Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This discussion should be read in conjunction with the condensed interim consolidated financial statements and accompanying notes for the periods ended September 30, 2026 and 2025, which have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management's expectations. Factors that could cause such differences are discussed in the sections entitled "Forward-Looking Statements" and "Risk Factors." We are not undertaking any obligation to update any forward-looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward-looking statements or other statements were made. Therefore, no reader of this document should rely on these statements being current as of the date of this Quarterly Report on Form 10-Q. As used in the discussion below, the "Company", "Silver Bow", "we", "us" and "ours" refer to Silver Bow Mining Corp.

All dollar amounts are in U.S. dollars, except per share amounts, commodity prices, and currency exchange rates unless specified otherwise.

Our Business

We were incorporated under the name Blackjack Silver Corp. pursuant to the Ontario Business Corporations Act on August 31, 2020. The Company changed its name to Silver Bow Mining Corp. pursuant to a certificate of amendment effective February 18, 2025. On May 27, 2025, we continued as a British Columbia corporation under the provisions of the British Columbia Business Corporations Act ("BCBCA"). The Company's registered office is located at 1200-750 West Pender St, Vancouver, British Columbia, V6C 2T8, and its corporate headquarters is located at 1401 Idaho Street, Butte, Montana 59701.

We are focused on the exploration of mineral property interests including silver, zinc, gold, lead, and copper targets in the state of Montana, United States. Our land holdings are located in Silver Bow County, Montana. Our mineral properties include the Rainbow Block, the Marget Ann Block, the Goldsmith Block, the Travona Block, the Great Republic Block and the Emma Block. Collectively, we refer to these properties as the "Butte Project".

As of September 30, 2026, we were an exploration stage issuer and have not commenced commercial production or established any Mineral Reserves under Subpart 1300 of Regulation S-K.

Recent Developments

Pending Acquisition of Assets of Montana Tunnels Mining, Inc.

On August 21, 2026, the Company entered into an Asset Purchase Agreement (the "Purchase Agreement") with Montana Tunnels Mining Inc. (MTMI). Under the Purchase Agreement, the Company agreed to acquire assets and rights comprising the Montana Tunnels Mine and milling complex, including related mineral and real property interests, improvements, tangible personal property, water rights, permits, books and records, intellectual property, and other specified assets, together with certain liabilities associated with the acquired assets, as described in the Purchase Agreement (the "Acquisition").

The Acquisition is structured in two stages: (i) an initial closing under the Purchase Agreement (the "First Closing"), where funds were placed in escrow by the Company to satisfy credit obligations of MTMI and (ii) a secondary closing at which the purchased assets will be transferred to the Company and contingent value rights ("CVRs") will be issued to MTMI shareholders (the "Final Closing").

In connection with the First Closing, $35.7 million was paid by the Company during the third quarter of 2026, which includes the $28.6 million escrow payment a $1 million payment as an exclusivity fee upon beginning negotiations, and approximately $1.1 million of transaction-related expenses. Concurrent with the First Closing, the Company also loaned MTMI shareholders $5 million in exchange for secured notes that will be settled through the surrender of 1,155,562 of the CVRs to be delivered at the Final Closing.

The Final Closing is conditioned on, among other matters, the approval of the Company's shareholders as required under applicable NYSE American rules with respect to the issuance of the Common Shares on conversion of the CVRs, as well as NYSE American approval of the supplemental listing of such Common Shares. There can be no assurance that Final Closing will occur timely or at all.

For further details, see Note 7 in the Notes to the Company's Condensed Interim Unaudited Financial Statements included within Item 1. See also "Part II. Item 1A. Risk Factors" below for certain risks related to the proposed Acquisition.

Additional information and where to find it

This report may be deemed to be solicitation material in respect of the proposed shareholders meeting of the Company to approve the issuance of the CVRs and the underlying common shares. In connection with the proposed shareholders meeting, the Company intends to file relevant materials with the U.S. Securities and Exchange Commission (the "SEC"), including the Company's proxy statement in preliminary and definitive form. INVESTORS AND SHAREHOLDERS OF SILVER BOW MINING ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING SILVER BOW MINING'S PROXY STATEMENT (WHEN THEY ARE AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE SHAREHOLDER APPROVAL BEING REQUESTED. Investors and shareholders of the Company are or will be able to obtain these documents (when they are available) free of charge from the SEC's website at www.sec.gov, or free of charge from the Company under the "Investors" section of the Company's website at www.silverbowmining.com/investors or by sending a request by e-mail to [email protected] or by mail to 1401 Idaho Street, Butte, Montana 59701, attention: Corporate Secretary.

