty, which is capped at $3 million.

To acquire the Jake Property, the Company is required to:

i. Make cash payments to UMS as follows:

a. $50,000 on the date of receipt of TSX Venture Exchange approval (the "Approval Date") (paid)

b. $50,000 on the date that is six months following the Approval Date (paid)

c. $50,000 on the date that is twelve months following the Approval Date (paid)

d. $50,000 on the date that is eighteen months following the Approval Date (paid)

ii. Make cash payments to Electrum as follows:

a. $50,000 on or before July 14, 2022 (paid)

b. $75,000 on or before July 14, 2023 (paid)

iii. Incur expenditures on the Underlying Claims as follows:

a. $60,000 on or before July 14, 2022 (completed)

b. Additional $100,000 on or before July 14, 2023 (completed)

As at July 31, 2025, the Company held a 100% interest in the Jake Property.

**5. SHARE CAPITAL AND RESERVES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Authorized share capital*

As at July 31, 2025 and July 31, 2024, the authorized share capital of the Company comprised an unlimited number of common shares without par value and an unlimited number of preferred shares without par value.

No preferred shares have been issued to date. All issued common shares are fully paid.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

<u>Shares issued during the year ended July 31, 2024</u>

On September 8, 2023, the Company issued 500,000 common shares upon the exercise of 500,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $100,000.

On September 28, 2023, the Company issued 500,000 common shares upon the exercise of 500,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $100,000.

On October 30, 2023, the Company completed a private placement of 1,538,889 flow-through units at a price of $0.18 per unit for gross proceeds of flow-through funds of $277,000. Each flow-through unit consists of one flow-through common share and one flow-through common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional flow-through common share at a price of $0.18 for a period of five years from the closing of the private placement. $15,389 of the proceeds was allocated to these warrants issued.

On November 27, 2023, the Company issued 250,000 common shares upon the exercise of 250,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $50,000.

On December 5, 2023, the Company issued 416,667 common shares upon the exercise of 416,667 flow-through warrants at $0.18 for gross proceeds of flow-through funds of $75,000, and $4,167 of the fair value previously allocated to these warrants was transferred to share capital.

On December 18, 2023, the Company issued 277,778 common shares upon the exercise of 277,778 flow-through warrants at $0.18 for gross proceeds of flow-through funds of $50,000, and $2,778 of the fair value previously allocated to these warrants were transferred to share capital.

On February 7, 2024, the Company issued 705,555 common shares upon the exercise of 705,555 flow-through warrants at $0.18 for gross proceeds of flow-through funds of $127,000, and $7,055 of the fair value previously allocated to these warrants was transferred to share capital.

On March 20, 2024, the Company issued 750,000 common shares (valued at $210,000) to Eagle Plains Resources Ltd., an arms-length vendor for the acquisition of the Lone Pine mineral claim (Note 4(a)).

On March 22, 2024, the Company issued 15,000 common shares (valued at $4,350) to Shawn Merkley, an arms-length vendor for the acquisition of the North mineral claim (Note 4(a)).

On May 30, 2024, the Company issued 3,300,000 flow-through shares ("FT Shares") at $0.35 per FT Share for gross proceeds of flow-through funds of $1,155,000, and 6,000,000 non-flow-through shares ("Non-FT Shares") at $0.35 per Non-FT Share for gross proceeds of $2,100,000. A key new investor, the Sutton Group Inc., subscribed for 6,000,000 of Non-FT Shares and became an insider of the Company, and 3,300,000 FT Shares were issued to Robert Dickinson, a director of the Company. These securities were subject to a 4-month hold period in Canada, and no commissions were paid in connection with the financings.

On July 8, 2024, the Company issued 750,000 common shares upon the exercise of 750,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $150,000.

In connection with the private placements completed during the year ended July 31, 2024, the Company incurred $17,174 of share issuance costs.

&nbsp;&nbsp;&nbsp;&nbsp;

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

<u>Shares issued during the year ended July 31, 2025</u>

On March 12, 2025, the Company issued 30,000 shares with fair value of $18,000 to Shawn Merkley, an arms-length vendor for the acquisition of the North mineral claim (Note 4(a)). 30,000 shares were measured at $18,000, with $8,700 recognized as shares to be issued for the year ended July 31, 2024.

On March 18, 2025, the Company completed a private placement of 1,700,000 flow-through units at a price of $0.42 per unit for gross proceeds of flow-through funds for $714,000. Each flow-through unit consists of one flow-through common share and one-half of one flow-through common share purchase warrant (a "FT Warrant"). Each FT Warrant entitles the holder to purchase one additional flow-through common share at a price of $0.60 for a period of one year from the date of issuance, and is subject to an accelerated exercise provision whereby if the Company's common shares trade at $1.00 or higher for 10 consecutive trading days on the TSX Venture Exchange then the holder will have 30 days to exercise the Warrant.

On March 18, 2025, the Company completed a private placement of 8,300,000 units at a price of $0.42 per unit for gross proceeds of $3,486,000. Each unit consists of one common share and one-half common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional common share at a price of $0.60 for a period of one year from the date of issuance, and is subject to an accelerated exercise provision whereby if the Company's common shares trade at $1.00 or higher for 10 consecutive trading days on the TSX Venture Exchange then the holder will have 30 days to exercise the Warrant.

On July 22, 2025, the Company issued 750,000 common shares upon the exercise of 750,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $150,000.

<u>Flow-through shares premium liability and expenditures commitment</u>

*<u>Year ended July 31, 2025</u>*

During the year ended July 31, 2025, the Company completed an issuance of flow-through shares for total gross proceeds of $864,000.

The Company did not recognize any flow-through share premium liability for the 17,000,000 flow-through units issued on March 18, 2025, as the unit price was equal to that of a non-flow-through unit at $0.42.

The Company also did not recognize any flow-through share premium liability for the 750,000 shares issued upon the exercise of the flow-through warrants on July 22, 2025, as the exercise price of each flow-through warrants of $0.20 was less than the closing market value of $0.64 on July 22, 2025.

*<u>Year ended July 31, 2024</u>*

During the year ended July 31, 2024, the Company completed eight issuances of flow-through shares for total gross proceeds of $2,084,000.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

The Company recognized a flow-through share premium liability of $62,778 to account for the excess of the subscription or exercise price at $0.20 over the fair value of the shares issued on September 8 (closing quote at $0.19 per share), September 28, 2023 (closing quote at $0.17 per share), on November 27 (closing quote at $0.14 per share), and for the excess of the subscription or exercise price at $0.18 over the fair value of the shares issued on December 5 (closing quote at $0.14 per share) and December 18, 2023 (closing quote at $0.14 per share).

The Company did not recognize any flow-through share premium liability for the flow through share issuance on October 30, 2023, as the $0.18 unit price has allocated $0.17 to the common shares and $0.01 residual value of the total unit price to the warrants issued on October 30, 2023.

The Company did not recognize any flow-through share premium liability for the flow through share issuance on February 7, 2024, as the $0.18 unit price has been allocated entirely to the issued common shares. The closing quote of the shares at $0.18 on February 7, 2024 resulted in no residual value to allocate to either warrants or flow-through share premium liability.

The Company did not recognize any flow-through share premium liability for the flow through share issuance on July 8, 2024, as the $0.20 unit price has been allocated entirely to the issued common shares. The closing quote of the shares at $0.46 on July 8, 2024 resulted in no residual value to allocate to either warrants or flow-through share premium liability.

The Company did not recognize any flow-through share premium liability for the flow-through share issuance on May 30, 2024, as the unit price of each flow-through share was equal to that of a non-flow-through share at $0.35.

A summary of the changes in the Company's flow-through shares premium liability was as follows:

---

| | | |
|:---|:---|:---|
| Flow-through shares premium liability | 2025 | 2024 |
| Balance as at July 31, 2024 | $- | $- |
| Flow-through shares issuance with premium recognition |  | 62778 |
| Amortization | - | (20000) |
| Balance as at July 31, 2025 & 2024 | $- | $42778 |

---

<u>Future Flow-through shares commitments</u>

During the year ended July 31, 2025, the Company had $150,000 in unspent flow-through proceeds that remain to be incurred on eligible exploration expenditures.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Warrants*

Share purchase warrants transactions are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of**<br>**Outstanding Warrants** | **Weighted**<br>**Average Exercise Price** |
| **Balance, July 31, 2023** | **2750000** | $**0.20** |
| &nbsp;&nbsp;&nbsp;&nbsp;Issued | 1538889 | 0.18 |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised | (3400000) | 0.19 |
| **Balance, July 31, 2024** | **888889** | $**0.20** |
| &nbsp;&nbsp;&nbsp;&nbsp;Issued | 5000000 | 0.60 |
| &nbsp;&nbsp;&nbsp;&nbsp;Exercised | (750000) | 0.20 |
| **Balance, July 31, 2025** | **5138889** | $**0.59** |

---

As at July 31, 2025, stock warrants outstanding and exercisable are as follows:

---

| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Outstanding Options** | &nbsp;&nbsp;&nbsp;&nbsp;**Exercise Price** |
| October 30, 2028 | 138889 | $0.18 |
| March 18, 2026 | 5000000 | $0.60 |

---

As at July 31, 2025, the weighted average remaining of the outstanding warrants was 0.70 years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c) Options*

Stock option transactions are summarized as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of**<br>**Outstanding Options** | **Weighted**<br>**Average Exercise Price** |
| **Balance, July 31, 2023 and 2024** | **4200000** | $**0.20** |
| &nbsp;&nbsp;&nbsp;&nbsp;Granted | 1000000 | 0.60 |
| **Balance, July 31, 2025** | **5200000** | $**0.28** |

---

As at July 31, 2025, stock options outstanding and exercisable are as follows:

---

| | | |
|:---|:---|:---|
|  | **Outstanding Options** | **Exercise Price** |
| October 31, 2027 | 3204300 | $0.20 |
| April 24, 2028 | 500000 | $0.77 |
| January 15, 2030 | 500000 | $0.44 |
| January 11, 2032 | 995700 | $0.20 |

---

As at July 31, 2025, the weighted average remaining life of the outstanding options was 3.31 years.

