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COMMITMENTS AND CONTINGENCIES | 9 Months Ended
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Sep. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES General Legal Matters Other than routine litigation incidental to our business, or as described below, the Company is not currently a party to any material pending legal proceedings that management believes would be likely to have a material adverse effect on our financial position, results of operations or cash flows. White Mesa Mill Historic Claims: In 2011, the Ute Mountain Ute Tribe filed an administrative appeal of the Utah Division of Air Quality’s (“UDAQ’s”) decision to approve a Modification to the Air Quality Approval Order at the Mill. Then, in 2013, the Ute Mountain Ute Tribe filed a Petition to Intervene and Request for Agency Action challenging the Corrective Action Plan approved by the State of Utah Department of Environmental Quality (“UDEQ”) relating to nitrate contamination in the shallow aquifer at the White Mesa Mill. In August 2014, the Ute Mountain Ute Tribe filed an administrative appeal to the Utah Division of Radiation Control’s (“DRC’s”) Radioactive Materials License (“License”) Amendment 7 approval regarding alternate feed material from Dawn Mining. The challenges remain open at this time and may involve the appointment of an administrative law judge (“ALJ”) to hear the matters. The Company does not consider these actions to have any merit. If the petitions are successful, the likely outcome would be a requirement to modify or replace the existing Air Quality Approval Order, Corrective Action Plan or Mill License Amendment, as applicable. At this time, the Company does not believe any such modification or replacement would materially affect its financial position, results of operations or cash flows. However, the scope and costs of remediation under a revised or replacement Air Quality approval Order, Corrective Action Plan and/or License Amendment have not yet been determined and could be significant. On January 19, 2018, UDEQ renewed, and on February 16, 2018 reissued, the Mill’s License for another ten years and the Groundwater Discharge Permit (“GWDP”) for another five years, after which further applications for renewal of the License and GWDP will need to be submitted. During the review period for each application for renewal, the Mill can continue to operate under its then existing License and GWDP until such time as the renewed License or GWDP is issued. Most recently, on July 15, 2022, the routine GWDP renewal application was submitted to UDEQ for consideration. In March 2018, the Grand Canyon Trust, Ute Mountain Ute Tribe and Uranium Watch (together, the “Plaintiffs”), filed Petitions for Review challenging UDEQ’s renewal of the License and GWDP. Then, in May and June 2018, the Plaintiffs each filed with UDEQ Requests for Appointment of an ALJ, which they subsequently agreed to suspend pursuant to a Stipulation and Agreement with UDEQ, effective June 4, 2018. The Company and Plaintiffs held multiple discussions over the course of 2018 and 2019 in an effort to settle the dispute outside of any judicial proceeding. On February 1, 2019, Plaintiffs submitted to the Company their proposal for reaching a settlement agreement. The parties have not to date come to agreement on resolution of these matters. Regardless, the Company does not consider the Plaintiffs’ challenges to have any merit and, if a settlement cannot be reached, intends to participate with UDEQ in defending against the challenges. If the challenges are successful, the likely outcome would be a requirement to modify the renewed License and/or GWDP. At this time, the Company does not believe any such modification would materially affect our financial position, results of operations or cash flows. On August 26, 2021, the Ute Mountain Ute Tribe filed a Petition to Intervene and Petition for Review challenging the UDEQ’s approval of Amendment No. 10 to the Mill License, which expanded the list of Alternate Feed Materials that the Mill is authorized to accept and process for its source material content. Then, on November 18, 2021, the Tribe filed its Request for Appointment of an ALJ to hear all outstanding matters (including the historic claims described, above), followed shortly thereafter by a stay on the request in accordance with a Stipulation and Agreement between the Tribe, UDEQ and the Company. Initial discussions between the Company and the Tribe were held starting in mid-2022 in an effort to resolve the dispute and other outstanding matters without formal adjudication. Additional follow-up discussions with both the Utes’ legal counsel and Tribal Council have been sought by the Company and may be scheduled in the future. However, the Company does not consider this action to have any merit. If the stay is lifted, an ALJ is appointed and the petition is successful, the likely outcome would be a requirement to modify or revoke the Mill License amendment. At this time, the Company does not believe any such modification or revocation would materially affect its financial position, results of operations or cash flows. Kwale Project Stevedoring Dispute with the Kenya Ports Authority To operate its ship loading and jetty facility in Likoni (“Jetty Facility”), the Company (acting through its wholly owned subsidiary Base Titanium) requires a Port Operating License issued by the Kenya