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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES For financial reporting purposes, income before taxes includes the following components:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Canada | $ | (24,213) |  |  | $ | (5,229) |  |  | $ | (23,964) |
Foreign | (24,000) |  |  | 105,261 |  |  | (35,980) |
Total | $ | (48,213) |  |  | $ | 100,032 |  |  | $ | (59,944) |
A reconciliation of income tax expense (benefit) and the product of accounting income before income tax, multiplied by the combined Canadian federal and provincial income tax rate (the rate applicable to the Canadian parent company) is as follows:
| Years Ended December 31,
| 2024 |  | 2023 |  | 2022
Income (loss) before income taxes | $ | (48,213) |  |  | $ | 100,032 |  |  | $ | (59,944) |
Combined federal and provincial rate | 26.50 | % |  | 26.50 | % |  | 26.50 | %
Expected income tax (benefit) | (12,776) |  |  | 26,508 |  |  | (15,885) |
Share-based compensation | 225 |  |  | (893) |  |  | 572 |
Transaction costs | 2,849 |  |  | — |  |  | — |
Other non-deductible/non-taxable items | 2,553 |  |  | 2,015 |  |  | 3,977 |
Foreign tax rate differences | (418) |  |  | — |  |  | — |
Unrecognized deferred tax assets | 7,195 |  |  | (27,354) |  |  | 11,336 |
Income tax benefit (expense) | $ | (372) |  |  | $ | 276 |  |  | $ | — |
The components of the net deferred tax assets are as follows:
| Years Ended December 31,
| 2024 |  | 2023
Operating loss carry forwards | $ | 117,493 |  |  | $ | 93,241 |
Mineral properties and deferred costs, United States | 13,990 |  |  | 16,872 |
Property, plant and equipment | 8,907 |  |  | 986 |
Accruals & reserves | 6,923 |  |  | — |
Deferred revenue and other | 4,722 |  |  | 2,431 |
Mineral properties and deferred costs, Other | 2,808 |  |  | — |
Asset retirement obligations | 1,909 |  |  | 2,894 |
Mineral properties and deferred costs, Canada | 1,724 |  |  | 1,726 |
Mineral properties and deferred costs, Madagascar | 1,263 |  |  | — |
Capital loss carry forwards | 837 |  |  | 849 |
Inventories | 832 |  |  | 547 |
Short-term investments | 209 |  |  | 209 |
Total deferred tax assets | 161,617 |  |  | 119,755 |
Less: valuation allowance | (161,617) |  |  | (119,755) |
Net deferred tax assets | $ | — |  |  | $ | — |
As of December 31, 2024 and 2023, the Company maintained a full valuation allowance against its net deferred tax assets. The Company continually reviews the adequacy of the valuation allowance and intends to continue maintaining a full valuation allowance on its net deferred tax assets until there is sufficient evidence to support the reversal of all or a portion of the allowance. Should the Company's assessment change in a future period, it may release all or a portion of the valuation allowance, which would result in a deferred tax benefit in the period of adjustment. The following table summarizes the changes to the valuation allowance:
For the Years Ended |  | Balance |  |  |  |  |  | Balance
December 31, |  | Beginning of Period |  | Additions (1) |  | Deductions (2) |  | End of Period
2024 |  | $ | 119,755 |  |  | $ | 45,743 |  |  | $ | (3,881) |  |  | $ | 161,617 |
2023 |  | $ | 146,931 |  |  | $ | — |  |  | $ | (27,176) |  |  | $ | 119,755 |
(1)The additions to the valuation allowance during the year ended December 31, 2024 result from the generation of additional tax losses and deferred tax assets acquired from Base Resources. For the year ended December 31, 2023, there were no additions to the valuation allowance. (2)For the year ended December 31, 2024, the reductions to the valuation allowance result from the decrease to tax assets such as ARO and mineral properties in the U.S. For the year ended December 31, 2023, the reductions to the valuation allowance are primarily due to the decreases to other tax assets such as inventories. The following table summarizes the Company's capital losses and net operating losses as of December 31, 2024 that can be applied against future taxable income.
Country |  | Type |  | Amount |  | Expiry Date |  |  |  |  |  |  |  |
Canada |  | Non-capital losses |  | $ | 55,970 |  |  | 2027 - 2039 |  |  |  |  |  |  |  |
Canada |  | Allowable capital losses |  | 3,157 |  |  | None |  |  |  |  |  |  |  |
Canada |  | Investment tax credits |  | 1,148 |  |  | 2024-2027 |  |  |  |  |  |  |  |
United States |  | Pre-2018 net operating losses |  | 194,434 |  |  | 2026-2036 |  |  |  |  |  |  |  |
United States |  | Post-2017 net operating losses |  | 122,005 |  |  | None |  |  |  |  |  |  |  |
Australia |  | Net operating losses |  | 61,411 |  |  | No expiration |  |  |  |  |  |  |  |
Madagascar |  | Net operating losses |  | 1,015 |  |  | 2025-2029 |  |  |  |  |  |  |  |
Other Jurisdictions |  | Net operating losses |  | 899 |  |  | Various |  |  |  |  |  |  |  |
Total |  |  |  | $ | 440,039 |  |  |  |  |  |  |  |  |  |  |
Under Section 382 of the Internal Revenue Code of 1986, a corporation that undergoes an ownership change is subject to limitations on its use of pre-change tax attributes and carryforwards to offset future taxable income. The Company had an ownership change in 2015 and is subject to an annual limitation for the use of loss carryforwards generated prior to 2015. In addition, as a result of the Tax Cuts and Jobs Act, United States net operating loss carryforwards generated after December 31, 2017, are limited to usage at 80% of taxable income and will be permitted to be carried forward indefinitely. Utilization of the Canadian loss carry forwards will be subject to the Acquisition of Control Rules in any year as a result of previous changes in ownership. The Company files income tax returns in the U.S. federal and various state jurisdictions with varying statutes of limitations. The Company’s NOL from all years may be subject to adjustment for three or four years following the year in which utilized. We do not anticipate that any potential tax adjustments will have a significant impact on our financial position or results of operations. The Company’s policy is to include interest and penalties related to uncertain tax positions in the income tax expense line on the financial statements. As of December 31, 2024, the Company does not have any uncertain tax positions. For the year ended December 31, 2024, the Company recorded income tax benefit of $0.37 million on loss before tax of $48.21 million. For the year ended December 31, 2023, the Company recorded income tax expense of $0.28 million on income before tax of $100.03 million. For the year ended December 31, 2022, the Company did not record income tax benefit on loss before tax of $59.94 million. The effective tax rate was 0.77% and 0.28% for the years ended December 31, 2024 and 2023, respectively. For the year ended December 31, 2023, the effective tax rate was 0%, which was a result of the full valuation allowance on net deferred tax assets.

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