Participants in the solicitation

The Company and certain of its directors and executive officers, under SEC rules, may be deemed to be "participants" in the solicitation of proxies from shareholders of the Company in connection with the proposed transaction. Information about the Company's directors and executive officers is available in the Company's registration statement on Form S-1/A, which was filed with the SEC on April 24, 2026. To the extent holdings of the Company's securities by their respective directors or executive officers have changed since the amounts set forth in the Registration Statement on Form S-1/A, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC. Additional information concerning the interests of the Company's participants in the solicitation, which may, in some cases, be different than those of the Company's shareholders generally, will be set forth in the Company's proxy statement relating to the proposed approval by shareholders, when it becomes available.

Ocean Partners Funding and Credit Support Package

On September 22, 2026, the Company announced an $88 million term sheet with Ocean Partners UK Limited ("Ocean Partners") for a funding, credit support and offtake package comprised of a $40 million concentrate prepayment facility in three tranches; guarantees supporting replacement surety bonds of up to $43.1 million subject to finalized terms and DEQ acceptance; $5 million lead commitment in future equity financing, if the Company conducts such future financing; and ten-year zinc and lead concentrate offtake agreements. The term sheet is non-binding except for the $5 million pre-closing bridge note. The bridge was funded on October 6, 2026 and bears interest at 12-month SOFR plus 6.75%, secured by an assignment of the Company's rights under the MTGF secured note and Purchase Agreement and credited against the first prepayment tranche. If Final Closing does not occur, the bridge becomes repayable on the long-stop date.

For further details on the Ocean Partners term sheet, see Note 15 in the Notes to the Company's Condensed Interim Unaudited Financial Statements included within Item 1.

Selected Statement of Financial Position Information

	September 30, 2026	December 31, 2025
Financial Position	$	$
Cash and cash equivalents	9,890,538	10,554,948
Working Capital Surplus	6,674,843	9,470,294
Mineral Properties	42,831,804	38,261,379
Total Assets	93,480,406	49,723,155
Total Liabilities	9,131,983	1,734,918

Results of Operations

Three months ended September 30, 2026 compared to Three months ended September 30, 2025

The following table summarizes the Company's financial results for the three months ended September 30, 2026 and 2025:

		Three months ended September 30,								Change
		2026				2025				Amount				Percentage
		$				$				$
Exploration costs			8,401,885				197,484				8,204,401				4154	%
Depreciation expenses			46,668				8,530				38,138				447	%
Salaries and wages			1,540,676				319,644				1,221,032				382	%
General and administration			1,582,616				119,686				1,462,930				1222	%
Management and advisory			433,526				976,523				(542,997	)			(56	%)
Professional fees			943,041				408,130				534,911				131	%
Operating lease expense			16,746				-				16,746				100	%
Net loss from operations			12,965,158				2,029,997				10,935,161				539	%
Total other (income) expenses			(252,966	)			60,988				(313,954	)			(515	%)
Net loss			12,712,192				2,090,985				10,621,207				508	%

The following is an analysis of our operations for the three months ended September 30, 2026 and 2025. Significant items contributing to the loss incurred were as follows:

●

Exploration costs increased $8,204,401 due to increased surface drilling and underground development activity in the Rainbow Block Property in 2026. The Company expects a significant increase in Rainbow Block Property exploration activity during the remainder of 2026 compared to 2025.

●

Salaries and wages and General and administration costs increased $1,221,032 and $1,462,930, respectively, due to the expansion of the Company's organizational structure in preparation for the increase in operations and the initial public offering ("IPO") in April 2026.

●

Management and advisory costs decreased $542,997 due to a shift in leadership resources in preparation for our IPO in 2026, partially offset by an increase in stock-based compensation of $304,936 in the third quarter of 2026.

●

Professional fees increased $534,911 due to higher audit, legal and consulting expenses associated with increased organizational activities and becoming a public company in 2026.

●

Other income increased $313,954 due primarily to receiving interest and securities income of $321,082 earned from the proceeds received from our IPO on May 1, 2026. There was minimal interest income received in the three months ended September 30, 2025.

Nine months ended September 30, 2026 compared to Nine months ended September 30, 2025

The following table summarizes the Company's financial results for the nine months ended September 30, 2026 and 2025:

		Nine months ended September 30,								Change
		2026				2025				Amount				Percentage
		$				$				$
Exploration costs			11,319,968				499,875				10,820,093				2165	%
Depreciation expenses			90,964				20,522				70,442				343	%
Salaries and wages			3,372,531				991,110				2,381,421				240	%
General and administration			2,639,678				329,115				2,310,563				702	%
Management and advisory			1,216,004				6,062,510				(4,846,506	)			(80	%)
Professional fees			2,709,295				1,040,637				1,668,658				160	%
Operating lease expense			22,689				104,444				(81,755	)			(78	%)
Net loss from operations			21,371,129				9,048,213				12,322,916				136	%
Total other (income) expenses			(618,544	)			76,715				(695,259	)			(906	%)
Net loss			20,752,585				9,124,928				11,627,657				127	%

The following is an analysis of our operations for the nine months ended September 30, 2026 and 2025. Significant items contributing to the loss incurred were as follows:

●

Exploration costs increased $10,820,093 due to increased surface drilling and underground development activity in the Rainbow Block Property in 2026. The Company expects a significant increase in Rainbow Block Property exploration activity during the remainder of 2026 compared to 2025.

