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COMMITMENTS AND CONTINGENCIES | 6 Months Ended
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Jun. 30, 2026
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 In 2011, the Ute Mountain Ute Tribe filed an administrative appeal of the State of Utah Division of Air Quality’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 Mill. In August 2014, the Ute Mountain Ute Tribe filed an administrative appeal to the Utah Division of Radiation Control’s (“DRC”) Radioactive Materials 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 license amendment, as applicable. At this time, the Company does not believe any such modifications or replacements would materially affect its financial position, results of operations or cash flows. However, the scope and costs of remediation under a revised or replaced 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 2018, the Grand Canyon Trust, Ute Mountain Ute Tribe and Uranium Watch (collectively, the “Mill Plaintiffs”) served Petitions for Review challenging UDEQ’s renewal of the Mill License and GWDP and Requests for Appointment of an ALJ, which they later agreed to suspend pursuant to a Stipulation and Agreement with UDEQ, effective June 4, 2018. The Company and the Mill Plaintiffs held multiple discussions over the course of 2018 and 2019 in an effort to settle the dispute outside of any judicial proceeding. In February 2019, the Mill 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 Mill 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, followed shortly thereafter by a stay on the request in accordance with a Stipulation and Agreement between the Tribe, UDEQ and the Company. Thereafter, discussions between the Company and the Tribe commenced in an effort to resolve the dispute and other outstanding matters without formal adjudication. However, the Company does not consider this action to have any merit. If resolution is not achieved, the stay is lifted and the petition is successful before an ALJ, 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, through its wholly owned subsidiary Base Titanium, requires a Port Operating License issued by the Kenya Ports Authority (“KPA”). In March 2014, KPA granted Base Titanium 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 it 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. However, 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. Nonetheless, KPA sought to levy such charges shortly prior to the maiden shipment from the Jetty Facility in 2014, which Base Titanium paid under protest to ensure the vessel was permitted to sail. In 2017, Base Titanium 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. Base Titanium sought resolution of the dispute through arbitration commenced in Kenya in February 2017, 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. This matter remains unresolved, and the Company anticipates that it may need to recommence formal dispute resolution proceedings through arbitration. The amount in dispute is approximately $4.6 million (with $1.4 million previously paid, and approximately $3.2 million held in the escrow account). Mivumoni B Village On March 18, 2021, a local landholder representing himself and 65 additional individuals (collectively, the “Petitioners”) filed a petition against Base Titanium in the Environment and Land Court alleging failings in the Environmental Impact Assessment process for the Kwale Project, excessive noise and air pollution from dust and adverse consequences of contaminated water allegedly caused by the Kwale Project’s operations. The Company maintains its position that it has not committed the alleged violations or breaches and that no substantive evidence has been adduced supporting the claims. Among other things, the Kwale Project has a valid and subsisting Environmental Impact Assessment License issued by the National Environmental Management Authority and the Company has conducted its operations in compliance with that license and its Environmental and Social Management Plan. A hearing for the matter before the Environment and Land Court is scheduled for October 21, 2026. Base Titanium expects to file its response to the Petition with the Court in the near future. 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. Vara Mada Project The Company acquired control over the Vara Mada 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 Madagascar memorandum of understanding (“MOU”) setting forth certain key terms applicable to the Project. Following lifting of the suspension and entry of the Madagascar 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. Since acquiring the Vara Mada Project, the Company has been in discussions with the Government of Madagascar to establish the necessary legal regime to support development of the Vara Mada 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 custom 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 Vara Mada 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. In-country political developments continue to evolve, including with respect to changes and appointments of key government ministers. At this time, it is too early to determine whether and to what extent social and political developments in Madagascar may impact the Vara Mada Project, whether positively or negatively, including with respect to the Vara Mada Project’s development prospects or timelines, the ability to achieve suitable fiscal or other terms applicable to the Vara Mada 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. There can be no assurance of achieving sufficient legal and fiscal stability or the timing thereof or of 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 FID in relation to the Vara Mada Project or prevent or otherwise have a significant effect on the development of the Vara Mada Project or ability to recover monazite from the Vara Mada 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 are expected to total $2.41 million for the remainder of the year ended December 31, 2026. 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 June 30, 2026, the Company has $22.85 million posted as collateral against undiscounted AROs of $47.52 million. As of December 31, 2025, the Company had $22.47 million posted as collateral against undiscounted AROs of $50.49 million. The Company will be liable to pay any reclamation expense that exceeds the amount of the collateral posted against the surety bonds. Senior Secured Term Loan Facility On June 23, 2026, the Company entered into a senior secured term loan facility commitment letter (the “Commitment Letter”) pursuant to which Goldman Sachs Bank USA has committed to provide, subject to the terms and conditions set forth in the Commitment Letter, a $250 million Senior Secured Term Loan Facility, if requested by the Company. The $250 million Senior Secured Term Loan Facility will be available to the Company upon the completion of the terms set forth in the Commitment Letter and the Summary of Terms and Conditions attached to the Commitment Letter if any additional cash is required to consummate the acquisition of VAC. Amounts available to be funded under the Senior Secured Term Loan Facility, if any, will be reduced by the net cash proceeds from the issuance or incurrence of certain debt, the issuance of equity financing (including equity and debt securities convertible or exchangeable into or exercisable for equity securities, other equity-linked securities or hybrid debt-equity securities) and non-ordinary course asset sales (in each case, with exceptions to be agreed).

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