On October 31, 2022, the Company granted 3,204,300 stock options to two directors of the Company at an exercise of $0.20 per option for a period of 5 years. The options fully vested as granted and valued at $640,860 using the Black- Scholes option pricing model with the following weighted average assumptions: expected life of 5 years, volatility of 478%, dividend yield of 0%, and risk- free rate of 3.43%. The fair value of the stock options granted was recognized to equity-settled share-based compensation in the amount of $640,860 in the year ended July 31, 2023.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

On January 15, 2025, 500,000 stock options to two consultants of the Company at an exercise of $0.435 per option for a period of 5 years. 125,000 stock options were fully vested on January 15, 2025. 125,000 stock options will be fully vested on April 15, 2025. 125,000 stock options will be fully vested on July 15, 2025. 125,000 stock options will be fully vested on October 15, 2025. The grant date fair value of these options were valued at $190,500 using the Black-Scholes option pricing model with the following weighted average assumptions: expected life of 5 years, volatility of 130%, dividend yield of 0%, and risk- free rate of 3.14%. The portion of the fair value of the stock options vested according to the graded vesting method was recognized to equity-settled share-based compensation in the amount of $177,242 in the year ended July 31, 2025.

On April 24, 2025, 500,000 stock options to a consultant of the Company at an exercise of $0.77 per option for a period of 3 years. 500,000 stock options were fully vested on the date of grant. The grant date fair value of these options were valued at $239,500 using the Black-Scholes option pricing model with the following weighted average assumptions: expected life of 3 years, volatility of 92%, dividend yield of 0%, and risk- free rate of 2.61%. The fair value of the stock options granted was recognized to equity-settled share-based compensation in the amount of $239,500.

**6. AMOUNTS PAYABLE AND OTHER LIABILITIES**

---

| | | |
|:---|:---|:---|
| | **July 31, 2025** | **July 31, 2024** |
| Amounts payable | $125561 | $226060 |
| Accrued liabilities | 141254 | 77633 |
|  | $266815 | $303693 |

---

**7. RELATED PARTY BALANCES AND TRANSACTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)Transactions with Key Management Personnel*

Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly, and by definition, include the directors of the Company.

The Company compensated key management personnel as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended July 31,** | **Years ended July 31,** | **Years ended July 31,** |
|  | **2025** | **2024** | **2023** |
| Administrative fees \* | $30195 | $17230 | $8500 |
| Fees paid to the entity controlled by CFO | 12000 | 12000 | 12000 |
| Fees paid to the entity controlled by a Director | 10505 |  |  |
| Equity-settled share-based compensation | $- | $- | $640860 |

---

\*Administrative fees include salaries, director's fees, and amounts paid to Hunter Dickinson Services Inc. ("HDSI") (note 7(b)) for the services provided to the Company by the CEO and a director of the Company.

During the year ended July 31, 2024, the Company received a loan of $200,000 from a director of the Company and repaid $202,000 in total with $2,000 of interest.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Entities with Significant Influence over the Company*

<u>Hunter Dickinson Inc. ("HDI")</u>

Hunter Dickinson Inc. ("HDI") and its wholly owned subsidiary, HDSI, are private companies established by a group of mining professionals. HDSI provides services under contracts for a number of mineral exploration and development companies, and also to companies that are outside of the mining and mineral development space. The Company receives services from a number of related contractors, and it is at the Company's discretion that HDSI provides certain contract services.

The Company's CEO and Corporate Secretary is employed by HDSI and works for the Company under an employee secondment arrangement between the Company and HDSI.

Pursuant to an agreement dated July 2, 2010, HDSI provides certain technical, geological, corporate communications, regulatory compliance, and administrative and management services to the Company on a non-exclusive basis as needed and as requested by the Company. As a result of this relationship, the Company has ready access to a range of diverse and specialized expertise on a regular basis, without having to engage or hire full-time employees or experts.

The Company is not obligated to require any minimum amount of services from HDSI. The monetary amount of the services received from HDSI in a given period of time is a function of annually set and agreed charge-out rates for and the time spent by each HDSI employee engaged with the Company.

HDSI also incurs third-party costs on behalf of the Company and such third-party costs include, for example, directors' and officers' insurance. These third- party costs are billed to the Company at cost without markup.

There are no ongoing contractual or other commitments resulting from the Company's transactions with HDSI, other than the payment for services already rendered and billed. The agreement may be terminated upon 60 days' notice by either the Company or HDSI.

The following is a summary of transactions with HDSI that occurred during the reporting period:

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended July 31,** | **Years ended July 31,** | **Years ended July 31,** |
|  | **2025** | **2024** | **2023** |
| Service charges based on management services agreement | $118772 | $89402 | $57686 |
| Office lease | 38623 | 28452 | 21883 |
| Reimbursement of third-party expenses | 20238 | 1386 | 3646 |
| Total | $177633 | $119240 | $83215 |

---

<u>United Mineral Services ("UMS")</u>

UMS is a private company controlled by a director of the Company. The Company was engaged with UMS in the acquisition and exploration of mineral property interests (Note 4 (b)).

During the year ended July 31, 2025, the Company paid $11,140 (2024 - $16,701) of service fees to UMS.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c) Payables due to related parties*

The following is a summary of amounts due to related parties:

---

| | | |
|:---|:---|:---|
| | **July 31, 2025** | **July 31, 2024** |
| Balance payable to HDSI | $3409 | $5913 |
| Balance payable to the entity controlled by the CFO  | 1050 | 1050 |
| Total amount due to related parties | $4459 | $6963 |

---

**8. OTHER INCOME**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* BCMETC

During the year ended July 31, 2025, the Company received $5,508 of BCMETC refund for its fiscal year ended July 31, 2024.

During the year ended July 31, 2024, the Company received $33,753 of BCMETC refund for its fiscal year ended July 31, 2022.

**9. OPERATING SEGMENTS**

The Company operates in a single reportable operating segment – the acquisition, exploration, and evaluation of mineral property interests. The Company is currently focusing on the acquisition and exploration of mineral property interests in BC, Canada. The Company's long-term assets are located only in Canada.

**10. TAXATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Provision for current tax*

During the year ended July 31, 2025, the Company recorded a provision of current income tax recovery of $Nil (2024 – $Nil).

---

| | | | |
|:---|:---|:---|:---|
| Reconciliation of effective tax rate: |  |  |  |
|  | **Years ended July 31,** | **Years ended July 31,** | **Years ended July 31,** |
|  | **2025** | **2024** | **2023** |
|  | $ | $ | $ |
| &nbsp;&nbsp;&nbsp;&nbsp;Income (loss) for the years |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income (loss) excluding income tax |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (recovery) using the Company's domestic rate |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Effect of tax rates in foreign jurisdictions |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-deductible expenses and other |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Difference in statutory tax rates and deferred tax rates |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrecognized temporary differences |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current tax expense |  |  |  |

---

The Company's domestic tax rate during the year ended July 31, 2025 was 27% (2024 – 27%; 2023 – 27%) and the effective tax rate was nil (2024 – nil; 2023 – nil).

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Provision for deferred tax* 

As future taxable profits of the Company are uncertain, no deferred tax asset has been recognized.

As at July 31, 2025, the Company had unused non-capital loss carry forwards of approximately $4,669,000 (2024 – $4,248,000) in Canada and $nil (2024 – $nil) in the United States.

As at July 31, 2025, the Company had the following balances in respect of which no deferred tax assets had been recognized:

---

| | | | |
|:---|:---|:---|:---|
| **Expiry** | **Tax Losses** | **Resource**<br>**Pools** | **Equipment and Other** |
| Within one year |  |  |  |
| One to five years |  |  | 69000 |
| After five years | 4669000 |  | 92000 |
| No expiry date | - | 5629000 | 114000 |
|  | 4669000 | 5629000 | 275000 |

---

In addition, the Company has approximately $5,629,000 (2024 - $4,395,000) of resource tax pools available, which may be used to shelter certain resource income in Canada.

**11. FINANCIAL INSTRUMENTS**

Financial assets and liabilities are classified in the fair value hierarchy according to the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement requires judgement and may affect placement within the fair value hierarchy levels. The hierarchy is as follows:

---

| | |
|:---|:---|
| Level 1: | quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| Level 2:  | inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). |
| Level 3:  | inputs for the asset or liability that are not based on observable market data (unobservable inputs). |

---

The carrying value of cash, amounts receivable, amounts payable and other liabilities, due to a related party, and loan payable approximates fair value due to the short-term nature of the financial instruments. Cash is classified as fair value through profit or loss and measured at fair value using level 1 inputs.

&nbsp;&nbsp;&nbsp;&nbsp;

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

**12. FINANCIAL RISK MANAGEMENT**

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Credit risk*

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash and amounts receivable. The Company limits its exposure to credit risk on liquid financial assets by only investing its cash with high- credit quality financial institutions in business and savings accounts. Receivables are due primarily from a government agency. The carrying value of the Company's cash and amounts receivable represent the maximum exposure to credit risk.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Liquidity risk*

Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The Company does not have sufficient capital in order to meet short-term business requirements, and accordingly is exposed to liquidity risk.