●

Salaries and wages and General and administration costs increased $2,381,421 and $2,310,563, respectively, due to the expansion of the Company's organizational structure in preparation for the increase in operations and the public listing in April 2026.

●

Management and advisory costs decreased $4,846,506 due to a decrease in stock-based compensation costs of $4,026,233. Excluding this, costs declined due to a shift in leadership resources in preparation for our IPO in 2026.

●

Professional fees increased $1,668,658 due to higher audit, legal and consulting expenses associated with increased organizational activities and becoming a public company in April 2026.

●

Other income increased $695,259 due primarily to receiving interest and securities income of $719,891 earned from the proceeds received from our IPO on May 1, 2026. There was minimal interest income received during the nine months ended September 30, 2025.

Management Outlook and Trends

Throughout the remainder of 2026, we are expecting to see continued increases in exploration and overhead as the Company pursues its exploration goals and continues building its management structure.

Financial Position, Liquidity and Capital Resources

A summary and discussion of our cash inflows and outflows for the nine months ended September 30, 2026 and 2025 are as follows:

		Nine months ended September 30,								Increase/(Decrease)
		2026				2025				Amount
		$				$				$
Cash Flows by (Used In):
Operating activities			(17,950,069	)			(3,636,177	)			(14,313,892	)
Investing activities			(37,385,901	)			(1,920,794	)			(35,465,107	)
Financing activities			55,984,383				6,581,255				49,403,128
Net Increase in Cash and Restricted Cash			648,413				1,024,284				(375,871	)

Cash used in operating activities increased in the nine months ended September 30, 2026 compared to the corresponding period in 2025 due to the increase in exploration activities, the expansion of the Company's management structure and increased professional fees as we increased operational activities and prepared for the 2026 IPO.

The increase in cash provided by financing activities was primarily due to the $55.1 million of funds raised in connection with the IPO on May 1, 2026. During the first nine months of 2025, the following financing transactions occurred:

●

From January through March 2025, we completed private placements, raising $1,912,078 from the issuance of common shares and purchase warrants with an exercise price of $6.00 for two years from each closing.

●

In February 2025, we issued 1,012,622 common shares pursuant to warrant exercises at a price of $3.50 per share, raising $3,544,177.

●

During August and September 2025, the Company issued 187,499 common shares pursuant to warrant exercises at a price of $6.00 per share, raising $1,125,000.

●

From January through April 2026, the Company issued 185,000 common shares pursuant to warrant exercises at a price between $4.00 and $6.00 per share, raising $900,000.

Cash used in investing activities was significantly higher due to the $35,675,808 paid in the third quarter of 2026 related to the Montana Tunnels Mining, Inc. asset acquisition. Other significant investing cash flow items were as follows:

●

In the first three months ended March 31, 2026, the Company invested $570,425 to purchase the Great Republic mineral rights.

●

In the first nine months ended September 30, 2025, we incurred investments associated with the Goldsmith mineral properties ($1,006,851) and completing the Ferry Lane acquisition ($750,000).

●

Purchases of property, plant and equipment increased $975,725 during 2026 due to increased exploration and organizational activities.

Cash Resources, Liquidity and Going-Concern

The Company has no source of revenue and has specific requirements to maintain its mineral property interests and meet its obligations as they come due. The Company has raised funds in the past through debt, equity and strategic investors, and continues to have further opportunities to raise capital, including public and private markets. The Company closed an initial public offering on May 1, 2026 whereby the Company raised net proceeds of approximately $55.1 million. In addition, on September 22, 2026, the Company announced an $88 million non-binding term sheet with Ocean Partners contingent upon the closing of the MTMI Purchase Agreement, which includes a $5 million pre-closing bridge note that was funded to the Company on October 6, 2026 (see discussion above within Recent Developments). On September 30, 2026, the Company had cash and cash equivalents of $9,890,538.

Based on the current liquidity position, planned expenditures and the ability to raise further capital, management believes the Company has sufficient resources to meet its obligations as they become due within twelve months from the issuance date of these Financial Statements, which have been prepared on a going-concern basis.