Ports Authority (“KPA”). In March 2014, KPA granted a waiver to operate the Jetty Facility indefinitely until the formal license is approved by the KPA board of directors. To date, the Port Operating License has not been finalized as KPA has refused to grant the license unless that license includes an obligation on the Company to pay a $1/tonne stevedoring charge on exports from the Jetty Facility. Under applicable KPA tariffs, KPA may levy a $1/tonne charge for stevedoring services it provides. KPA sought to levy such charges shortly prior to the maiden shipment from the Jetty Facility in 2014, which was ultimately paid by the Company under formal protest to ensure the vessel was permitted to sail. The Company objects to stevedoring charges being levied by KPA principally on the grounds that (i) the Company’s Jetty Facility is a private facility that was built entirely at the Company’s expense; and (ii) no such stevedoring services are either required of, or are being provided by, KPA and, therefore, a service charge in respect of stevedoring is not applicable and invalid. In 2017, the Company sought and obtained an injunction from the High Court of Kenya to compel KPA to provide necessary marine services to vessels berthing at the Jetty Facility (“2017 Ruling”). In conjunction, the parties entered consent orders to establish an escrow account where disputed charges are being held pending the final outcome of the dispute. The Company sought resolution of the dispute through arbitration commenced in Kenya in February 2017 and brought under the Kenya Ports Authority Act. The KPA challenged the jurisdiction of the arbitrator to hear the dispute and, in late 2019, the arbitrator ruled in favor of arbitration having jurisdiction. In March 2022, the High Court of Kenya upheld the arbitrator’s jurisdictional ruling. The KPA appealed this ruling to the Court of Appeal of Kenya, but this appeal has not progressed. Separately, in February 2021, the High Court of Kenya ruled that the arbitrator should be removed and directed the parties to seek appointment of a new arbitrator. KPA separately appealed the 2017 Ruling and, in April 2023, the Court of Appeal of Kenya dismissed KPA’s appeal, paving the way for the Company to seek appointment of a new arbitrator. The Company has held off on seeking the appointment of a new arbitrator to allow for a potential amicable resolution of the matter. The matter remains unresolved, and the Company anticipates that it may need to recommence formal dispute resolution proceedings through arbitration. As at September 30, 2025, with all bulk shipments from the Jetty Facility now completed, the amount in dispute is approximately $4.6 million (with $1.4 million previously paid directly to the KPA, and approximately $3.2 million held in the escrow account). Mivumoni B Village On March 18, 2021, a local landholder (on his own behalf and on behalf of 65 others (collectively, the “Petitioners”)) filed a petition against the Company in the Environment and Land Court at Mombasa alleging failings in the Environmental Impact Assessment process for the Kwale Project, claiming excessive noise and air pollution from dust and adverse consequences of contaminated water allegedly caused by the Company’s operations. The Company denies that it has committed the alleged violations or breaches, and is of the view that no substantive evidence has been adduced supporting the claims. The Company conducts its operations in compliance with its Environmental Impact Assessment License and Environmental and Social Management Plan, and has a valid and subsisting license issued by the National Environmental Management Authority. The Company raised a preliminary objection challenging the jurisdiction of the Environment and Land Court at first instance on the basis that the proper procedure for raising grievances specified in the Mining Act had not been followed which requires grievances with respect to mining operations to be first raised with the Cabinet Secretary for Mining, Blue Economy and Maritime Affairs. The Court dismissed the Company’s application by way of ruling dated February 10, 2022, which has since been upheld by the Court of Appeal of Kenya by way of ruling dated July 18, 2025. The Company is now pursuing an appeal to the Supreme Court of Kenya. The Company believes these claims lack merit. The Company therefore does not believe, at this time, that this action will materially impact the Company’s financial position, results of operations or cash flows. Mchingirini Residents On July 18, 2023, former local landholders filed a petition with the Environment and Land Court alleging they were the registered and beneficial owners of suit properties in the Mchingirini area, which formed part of the Kwale Project’s Special Mining Lease 23, that their prior relocation and resettlement was unlawful and that the compensation paid was inadequate on the basis of an alleged understanding that there were no minerals on the suit properties. The former local landholders have sought a declaration to this effect and that the Company pay an additional KSH 360,000 per acre (representing the difference between the monetary compensation paid by the Company to the local landholders for their land and the compensation paid to other local landholders for their land for resettlements undertaken in 2021) and interest on this amount at 20% per annum. The Company denies any liability to the plaintiffs. In 