The following obligations existed as at July 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Total** | **Within 1 year** | **1-5 years** |
| Amounts payable and other liabilities | $266815 | $266815 | $- |
| Due to related parties | 4459 | 4459 |  |
| Lease liability | 10169 | 10169 | - |
| **Total** | $**281443** | $**281443** | $**-** |

---

The following obligations existed as at July 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Total** | **Within 1 year** | **1-5 years** |
| Amounts payable and other liabilities | $303693 | $295693 | $8000 |
| Due to related parties | 6963 | 6963 |  |
| Lease liability | 22385 | 12216 | 10169 |
| **Total** | $**333041** | $**314872** | $**18169** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c) Interest rate risk*

The Company's exposure to interest rate risk arises from the interest rate impact on cash. The Company's practice has been to invest cash at floating rates of interest, in order to maintain liquidity, while achieving a satisfactory return for shareholders. There is minimal risk that the Company would recognize any loss because of a decrease in the fair value of any demand bank investment certificates included in cash as they are generally held with large financial institutions. The Company from time to time has debt instruments and is exposed to risk in the event of interest rate fluctuations. The Company has not entered any interest rate swaps or other financial arrangements that mitigate the exposure to interest rate fluctuations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d) Market risk*

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The Company is not subject to significant market risk.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e) Capital management objectives*

The Company's primary objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can continue to potentially provide returns for shareholders, and to have sufficient liquidity available to fund ongoing expenditures and suitable business opportunities as they arise.

The Company considers the components of shareholders' equity (deficiency) as capital. The Company manages its capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue equity, sell assets, or return capital to shareholders as well as issue or repay debt.

The Company's investment policy is to invest its cash in highly liquid short–term interest–bearing investments having maturity dates of three months or less from the date of acquisition and that are readily convertible to known amounts of cash.

There were no changes to the Company's approach to capital management during the year ended July 31, 2024.

The Company is not subject to any externally imposed equity requirements.

**13. OFFICE LEASE – RIGHT OF USE ASSET AND LEASE LIABILITY**

The Company subleases corporate offices in Vancouver, BC from HDSI under a lease agreement dated May 1, 2021 and the lease expires on April 29, 2026. According to IFRS 16 Leases, the Company recorded a right-of-use asset and lease liability regarding its office lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a) Right-of-use asset*

As at July 31, 2025, $7,421 of right-of-use asset was recorded as follows:

---

| | |
|:---|:---|
| **Balance, July 31, 2023** | $**27211** |
| Amortization | (9895) |
| **Balance, July 31, 2024** | $**17316** |
| Amortization | (9895) |
| **Balance, July 31, 2025** | $**7421** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b) Lease liability*

On May 1, 2021, the Company entered into an office lease agreement, which resulted in a lease liability of $49,475. The lease liability represents a monthly payment of $1,066 for the period from May 1, 2021 to April 30, 2023, $1,121 for the period from May 1, 2023 to April 30, 2024, and $1,175 for the period from May 1, 2024 to April 30, 2026. The incremental borrowing rate applied to the lease liability was 12%.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br>**NOES TO THE CONSODLIATED FINANCIAL STATEMENTS** <br>**FOR THE YEARS ENDED JULY 31, 2025, 2024 AND 2023**<br>(Expressed in Canadian Dollars, unless otherwise stated)<br>

As at July 31, 2025, $10,169 of lease liability was recorded as follows:

---

| | |
|:---|:---|
| **Balance, July 31, 2020** | $**-** |
| Addition | 49475 |
| Lease payment – base rent portion | (2132) |
| Lease liability – accretion expense | 1456 |
| **Balance, July 31, 2021** | $**48799** |
| Lease payment – base rent portion | (12792) |
| Lease liability – accretion expense | 5326 |
| **Balance, July 31, 2022** | $**41333** |
| Lease payment – base rent portion | (12956) |
| Lease liability – accretion expense | 4376 |
| **Balance July 31, 2023** | $**32753** |
| Lease payment – base rent portion | (13612) |
| Lease liability – accretion expense | 3244 |
| **Balance July 31, 2024** | $**22385** |
| Lease payment – base rent portion | (14104) |
| Lease liability – accretion expense | 1888 |
| **Balance July 31, 2025** | $**10169** |
| **Current portion** | $**10169** |
| **Long-term portion** | $**-** |

---

The following is a schedule of the Company's future lease payments (base rent portion):

---

| | |
|:---|:---|
| Fiscal 2026 (August 1, 2025 to April 30, 2026) | 10578 |
| **Total undiscounted lease payments** | $**10578** |
| Less: imputed interest | (409) |
| **Lease liability at July 31, 2025** | $**10169** |

---

**14. EVENTS AFTER THE REPORTING PERIOD**

On August 20, 2025, 357,144 shares were issued upon the exercise of flow-through warrants with an exercise price of $0.60 for proceeds of $214,286.

On October 14, 2025, 25,407 shares were issued upon the exercise of non-flow through warrants with an exercise price of $0.60 for proceeds of $15,200.

On November 20, 2025, 433,334 shares were issued upon the exercise of flow-through warrants with an exercise price of $0.60 for proceeds of $260,000.

## Exhibit 99.2

&nbsp;&nbsp;&nbsp;&nbsp;**EXHIBIT 99.2**

![](qzm_ex992img18.jpg)

**QUARTZ MOUNTAIN RESOURCES LTD.**

**MANAGEMENT'S DISCUSSION AND ANALYSIS**

**YEAR ENDED JULY 31, 2025**

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

T A B L E O F C O N T E N T S

1.1 Date 3

1.2 Overview 3

1.3 Selected Annual Information 24

1.4 Summary of Quarterly Results 25

1.5 Results of Operations and Financial Condition 25

1.6 Liquidity 27

1.7 Capital Resources 28

1.8 Off-Balance Sheet Arrangements 28

1.9 Transactions with Related Parties 28

1.10 Fourth Quarter 29

1.11 Proposed Transactions 30

1.12 Critical Accounting Estimates 30

1.13 Changes in Accounting Policies including Initial Adoption 30

1.14 Financial Instruments and Risk Management 31

1.15 Other MD&A Requirements 31

1.16 Risk Factors 33

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**1.1 Date**

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the audited consolidated financial statements of Quartz Mountain Resources Ltd. ("Quartz Mountain" or the "Company") for the year ended July 31, 2025, as publicly filed under the Company's profile on Sedarplus at <u>www.sedarplus.ca</u>. All dollar amounts herein are expressed in Canadian dollars, unless otherwise specified.

The Company reports in accordance with IFRS Accounting Standards ("IFRS") and the following disclosure, and associated financial statements, are presented in accordance with IFRS. All comparative information provided is in accordance with IFRS.

This MD&A is prepared as of November 27, 2025.

Cautionary Note to Investors Concerning Forward-looking Statements

This discussion includes certain statements that may be deemed "forward-looking statements." All statements in this disclosure, other than statements of historical facts, that address permitting, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Assumptions used by the Company to develop forward-looking statements include the following: the Company's projects will obtain all required environmental and other permits and all land use and other licenses, and no geological or technical problems will occur. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and exploitation successes, continuity of mineralization, potential environmental issues and liabilities associated with exploration, development and mining activities, uncertainties related to the ability to obtain necessary permits, licenses and title and delays due to third party opposition or litigation, exploration and development of properties located within First Nations treaty and asserted territories may affect or be perceived to affect treaty and asserted aboriginal rights and title, which may cause permitting delays or opposition by First Nation communities, changes in laws and government policies regarding mining and natural resource exploration and exploitation, continued ability of the Company to raise necessary capital, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. The Company reviews its forward-looking statements on an on-going basis and updates this information when circumstances require it.

**1.2 Overview**

The information included in this MD&A relates to Quartz Mountain Resources Ltd. and its wholly owned subsidiaries which were dissolved on March 2, 2023 (collectively, the "Company").

The Company focuses on assessing mineral prospects for potential acquisition and exploration in British Columbia, Canada. The Company has acquired three mineral properties.

**<u> </u>**

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**<u>Other Corporate Information</u>**

The Board of Directors consists of the following members: Albert (AI) Basile, Robert Dickinson (Chairman), Trevor Thomas, Matthew Dickinson, and Michael Clark. Management is comprised of Trevor Thomas (Chief Executive Officer and Corporate Secretary) and Sebastian Tang (CFO).

The Company is a reporting issuer in the provinces of British Columbia, Alberta and Ontario.

The Company's head office is located at 1040 West Georgia Street, 14th Floor, Vancouver, British Columbia, Canada V6E 4H1.

The Company's common shares are listed for trading on the TSX Venture Exchange under the symbol QZM and in the United States the Company's common shares are listed on the OTCQB market under the symbol QZMRF.

**1.2.1 Mineral Properties**

The following information has been summarized from company files. The disclosure has been reviewed by Farshad Shirmohammad, P.Geo., a Qualified Person, who is not independent of the Company.

Quartz Mountain currently holds the Jake and Maestro properties located in BC, Canada as shown on the map below.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img19.jpg)

**BC Location Map for Company's Jake andMaestro Properties (None of the mines or other projects shown on the map belongs to Quartz Mountain).**

**Jake Property**

<u>Property Description</u>

On November 5, 2021, the Company entered into a mineral claims purchase agreement with United Mineral Services Ltd. ("UMS") to acquire 100% interest in the Jake mineral property consisting of four staked claims (the "Jake Property") and obtained an additional option to purchase 100% of five adjacent claims owned by Electrum Resource Corporation ("Electrum"), an arm's length third party.

