Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Certain statements contained in this Form 10-Q, including in Management's Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. We have tried to identify these forward-looking statements by using words such as "may," "will," "expect," "anticipate," "believe," "intend," "feel," "plan," "estimate," "project," "forecast" and similar expressions. These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item 1A. - Risk Factors in our 2025 Annual Report on Form 10-K and in Part II, Item 1A. - Risk Factors in this Quarterly Report on Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Thunder Mountain Gold, Inc. or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

The following Management's Discussion and Analysis of Financial Condition and Results of Operation ("MD&A") is intended to help the reader understand our financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying integral notes ("Notes") thereto. The following statements may be forward-looking in nature and actual results may differ materially.

Plan of Operations

The Company, including its subsidiaries, owns mining rights, mining claims, and properties in the mining areas of Nevada and Idaho, which includes its South Mountain Property in Idaho, and its Trout Creek Property in Nevada.

The Company owns 100% of the outstanding stock of Thunder Mountain Resources, Inc., a Nevada Corporation. Thunder Mountain Resources, Inc. owns 100% of the outstanding stock of South Mountain Mines, Inc. (SMMI), an Idaho Corporation. Thunder Mountain Resources, Inc. completed the direct purchase of 100% ownership of South Mountain Mines, Inc. on September 27, 2007, which at the time, consisted of 17 patented mining claims (approximately 327 acres) located in Owyhee County in southwestern Idaho. After the purchase, Thunder Mountain Resources staked an additional 34 unpatented lode claims covering approximately 550 acres and leased approximately 489 acres of private minerals and land. The Company subsequently acquired additional surface and mineral rights, including a 360-acre millsite property, and has continued to expand its land position through additional claim staking, lease agreements, and acquisitions of private mineral lands.

The Company's plan of operation for the next twelve months, subject to available capital and market conditions, will be to continue to advance the South Mountain Project, including continued baseline environmental and engineering work necessary to complete a Preliminary Economic Analysis (PEA). The Company plans to continue to pursue and evaluate options to advance the South Mountain Project and acquire additional properties through partnerships, joint ventures, option agreements, and strategic relationships.

Financial Condition

Results of Operations:

For the three months ended March 31, 2026, the Company incurred a net loss of $590,758, compared to a net loss of $540,300 for the comparable period in 2025. The increase in net loss was primarily attributable to higher exploration expenditures and increased professional fees, partially offset by lower stock-based compensation expense during the current period.

Three-month period comparisons

Operating expenses for the three months ended March 31, 2026 totaled $594,595, an increase of $53,249, or 10%, compared to $541,346 for the prior year period. This increase was primarily attributable to expanded exploration activities and higher legal and accounting expenses, partially offset by lower stock-based compensation expense during the current period.

Exploration expenditures totaled $167,128 for the three months ended March 31, 2026, compared to $67,073 for the same period in 2025, representing an increase of $100,055, or 149%. The increase was driven by expanded exploration efforts related to the advancement of the Company's mineral interests.

Legal and accounting expenses totaled $95,186 for the three months ended March 31, 2026, compared to $45,810 for the same period in 2025, representing an increase of $49,376, or 108%. The increase primarily reflects higher professional service fees associated with financial reporting, regulatory compliance, and ongoing corporate activities.

Management and administrative expenses totaled $332,281 for the three months ended March 31, 2026, compared to $428,463 for the same period in 2025, representing a decrease of $96,182, or 22%. The decrease was primarily attributable to lower stock-based compensation expense recognized during the current period.

Liquidity and Capital Resources

The Company is in the exploration stage and has not generated revenues from operations. Accordingly, the Company is dependent upon external financing to fund its operations and advance its exploration activities.

As of March 31, 2026, the Company had cash and cash equivalents of $1,813,057 compared to cash and cash equivalents of $2,592,167 as of December 31, 2025. As of May 05, 2026, the Company had cash and cash equivalents of $1,677,457. Management believes the Company's existing cash resources are sufficient to fund its planned operations for at least the next twelve months.

The Company's future liquidity and capital requirements will depend on many factors, including the timing and cost of its exploration activities, evaluation of strategic alternatives and related decisions, and regulatory requirements. The Company's short-term liquidity needs consist primarily of exploration expenditures, lease payments, salaries, administrative expenses, and required principal and interest payments under the seller-financed promissory note issued in December 2025. Longer-term liquidity requirements include potential construction and equipment costs if the Company is able to advance its mining project toward production.

If the Company does not have sufficient cash to complete its exploration programs, it intends to seek additional funding through equity or debt financings or adjust its business plans accordingly. The Company may also consider alternative sources of funding, including potential mergers, asset sales, or additional agreements related to its exploration properties.

During the three months ended March 31, 2026, the Company used net cash in operating activities of $607,786, compared to net cash used in operating activities of $247,613 for the same period in 2025. The increase in cash used in operating activities during the current period was primarily attributable to higher operating expenditures associated with expanded exploration activities and increased professional fees.

