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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Net loss before income taxes was generated as follows:
|  | As of December 31,
|  | 2025 |  | 2024
Domestic - Canada |  | $ | (28,587) |  |  | $ | (21,525) |
Foreign – outside of Canada |  | (34,924) |  |  | (52,397) |
|  | $ | (63,511) |  |  | $ | (73,922) |
Income tax expense (benefit) is comprised of the following:
|  | As of December 31,
|  | 2025 |  | 2024
Current tax expense |  |  |  |
Domestic – Canada |  | $ | - |  |  | $ | - |
Foreign – outside of Canada |  | 108 |  |  | 38 |
|  | $ | 108 |  |  | $ | 38 |
Deferred tax benefit |  |  |  |
Domestic – Canada |  | $ | - |  |  | $ | - |
Foreign – outside of Canada |  | (596) |  |  | (5,967) |
|  | $ | (596) |  |  | $ | (5,967) |
Income tax benefit |  | $ | (488) |  |  | $ | (5,929) |
The amounts of income tax paid, net of tax refunds received, are as follows:
|  | As of December 31,
|  | 2025 |  | 2024
Domestic – Canada |  | 0 |  | 0
Foreign – outside of Canada |  | 108 |  | 38
|  | 108 |  | 38
A reconciliation of income tax benefit (expense) to the amount computed by applying the 15% Canadian federal income tax rate after the adoption of ASU 2023-09 is presented below. The Canadian federal income tax rate is utilized as the Company's income tax filing entity is a Canadian corporation that is domiciled in Canada.
|  | As of December 31, |
|  | 2025 |  | 2024
Loss before tax |  | $ | (63,511) |  |  |  | $ | (73,922) |  |
Canadian Federal income tax |  | (9,527) |  | 15.00 | % |  | (11,088) |  | 15.00 | %
Nontaxable or nondeductible items |  |  |  |  |  |
Share-based payment awards |  | 630 |  | (0.99) | % |  | 729 |  | (0.99) | %
Non-taxable portion of capital gains |  | (1,562) |  | 2.46 | % |  | - |  | - | %
Other |  | 264 |  | (0.42) | % |  | 41 |  | (0.05) | %
Cross-border taxes |  | - |  | - | % |  | - |  | - | %
Changes in valuation allowances |  | 4,713 |  | (7.42) | % |  | 2,312 |  | (3.13) | %
Other |  | (112) |  | 0.18 | % |  | (14) |  | 0.02 | %
Foreign tax effects |  |  |  |  |  |
Statutory tax rate difference between United States and Canada |  | (2,426) |  | 3.82 | % |  | (3,678) |  | 4.98 | %
Nontaxable or nondeductible items |  | 240 |  | (0.38) | % |  | - |  | - | %
Tax rate differences and tax rate changes |  | - |  | - | % |  | 552 |  | (0.75) | %
Non-controlling interest |  | 1,091 |  | (1.72) | % |  | 1,345 |  | (1.82) | %
Changes in valuation allowances |  | 3,786 |  | (5.96) | % |  | 4,217 |  | (5.70) | %
Deferred only adjustment |  | 1,576 |  | (2.48) | % |  | - |  | - | %
Other |  | 484 |  | (0.76) | % |  | (507) |  | 0.68 | %
Tax rate differences and tax rate changes |  | 355 |  | (0.56) | % |  | 162 |  | (0.22) | %
Canadian provincial income tax |  | - |  | - | % |  |  | - | %
Income tax benefit |  | $ | (488) |  | 0.77 | % |  | $ | (5,929) |  | 8.02 | %
Deferred taxes result from the temporary differences between financial reporting carrying amounts and the tax basis of existing assets and liabilities. The table below summarizes the principal components of the deferred tax assets (liabilities) as follows:
|  | December 31,
|  | 2025 |  | 2024
Deferred tax assets: |  |  |  |
Loss carryforwards |  | $34,024 |  | $24,983
Mineral rights and properties |  | 3,363 |  |  | 4,952 |
Inventory |  | - |  |  | 1,489 |
Transaction and financing costs |  | 920 |  |  | 1,685 |
Lease liability |  | 881 |  |  | 97 |
Warranty liability |  | 815 |  |  | 815 |
Investment in partnership |  | 4,039 |  |  | 3,066 |
Investments in equity and securities |  | 2,880 |  |  | - |
Restricted interest and financing expenses |  | 1,608 |  |  | - |