The Property consists of a block of 14 contiguous mineral claims that cover an area of approximately 6,731 ha. 12 primary mineral claims within the Jake claim block currently have Good To Date (Expiry Date) of December 31, 2034; two recently staked mineral claims (JTC1 and JTC2) have Good To Date of April 30, 2027. All claims' information are listed in the Table below.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

UMS is a private company owned by Robert Dickinson, a controlling shareholder of Quartz Mountain and a non-arm's-length vendor.

![](qzm_ex992img20.jpg)

**Jake Property Claims Map.**

The total cash consideration that the Company was required to pay UMS was $200,000, according to the following schedule: $50,000 immediately on the date of receipt of TSX Venture Exchange conditional approval of this transaction ("TSX-V Approval Date"); $50,000 on or before the date that is six months after the TSX-V Approval Date; $50,000 on or before the date that is twelve months after the TSX-V Approval Date and $50,000 on or before the date that is eighteen months after the TSX-V Approval Date.

The Company was also required to make payments of $125,000 to Electrum in connection with the acquisition of Jake Property. In May 2022, the Company obtained the TSX Venture Exchange approval for this acquisition.

During the year ended July 31, 2023, the Company made all cash payments required and earned 100% interest in Jake Property.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The five mineral claims previously owned by Electrum are subject to a 2% net smelter return royalty which is capped at $3 million.

![](qzm_ex992img21.jpg)

**Jake Property Claims List.**

<u>Location and Access</u>

The Jake Property is located 160 km north of Smithers in northwestern BC. Smithers is a hub location for BC Provincial Government services.

The Property, currently only accessible by helicopter, is situated about 14 km southwest of the Valhalla and Suskeena Lodges, located on the Sustut River.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img22.jpg)

**Access, Infrastructures, and Other Mine & Development Projects in the Region.**

<u>History</u> 

Mineral exploration work on the Jake Property dates back to 1965 and includes mapping, sampling, geophysics, trenching, backpack and diamond drilling, and road building. To date, two deposit target areas – Jake North and Jake South – have been identified. Noteworthy historical exploration work includes:

1. Kennco Exploration (Western) Ltd. (1965): two backpack drill holes totaling 55 m at Jake South.

2. Canadian Superior Exploration Ltd. (1968, 1971-1976): 12 diamond drill holes totaling 1,207 m at Jake North.

3. Cities Services Minerals Corporation (1977): two diamond drill holes totaling 436 m at Jake North, intersected grades of 0.19% Cu and 13-27.43 g/t Ag over 40 m.

4. QPX Minerals Inc. (1987): geological mapping and extensive property wide soil sampling confirmed copper, gold, molybdenum, silver, lead, zinc mineralization at Jake North and Jake South.

5. Teck Corporation (1997-1999): six diamond drill holes totaling 696 m at Jake North, intersecting high-grade silver and gold veins and copper-gold stockworks near intrusive/sediment contacts.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

In the period 2016 through 2020, UMS conducted an aerial magnetic survey and reinterpreted historical geochemical data over the entire Property and conducted geological mapping and sampling over Jake South.

The magnetic target survey was flown at 200 m line spacing and provides excellent detail for interpreting the property geology. Results from the survey show several large magnetic highs, one associated with Cu+Au mineralization intersected in 1999 core drilling at Jake North by Teck Corporation ("Teck").

At the request of Quartz Mountain Resources Ltd., a Report on the Jake Property was prepared by Charles J. Greig (C.J. Greig & Associates Ltd.) and published in 2022 ("2022 report"), by Charles J. Greig, P.Geo., who conducted an independent evaluation of the Jake Property, which included a site inspection in October 2021.

The 2022 report concluded that "the Jake Property has been shown to host broad areas of alteration and precious and base metals mineralization characteristic of Cu + Au porphyry-type, as well as low-sulphidation epithermal type and Ag-rich polymetallic vein systems". Further phased exploration programs, comprising geological mapping, geochemical sampling, IP surveys, and diamond drilling was recommended by the author.

The Company completed approximately 8.5 line-km of Induced Polarization ("IP") survey on Jake's high-priority targets during in 2022 and has received government approval for a total of 50 core drilling sites, to be developed within the next five years. Positive IP survey results, indicating the presence of a large-scale, near surface sulphide system, open and expanding to depth, were obtained from surveying the Jake porphyry Cu-Au target area.

In 1973 and 1999, historical drill holes, of which the most westerly ones (73-3 and 99-04) ended in porphyry Cu-Au style mineralization, were drilled shallow and outboard from the newly established targets. The Company completed 7 holes totalling 3,418 meters in 2024.

<u>Geology</u> 

The geology of Jake consists of Upper Jurassic Bowser Lake Group sedimentary rocks that are intersected by a series of north to northeast-trending monzonite dykes of the Tertiary Babine Plutonic Suite. Mineralization at the Jake Property is situated within a prominent gossan measuring 3.75 km long by 1.5 km wide.

Within the gossan is a series of north-northeast trending dyke swarms that intrude into sedimentary rocks. The combination of results from historical and recent work has outlined a broadly altered and mineralized area comprising porphyry-style sulphide disseminations, and quartz-sulphide stockwork veins hosting Cu-Au±Mo mineralization.

Positive IP survey results, indicating the presence of a large-scale, near surface sulphide system, open and expanding to depth, were obtained from surveying the Jake North porphyry Cu-Au target area. In 1973 and 1999, historical drill holes, of which the most westerly ones (73-3 and 99-04) ended in porphyry Cu-Au style mineralization, were drilled shallow and outboard from the newly established targets.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img23.jpg)

**Pronounced Jake Gossan Indicates the Presence of a Large Mineral System.**

<u>Recent Work</u>

On January 14, 2025, the Company announced the results of a seven-hole, 3,418-meter scout core drilling program, and the discovery of a new copper-gold silver porphyry system.

Drill holes JK24-01 to JK24-04, and JK24-06 were drilled on an angle to vector into the vicinity of a possible concealed copper-gold porphyry system, along with testing epithermal mineralization potentially related to a porphyry centre. Both drillholes JK24-05 and JK24-07 were drilled at a subvertical orientation testing the potential for a concealed copper-gold porphyry system in the centre of concentrically zoned alteration and mineralization.

The discovery of a new copper-gold porphyry system at Jake was highlighted by drill hole JK24-05, shown in the table below:

![](qzm_ex992img24.jpg)

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

Notes to the table:

1. Widths reported are drill widths, such that true thicknesses are unknown.

2. All assay intervals represent length-weighted averages.

3. Some figures may not sum exactly due to rounding.

4. Copper equivalent (CuEQ) calculations use metal process prices of: Cu US$4.00/lb, Au US$2000/oz., Ag US$25/oz, and Mo US$15.00/lb, and conceptual recoveries of: Cu 85%, Au 75%, Ag 70% and Mo 82%. Conversion of metals to an equivalent copper grade based on these metal prices is relative to the copper price per unit mass factored by conceptual recoveries for those metals normalized to the conceptualized copper recovery. The metal equivalencies for each metal are added to the copper grade. The general formula for this is: CuEQ% = Cu% + ((Au g/t \\* (Au recovery / Cu recovery) \\* (Au $ per oz./31.1034768 / Cu $ per lb. \\* 22.04623)) + ((Ag g/t \\* (Ag recovery / Cu recovery) \\* (Ag $ per oz./ 31.1034768 / Cu $ per lb. \\* 22.04623)) + ((Mo% \\* (Mo recovery / Cu recovery) \\* (Mo $ per lb.) / Cu $ per lb.)).

Based on its successful drilling program, **Quartz** has also acquired a 100% interest in mineral claims capturing an entire new potential BC porphyry copper-gold district surrounding the **Jake** discovery

![](qzm_ex992img35.jpg)

**Jake Property Targets.** 

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**Maestro Property**

<u>Property Description</u>

On June 8, 2021, the Company entered into a mineral claims purchase agreement with a third-party vendor to purchase a 100% interest in the nine mineral claims located near Houston, British Columbia. In connection with the acquisition of the Maestro Property, the Company paid $105,000 in cash and issued 1,000,000 common shares of the Company (valued at $210,000).

These claims are subject to a 2.5% NSR which can be bought down to 1.5% for $1.5 million, and this NSR is subject to an annual advance payment of $25,000. There are no required work commitments for these claims as this transaction is a purchase of the mineral claims and not an option.

Another claim was purchased outright from another third-party vendor by the Company for $2,000.

On March 19, 2024, the Company announced it has agreed under two separate transactions, to purchase a 100% interest in each of the Lone Pine Claim (Tenure Number 1106400) and the North Claim (Tenure Number 1047568) (the "Acquisitions"). These two mineral claims total 169 hectares and are located within the Company's 100% owned Maestro Property located 15km north of the town of Houston, British Columbia.

The Lone Pine mineral claim was purchased from Eagle Plains Resources Ltd., an arms-length vendor, for 750,000 common shares of the Company and a 2% NSR royalty, of which 1.5% can be purchased at any time by payment of $5 million. The shares are subject to a 24-month contractual resale restriction and a further right for the Company to arrange purchasers of the shares in the case of resales after that period. The Lone Pine transaction has been approved by TSX Venture Exchange and closed with the 750,000 common shares of the Company issued on March 20, 2024.

