LION COPPER & GOLD CORP.

Federal Regulations

At the federal level, our activities are subject to various environmental and mining-related laws and regulations administered by agencies such as the Bureau of Land Management ("BLM"), the Environmental Protection Agency ("EPA") and other federal authorities. These include requirements under statutes such as the National Environmental Policy Act ("NEPA"), the Clean Water Act, the Clean Air Act and other environmental laws governing permitting, water discharge, air emissions and environmental review processes.

Nevada Regulation

At the state level, our activities are subject to regulation by Nevada state agencies, including the Nevada Division of Environmental Protection and the Nevada Division of Minerals. Nevada regulations address mine permitting, reclamation bonds, water rights, air quality and environmental compliance. These requirements may affect the timing and cost of advancing the Yerington Copper Project.

Government agencies have broad discretion in administering and enforcing these laws and regulations, and regulatory requirements may change over time. See "Item 1A. Risk Factors" for additional discussion of risks associated with environmental and regulatory matters.

Employees

As of March 31, 2026, we have eight full and part time employees and approximately 50 individuals engaged on a consulting basis, including technical and project personnel. Our operations and financial reporting processes are managed by our officers with oversight from the Board of Directors and the Audit Committee. We also retain geological, metallurgical, environmental and engineering consultants, as needed, to assist in evaluating our mineral properties and planning and executing work programs.

Investing in our common shares involves a high degree of risk. You should consider carefully the risks described below, together with the other information contained in this Annual Report, including our consolidated financial statements and related notes. If any of the following risks materialize, our business, financial condition, results of operations, and future prospects may be materially and adversely affected, and the market price of our common shares could decline.

The risks described beloware* not the only risks we face.*

We have a history of losses, no revenue from mining operations and may never achieve profitability.

We have not generated revenue from mineral production and do not expect to do so in the foreseeable future. Our activities are speculative and capital-intensive, and we expect to continue incurring losses unless and until we achieve commercial production, which may never occur. Our ability to achieve profitability depends on successful completion of the feasibility study, permitting, project financing and development of the Yerington Copper Project.

We are dependent on a single material project, and any adverse development affecting the Project would materially harm our business.

Our principal asset is the PFS-level Yerington Copper Project in Nevada, and our business and prospects are highly dependent on its advancement. As a result, we are particularly exposed to risks affecting the Project, including unfavorable technical results, cost increases, engineering challenges, permitting delays, environmental or regulatory developments, declines in copper prices, financing constraints or changes in our option agreement with Nuton. If any of the foregoing occurs, it could materially and adversely affect our business, financial condition and results of operations.

Advancing the Project through a feasibility study may encounter unexpected technical challenges that could reduce projected economic returns, delay production, or require additional capital expenditures.

We rely significantly on our collaboration with Nuton

Advancement of the Yerington Copper Project depends significantly on the agreement with Nuton. Nuton has elected to proceed to the feasibility study stage and has provided a lump-sum payment of $30.5 million to us. Further advancement of the Project remains subject to future technical results, investment decisions and funding approvals by Nuton, which retains discretion regarding future participation. If Nuton elects not to proceed beyond the current stage in accordance with the agreement, we may not have sufficient financial or technical resources to advance the project independently.

We will require substantial additional capital to advance the Project.

Our development plan relies substantially on funding from Nuton and potentially other equity or debt financing. There is no assurance that Nuton or other sources will provide funding on acceptable terms or at all. Our ability to raise additional funds depends on market conditions, investor sentiment, copper prices and other factors. In the absence of such financing, we may delay or suspend planned activities or dispose of interests in our mineral properties.

Our investment in Falcon Copper Corp. and related valuation judgments may result in significant volatility in our financial results.

As of December 31, 2025, we deconsolidated Falcon Copper Corp. (“FCC”) and recognized a non-cash gain based primarily on the estimated fair value of our retained interest at the date of deconsolidation. FCC is a private, exploration-stage company with no active trading market for its shares. Accordingly, the initial carrying value of our retained investment, including an implied share price of $0.31, was determined using significant judgment and unobservable inputs.