During the three months ended March 31, 2026, net cash used in investing activities was $211,324, compared to no investing activity during the same period in 2025. Investing activity in the current period consisted of expenditures related to the acquisition of mineral properties.

During the three months ended March 31, 2026, net cash provided by financing activities was $40,000, compared to $130,000 for the same period in 2025. Financing activities during the current period consisted of proceeds from the exercise of stock options, while the prior period included proceeds from the issuance of common stock and warrants.

The Company experienced a net decrease in cash and cash equivalents of $779,110 for the three months ended March 31, 2026, compared to a net decrease of $117,613 for the same period in 2025.

Going Concern

The condensed consolidated financial statements included in this Form 10-Q have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.

The Company is in the exploration stage and has not generated revenues from operations. As of the date of this report, management believes the Company has sufficient cash to meet its normal operating requirements for at least the next twelve months. However, the Company's ability to continue to advance its exploration activities is dependent on its ability to obtain additional financing.

The Company plans, as funding allows, to continue advancing its South Mountain Project and to conduct exploration activities on its mineral properties. The extent and timing of these activities will depend on the availability of capital.

There can be no assurance that additional financing will be available on acceptable terms, or at all. If additional financing is not obtained, the Company may be required to reduce or delay its exploration activities and other expenditures in order to conserve cash and maintain its mineral property interests.

Contractual Obligations

The Company holds several leases pertaining to land parcels adjacent to its South Mountain patented and unpatented mining claims. The details of these leases are as follows:

Lowry Lease:

On October 24, 2008, the Company executed a lease agreement with William and Nita Lowry for a duration of 6 years, encompassing 376 acres at a rate of $20 per acre. The lease incorporated an option to extend for an additional 10 years at a revised rate of $30 per acre. Following the passing of the original lessors, the lease was inherited by Michael Lowry, their son. Commencing October 24, 2025, the Company executed an extension to the lease agreement with Michael Lowry for an additional 21 years, through October 24, 2046. Under the amended lease agreement, the annual rental payments for the first seven years increased to $40 per acre. The rental rate increases to $50 per acre for the second seven-year period and to $60 per acre for the final seven-year period.

Looten Lease:

On June 2, 2025, the Company executed a lease agreement with Kevin and Jo Looten for an initial term of 7 years, encompassing 18 acres at a rate of $30 per acre. The lease incorporates an option to extend for an additional 10 years at a revised rate of $40 per acre.

Lequerica & Sons Lease:

On August 22, 2025, the Company executed a lease agreement with Lequerica & Sons, Inc. for an initial term of 7 years, encompassing 432 acres at a rate of $30 per acre. The lease incorporates an option to extend for an additional 7 years at a revised rate of $40 per acre. The lease agreement also contains a right of first refusal in favor of the Company with respect to the underlying property, exercisable upon a proposed sale by the lessor.

OGT, LLC:

SMMI is the sole manager of the South Mountain Project in its entirety through a separate Mining Lease with Option to Purchase ("Lease Option") with the Company's majority-owned subsidiary OGT. SMMI has an option to purchase the South Mountain mineral interest for a capped $5 million less net returns royalties paid through the date of exercise. The Lease Option expires in November 2026. Under the Lease Option, SMMI paid annual $5,000 net returns royalty payments to OGT through November 2025. The final $5,000 payment was made in November 2025, and no further payments are required under this arrangement.

Idaho State Mineral Lease:

In March 2026, the Company was awarded mineral lease rights on approximately 3,500 acres of Idaho state land through a competitive auction process and submitted a winning bid of $210,000. In connection with the proposed lease, the Company also paid 2026 lease rent of $10,495 and a minimum annual royalty of $10,000.

As of March 31, 2026, the lease was subject to final approval by the Idaho State Land Board and had not yet been formally executed. Upon execution, the lease is expected to have a 20-year term and require ongoing annual lease payments and minimum royalty obligations to maintain the lease in good standing.

The leases and net royalty payments are summarized in the following table:

Contractual obligations	Payments due by period
	Total*	Less than 1 year	2-3 years	4-5 years	More than 5 years
Lowry Lease (yearly, October) (1)	$315,840	$15,040	$30,080	$30,080	$240,640
Kevin and Jo Looten Trust	$3,780	$540	$1,080	$1,080	$1,080
Lequerica & Sons Lease	$90,720	$12,960	$25,920	$25,920	$ 25,920
Idaho State Lease (2)	$20,495	$20,495	-	-	-
Total	$430,835	$49,035	$57,080	$57,080	$267,640

(1) The amounts presented above reflect the current annual rental rates in effect as of December 31, 2025, and do not reflect scheduled future increases in rental rates.

(2) Represents annual lease rent and minimum royalty payments associated with the Idaho State mineral lease awarded in March 2026. The lease is subject to final approval by the Idaho State Land Board and had not been formally executed as of March 31, 2026. Future payments beyond the current period are dependent upon final lease execution and annual renewal.

Significant Accounting Policies

Our significant accounting policies are disclosed in Note 1 to the accompanying financial statements.

Off Balance Sheet Arrangements

As of March 31, 2026, we have no off-balance sheet arrangements.