The NORTH mineral claim was purchased from Shawn Merkley, an arms-length vendor, for $24,000, 45,000 common shares of the Company, and a 2% NSR royalty which can be purchased at any time by a payment of $2 million. The transaction has been approved by TSX Venture Exchange and the cash and common shares were settled in three equal installments ($8,000 and 15,000 common shares) over two years with the first installment due upon closing ($8,000 cash payment was paid and 15,000 common shares were issued on March 22, 2024). On March 6, 2025, the cash payments of $16,000 for the second and third instalment were paid and 30,000 common shares were issued on March 12, 2025.

The Maestro Property consists of a block of 13 contiguous mineral claims. The 13 claims that comprise the Maestro Property cover an area of 2,309.4 ha. All claims are 100% owned by the Company and they are all in good standing.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img34.jpg)

**Maestro Property Claims Map.**

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img26.jpg)

**Maestro Property Claims List.**

<u>Location and Infrastructure</u>

The Maestro Property is located in central British Columbia, 15 km north of Houston and 50 km south of Smithers. Highway 16 intersects the western edge of the Property, enabling easy access to nearby infrastructure including airports, railways, and power. The central region of the Property is accessible by numerous drill roads constructed by past operators.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img27.jpg)

**Maestro Property location, access, and infrastructures.**

<u>History</u>

The Maestro Property and surrounding area has over 100 years of mineral exploration history dating back to 1914; however, work has only been accurately recorded from the 1960's onwards and includes mapping, sampling, geophysics, trenching, percussion, and diamond drilling. Most of this work in and surrounding the Property focused on porphyry Mo±Cu mineralization for the Lone Pine Molybdenum Deposit, which lies internal to the Maestro claims. Because of the focus on the Lone Pine porphyry, the precious metal potential of the surrounding area has not been systematically explored.

Notable historical drilling includes:

1. Molymines Exploration Ltd. (1965-1969): 128 percussion and diamond drill holes totaling 6,381 m at the Lone Pine Deposit and, to a lesser extent, the Prodigy Zone.

2. Granby Mining Corp. (1976-1978): 22 drill holes totaling 2,160 m at the Prodigy Zone, Granby Zone, and Mineral Hill Zone.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

3. Dafrey Resources Inc. (1985): 12 percussions drill holes at the Lone Pine Deposit and the Prodigy Zone.

4. Southern Cross Gold (1987): Eight diamond drill holes totaling 521 m at the Lone Pine Deposit and the Prodigy Zone.

5. Bard Ventures Ltd. (2007-2011): 77 diamond drill holes totaling 35,334 m at the Lone Pine Deposit, Prodigy Zone, Granby Zone, and Mineral Hill Zone.

<u>Geology</u>

The geology of Maestro consists mainly of Lower to Middle Jurassic volcanic and volcaniclastic rocks from the Hazelton Group and, to a lesser amount, Upper Jurassic sedimentary rocks from the Bowser Lake Group. Both Groups are intruded by stocks and dikes belonging to the Late Cretaceous Bulkley and Tertiary Goosly suites. The Maestro Property covers three known precious and base metal mineralized zones, named Prodigy, Granby and Mineral Hill. These zones are outbound of the Lone Pine Molybdenum Deposit which is internal to the property.

![](qzm_ex992img28.jpg)

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**Maestro Property 1st Vertical Derivative of Total Magnetic Intensity**

During October 2021, the Company contracted Hardline Exploration Corp. ("HEC") of Smithers, BC, to conduct a geochemical soil-sampling program on the Company's 100%-owned Maestro Property. The 614-sample geochemical soil survey (100m x 100m grid) was implemented based on the extensive review and compilation of historical data and covered all three mineralized zones within the Maestro Property.

![](qzm_ex992img29.jpg)

**Area Covered by Grid Soil Sampling (dashed outline).**

Analyses of 614 grid-based soil samples collected on the Maestro Property delineated several base metal and pathfinder element anomalies. Geochemical modeling of the soil sample results, and historical drill data shows distinctive metal zonation, indicative of a potentially large hydrothermal mineralizing system.

In 2023, Equity Exploration Consultants Ltd. was contracted by Quartz to conduct a detailed stream sediment sampling program, and reconnaissance surface mapping and prospecting review of key prospects at the Maestro project. The contemplated work was completed within the budget and timeframe; 53 silt samples and 12 rock samples were collected from prospective areas and were shipped to ALS Global in North Vancouver for geochemical analysis.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

Reviewing the results showed that the Maestro property boasts indications for numerous robust mineral systems. The geochemical footprint of the Prodigy, Lone Pine, Mineral Hill and Granby mineralized centres is widespread approximately 1.5 km by 1.3 km across.

Initial results from one of the newly identified mineralized zones, Road Zone, corroborate historical samples with highly anomalous silver and widespread quartz veins. The Road Zone may host an underexplored opportunity for additional intrusion-related precious metal mineralization and should be followed up with surface geological, geochemical, and geophysical work.

**Sequential Phases of Diamond Drilling at Prodigy Target**

1. During late November and early December 2023, the Company completed 1,445 metres of Phase 1 core drilling in two holes at the Prodigy Au-Ag-Mo-Cu epithermal target on its Maestro Property, located 15 kilometres north of Houston, BC.

2. The Prodigy epithermal deposit target is hosted within an extensive porphyry-type mineral system and is thought by Management to have some geological similarities to that of the Blackwater-Davidson gold-silver deposit of Artemis Gold Inc., located near Vanderhoof, BC.

3. The drill program was completed by Apex Diamond Drilling Ltd. from nearby Smithers, and some 482 core samples have been sent to and received by ALS Global in North Vancouver, BC, for analysis.

4. Results from Quartz's first two drill holes at the Prodigy Zone on the **Maestro** Property intersected a high-grade gold-silver lode deposit within multi-generation precious metal mineralization all hosted within a Mo-Cu porphyry environment.

5. Core hole PR23-02 intersected 102 m grading 2.22 g/t Au and 104 g/t Ag, including 12 m grading 1.23 g/t Au and 586 g/t Ag and 36 m of 5.73 g/t Au and 87 g/t Ag. Notably, green sericite alteration reminiscent of deposits such as Blackwater Gold-Silver Mine, which is currently being placed into production, plays a significant role at Prodigy. The discovery is open in multiple directions and at depth, promising significant further potential.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img30.jpg)

**Hole PR23-02 Intersects High Grade Gold-Silver Lodes Within an Extensive Precious Metals System**

Immediately after the completion of the drilling program, a downhole geophysical survey was conducted over the discovery hole PR23-02, to test the geophysical signature of the intercepted mineralization.

The second geophysical survey after the 2023 drilling program was carried out during October and November 2024. All newly and historically drilled areas of the Maestro Property were tested by approximately 30 line-kilometer of geophysical survey, to define the mineralization trend and provide delineation drill targets.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

<u>Recent Work</u>

Phase 2 drill program completed at the Prodigy gold-silver discovery on its Maestro Property during early 2025. All four holes, PR25-03 through PR25-06, returned broad intervals of precious and base metals mineralization, starting from a shallow depth. The results represent a successful follow-up to previously announced discovery drilling and the initial start to delineation of a substantial new epithermal Au-Ag system at Maestro.

Drill intersections indicate strong potential for both bulk tonnage and high-grade mineralization. The Prodigy Au-Ag system remains open in all directions promising signiﬁcant upside and expansion potential.

The Phase 3 drilling program was completed during June through August, 2025 and comprised seven holes (PR25-07 through PR25-13) totalling 3,885 meters. Quartz's sequential drill programs (Phases 1 through 3) at Prodigy now total 8,346 meters across 13 holes (PR23-01 through PR25-13). This drilling has intersected three distinct types of mineralization which are closely integrated. Quartz plans to mobilize Phase 4 drilling in Q1 2026 to continue further systematic delineation of Prodigy

![](qzm_ex992img31.jpg)

**Table 1. Quartz Phase One and Phase Two Prodigy "Eye" Assay Results, Represent the Discovery of a Substantial New Au-Ag System at Maestro.**

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img32.jpg)

**Table 2. Quartz Phase One and Phase Three Prodigy Assay Results.**

*Footnotes to Tables 1 and 2:*

*1.* *Width reported are drill widths, such that true thicknesses are unknown.* 

*2.* *All assay intervals represent length-weighted averages.* 

*3.* *Some figures may not sum exactly due to rounding.* 

*4.* *Gold equivalent (AuEQ) calculations use metal prices of: Au US\$1,800.00/oz, Ag US\$22.00/oz, Mo US\$17.00/lb and Cu US\$4.00/lb. and conceptual recoveries of: Au 80%, Ag 80%, Mo 75%, and Cu 75%. Conversion of metals to an equivalent gold grade based on these metal prices is relative to the gold price per unit mass factored by conceptual recoveries for those metals normalized to the conceptualized gold recovery. The metal equivalencies for each metal are added to the gold grade. The general formula is: AuEQ g/t NMV = (Au g/t) + (Ag recovery / Au recovery) \\* (Ag \$ per oz. / Au \$ per oz. \\* Ag g/t)) + ((Mo recovery / Au recovery) \\* (Mo % \\* Mo \$ per lb. \\* 22.0462) / (Au \$ per oz. / 31.10348)) + (Cu recovery / Au recovery) \\* (Cu % \\* Cu \$ per lb. \\* 22.0462) / (Au \$ per oz. / 31.10348)).* 

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

![](qzm_ex992img33.jpg)

**Prodigy "Eye" Drill Hole Plan Map, showing historical, and Quartz's Phase 1 through 3 drill collar locations.** 

<u>Sale of Geological Data</u>

On November 2, 2021 the Company entered into a binding Agreement with Torr Resources Corp. ("Torr") whereby Torr agreed to purchase historical project data the Company had collected on the Galaxie Property for $150,000. The transaction was closed and cash payment was received on December 10, 2021.