Critical Accounting Policies and Estimates

This MD&A of the Company's financial condition and results of operations is based on our condensed interim consolidated financial statements, which have been prepared in accordance with U.S. GAAP. Preparation of financial statements requires management to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and the related disclosures of contingencies. Management bases its estimates on various assumptions and historical experience, which are believed to be reasonable; however, due to the inherent nature of estimates, actual results may differ significantly due to changed conditions or assumptions. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that the Company's condensed interim consolidated financial statements are fairly presented in accordance with U.S. GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from the Company's assumptions and estimates, and such differences could be material. Management believes that the following critical accounting estimates and judgments have a significant impact on the Company's condensed interim consolidated financial statements; valuation of options and warrants granted to directors and officers using Black-Scholes models.

The Company's accounting policies are described in greater detail in Note 2 to the Company's audited annual consolidated financial statements for the year ended December 31, 2025, which can be found in the Company's Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on April 24, 2026. There have been no material changes to the Company's critical accounting policies and estimates as compared to the Company's critical accounting policies and estimates described in the Registration Statement.

Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements. We may, in some cases, use words such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar expressions that convey uncertainty of future events or outcomes to identify these forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements in this quarterly report include, but are not limited to, statements about:

●

our strategies and objectives, both generally and in respect of our specific mineral properties;

●

the expected timing, approval and closing of the Company's proposed acquisition of certain assets of MTMI;

●

the timing of decisions regarding the strategy and costs of exploration programs with respect to, and the issuance of the necessary permits and authorizations required for, our exploration programs;

●

the timing and cost of our planned exploration programs, and the timing of the receipt of results therefrom;

●

our future cash requirements;

●

general business and economic conditions;

●

our ability to meet our financial obligations as they come due, including payments required to maintain our mineral property interests;

●

the timing and pricing of proposed financings, if applicable;

●

the anticipated use of the proceeds from any financings completed by us;

●

the potential for the expansion of the known mineralized zones; and

●

the potential for the amenability of mineralization to respond to proven technologies and methods for recovery of ore.

Although we believe that such statements are reasonable, we can give no assurance that such expectations will prove to be correct. Inherent in forward-looking statements are risks and uncertainties beyond our ability to predict or control, including, but not limited to, risks related to our inability to negotiate successfully for the acquisition of interests in exploration and evaluation assets, the determination of applicable governmental agencies not to issue the exploration concessions applied for by us or excessive delay by the applicable governmental agencies in connection with any such issuances, our inability to identify one or more economic deposits on our properties, variations in the nature, quality and quantity of any mineral deposits that may be located, our inability to obtain any necessary permits, consents or authorizations required for our activities, to produce minerals from our properties successfully or profitably, to continue our projected growth, to raise the necessary capital, to complete certain financing transactions, or to be fully able to implement our business strategies.

We caution investors that any forward-looking statements by us are not guarantees of future performance, and that actual results are likely to differ, and may differ materially, from those expressed or implied by forward-looking statements contained in this quarterly report. Such statements are based on a number of assumptions which may prove incorrect, including, but not limited to, assumptions about:

●

the level and volatility of the prices for precious and base metals, including silver, zinc, gold, lead and copper;

●

general business and economic conditions;

●

the timing of the receipt of regulatory and governmental approvals, permits and authorizations necessary to implement and carry on our planned exploration programs;

●

conditions in the financial markets generally, and with respect to the prospects for junior exploration silver, copper and precious and base metal companies specifically;

●

our ability to secure the necessary consulting, drilling and related services and supplies on favorable terms;

●

our ability to attract and retain key staff, and to retain consultants to provide the specialized information and skills involved in understanding the precious and base metal exploration, mining, processing and marketing businesses;

●

the nature and location of our mineral exploration projects, and the timing of the ability to commence and complete the planned exploration programs;

●

the anticipated terms of the consents, permits and authorizations necessary to carry out the planned exploration programs and our ability to comply with such terms on a cost-effective basis;

●

our ongoing relations with government agencies and regulators and our underlying property vendors/optionees;

●

that the metallurgy and recovery characteristics of samples from certain of our mineral properties are reflective of the deposit as a whole;

●

risks related to the Company's proposed acquisition of certain assets of MTMI.

These forward-looking statements are made as of the date hereof and we do not intend and do not assume any obligation, to update these forward-looking statements, except as required by applicable law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

This list is not exhaustive of the factors that might affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the "Risk Factors" section of our registration statement on Form S-1/A (No. 333-292928) as filed with the SEC on April 24, 2026 and this quarterly report on Form 10-Q. Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that could cause results not to be as anticipated, estimated or intended. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as required by law, we disclaim any obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all of the forward-looking statements contained or incorporated by reference in this quarterly report on Form 10-Q by the foregoing cautionary statements.