In addition, warrants received in connection with the Falcon Butte transaction were valued using a Monte Carlo simulation model. This model incorporates assumptions such as expected volatility, probability of financing or development milestones, valuation caps, and market-based inputs. These assumptions are inherently uncertain and subjective. The related valuations are classified as Level 3 under ASC 820 – Fair Value Measurement.

Following deconsolidation, our investment in FCC is accounted for under the equity method. The carrying value is not remeasured to fair value but is adjusted for our share of FCC’s earnings or losses. FCC has a limited operating history and is dependent on future financing and the successful advancement of its mineral properties. As a result, if FCC’s performance or development outcomes differ from expectations, we may be required to record our share of losses or recognize impairment charges, which could be material.

There can be no assurance that the implied valuation of $0.31 per share will be realized or that the carrying value of our investment will be recoverable.

Risks Related to the Mining Industry

Our mineral resource and reserve estimates are subject to significant uncertainty and may not be realized.

Our estimates of mineral resources and mineral reserves for the Yerington Copper Project are based on geological modeling, engineering assumptions and economic analyses that involve significant judgment. These estimates may change as additional data becomes available, as further technical work is completed, or as economic conditions change.

There can be no assurance that mineral resources will be converted to mineral reserves or that mineral reserves will be ultimately mined or processed profitably. Differences between actual results and assumptions regarding ore grade, recovery rates, operating costs, capital expenditures, metallurgical performance, permitting, infrastructure or copper prices could materially affect the economic viability of the Project.

Fluctuations in copper prices may may adversely affect the economic viability of the Project.

The economic viability of the Yerington Copper Project depends significantly on copper prices, which are volatile and influenced by various factors. Although copper prices have improved in recent periods, there can be no assurance that such pricing levels will remain in the future. Sustained price declines could affect the economic viability of the Project, our ability to obtain financing and the market value of our common shares.

If developed, mining operations would be subject to significant risks.

Mining operations involve risks such as equipment failures, geotechnical instability, adverse weather conditions, labor disruptions and environmental incidents, which could result in operational disruptions and financial losses.

Our operations are subject to extensive environmental and permitting requirements.

Our exploration activities are regulated by federal, state and local authorities in the United States. Permitting delays, regulatory changes or compliance failures could materially affect our ability to advance our project. Compliance with environmental and other regulatory requirements may increase costs, delay schedules or limit operations.

Our properties may be subject to uncertain title.

Mineral properties may be subject to prior, and in some cases, not fully ascertainable unregistered agreements or transfers, and title may be affected by undetected defects. Title may be based upon interpretation of a country's laws, which may be ambiguous, inconsistently applied and subject to reinterpretation or change.

Risks Related to Our Securities and Capital Structure

Our largest shareholder has significant influence over our Company.

Our largest shareholder beneficially owns a substantial portion of our common shares and is able to influence the outcome of matters submitted to shareholders, including the election of directors and significant corporate transactions. This concentration of ownership may discourage a change in control and may not align with the interests of other shareholders.

Our share price may be volatile and trading volume may remain limited.

Our common shares trade on the Canadian Securities Exchange and the OTCQB, which generally have lower liquidity than major exchanges. Market volatility and limited trading volume may adversely affect investors' ability to buy or sell our shares.

Future equity issuances may dilute existing shareholders.

We may issue additional securities to finance operations. Such issuances may dilute existing shareholders and negatively affect our share prices.

Risks Related to Governance, Compliance and Reporting

As a Canadian company subject to U.S. reporting obligations, we are subject to complex compliance requirements.

We are incorporated in Canada and listed on the CSE and remain a registrant with the SEC as a domestic issuer. Because most of our directors and shareholders are based in the United States, we are no longer a foreign private issuer. As a result, we must comply with both Canadian and U.S. regulatory regimes, including periodic reporting, internal control and corporate governance requirements.

Compliance with these regulatory frameworks increases legal, audit and administrative costs and management time. Differences between U.S. and Canadian disclosure requirements may also increase the risk of errors or regulatory scrutiny. Failure to comply with applicable securities laws in either jurisdiction could result in enforcement actions, fines, penalties or reputational harm.

We are subject to risks associated with internal control over financial reporting.