**1.2.3 Financing**

On October 18, 2021, the Company issued 1,909,092 flow-through common shares on the exercise of warrants at an exercise price of $0.05 for gross proceeds of $95,455.

On December 13, 2021, the Company issued 7,000,000 flow-through common shares on the exercise of warrants at an exercise price of $0.05 for gross proceeds of $350,000.

On July 12, 2022, the Company issued 1,000,000 common shares on the exercise of options at an exercise price of $0.20 for gross proceeds of $200,000.

On October 27, 2022, the Company completed a private placement by issuing 2,750,000 flow-through common shares at a price of $0.20 per share for gross proceeds of $550,000. Each unit consists of one common share and one transferable flow-through common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional flow-through common share at a price of $0.20 for a period of five years from the closing of the private placement.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

On September 8, 2023, the Company issued 500,000 common shares upon the exercise of 500,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $100,000.

On September 28, 2023, the Company issued 500,000 common shares upon the exercise of 500,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $100,000.

On October 30, 2023, the Company completed a private placement of 1,538,889 flow-through units at a price of $0.18 per unit for gross proceeds of $277,000. Each flow-through unit consists of one flow-through common share and one flow-through common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional flow-through common share at a price of $0.18 for a period of five years from the closing of the private placement. $15,389 of the proceeds was allocated to these warrants issued.

On November 27, 2023, the Company issued 250,000 common shares upon the exercise of 250,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $50,000.

On December 5, 2023, the Company issued 416,666 common shares upon the exercise of 416,666 flow-through warrants at $0.18 for gross proceeds of flow-through funds of $75,000, and $4,167 of the fair value previously allocated to these warrants was transferred to share capital.

On December 18, 2023, the Company issued 277,778 common shares upon the exercise of 277,778 flow-through warrants at $0.18 for gross proceeds of flow-through funds of $75,000, and $4,167 of the fair value previously allocated to these warrants was transferred to share capital.

On February 7, 2024, the Company issued 705,555 common shares upon the exercise of 705,555 flow-through warrants at $0.18 for gross proceeds of flow-through funds of $127,000, and $7,055 of the fair value previously allocated to these warrants was transferred to share capital.

On May 30, 2024, the Company issued 3,300,000 flow-through shares ("FT Shares") at $0.35 per FT Share for gross proceeds of flow-through funds of $1,155,000 and 6,000,000 non-flow-through shares ("Non-FT Shares") at $0.35 per Non-FT Share for gross proceeds of $2,100,000. A key new investor, the Sutton Group Inc., subscribed for 6,000,000 of the shares and became an insider of Quartz, and 3,300,000 FT Shares were issued to Robert Dickinson, a director of the Company.

On July 8, 2024, the Company issued 750,000 common shares upon the exercise of 750,000 flow-through warrants at $0.20 with gross proceeds of flow-through funds for $150,000.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

On March 18, 2025, the Company completed a private placement of 1,700,000 flow-through units at a price of $0.42 per unit for gross proceeds of flow-through funds for $714,000. Each flow-through unit consists of one flow-through common share and one-half of one flow-through common share purchase warrant (a "FT Warrant"). Each FT Warrant entitles the holder to purchase one additional flow-through common share at a price of $0.60 for a period of one year from the date of issuance, and is subject to an accelerated exercise provision whereby if the Company's common shares trade at $1.00 or higher for 10 consecutive trading days on the TSX Venture Exchange then the holder will have 30 days to exercise the Warrant.

On March 18, 2025, the Company completed a private placement of 8,300,000 units at a price of $0.42 per unit for gross proceeds of $3,486,000. Each unit consists of one common share and one-half common share purchase warrant (a "Warrant"). Each Warrant entitles the holder to purchase one additional common share at a price of $0.60 for a period of one year from the date of issuance, and is subject to an accelerated exercise provision whereby if the Company's common shares trade at $1.00 or higher for 10 consecutive trading days on the TSX Venture Exchange then the holder will have 30 days to exercise the Warrant.

On July 22, 2025, the Company issued 750,000 common shares upon the exercise of 750,000 flow-through warrants at $0.20 for gross proceeds of flow-through funds of $150,000.

**1.3 Selected Annual Information**

The following selected annual information is from the Company's annual consolidated financial statements for the year ended July 31, 2025, which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC") effective for the respective reporting years of the Company and are expressed in Canadian Dollars. The Company's audited financial statements are publicly available on SEDAR at <u>www.sedar.com</u>.

Amounts are expressed in thousands of Canadian dollars (except per share amounts).

---

| | | | |
|:---|:---|:---|:---|
|  | **Years ended July 31,** | **Years ended July 31,** | **Years ended July 31,** |
|  | **2025** | **2024** | **2023** |
| Total income (loss) for the year | $(3474) | $(2437) | $(910) |
| Basic earnings (loss) per share | $(0.06) | $(0.05) | $(0.02) |
| Diluted earnings (loss) per share | $(0.06) | $(0.05) | $(0.02) |
| Total assets  | $4192 | $3014 | $864 |
| Total liabilities  | $281 | $333 | $73 |

---

The Company does not currently generate revenue from its operations and variation in its total loss was due in large part to changes in its exploration and evaluation activities. The increase in loss during the fiscal year 2025 was mainly due to increased exploration costs incurred on the Jake and the Maestro Properties.

The Company's cash balance at the current year end date was higher compared to the balance at the prior year end date because cash spent in exploration activities was covered by the proceeds from issuances of common shares.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**1.4 Summary of Quarterly Results**

These amounts are expressed in thousands of Canadian Dollars, except per share amounts and the weighted average number of common shares outstanding. Minor differences are due to rounding.

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** | **Fiscal Quarter Ended** |
|  | **Jul-31** <br> **2025** | **Apr-30** <br> **2025** | **Jan-31** <br> **2025** | **Oct-31** <br> **2024** | **Jul-31** <br> **2024** | **Apr-30** <br> **2024** | **Jan-31** <br> **2024** | **Oct-31** <br> **2023** |
| Income (loss) for the period | $(1155) | $(1878) | $(350) | $(90) | $(1675) | $(92) | $(533) | $(137) |
| Basic earnings (loss) per common share | $(0.02) | $(0.03) | $(0.01) | $(0.00) | $(0.03) | $(0.00) | $(0.01) | $(0.00) |
| Diluted earnings (loss) per common share | $(0.02) | $(0.03) | $(0.01) | $(0.00) | $(0.03) | $(0.00) | $(0.01) | $(0.00) |

---

**1.5 Results of Operations and Financial Condition**

The following financial data has been prepared in accordance with IFRS and are expressed in Canadian dollars unless otherwise stated.

**1.5.1 Income (loss) for the year ended July 31, 2025 vs. 2024**

The Company recorded loss from its operations of $3,560,819 during the current fiscal year (2024 – $2,542,646). The loss incurred in fiscal 2025 was higher compared to the loss incurred in fiscal 2024 due to the commencement of the delineation drilling program for the Maestro Project in British Columbia in late February 2025.

The total amount of exploration and evaluation expenditures incurred in the current fiscal year was $2,616,260 (2024 – 2,285,511). The Company commenced its 1,445 metres of core drilling in two holes of its Maestro property and the Jake Properties during the year ended July 31, 2024. As such, the total costs of exploration and evaluation were higher in the current fiscal year compared with the prior year.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The following table provides a breakdown of exploration and evaluation expenditures for the current and the prior year:

---

| | | |
|:---|:---|:---|
|  | **Years ended July 31,** | **Years ended July 31,** |
|  | **2025** | **2024** |
| Assay and analysis | $212497 | $225954 |
| Drilling | 1487489 | 907694 |
| Engineering |  | 562 |
| Environmental | 8096 | 466 |
| Geological | 441570 | 284834 |
| Helicopter and fuel |  | 447828 |
| Property costs and assessments | 15669 | 1732 |
| Site activities | 406947 | 393350 |
| Socioeconomic |  | 2330 |
| Travel and accommodation | 43992 | 20761 |
| Total | $2616260 | $2285511 |

---

The significant increase in the total amount of general and administrative expenses in fiscal 2025 compared to fiscal 2024 was due to all the related costs regarding the shareholders' communication of project development status of for the Prodigy on the Maestro Project in British Columbia.

The following table provides a breakdown of general and administrative expenses and equity-settled share-based compensation incurred during the year ended July 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Years ended July 31,** | **Years ended July 31,** |
|  | **2025** | **2024** |
| Administrative fees | $57934 | $52700 |
| Conference and travel | 405 | 705 |
| Insurance  | 24929 | 23481 |
| IT Services  | 33640 | 21120 |
| Legal, accounting and audit  | 144183 | 58023 |
| Office and miscellaneous  | 181072 | 37167 |
| Regulatory, trust and filing  | 85654 | 63939 |
| Total | $527817 | $257135 |
| Equity-settled share-based compensation | $416742 | $- |

---

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The equity-settled share-based compensation incurred during the year ended July 31, 2025 was related to the two stock option grants to the consultants of the Company:

1. the recognition of the share-based compensation for the grant of 500,000 stock options issued on January 15, 2025 with an exercise price of $0.435 and the expiry date on January 15, 2030;

2. the recognition of the share-based compensation for the grant of 500,000 stock options issued on April 24, 2025 with an exercise price of $0.77 and the expiry date on January 24, 2028;

**1.6 Liquidity**

The Company's primary source of funding is issuances of equity securities through private placements mainly to sophisticated investors and institutions. The Company's continuing operations entirely depend upon its ability to obtain equity financings required to complete exploration and development of its projects, existence of economically recoverable mineral reserves at its projects, its ability to acquire necessary permits to explore or mine, future profitable production of any mine, and proceeds from disposition of its mineral property interests. These material uncertainties are indicative of significant doubt as to the Company's ability to continue as a going concern.