2015 and 2016, following negotiations between the parties, agreements were reached to have the plaintiffs relocated from the suit properties. Pursuant to the said agreements, the plaintiffs were relocated, and compensation was paid by the Company. In turn, the plaintiffs surrendered their title deeds to the Company and transfer instruments were executed. The Company has raised a preliminary objection challenging jurisdiction on the basis that the proper procedure for raising grievances specified in the Mining Act has not been followed. This objection was dismissed by the Environment and Land Court by way of ruling on April 12, 2024. The Company is pursuing an appeal in the Court of Appeal of Kenya. Appeal dates are yet to be set. The original proceedings have been stayed, pending the Company’s appeal. The Company does not consider this action to have any merit. The Company therefore does not believe, at this time, that this action will materially impact the Company’s financial position, results of operations or cash flows. Toliara Project The Company acquired control over the Toliara Project on October 2, 2024 through its acquisition of Base Resources. At the time of the acquisition, the Project had, since November 2019, been suspended by the Government of Madagascar. Shortly after the acquisition, on November 28, 2024, the Government lifted the suspension and on December 5, 2024, the Company entered into the MOU with the Government of Madagascar setting forth certain key terms applicable to the Project. Following lifting of the suspension and entry of the MOU, the Company has been in the process of re-commencing development efforts and investment in the Project, re-establishing community and social programs, and advancing the technical, environmental, social and other activities necessary to achieve a positive FID, which the Company expects could be made as early as 2026 if fiscal and stability arrangements are finalized. Since acquiring the Project, the Company has been in discussions with the Government of Madagascar to establish the necessary legal regime to support development of the Project, which will be required before a positive FID can be made. These discussions have been focused on, among other things, mechanisms for achieving legal and fiscal stability, select tax and customs benefits, necessary adjustments to foreign exchange rules, protections from expropriation and access to international arbitration for dispute resolution. The Company has also been seeking clarification of existing procedures for adding monazite to the Project's mining permit, which currently allows for the production of ilmenite, rutile, and zircon. Recent discussions with the Government have focused on addressing these issues through an investment agreement to be approved by Parliament or through revisions to existing Malagasy law applicable to large scale mining investments. On October 17, 2025, a new President of Madagascar was sworn in by the Country's High Constitutional Court following a period of social unrest and political instability that resulted in the removal of the Country's prior President. On October 20, 2025, a new Prime Minister was appointed, and, on October 28, 2025, a new cabinet was announced. At this time, it is too early to determine whether and to what extent recent social and political developments in Madagascar may impact the Toliara Project, whether positively or negatively, including with respect to the Project's development prospects or timelines, the ability to achieve suitable fiscal or other terms applicable to the Project or the ability to achieve a positive FID. These developments have not had an impact on the financial results of the Company at this time. The Company will continue to monitor events as they unfold. There can be no assurance of achieving sufficient legal and fiscal stability or the timing thereof, or obtaining approval of the addition of monazite to the mining permit or the timing thereof. If such approvals are not obtained, or obtained on terms less favorable than expected, this could delay any final investment decision in relation to the Toliara Project or prevent or otherwise have a significant effect on the development of the Toliara Project or ability to recover monazite from the Toliara Project. Mineral Property Commitments The Company enters into commitments with federal and state agencies and private individuals to lease mineral rights. These leases are renewable annually, and renewal costs for the remainder of 2025 are expected to total approximately $0.54 million. Surety Bonds The Company has indemnified third-party companies to provide surety bonds as collateral for the Company’s AROs. The Company is obligated to replace this collateral in the event of a default and is obligated to repay any reclamation or closure costs due. As of September 30, 2025, the Company has $22.66 million posted as collateral against undiscounted AROs of $55.68 million. As of December 31, 2024, the Company had $20.00 million posted as collateral against undiscounted AROs of $74.27 million. The Company will be liable to pay any reclamation expense that exceeds the amount of the collateral posted against the surety bonds. Commitments The Company is contractually obligated under a Sales and Agency Agreement appointing an exclusive sales and marketing agent for all vanadium pentoxide produced by the Company.

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