Our financial reporting processes rely on a small management team supported by external service providers and advisors for certain complex accounting matters. While management believes appropriate oversight and review procedures mitigate these limitations, maintaining effective internal controls may become more challenging as the Company grows or undertakes more complex transactions. Failure to maintain effective internal controls could adversely affect investor confidence in our financial reporting and harm our business and reputation.

Overlapping leadership roles may give rise to conflicts of interest.

Our board currently consists of three members, and one director also serves as Chairman of Falcon Copper. Situations may arise in which such director has competing fiduciary duties when matters involve or affect both companies. Although we have governance policies in place, such conflicts may not always be resolved in our favor.

Cybersecurity threats could disrupt our operations and adversely affect our business.

We rely on information technology systems and third-party service providers for our operations. Despite the cybersecurity measures we have implemented, our systems and those of our service providers remain vulnerable to cyberattacks, including phishing, malware, ransomware and unauthorized access. A successful cybersecurity incident could result in operational disruptions, financial losses, theft or loss of sensitive data, reputational harm or regulatory exposure. In addition, responding to cybersecurity incidents could require significant management time and resources. See "Item 1C. Cybersecurity" for additional information.

Risks Related to Strategic Initiatives and Forward-Looking Statements

We may pursue strategic initiatives that involve execution risks.

We may evaluate financings, joint ventures, corporate reorganizations or exchange listings. These initiatives involve legal, financial and execution risks and may not be completed successfully.

Forward-looking statements involve significant risks and uncertainties.

Forward-looking statements are based on assumptions regarding commodity prices, technical outcome, financing availability, permitting timelines and other factors. Actual results may differ materially.

Global economic conditions may adversely affect our business.

Economic uncertainty, inflation, rising geopolitical tensions and conflicts, may impair our access to capital and negatively impact our operations.

Tax Risks

The Company is possibly a "passive foreign investment company", which would likely have adverse U.S. federal income tax consequences for U.S. shareholders.

If the Company is or becomes a "passive foreign investment company," its U.S. investors may suffer adverse U.S. income tax consequences.

Generally, for any taxable year, if at least 75% of the Company's gross income is passive income, or at least 50% of the value of the Company's assets (generally determined based on a weighted quarterly average) is attributable to assets that produce, or are held for the production, of passive income, the Company will be a "passive foreign investment company" ("PFIC") for U.S. federal income tax purposes. For purposes of these tests, passive income generally includes dividends, interest, certain gains from the sale of investment property, and certain rents and royalties, and passive assets generally include cash. Additionally, the Company generally will be treated as directly holding and receiving its proportionate share of the assets and income, respectively, of any corporation in which it owns, directly or indirectly, 25% of its stock by value. If the Company is a PFIC for any taxable year, certain U.S. investors may suffer adverse tax consequences, including ineligibility for preferential tax rates on capital gains or dividends, interest charges on certain taxes treated as deferred, and additional tax reporting requirements.

The Company's PFIC status generally will depend on the nature and composition of the Company's income and assets and the value of the Company's assets (which generally will be determined based on the fair market value of each asset, with the value of goodwill determined in large part by reference to the market value of the Company's stock from time to time, which may be volatile). If the Company's market capitalization declines while it holds a substantial amount of cash for any taxable year, the Company may be a PFIC for such taxable year. The manner and timeframe in which the Company spends the cash it raises in any offering, the transactions it enters into, and how the Company's corporate structure may change in the future will affect the nature and composition of the Company's income and assets. Based on the nature and composition of the Company's income and assets and the value of the Company's assets, including goodwill, the Company believes it may be classified as a passive foreign investment company up to and including the taxable year ended December 31, 2025, and based on current business plans and financial projections, management believes there is a possibility that we could be classified as a PFIC during the current taxable year. If we are classified as 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 their 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" ("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 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. U.S. shareholders should be aware that there can be no assurance that the Company will satisfy record keeping requirements that apply to a QEF Election, 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 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 in "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Certain U.S. Federal Income Tax Considerations for U.S. Residents." Each U.S. shareholder should consult his or her own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the PFIC rules and the acquisition, ownership, and disposition of common shares.