As at July 31, 2025, the Company had an accumulated deficit of $35,546,915 (2024 – $32,073,376) and net working capital of $2,881,768 (2024 – $1,702,797).

The Company believes that its liquid assets as at July 31, 2025, are sufficient to meet its current obligations. The Company is actively managing its cash reserves, and curtailing activities as necessary in order to ensure its ability to meet payments as they come due.

Additional debt or equity financing will be required to fund exploration or development programs. However, there can be no assurance that the Company will continue to obtain additional financial resources or that it will be able to achieve positive cash flows.

Financial market conditions for junior exploration companies have resulted in very depressed equity prices. A further and continued deterioration in market conditions will increase the cost of obtaining capital and significantly limit the availability of funds to the Company in the future. Accordingly, management is actively monitoring the effects of the current economic and financing conditions on the Company's business and reviewing discretionary spending, capital projects and operating expenditures, while implementing cash management strategies.

**Table of Obligations and Commitments**

The following obligations existed as at July 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Total** | **Within 1 year** | **1-5 years** |
| Amounts payable and other liabilities | $266815 | $266815 | $- |
| Due to related parties | 4459 | 4459 |  |
| Lease liability  | 10169 | 10169 | - |
| **Total**  | $**281443** | $**281443** | $**-** |

---

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The Company has no "Purchase Obligations" defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

**1.7 Capital Resources**

The Company had no material commitments for capital expenditures as at July 31, 2025.

The Company has no lines of credit or other sources of financing which have been arranged but are as of yet, unused.

As at July 31, 2025, there were no externally imposed capital requirements to which the Company was subject and with which the Company has not complied.

**1.8 Off-Balance Sheet Arrangements**

None.

**1.9 Transactions with Related Parties**

**Key management personnel** 

The required disclosure for the remuneration of the Company's key management personnel is provided in note 7(a) of the accompanying audited consolidated financial statements for the years ended July 31, 2025 and 2024. These are also available at <u>www.sedarplus.ca</u>.

**Hunter Dickinson Inc.**

Hunter Dickinson Inc. ("HDI") and its wholly-owned subsidiary HDSI are private companies established by a group of mining professionals. HDSI provides services under contract for a number of mineral exploration and development companies, and also to companies that are outside of the mining and mineral development space. The Company acquires services from a number of related and arms-length contractors, and it is at the Company's discretion that HDSI provides certain contract services.

The Company's Chief Executive Officer and Corporate Secretary is an employee of HDSI and is contracted to work for the Company under an employee secondment agreement between the Company and HDSI and the Company's Chairman is a principal of HDSI.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The Company is not obligated to acquire any minimum amount of services from HDSI. The monetary amount of the services received from HDSI in a given period of time is a function of annually set and agreed charge-out rates for and the time spent by each HDSI employee engaged by the Company.

HDSI also incurs third-party costs on behalf of the Company. Such third party costs include, for example, information technology expenses. Third party costs are billed at cost, without markup.

There are no ongoing contractual or other commitments resulting from the Company's transactions with HDSI, other than the payment for services already rendered and billed. The agreement may be terminated upon 60 days' notice by either the Company or HDSI.

The details of transactions with HDSI and the balance due to HDSI as a result of such transactions are provided in the Financial Statements.

**1.10 Fourth Quarter**

The Company recorded loss from operations of $1,184,478 during the fourth quarter of the current fiscal year (the "2025 Q4") (the fourth quarter of the fiscal 2024 (the "2024 Q4") – $1,764,293). The loss incurred in 2025 Q4 was significantly higher compared to the loss incurred in 2024 Q4 due to the commencement of a four-hole (totaling approximately 3,000m) diamond drill program for the Maestro Property announced on April 9, 2025 by the Company. The initial focus of the drill program is to follow up the discovery with additional delineation drilling, aimed at expanding the known extent of the mineralized system.

The following table provides a breakdown of exploration and evaluation expenditures for the current and the prior year:

---

| | | |
|:---|:---|:---|
|  | **Three months ended July 31,** | **Three months ended July 31,** |
|  | **2025** | **2024** |
| Assay and analysis | $141910 | $120629 |
| Drilling | 492472 | 617016 |
| Environmental | 5557 | 135 |
| Geological | 143605 | 142509 |
| Helicopter and fuel |  | 447828 |
| Property costs and assessments |  | 379 |
| Site activities | 135224 | 354055 |
| Travel and accommodation | 23669 | 11495 |
| Total | $942437 | $1694046 |

---

The significant increase in the total amount of general and administrative expenses in 2025 Q4 compared to 2024 Q4 was due to all the related costs regarding the shareholders' communication of project development status of for the Prodigy on the Maestro Project in British Columbia.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The following table provides a breakdown of general and administrative expenses incurred during the three months ended July 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Three months ended July 31,** | **Three months ended July 31,** |
|  | **2025** | **2024** |
| Administrative fees | $43598 | $6603 |
| Conference and travel  | 159 |  |
| Insurance  | 6205 | 5523 |
| IT Services  | 8440 | 8520 |
| Legal, accounting and audit  | 72103 | 17083 |
| Office and miscellaneous  | 65563 | 12344 |
| Regulatory, trust and filing  | 9926 | 20174 |
| Total | $205994 | $70247 |
| Equity-settled share-based compensation | $36047 | $- |

---

The equity-settled share-based compensation incurred during the quarter ended July 31, 2025 was related to the stock options granted to the consultants of the Company:

(a) On January 15, 2025, 500,000 stock options were granted with an exercise price of $0.435 and a 5-year term. 25% of the options vested on the grant date with an additional 25% vesting in 3 months, 25% in 6 months and the remaining 25% in 9 months.

**1.11 Proposed Transactions**

There are no proposed material assets or business acquisitions or dispositions before the Board of Directors for consideration.

**1.12 Critical Accounting Estimates**

Not required. The Company is a Venture Issuer.

**1.13 Changes in Accounting Policies including Initial Adoption**

The required disclosure is provided in note 2 of the accompanying audited consolidated financial statements as at and for the year ended July 31, 2025, publicly available on Sedarplus at <u>www.sedarplus.ca</u>.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**1.14 Financial Instruments and Risk Management**

The carrying amounts of cash, amounts receivable, accounts payable and other liabilities, and balances due to a related party, approximate their fair values due to their short-term nature.

**1.15 Other MD&A Requirements**

**1.15.1 Additional Disclosure for Venture Issuers without Significant Revenue**

(a) exploration and evaluation assets or expenditures The required disclosure is presented in Section 1.5 of this MD&A.

(b) expensed research and development costs Not applicable

(c) intangible assets arising from development Not applicable

(d) general and administration expenses The required disclosure is presented in Section 1.5 of this MD&A.

(e) any material costs, whether expensed or recognized as assets, not referred to in paragraphs (a) through (d) None

**1.15.2 Disclosure of Outstanding Share Data**

The following details the share capital structure as at the date of this MD&A:

---

| | | |
|:---|:---|:---|
|  | Number | Number |
| Common shares |  | 70463915 |
| Options |  | 5200000 |
| Warrants |  | 4,323,004 |

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**1.15.3 Internal Controls over Financial Reporting Procedures** 

The Company's management, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of the Chief Executive Officer and Chief Financial Officer, the Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Company's internal control over financial reporting includes those policies and procedures that:

1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

There has been no change in the design of the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting during the period covered by this Management's Discussion and Analysis.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of July 31, 2025. In making the assessment, it used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on their assessment, management has concluded that, as July 31, 2025, the Company's internal control over financial reporting was effective based on those criteria.

**1.15.4 Disclosure Controls and Procedures**

The Company's management, with the participation of its Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported within the appropriate time periods and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

**1.15.5 Limitations of Controls and Procedures**

The Company's management, including its Chief Executive Officer and Chief Financial Officer, believe that any system of disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**1.16 Risk Factors**

The risk factors associated with the principal business of the Company are discussed below. The Company currently holds several mineral claims at early stage. The Company is subject to the highly speculative nature of the resources industry characterized by the requirement for large capital investments from an early stage and a very small probability of finding economic mineral deposits. In addition to the general risks of mining, there are country-specific risks, including currency, political, social, permitting and legal risk. An investor should carefully consider the risks described below and the other information that Quartz Mountain furnishes to, or files with, the Securities and Exchange Commission and with Canadian securities regulators before investing in Quartz Mountain's common shares, and should not consider an investment in Quartz Mountain unless the investor is capable of sustaining an economic loss of the entire investment. The Company's actual exploration and operating results may be very different from those expected as at the date of this MD&A.

**Community Relationship**

The Company may enter into agreements with Indigenous groups, inclusive of First Nations, in relation to its current and future exploration activities, and any potential future production, which could impact any expected earnings.

Our properties are located within First Nations asserted traditional territories, and the exploration and development of these properties may affect, or be perceived to affect, asserted aboriginal rights and title, which has the potential to manifest permitting delays or opposition by First Nations communities.

The Company is working to establish positive relationships with First Nations. As part of this process the Company may enter into agreements, commensurate with the stage of activity, with First Nations in relation to current and future exploration and any potential future production. This could impact any expected earnings.

**Going Concern Assumption**

The Company's financial statements have been prepared assuming the Company will continue on a going concern basis. However, unless additional funding is obtained, this assumption will have to change. The Company has a negative working capital position, and has incurred losses since inception. Failure to continue as a going concern would require that Quartz Mountain's assets and liabilities be restated on a liquidation basis, which could differ significantly from the going concern basis.