Other |  | 2,282 |  |  | 197 |
Deferred tax assets |  | 50,812 |  |  | 37,284 |
Valuation allowance |  | (46,906) |  |  | (34,697) |
Net deferred tax asset |  | 3,906 |  |  | 2,587 |
Deferred tax liabilities: |  |  |  |
Investments in equity securities |  | - |  |  | (786) |
Intangible assets |  | (31) |  |  | (35) |
Right of use of assets |  | (828) |  |  | (86) |
Mineral rights and properties |  | (28,162) |  |  | (28,142) |
Property, plant and equipment |  | (1,030) |  |  | - |
Other |  | (239) |  |  | (518) |
Deferred tax liabilities |  | (30,290) |  |  | (29,567) |
Deferred tax assets |  | 3,906 |  |  | 2,587 |
Net deferred tax liability | $ | $(26,384) |  | $(26,980)
Deferred income taxes have not been recorded on the basis differences for investments in consolidated subsidiaries as these basis differences are indefinitely reinvested or will reverse in a non-taxable manner. Quantification of the deferred income tax liability, if any, associated with indefinitely reinvested basis differences is not practicable. A valuation allowance has been taken against the US federal and state deferred tax assets of $19,486. A valuation allowance has been taken against the Canadian deferred tax assets of $27,420. 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
2025 |  | $ | 34,697 |  |  | $ | 19,065 |  |  | $ | (6,856) |  |  | $ | 46,906 |
2024 |  | $ | 24,819 |  |  | $ | 12,138 |  |  | $ | (2,260) |  |  | $ | 34,697 |
(1) The additions to the valuation allowance during the year ended December 31, 2025 result from the generation of additional tax losses as well as increases to tax assets such as mineral property and inventory. 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. (2) The reductions to the valuation allowance during the year ended December 31, 2025 result from the decrease to tax assets such as debt issuance costs, property, plant and equipment and asset retirement obligations. 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. The following table summarizes the Company’s capital losses and net operating losses as of December 31, 2025 that can be applied against future taxable income:
Country |  | Type |  | Amount |  | Expiry Date
Canada |  | Non-capital losses |  | $ | 80,542 |  |  | Between 2028 and 2045
Canada |  | Investment tax credits |  | - |  |  |
United States |  | Expiring loss (Federal and state) |  | 32,291 |  |  | Between 2028 and 2044
United States |  | Non-Expiring loss (Federal and state) |  | 56,810 |  |  | No expiration
Total |  |  |  | $ | 169,643 |  |  |
Under Section 382 of the Internal Revenue Code of 1986, a corporation that undergoes an ownership change is subject to limitation on its use of pre-change tax attributes and carryforward to offset future taxable income. At December 31, 2025 and 2024, the historical section 382 federal net operating loss limitation for certain subsidiaries is $11,302. In addition, as a result of the Tax Cuts and Jobs Act, U.S. 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 net operating losses 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, 2025, the Company does not have any uncertain tax positions. For the year ended December 31, 2025, the Company recorded income tax benefit of $0.5 million on loss before tax of $63.5 million. For the year ended December 31, 2024, the Company recorded income tax benefit of $5.9 million on loss before tax of $73.9 million. For the year ended December 31, 2023, the Company recorded income tax benefit of $0.5 million on loss before tax of $26.1 million. The effective tax rate was 0.77%, and 8.02% for the years ended December 31, 2025 and 2024, respectively.

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