**Additional Funding Requirements**

Further development of the Company's continued operations will require additional capital. The Company currently does not have sufficient funds to explore the properties it holds. It is possible that the financing required by the Company will not be available, or, if available, will not be available on acceptable terms. If the Company does issue treasury shares to finance its operations or expansion plans, shareholders will suffer dilution of their investment and control of the Company may change. If adequate funds are not available, or are not available on acceptable terms, the Company will not be able to remain in business. In addition, a positive production decision at any of the Company's current projects or any other development projects acquired in the future will require significant resources and funding for project engineering and construction. Accordingly, any development of the Company's properties depends upon the Company's ability to obtain financing through debt financing, equity financing, the joint venturing, or disposition of its current projects, or other means. There is no assurance that the Company will be successful in obtaining financing for these or other purposes, including for general working capital.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**Future Profits/Losses and Production Revenues/Expenses**

The Company has no history of mining operations or earnings, and expects that its losses and negative cash flow will continue for the foreseeable future. No deposit that has been shown to be economic has yet been found on the Company's projects. There can be no assurance that the Company will be able to acquire any additional properties. There can be no assurance that the Company will be profitable in the future. The Company's operating expenses and capital expenditures may increase in subsequent years as needed consultants, personnel and equipment associated with advancing exploration, development and commercial production of the Company's projects and any other properties the Company may acquire, are added. The amounts and timing of expenditures will depend on:

1. the progress of ongoing exploration and development;

2. the results of consultants' analyses and recommendations;

3. the rate at which operating losses are incurred;

4. the execution of any joint venture agreements with strategic partners; and

5. the acquisition of additional properties and other factors, many of which are beyond the Company's control.

The Company does not expect to receive revenues from operations in the foreseeable future, if at all. The Company expects to incur losses unless and until such time as the projects the Company advances, or any other properties the Company may acquire, enter into commercial production and generate sufficient revenues to fund its continuing operations.

The development of mineral properties will require the commitment of substantial resources to conduct the time-consuming exploration and development of the properties. There can be no assurance that the Company will generate any revenues or achieve profitability. There can be no assurance that the underlying assumed levels of expenses will prove to be accurate.

**Exploration, Development and Mining Risks**

Resource exploration, development, and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not reduce, including among other things, unsuccessful efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. Few properties that are explored are ultimately developed into producing mines. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, cave-ins, landslides, and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the operation of mines and the conduct of exploration programs. The Company will rely upon consultants and others for exploration, development, construction, and operating expertise. Substantial expenditures are required to establish mineral resources and mineral reserves through drilling, to develop metallurgical processes to extract the metal from mineral resources, and in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection. The exact effect of these factors cannot accurately be predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.

**Permits and Licenses**

If the Company acquires a new mineral property(ies), its operations would require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits which may be required to carry out exploration and development for the Company's Projects.

**Changes in Local Legislation or Regulation**

Any mining and processing operations that may be acquired and any exploration activities that might be conducted would be subject to extensive laws and regulations governing the protection of the environment, exploration, development, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, mine and worker safety, protection of endangered and other special status species and other matters. The Company's ability to obtain permits and approvals and to successfully operate in particular communities may be adversely impacted by real or perceived detrimental events associated with the Company's activities or those of other mining companies affecting the environment, human health and safety of the surrounding communities. Delays in obtaining or failure to obtain government permits and approvals may adversely affect the Company's operations, including its ability to explore or develop properties, commence production or continue operations. Failure to comply with applicable environmental and health and safety laws and regulations may result in injunctions, fines, suspension, or revocation of permits and other penalties. The costs and delays associated with compliance with these laws, regulations and permits could prevent the Company from proceeding with the development of a project or the operation or further development of a mine or increase the costs of development or production and may materially adversely affect the Company's business, results of operations or financial condition. The Company may also be held responsible for the costs of addressing contamination at the site of current or former activities or at third party sites. The Company could also be held liable for exposure to hazardous substances.

**Environmental Matters**

All of the operations that the Company might acquire would be subject to environmental regulations, which can make operations expensive or prohibit them altogether. The Company may be subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products that could occur as a result of its mineral exploration, development, and production. In addition, environmental hazards may exist on a property in which the Company directly or indirectly holds an interest, which are unknown to the Company at present and have been caused by previous or existing owners or operators of the Company's projects. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties, or the requirement to remedy environmental pollution, which would reduce funds otherwise available to the Company and could have a material adverse effect on the Company. If the Company is unable to fully remedy an environmental problem, it could be required to suspend operations or undertake interim compliance measures pending completion of the required remedy, which could have a material adverse effect on the Company.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company's operations. There is also a risk that the environmental laws and regulations may become more onerous, making the Company's operations more expensive. Many of the environmental laws and regulations will require the Company to obtain permits for its activities. The Company will be required to update and review its permits from time to time, and may be subject to environmental impact analyses and public review processes prior to approval of the additional activities. It is possible that future changes in applicable laws, regulations, and permits or changes in their enforcement or regulatory interpretation could have a significant impact on some portion of the Company's business, causing those activities to be economically re-evaluated at that time.

**Groups Opposed to Mining May Interfere with the Company's Efforts to Explore and Develop its Properties**

Organizations opposed to mining may be active in the regions in which the Company conducts its exploration activities. Although the Company intends to comply with all environmental laws and maintain good relations with local communities, there is still the possibility that those opposed to mining will attempt to interfere with the development of any property(ies) the Company might acquire. Such interference could have an impact on the Company's ability to explore and develop its properties in a manner that is most efficient or appropriate, or at all, and any such impact could have a material adverse effect on the Company's financial condition and the results of its operations.

**Market for Securities and Volatility of Share Price**

There can be no assurance that an active trading market in the Company's securities will be established or sustained. The market price for the Company's securities is subject to wide fluctuations. Factors such as announcements of exploration results, as well as market conditions in the industry or the economy as a whole, may have a significant adverse impact on the market price of the securities of the Company.

The stock market has from time to time experienced extreme price and volume fluctuations that have often been unrelated to the operating performance of particular companies.

**Conflicts of Interest**

The Company's directors and officers may serve as directors or officers of other companies, joint venture partners, or companies providing services to the Company or they may have significant shareholdings in other companies. Situations may arise where the directors and/or officers of the Company may be in competition with the Company. Any conflicts of interest will be subject to and governed by the law applicable to directors' and officers' conflicts of interest. In the event that such a conflict of interest arises at a meeting of the Company's directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In accordance with applicable laws, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

**General Economic Conditions**

Global financial markets have experienced a sharp increase in volatility during the last few years. Market conditions and unexpected volatility or illiquidity in financial markets may adversely affect the prospects of the Company and the value of the Company's shares.

**Reliance on Key Personnel** 

The Company is dependent on the continued services of its senior management team, and its ability to retain other key personnel. The loss of such key personnel could have a material adverse effect on the Company. There can be no assurance that any of the Company's employees will remain with the Company or that, in the future, the employees will not organize competitive businesses or accept employment with companies competitive with the Company.

There can be no assurance that the Company will be able to attract, train, or retain qualified personnel in the future, which would adversely affect its business.

**Competition**

The resources industry is highly competitive in all its phases, and the Company will compete with other mining companies, many of which have greater financial, technical, and other resources. Competition in the mining industry is primarily for attractive mineral rich properties capable of being developed and producing economically; the technical expertise to find, develop, and operate such properties; the labour to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for and mine certain minerals, but also conduct production and marketing operations on a worldwide basis. Such competition may result in the Company being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop any property(ies) the Company might acquire. The Company's inability to compete with other mining companies for these resources could have a materially adverse effect on the Company's results of operation and its business.

**Information Systems and Cyber Security**

The Company's operations depend on information technology ("IT") systems. These IT systems include the IT systems of HDSI who provides technical, management and administrative services to the Company under the Services Agreement. These IT systems are used by us to store sensitive data in the ordinary course of our business, including personal information of our employees, as well as proprietary and confidential business information relating to ourselves and in some cases, our service providers, investors and other stakeholders. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft. The Company's operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures and to address the threat of attacks. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company's reputation and results of operations. There is a risk that the Company or HDSI may be subject to cyber-attacks or other information security breaches which could result in material loss to the Company and could severely damage our reputation, compromise our IT systems and result in a loss or escape of sensitive information, a misappropriation of assets or incidents of fraud, disrupt our normal operations, and cause us to incur additional time and expense to remediate and improve our information systems. While we employ security measures in respect of our information and data, we cannot be certain that we will be successful in securing this information and data and there may be instances where we are exposed to malware, cyber-attacks or other unauthorized access or use of our information and data. The Company's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature and sophistication of these cyber-attacks and potential security breaches. In addition, the Company is dependent on the efforts of HDSI to mitigate its IT systems from cyber-attacks and other information breaches. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority but may not ultimately defeat all potential attacks. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

**QUARTZ MOUNTAIN RESOURCES LTD.**<br> **MANAGEMENT'S DISCUSSION AND ANALYSIS**<br> **FOR YEAR ENDED JULY 31, 2025**<br>

The Company may enter into agreements with Indigenous groups, inclusive of First Nations, in relation to its current and future exploration activities, and any potential future production, which could impact any expected earnings.

Our properties are located within First Nations asserted traditional territories, and the exploration and development of these properties may affect, or be perceived to affect, asserted aboriginal rights and title, which has the potential to manifest permitting delays or opposition by First Nations communities.

**Uninsurable Risks**

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons.