[10-Q] NexMetals Mining Corp. Quarterly Earnings Report
NexMetals Mining Corp. (NEXM) reported continued exploration-stage losses while completing a material recapitalization that strengthened its balance sheet. The company recorded a net loss of $15.09 million for Q2 2025 and $30.32 million for the six months ended June 30, 2025, driven by $16.47 million of exploration spending and higher depreciation and administrative costs. Cash and short-term deposits rose to $26.46 million at June 30, 2025 from $6.11 million at year-end 2024 after a $46.0 million private placement and the conversion of a $20.88 million term loan to equity in March 2025. Total assets increased to $47.05 million and shareholders' equity moved to a positive $36.56 million from a prior deficiency. The company remains exploration-stage, has a $34.11 million contractual second instalment under the Selebi APA due by January 31, 2026, and discloses material uncertainties about its ability to continue as a going concern.
NexMetals Mining Corp. (NEXM) ha continuato a registrare perdite in fase esplorativa pur completando una significativa ricapitalizzazione che ha rafforzato il suo bilancio. La società ha riportato una perdita netta di $15.09 million per il secondo trimestre 2025 e di $30.32 million nei sei mesi chiusi al 30 giugno 2025, trainata da $16.47 million di spese esplorative e da maggiori costi di ammortamento e amministrativi. La liquidità e i depositi a breve termine sono saliti a $26.46 million al 30 giugno 2025, rispetto a $6.11 million a fine 2024, grazie a un collocamento privato da $46.0 million e alla conversione in azioni di un prestito a termine di $20.88 million avvenuta a marzo 2025. Gli attivi totali sono aumentati a $47.05 million e il patrimonio netto è tornato positivo a $36.56 million da un precedente disavanzo. La società resta in fase esplorativa, ha un secondo pagamento contrattuale di $34.11 million previsto dall'APA di Selebi entro il 31 gennaio 2026, e dichiara incertezze rilevanti sulla sua capacità di proseguire come impresa in funzionamento.
NexMetals Mining Corp. (NEXM) siguió registrando pérdidas en fase exploratoria mientras completaba una recapitalización material que fortaleció su balance. La compañía registró una pérdida neta de $15.09 million en el segundo trimestre de 2025 y de $30.32 million en los seis meses cerrados al 30 de junio de 2025, impulsada por $16.47 million en gastos de exploración y mayores costes por depreciación y administrativos. El efectivo y los depósitos a corto plazo aumentaron a $26.46 million al 30 de junio de 2025 desde $6.11 million a cierre de 2024, tras una colocación privada de $46.0 million y la conversión a capital de un préstamo a plazo de $20.88 million en marzo de 2025. Los activos totales subieron a $47.05 million y el patrimonio pasó a ser positivo con $36.56 million desde un déficit previo. La compañía sigue en fase exploratoria, tiene un segundo pago contractual de $34.11 million bajo el APA de Selebi con vencimiento el 31 de enero de 2026, y revela incertidumbres materiales sobre su capacidad para continuar como empresa en funcionamiento.
NexMetals Mining Corp. (NEXM)은 재무구조를 강화하는 주요 자본 재편을 완료하는 동안 탐사 단계에서 계속 손실을 기록했습니다. 회사는 2025년 2분기에 $15.09 million, 2025년 6월 30일 종료된 6개월 동안 $30.32 million의 순손실을 보고했으며, 이는 $16.47 million의 탐사비 지출과 증가한 감가상각비 및 관리비에 기인합니다. 현금 및 단기예금은 2025년 6월 30일 기준 $26.46 million으로 2024년 말의 $6.11 million에서 증가했는데, 이는 $46.0 million의 사모 유상증자와 2025년 3월 $20.88 million의 기한부 대출을 자본으로 전환한 결과입니다. 총자산은 $47.05 million으로 늘었고, 자본은 이전의 적자에서 벗어나 $36.56 million의 흑자로 전환되었습니다. 회사는 여전히 탐사 단계에 있으며 Selebi APA에 따른 계약상 두 번째 분할지급액 $34.11 million이 2026년 1월 31일까지 지급되어야 하고, 계속기업으로서 존속할 수 있는지에 대한 중대한 불확실성을 공시하고 있습니다.
NexMetals Mining Corp. (NEXM) a continué d'enregistrer des pertes liées à sa phase d'exploration tout en réalisant une recapitalisation importante qui a renforcé son bilan. La société a affiché une perte nette de $15.09 million pour le deuxième trimestre 2025 et de $30.32 million pour les six mois clos le 30 juin 2025, en raison de $16.47 million de dépenses d'exploration et d'une augmentation des dotations aux amortissements et des frais administratifs. La trésorerie et les dépôts à court terme ont augmenté à $26.46 million au 30 juin 2025, contre $6.11 million à la clôture 2024, après un placement privé de $46.0 million et la conversion en capital d'un prêt à terme de $20.88 million en mars 2025. L'actif total s'est élevé à $47.05 million et les capitaux propres sont redevenus positifs à $36.56 million après une situation déficitaire antérieure. La société reste en phase d'exploration, doit s'acquitter d'une deuxième échéance contractuelle de $34.11 million au titre de l'APA de Selebi avant le 31 janvier 2026, et indique des incertitudes importantes quant à sa capacité à poursuivre son activité.
NexMetals Mining Corp. (NEXM) verzeichnete weiterhin verlustreiche Explorationsaktivitäten, während es eine erhebliche Rekapitalisierung durchführte, die die Bilanz stärkte. Das Unternehmen meldete einen Nettoverlust von $15.09 million für das zweite Quartal 2025 und $30.32 million für die sechs Monate zum 30. Juni 2025, bedingt durch $16.47 million an Explorationsausgaben sowie höhere Abschreibungs- und Verwaltungskosten. Zahlungsmittel und kurzfristige Einlagen stiegen zum 30. Juni 2025 auf $26.46 million gegenüber $6.11 million zum Jahresende 2024, nach einer Privatplatzierung über $46.0 million und der Umwandlung eines Terminkredits in Eigenkapital in Höhe von $20.88 million im März 2025. Die Gesamtaktiva erhöhten sich auf $47.05 million und das Eigenkapital wurde mit $36.56 million wieder positiv statt zuvor defizitär. Das Unternehmen befindet sich weiterhin in der Explorationsphase, hat eine vertragliche zweite Rate von $34.11 million aus dem Selebi-APA, fällig bis zum 31. Januar 2026, und benennt wesentliche Unsicherheiten hinsichtlich seiner Fortführungsfähigkeit.
- $46.0 million non-brokered private placement that materially increased cash and short-term deposits to $26.46 million
- Conversion of $20.88 million Term Loan to equity eliminated the Term Loan balance and reduced liabilities, contributing to a positive shareholders' equity of $36.56 million
- Selkirk Mineral Resource Estimate (MRE) filed in conformance with SEC S-K 1300, providing a technical basis to advance the Selkirk deposit
- Substantial net losses of $15.09 million (quarter) and $30.32 million (six months) reflecting high exploration and operating spending
- Operating cash used of $21.69 million in the six months ended June 30, 2025
- $34.11 million second instalment under the Selebi APA due by January 31, 2026, a material contractual obligation the company currently states it may not have funds to meet
- Material uncertainty about going concern disclosed due to continued losses and the need for additional financing
- $5.98 million loss recognized on Term Loan extinguishment as part of the Debt Conversion
Insights
TL;DR: Recapitalization materially improved liquidity and balance sheet, but large exploration losses and a $34.1M payment due create funding risk.
The March 2025 Financing, comprising a $46.0M private placement and conversion of a $20.88M term loan, shifted the capital structure by eliminating the Term Loan and increasing cash to $26.46M. This deleveraging converted near-term debt servicing needs into equity and generated a one-time non-cash loss on extinguishment of $5.98M. Operating cash used totaled $21.69M for the six months, reflecting heavy drilling and site-development activity ($16.47M in the quarter alone). The company now has positive shareholders' equity of $36.56M and substantially higher total assets, but faces a contractual $34.11M second Selebi instalment due Jan 31, 2026, and continues to record recurring quarterly net losses. Overall impact: materially impactful but with near-term funding requirements that keep risk elevated.
TL;DR: Management completed a strategic recapitalization and governance changes, but going-concern disclosures highlight execution risk.
Leadership and capital actions reported include a share consolidation, new omnibus incentive plan, board appointments, and the March 2025 Financing which included issuance of settlement units and warrants to related parties. The Company discloses material uncertainties about its ability to continue as a going concern, a governance-significant disclosure that requires directors to prioritize financing and compliance milestones, including regulatory approvals tied to Selebi and Selkirk licence conversions. Related-party participation in financings and options over NSR interests are documented and notable for minority-holder governance considerations. Impact: important governance and control implications for shareholders while operational execution remains the determining factor for long-term value.
NexMetals Mining Corp. (NEXM) ha continuato a registrare perdite in fase esplorativa pur completando una significativa ricapitalizzazione che ha rafforzato il suo bilancio. La società ha riportato una perdita netta di $15.09 million per il secondo trimestre 2025 e di $30.32 million nei sei mesi chiusi al 30 giugno 2025, trainata da $16.47 million di spese esplorative e da maggiori costi di ammortamento e amministrativi. La liquidità e i depositi a breve termine sono saliti a $26.46 million al 30 giugno 2025, rispetto a $6.11 million a fine 2024, grazie a un collocamento privato da $46.0 million e alla conversione in azioni di un prestito a termine di $20.88 million avvenuta a marzo 2025. Gli attivi totali sono aumentati a $47.05 million e il patrimonio netto è tornato positivo a $36.56 million da un precedente disavanzo. La società resta in fase esplorativa, ha un secondo pagamento contrattuale di $34.11 million previsto dall'APA di Selebi entro il 31 gennaio 2026, e dichiara incertezze rilevanti sulla sua capacità di proseguire come impresa in funzionamento.
NexMetals Mining Corp. (NEXM) siguió registrando pérdidas en fase exploratoria mientras completaba una recapitalización material que fortaleció su balance. La compañía registró una pérdida neta de $15.09 million en el segundo trimestre de 2025 y de $30.32 million en los seis meses cerrados al 30 de junio de 2025, impulsada por $16.47 million en gastos de exploración y mayores costes por depreciación y administrativos. El efectivo y los depósitos a corto plazo aumentaron a $26.46 million al 30 de junio de 2025 desde $6.11 million a cierre de 2024, tras una colocación privada de $46.0 million y la conversión a capital de un préstamo a plazo de $20.88 million en marzo de 2025. Los activos totales subieron a $47.05 million y el patrimonio pasó a ser positivo con $36.56 million desde un déficit previo. La compañía sigue en fase exploratoria, tiene un segundo pago contractual de $34.11 million bajo el APA de Selebi con vencimiento el 31 de enero de 2026, y revela incertidumbres materiales sobre su capacidad para continuar como empresa en funcionamiento.
NexMetals Mining Corp. (NEXM)은 재무구조를 강화하는 주요 자본 재편을 완료하는 동안 탐사 단계에서 계속 손실을 기록했습니다. 회사는 2025년 2분기에 $15.09 million, 2025년 6월 30일 종료된 6개월 동안 $30.32 million의 순손실을 보고했으며, 이는 $16.47 million의 탐사비 지출과 증가한 감가상각비 및 관리비에 기인합니다. 현금 및 단기예금은 2025년 6월 30일 기준 $26.46 million으로 2024년 말의 $6.11 million에서 증가했는데, 이는 $46.0 million의 사모 유상증자와 2025년 3월 $20.88 million의 기한부 대출을 자본으로 전환한 결과입니다. 총자산은 $47.05 million으로 늘었고, 자본은 이전의 적자에서 벗어나 $36.56 million의 흑자로 전환되었습니다. 회사는 여전히 탐사 단계에 있으며 Selebi APA에 따른 계약상 두 번째 분할지급액 $34.11 million이 2026년 1월 31일까지 지급되어야 하고, 계속기업으로서 존속할 수 있는지에 대한 중대한 불확실성을 공시하고 있습니다.
NexMetals Mining Corp. (NEXM) a continué d'enregistrer des pertes liées à sa phase d'exploration tout en réalisant une recapitalisation importante qui a renforcé son bilan. La société a affiché une perte nette de $15.09 million pour le deuxième trimestre 2025 et de $30.32 million pour les six mois clos le 30 juin 2025, en raison de $16.47 million de dépenses d'exploration et d'une augmentation des dotations aux amortissements et des frais administratifs. La trésorerie et les dépôts à court terme ont augmenté à $26.46 million au 30 juin 2025, contre $6.11 million à la clôture 2024, après un placement privé de $46.0 million et la conversion en capital d'un prêt à terme de $20.88 million en mars 2025. L'actif total s'est élevé à $47.05 million et les capitaux propres sont redevenus positifs à $36.56 million après une situation déficitaire antérieure. La société reste en phase d'exploration, doit s'acquitter d'une deuxième échéance contractuelle de $34.11 million au titre de l'APA de Selebi avant le 31 janvier 2026, et indique des incertitudes importantes quant à sa capacité à poursuivre son activité.
NexMetals Mining Corp. (NEXM) verzeichnete weiterhin verlustreiche Explorationsaktivitäten, während es eine erhebliche Rekapitalisierung durchführte, die die Bilanz stärkte. Das Unternehmen meldete einen Nettoverlust von $15.09 million für das zweite Quartal 2025 und $30.32 million für die sechs Monate zum 30. Juni 2025, bedingt durch $16.47 million an Explorationsausgaben sowie höhere Abschreibungs- und Verwaltungskosten. Zahlungsmittel und kurzfristige Einlagen stiegen zum 30. Juni 2025 auf $26.46 million gegenüber $6.11 million zum Jahresende 2024, nach einer Privatplatzierung über $46.0 million und der Umwandlung eines Terminkredits in Eigenkapital in Höhe von $20.88 million im März 2025. Die Gesamtaktiva erhöhten sich auf $47.05 million und das Eigenkapital wurde mit $36.56 million wieder positiv statt zuvor defizitär. Das Unternehmen befindet sich weiterhin in der Explorationsphase, hat eine vertragliche zweite Rate von $34.11 million aus dem Selebi-APA, fällig bis zum 31. Januar 2026, und benennt wesentliche Unsicherheiten hinsichtlich seiner Fortführungsfähigkeit.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _______ to _______
Commission
File Number:
(Exact name of registrant as specified in its charter)
| Province
of Ontario, |
||
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer
| |
| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 13, 2025, there were Common Shares issued and outstanding.
TABLE OF CONTENTS
| Part I | Financial Information | 3 |
| Cautionary Note Regarding Forward-Looking Statements | 3 | |
| Item 1. Financial Statements | 4 | |
| Unaudited Condensed Interim Consolidated Balance Sheets | 5 | |
| Unaudited Condensed Interim Consolidated Statements of Operations and Comprehensive Loss | 6 | |
| Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency) | 7 | |
| Unaudited Condensed Interim Consolidated Statements of Cash Flows | 9 | |
| Notes to the Unaudited Condensed Interim Consolidated Financial Statements | 10 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 46 | |
| Item 4. Controls and Procedures | 46 | |
| Part II | Other Information | 47 |
| Item 1. Legal Proceedings | 47 | |
| Item 1A. Risk Factors | 47 | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 55 | |
| Item 3. Defaults Upon Senior Securities | 56 | |
| Item 4. Mine Safety Disclosures | 56 | |
| Item 5. Other Information | 56 | |
| Item 6. Exhibits | 56 | |
| Exhibit Index | 56 | |
| Signature | 57 | |
| 2 |
PART I - FINANCIAL INFORMATION
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Report”) for NexMetals Mining Corp. (the “Company” or “NEXM”) contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. These risks and other factors include those listed under “Risk Factors” in Part I, Item 1A of this Report. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date hereof. You should read this Report and the documents that we have filed as exhibits to this Report completely and with the understanding that our actual future results may be materially different from what we expect.
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
Unless otherwise indicated, all references to “$”, “C$” and “dollars” in this Report refer to Canadian dollars, references to “US$” in this Report refer to United States dollars and references to “BWP” in this Report refer to Botswanan pula. On June 30, 2025, the daily exchange rate: (i) for one United States dollar expressed in Canadian dollars was US$1.00 = C$1.3643 (or C$1.00 = US$0.7330); (ii) for one Botswanan pula expressed in Canadian dollars was BWP 1.00 = C$0.1012 (or C$1.00 = BWP 9.8814); and (iii) for one Botswanan pula expressed in United States dollars was BWP 1.00 = US$0.0737 (or US$1.00 = BWP 13.5685). “This quarter” or “the quarter” means the second quarter (“Q2”) of 2025.
| 3 |
Item 1. Financial Statements
(Formerly Premium Resources Ltd.)
Unaudited Condensed interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
In accordance with generally accepted accounting principles in the United States and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission and stated in Canadian dollars, unless otherwise indicated
INDEX
| ● | Unaudited Condensed Interim Consolidated Financial Statements | |
| ● | Unaudited Condensed Interim Consolidated Balance Sheets | |
| ● | Unaudited Condensed Interim Consolidated Statements of Operations and Comprehensive Loss | |
| ● | Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency) | |
| ● | Unaudited Condensed Interim Consolidated Statements of Cash Flows | |
| ● | Notes to the Unaudited Condensed Interim Consolidated Financial Statements |
| 4 |
Unaudited Condensed Interim Consolidated Balance Sheets
(Expressed in Canadian dollars)
| As at | ||||||||||
| Notes | June 30, 2025 $ | December 31, 2024 $ | ||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | 3 | |||||||||
| Prepaid expenses | ||||||||||
| Other receivables | 4 | |||||||||
| TOTAL CURRENT ASSETS | ||||||||||
| NON-CURRENT ASSETS | ||||||||||
| Exploration and evaluation assets | 5 | |||||||||
| Property, plant and equipment | 6 | |||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||
| TOTAL ASSETS | ||||||||||
| LIABILITIES | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Trade payables and accrued liabilities – current | 7 | |||||||||
| Vehicle financing – current | ||||||||||
| DSU liability – current | 10(c) | |||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||
| NON-CURRENT LIABILITIES | ||||||||||
| Trade payables and accrued liabilities – non-current | 7 | |||||||||
| Provision for leave and severance | ||||||||||
| Vehicle financing – non-current | ||||||||||
| Term Loan | 8 | |||||||||
| NSR option liability | 9 | |||||||||
| DSU liability – non-current | 10(c) | |||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||
| TOTAL LIABILITIES | ||||||||||
| SHAREHOLDERS’ EQUITY (DEFICIENCY) | ||||||||||
| Common Shares ( | 10 | |||||||||
| Preferred shares | 10 | |||||||||
| Additional paid-in capital | ||||||||||
| Deficit | ( | ) | ( | ) | ||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||||
| TOTAL SHAREHOLDERS’ EQUITY (DEFICIENCY) | ( | ) | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY) | ||||||||||
| Nature of Operations and Going Concern (Note 1) | ||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
Approved by the Board of Directors on August 13, 2025.
“signed” Morgan Lekstrom Director and Chief Executive Officer |
“signed” Jason LeBlanc Director |
| 5 |
Unaudited Condensed Interim Consolidated Statements of Operations and Comprehensive Loss
(Expressed in Canadian dollars)
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||
| Notes | $ | $ | $ | $ | ||||||||||||||
| EXPENSES | ||||||||||||||||||
| General exploration expenses | 5 | |||||||||||||||||
| Depreciation and amortization | 6 | |||||||||||||||||
| General and administrative expenses | 15 | |||||||||||||||||
| Investor relations and communications | ||||||||||||||||||
| Director fees | 10(c) | |||||||||||||||||
| Fair value movement of DSUs | 10(c) | ( | ) | ( | ) | |||||||||||||
| Net foreign exchange loss | ||||||||||||||||||
| LOSS FOR THE PERIOD BEFORE OTHER ITEMS | ||||||||||||||||||
| OTHER ITEMS | ||||||||||||||||||
| Interest (income) expense, net | ( | ) | ( | ) | ( | ) | ||||||||||||
| Interest expense and accretion on Term Loan | 8 | |||||||||||||||||
| Loss on Term Loan extinguishment | 8 | |||||||||||||||||
| NET LOSS FOR THE PERIOD | ||||||||||||||||||
| OTHER COMPREHENSIVE LOSS (INCOME) | ||||||||||||||||||
| Exchange differences on translation of foreign operations | ( | ) | ( | ) | ||||||||||||||
| TOTAL COMPREHENSIVE LOSS FOR THE PERIOD | ||||||||||||||||||
| Basic and diluted loss per share | ||||||||||||||||||
| Weighted average number of Common Shares outstanding – basic and diluted | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 6 |
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)
(Expressed in Canadian dollars)
| Three months ended June 30 | ||||||||||||||||||||||||||
| Notes | Number of shares | Preferred shares $ | Additional paid-in capital $ | Deficit $ | Accumulated other comprehensive (loss) income $ | Total shareholders’ equity (deficiency) $ | ||||||||||||||||||||
| BALANCE, MARCH 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||||
| Share-based compensation | 10(c) | - | ||||||||||||||||||||||||
| Exchange differences on translation of foreign operations | - | ( | ) | ( | ) | |||||||||||||||||||||
| BALANCE, JUNE 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE, MARCH 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||||
| Share capital issued through private placement | ||||||||||||||||||||||||||
| Share issue costs | - | ( | ) | ( | ) | |||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||||
| Exchange differences on translation of foreign operations | - | |||||||||||||||||||||||||
| BALANCE, JUNE 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 7 |
Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)…continued
(Expressed in Canadian dollars)
| Six months ended June 30 | ||||||||||||||||||||||||||
| Notes | Number of shares | Preferred shares $ | Additional paid-in capital $ | Deficit $ | Accumulated other comprehensive (loss) income $ | Total shareholders’ (deficiency) equity $ | ||||||||||||||||||||
| BALANCE, DECEMBER 31, 2024 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||||
| Share capital issued through private placement | 10(a) | |||||||||||||||||||||||||
| Share issue costs – private placement | 10(a) | - | ( | ) | ( | ) | ||||||||||||||||||||
| Share capital issued through debt conversion | 8 | |||||||||||||||||||||||||
| Share issue costs – debt conversion | 8 | - | ( | ) | ( | ) | ||||||||||||||||||||
| Share-based compensation | 10(c) | - | ||||||||||||||||||||||||
| Exchange differences on translation of foreign operations | - | ( | ) | ( | ) | |||||||||||||||||||||
| BALANCE, JUNE 30, 2025 | ( | ) | ( | ) | ||||||||||||||||||||||
| BALANCE, DECEMBER 31, 2023 | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||||
| Share capital issued through private placement | ||||||||||||||||||||||||||
| Share issue costs | - | ( | ) | ( | ) | |||||||||||||||||||||
| Exercise of options, net | ||||||||||||||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||||
| Exchange differences on translation of foreign operations | - | |||||||||||||||||||||||||
| BALANCE, JUNE 30, 2024 | ( | ) | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 8 |
Unaudited Condensed Interim Consolidated Statements of Cash Flows
(Expressed in Canadian dollars)
| Six months ended June 30, | ||||||||||
| Notes | 2025 $ | 2024 $ | ||||||||
| OPERATING ACTIVITIES | ||||||||||
| Net loss for the period | ( | ) | ( | ) | ||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
| DSUs granted | 10(c) | |||||||||
| Fair value movement of DSUs | 10(c) | ( | ) | |||||||
| Share-based compensation | 10(c) | |||||||||
| Depreciation and amortization | 6 | |||||||||
| Provision for leave and severance | ||||||||||
| Interest and accretion, net | ||||||||||
| Accrued interest on lease liability | ||||||||||
| Loss on Term Loan extinguishment | 8 | |||||||||
| DSU redemption | 10(c) | ( | ) | |||||||
| Changes in non-cash working capital | ||||||||||
| Prepaid expenses and other receivables | ( | ) | ( | ) | ||||||
| Trade payables and accrued expenses | ( | ) | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||
| INVESTING ACTIVITIES | ||||||||||
| Acquisition of property, plant and equipment | 6 | ( | ) | ( | ) | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||||
| FINANCING ACTIVITIES | ||||||||||
| Proceeds from issuance of units | 10(a) | |||||||||
| Share issue costs | 8 | ( | ) | ( | ) | |||||
| Vehicle loan financing, net of repayments | ( | ) | ||||||||
| Lease payments | ( | ) | ||||||||
| Net cash provided by financing activities | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||||
| Change in cash and cash equivalents for the period | ||||||||||
| Cash and cash equivalents at the beginning of the period | ||||||||||
| Cash and cash equivalents at the end of the period | ||||||||||
| Supplemental cash flow information | ||||||||||
| Income taxes paid | ||||||||||
| Interest paid | ||||||||||
See Note 8 and 10(a) for noncash Financing Activities.
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
| 9 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
1. NATURE OF OPERATIONS AND GOING CONCERN
a) Nature of Operations
NexMetals Mining Corp. and its wholly-owned subsidiaries’ (collectively, the “Company” or “NEXM” and formerly Premium Resources Ltd.) principal business activity is the exploration and evaluation of the Selebi and Selebi North nickel-copper-cobalt (“Ni-Cu-Co”) mines in Botswana and related infrastructure (together, the “Selebi Mines”), as well as the nickel, copper, cobalt, platinum-group elements (“Ni-Cu-Co-PGE”) Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licences (collectively, the “Selkirk Mine” and together with the Selebi Mines, the “Mines”).
The common shares of NEXM (“Common Shares”) are listed and posted for trading on the Nasdaq Capital Market (the “Nasdaq”) and on the TSX Venture Exchange (the “TSXV”) under the symbol “NEXM”. Prior to June 11, 2025, the Company traded on the TSXV under its previous name and symbol, Premium Resources Ltd. and “PREM”, respectively. The Company’s head and registered office is located at One First Canadian Place, 100 King Street West, Suite 3400, Toronto, Ontario, Canada M5X 1A4.
b) Share Consolidation
On June 20, 2025, the Company consolidated its Common Shares on the basis of twenty (20) pre-consolidated shares for every one (1) post-consolidation share (the “Share Consolidation”). No fractional shares were issued in connection with the Share Consolidation. All fractional shares created by the Share Consolidation were rounded to the nearest whole number of Common Shares, with any fractional interest representing one-half (1/2) or more Common Shares entitling holders thereof to receive one whole Common Share.
As a result of the Share Consolidation, the number of Common Shares issuable upon exercise of warrants has been adjusted in accordance with the applicable warrant terms, such that each warrant now entitles the holder to receive one post-consolidation Common Share for every twenty Common Shares previously issuable, at a proportionally adjusted exercise price. The total number of warrants outstanding was not affected by the Consolidation. For comparative and presentation purposes, all warrant figures presented herein, including the number of warrants outstanding and the number of Common Shares issuable upon exercise, are presented on a post-consolidation basis.
The exercise price, number of Options outstanding, and number of Common Shares issuable upon the exercise of outstanding Options presented in these financial statements were proportionately adjusted to reflect the Share Consolidation. Further, the number of restricted share units and deferred share units, and number of Common Shares issuable upon the vesting of restricted share units presented in these financial statements were also proportionately adjusted to reflect the Share Consolidation. All information respecting outstanding Common Shares and other securities of the Company, including basic and diluted loss per share, in the current and comparative periods presented herein give effect to the Share Consolidation.
c) Going Concern
The Company, being in the exploration stage, is subject to risks and challenges similar to companies in a comparable stage of exploration and development. These risks include the challenges of securing adequate capital for exploration and advancement of the Company’s material projects, operational risks inherent in the mining industry, and global economic and metal price volatility, and there is no assurance management will be successful in its endeavors.
These
unaudited condensed interim consolidated financial statements have been prepared on the assumption that the Company will continue as
a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities
in the ordinary course of operations. The ability of the Company to continue operations as a going concern is ultimately dependent upon
achieving profitable operations and its ability to obtain adequate financing. The Company incurred a net loss of $
It is not possible to predict whether future financing efforts will be successful or if the Company will attain a profitable level of operations. These material uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material.
| 10 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
The
properties in which the Company currently has an interest are in pre-revenue stage. As such, the Company is dependent on external financing
to fund its activities. In order to carry out the planned activities and cover administrative costs, the Company will use its existing
working capital and raise additional amounts as needed. Further, the second instalment under the Selebi APA (defined in Note 5) of $
On March 18, 2025, the Company closed a significant refinancing (Note 8 and Note 10(a)). While this transaction will provide sufficient capital for the Company to fund operations in the near term, the Company will need further funding to support advancement of the Selebi Mines and the Selkirk Mine toward the development stage.
Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.
2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
(a) Statement of Compliance
These unaudited condensed interim consolidated financial statements reflect the accounts of the Company and have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information and in accordance with the instructions in Article 10 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”).
Certain information or footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2024. The interim period results do not necessary indicate the results that may be expected for any other interim period or for the full fiscal year.
(b) Basis of Preparation
These unaudited condensed interim consolidated financial statements have been prepared under the historical cost convention, modified by the revaluation of any financial assets and financial liabilities where applicable. The preparation of these unaudited condensed interim consolidated financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company as of June 30, 2025, and through the date of this report filing.
Operating segments are reported in a manner consistent with the internal reporting provided to executive management. The Company determined that it has one reportable operating segment being that of the acquisition, exploration and evaluation of mineral properties in three geographic segments, which are Canada, Barbados and Botswana (Note 13).
The Company’s presentation currency is Canadian dollars. Reference herein of $ or CAD is to Canadian dollars, US$ or USD is to United States dollars, and BWP is to Botswana pula.
| 11 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
The significant accounting policies used in the preparation of these unaudited condensed interim consolidated financial statements are consistent with those used in the preparation of the audited annual consolidated financial statements for the year ended December 31, 2024. Except as described in Note 2(e) and (f), there were no changes in significant accounting policies during the three and six months ended June 30, 2025.
(c) Reclassification
Certain
comparative figures on the unaudited condensed interim consolidated balance sheets, unaudited condensed interim consolidated statements
of operations and comprehensive loss, unaudited condensed interim consolidated statements of cash flows, and the notes to the unaudited
condensed interim consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications
have no effect on net loss or shareholders’ equity as previously reported. For the three and six months ended June 30, 2024, an
adjustment has been made to reduce share-based compensation by $
(d) Basis of Consolidation
These unaudited condensed interim consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries as summarized in the table below. All intercompany transactions, balances, income and expenses are eliminated upon consolidation.
| Name of Entity | Place of Incorporation | Percentage Ownership | Functional Currency | |||
| NexMetals Mining Corp. | CAD | |||||
| NAN Exploration Inc. | CAD | |||||
| PNR Amalco Ltd. | CAD | |||||
| Premium Resources International Ltd. | USD | |||||
| Premium Resources Selkirk (Barbados) Limited | USD | |||||
| Premium Resources Selebi (Barbados) Limited | USD | |||||
| Premium Nickel Group Proprietary Limited | BWP | |||||
| Premium Nickel Resources Proprietary Limited | BWP | |||||
(e) Debt Extinguishment
Upon the extinguishment of debt, the difference between the amount paid on extinguishment, including miscellaneous costs of reacquisition, and the net carrying amount of the debt being extinguished, being the amount due at maturity, adjusted for unamortized premiums, discounts, and costs of issuance, is recognized as a gain or loss when the debt is extinguished. The fair value of the assets transferred or the fair value of an equity interest granted is used in accounting for the settlement of the debt unless the fair value of the debt being settled is more clearly evident.
Recently Adopted Accounting Pronouncements
(f) ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures
In December 2023, the Financial Accounting Standards Board (“FASB”) issued a final standard on improvements to income tax disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The Company adopted the new standard effective January 1, 2025, and will include certain additional disclosures in the notes to its consolidated financial statements for the year ending December 31, 2025.
| 12 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
Recently Issued Accounting Pronouncements and Disclosures Not Yet Adopted
(g) ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures
In November 2024, FASB issued an Accounting Standards Update (“ASU”) which will require entities to provide disaggregated disclosure of specified categories of expenses that are included on the face of the income statement, including: purchases of inventory, employee compensation, depreciation, amortization and depletion. This ASU becomes effective January 1, 2027. The Company is assessing the impact of this ASU, and upon adoption, may be required to include certain additional disclosures in the notes to its consolidated financial statements.
3. CASH AND CASH EQUIVALENTS
A summary of the Company’s cash and cash equivalents is detailed in the table below:
June 30, 2025 $ | December 31, 2024 $ | |||||||
| Cash | ||||||||
| Short-term deposits | ||||||||
4. OTHER RECEIVABLES
A summary of the Company’s other receivables is detailed in the table below:
June 30, 2025 $ | December 31, 2024 $ | |||||||
| HST paid on purchases | ||||||||
| VAT paid on purchases | ||||||||
| Interest receivable | ||||||||
5. EXPLORATION AND EVALUATION ASSETS
The exploration and evaluation assets of the Company consist of the acquisition costs of mining assets located in Botswana:
| Botswana | ||||||||||||
Selebi $ | Selkirk $ | Total $ | ||||||||||
| Balance, December 31, 2023 | ||||||||||||
| Foreign currency translation | ||||||||||||
| Balance, December 31, 2024 | ||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ( | ) | ||||||
| Balance, June 30, 2025 | ||||||||||||
The following is a description of the Company’s exploration and evaluation assets and the related spending commitments:
Botswana Assets - Selebi and Selkirk
In September 2021, the Company executed the Selebi Asset Purchase Agreement (“Selebi APA”) with the BCL Limited (“BCL”) liquidator to acquire the Selebi Mines formerly operated by BCL. In January 2022, the Company closed the transaction and ownership of the Selebi Mines transferred to the Company.
Pursuant
to the Selebi APA, the aggregate purchase price payable to the seller for the Selebi Mines shall be the sum of $
| ● | $ |
| 13 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
| ● | $ |
| ● | $ |
The
total acquisition cost of the Selebi Mines included the first instalment of $
In
addition to the Selebi APA, the purchase of the Selebi Mines is also subject to a royalty agreement as well as a contingent consideration
agreement with the liquidator.
The Company also negotiated a separate asset purchase agreement (the “Selkirk APA”) with the liquidator of Tati Nickel Mining Company (“TNMC”) in January 2022 to acquire the Selkirk deposit and related infrastructure formerly operated by TNMC. The transaction closed in August 2022.
The
Selkirk APA does not provide for a purchase price or initial payment for the purchase of the assets. The acquisition cost of the Selkirk
Mine of $
In
addition to the Selkirk APA, the purchase of the Selkirk Mine is also subject to a royalty agreement as well as a contingent consideration
agreement with the liquidator.
In
August 2023, the Company entered into a binding commitment letter with the liquidator of BCL to acquire a
Both
the Selebi Mines and Selkirk Mine are subject to a royalty payable to the Botswana Government of
| 14 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
General Exploration Expenses - Details of the general exploration expenses by nature are presented as follows:
| Three months ended June 30, 2025 | Three months ended June 30, 2024 | |||||||||||||||||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||||||||||||||
| Drilling | ||||||||||||||||||||||||||||||||
| Site operations, administration, & overhead | ||||||||||||||||||||||||||||||||
| Infrastructure & equipment maintenance | ||||||||||||||||||||||||||||||||
| Geology | ||||||||||||||||||||||||||||||||
| Mine development | ||||||||||||||||||||||||||||||||
| Electricity | ||||||||||||||||||||||||||||||||
| Engineering & technical studies | ||||||||||||||||||||||||||||||||
| Geophysics | ||||||||||||||||||||||||||||||||
| Freight, tools, supplies, & other consumables | ||||||||||||||||||||||||||||||||
| Health & safety | ||||||||||||||||||||||||||||||||
| Environmental, social & governance | ||||||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| Six months ended June 30, 2025 | Six months ended June 30, 2024 | |||||||||||||||||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||||||||||||||
| Drilling | ||||||||||||||||||||||||||||||||
| Site operations, administration, & overhead | ||||||||||||||||||||||||||||||||
| Infrastructure & equipment maintenance | ||||||||||||||||||||||||||||||||
| Geology | ||||||||||||||||||||||||||||||||
| Mine development | ||||||||||||||||||||||||||||||||
| Electricity | ||||||||||||||||||||||||||||||||
| Engineering & technical studies | ||||||||||||||||||||||||||||||||
| Geophysics | ||||||||||||||||||||||||||||||||
| Freight, tools, supplies, & other consumables | ||||||||||||||||||||||||||||||||
| Health & safety | ||||||||||||||||||||||||||||||||
| Environmental, social & governance | ||||||||||||||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||||||||||
| Total | ||||||||||||||||||||||||||||||||
| 15 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
6. PROPERTY, PLANT AND EQUIPMENT
The tables below set out costs and accumulated depreciation and amortization as at June 30, 2025 and December 31, 2024:
| Cost | Land and Buildings(1) $ | Equipment(1) (2) $ | Furniture & Fixtures $ | Vehicles $ | Computer & Software $ | Total $ | ||||||||||||||||||
| Balance – December 31, 2023 | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Foreign currency translation | ( | ) | ||||||||||||||||||||||
| Balance – December 31, 2024 | ||||||||||||||||||||||||
| Additions | ||||||||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance – June 30, 2025 | ||||||||||||||||||||||||
| Accumulated Depreciation & Amortization | Land and Buildings(1) | Equipment(1) (2) | Furniture & Fixtures | Vehicles | Computer & Software | Total | ||||||||||||||||||
| Balance – December 31, 2023 | ||||||||||||||||||||||||
| Depreciation during the year | ||||||||||||||||||||||||
| Foreign currency translation | ||||||||||||||||||||||||
| Balance – December 31, 2024 | ||||||||||||||||||||||||
| Depreciation during the period | ||||||||||||||||||||||||
| Foreign currency translation | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance – June 30, 2025 |
| Carrying Value | Land and Buildings(1) | Equipment(1) (2) | Furniture & Fixtures | Vehicles | Computer & Software | Total | ||||||||||||||||||
| Balance – December 31, 2024 | ||||||||||||||||||||||||
| Balance – June 30, 2025 |
Note:
| (1) | |
| (2) |
| 16 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
7. TRADE PAYABLES AND ACCRUED LIABILITIES
A summary of trade payables and accrued liabilities is detailed in the table below:
June 30, 2025 $ | December 31, 2024 $ | |||||||
| Amounts due to related parties (Note 11) | ||||||||
| Trade payables | ||||||||
| Accrued liabilities | ||||||||
| Total | ||||||||
| Less: current portion | ||||||||
| Non-current portion | ||||||||
Included
in accrued liabilities at June 30, 2025 is $
8. TERM LOAN
The
Company had a three-year term loan (the “Term Loan”) with Cymbria Corporation (“Cymbria”), the
lender and an affiliate of the Company’s largest shareholder, EdgePoint Investment Group Inc. (“EdgePoint”),
in the amount of $
On March 18, 2025, the Company closed a financing transaction (the “March 2025 Financing”) which included a non-brokered private placement (Note 10(a)) and the conversion of the Term Loan to equity (the “Debt Conversion”).
The
Company issued to Cymbria an aggregate of units (each, a “Settlement Unit”) at a deemed issue price of $
per Settlement Unit in full satisfaction of the $
Each
Settlement Warrant entitles the holder to acquire one additional Common Share of the Company at a price of $ per Common Share until
March 18, 2028. If, at any time prior to the expiry date, the volume-weighted average trading price of the Common Shares is at least
$ per Common Share for a period of
The
fair value of the Common Shares issued as part of the Settlement Units was estimated at $ and was determined by applying an
implied discount for lack of marketability to the market observed price on the date of issuance. The fair value of the Settlement Warrants
was estimated at $
| 17 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
The Monte Carlo model used to value the Settlement Warrants was based on the following assumptions:
| Settlement Warrants | ||||
| Expected dividend yield | % | |||
| Share price | $ | |||
| Expected share price volatility | % | |||
| Risk free interest rate | % | |||
| Expected life of warrant | ||||
The volatility was determined by calculating the historical volatility of the Company’s share price over a 3-year period using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns. The same implied discount for lack of marketability for purposes of the Common Shares valuation was also applied to the share price for the Settlement Warrants valuation.
In
connection with the March 2025 Financing, the Company issued: (i) Common Shares to TriView Capital Ltd. (“TriView”)
for its services as finder; (ii) Common Shares to Fiore Management and Advisory Corp. (“Fiore”) and
Common Shares to Bowering Projects Ltd. (“Bowering”) for certain advisory services; and (iii) Common Shares
to a financial advisor for financial advisory services. The fair value of these shares was determined to be $. In addition to
the Common Shares, the Company incurred various legal, listing and financing fees payable in cash totalling $
All securities issued as part of the Debt Conversion are subject to a hold period which expired July 19, 2025, with the exception of the Common Shares issued to Fiore and Bowering which have a hold period expiring March 19, 2026.
The following is a continuity of the Term Loan:
| $ | ||||
| Term Loan balance, December 31, 2023 | ||||
| Accrued interest | ||||
| Accretion of warrant value and transaction costs | ||||
| Interest paid | ( | ) | ||
| Term Loan balance, December 31, 2024 | ||||
| Accrued interest | ||||
| Accretion of warrant value and transaction costs | ||||
| Interest paid | ( | ) | ||
| Debt Conversion | ( | ) | ||
| Term Loan balance, June 30, 2025 | ||||
9. NSR OPTION
In
2023, Cymbria paid an aggregate of $
As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at June 30, 2025 and December 31, 2024 is $. The Option payment received in cash was recorded as a non-current liability.
| 18 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
NEXM’s
indirect wholly-owned subsidiary Premium Nickel Resources Proprietary Limited (“PNRP”) acquired the Selebi Mines in
January 2022 out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a
PREM’s
indirect wholly-owned subsidiary Premium Nickel Group Proprietary Limited (“PNGP”) acquired the Selkirk Mine in August
2022 out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a
Each
of PNRP and PNGP has agreed to grant Cymbria, in exchange for the Option Payment, an option to participate in any such repurchase of
the applicable portion of its NSR from the relevant liquidator. Cymbria will, following the exercise of its option to participate in
any such repurchase, acquire a
Under
the NSR option purchase agreements, Cymbria could acquire a
As disclosed in Note 1(b), the Share Consolidation has been applied retrospectively herein.
The authorized capital of the Company comprises an number of Common Shares without par value and Preferred Shares, issuable in series, of which are authorized to be designated as Series 1 Convertible Preferred Shares.
| a) | Common Shares Issued and Outstanding |
Six months ended June 30, 2025
On
March 18, 2025, the Company closed the March 2025 Financing which included a non-brokered private placement and the conversion of its
$
The
non-brokered private placement (the “Private Placement”) consisted of issuing
| 19 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
In
connection with the March 2025 Financing, the Company issued: (i) Common Shares to TriView for its services as finder; (ii)
Common Shares to Fiore and Common Shares to Bowering for certain advisory services; and (iii) Common Shares to a financial
advisor for financial advisory services. The fair value of these shares was determined to be $. In addition to the Common Shares,
the Company incurred various legal, listing and financing fees payable in cash totalling $
All securities issued as part of the Private Placement are subject to a hold period which expired July 19, 2025, with the exception of the Common Shares issued to Fiore and Bowering which have a hold period expiring March 19, 2026.
The
fair value of the Common Shares issued under the Private Placement was estimated at $
The fair value of the Private Placement Warrants was calculated using the following assumptions:
| Private Placement Warrants | ||||
| Expected dividend yield | % | |||
| Share price | $ | |||
| Expected share price volatility | % | |||
| Risk free interest rate | % | |||
| Expected life of warrant | ||||
The volatility was determined by calculating the historical volatility of the Company’s share price over a 3-year period using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns. The same implied discount for lack of marketability for purposes of the Common Shares valuation was also applied to the share price for the Settlement Warrants valuation.
As at June 30, 2025, the Company had Common Shares issued and outstanding (December 31, 2024 – ).
Year ended December 31, 2024
During the year ended December 31, 2024, Common Shares were issued for the net exercise of options. In addition, Common Shares were issued as a result of the following financing transactions:
On June 14, 2024, the Company closed the first tranche of a non-brokered private placement offering (the “June 2024 Financing”), pursuant to which the Company issued an aggregate units of the Company (the “June 2024 Units”) at a price of $ per Unit for aggregate gross proceeds of $. Each June 2024 Unit was comprised of one Common Share and one Common Share purchase warrant of the Company (each, a “June 2024 Warrant”).
On June 21, 2024, the Company closed the second tranche of the June 2024 Financing and issued an additional June 2024 Units at $ per Unit for gross proceeds of $.
Each
June 2024 Warrant entitles the holder thereof to acquire one Common Share for a period expiring 60 months following the date of issuance
(the “Expiry Date”) at a price of $
| 20 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
In
connection with the June 2024 Financing, the Company issued
The
fair value of the June 2024 Warrants, calculated using the Monte Carlo model, was estimated at $
| June 14, 2024 | June 21, 2024 | |||||||
| Expected dividend yield | % | % | ||||||
| Share price | $ | $ | ||||||
| Expected share price volatility | % | % | ||||||
| Risk free interest rate | % | % | ||||||
| Expected life of warrant | ||||||||
The volatility was determined by calculating the historical volatility of stock prices of the Company over a 5-year period using daily closing prices. The formula used to compute historical volatility is the standard deviation of the logarithmic returns.
| b) | Warrants |
The following summarizes Common Share purchase warrant activity:
| Six months ended | Year ended | |||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||||
Number Outstanding | Weighted Average Exercise Price $ | Number Outstanding | Weighted Average Exercise Price $ | |||||||||||||
| Outstanding, beginning of the year | ||||||||||||||||
| Issued | ||||||||||||||||
| Exercised | ||||||||||||||||
| Expired | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Outstanding, end of the period | ||||||||||||||||
At June 30, 2025, the Company had outstanding Common Share purchase warrants exercisable to acquire Common Shares as follows:
Warrants Outstanding | Warrants Exercisable | Expiry Date | Exercise Price $ | Intrinsic Value $ | ||||||||||||
| June 28, 2026 | ||||||||||||||||
| June 14, 2029 | ||||||||||||||||
| June 21, 2029 | ||||||||||||||||
| March 18, 2028 | ||||||||||||||||
| March 18, 2028 | ||||||||||||||||
| 21 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
| c) | Omnibus Plan |
During the second quarter of 2025, the Company adopted a new “rolling up to 10%” long-term omnibus incentive plan (the “Omnibus Plan”) which replaces the Company’s existing stock option plan, restricted share unit plan, and deferred share unit plan.
The Omnibus Plan provides for the award of Restricted Share Units (“RSUs”), Deferred Share Units (“DSUs”) and options to purchase Common Shares (“Options” and together with RSUs and DSUs, “Awards”) to directors, officers, employees and consultants upon approval by the Board of Directors. The maximum aggregate number of Common Shares issuable in respect of all past and future Awards granted or issued, at any point, shall not exceed 10% of the total number of issued and outstanding Common Shares on a non-diluted basis at such point in time, subject to certain participation limits on grants. No Award granted or issued under the Omnibus Plan, other than Options, may vest before the date that is one year following the date it is granted or issued.
Options
An Option is an Award that gives a participant the right to purchase one Common Share at a specified price. The exercise price of each Option shall not be less than the discounted market price on the grant date and as approved by the Board of Directors of the Company. The Options can be granted for a maximum term of .
The following summarizes the Option activity:
| Six months ended | Year ended | |||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||||
Number Outstanding | Weighted Average Exercise Price $ | Number Outstanding | Weighted Average Exercise Price $ | |||||||||||||
| Outstanding, beginning of the year | ||||||||||||||||
| Granted | ||||||||||||||||
| Exercised | ( | ) | ( | ) | ||||||||||||
| Expired/cancelled | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Outstanding, end of the period | ||||||||||||||||
The total intrinsic value of options exercised for the year ended December 31, 2024, was $.
During the six months ended June 30, 2025, the Company granted an aggregate of Options to employees, directors, officers and consultants with a term of . The Options have a weighted average exercise price of $ per Common Share. Of the stock options granted, vest as to one-half on the date of grant and the balance on the first anniversary of the date of grant, vested immediately on the date of grant, and vest annually in equal thirds beginning on the date of grant.
For the three and six months ended June 30, 2025, a total of $ (three months ended June 30, 2024 - $) and $ (six months ended June 30, 2024 – $), respectively, was recorded as share-based compensation expense and credited to additional paid-in capital related to Options.
| 22 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
The fair value of Options granted was calculated using the Black-Scholes Option Pricing Model. The volatility was determined using the historical daily volatility over the expected life of the Options. The expected life of the Options considered the contractual term of the Options, as well as an estimate of the time to exercise. The Black-Scholes Option Pricing Model used the following assumptions:
| Six months ended | Year ended | |||||||
| June 30, 2025 | December 31, 2024 | |||||||
| Expected dividend yield | % | % | ||||||
| Expected forfeiture rate | % | % | ||||||
| Expected share price volatility range | -% | -% | ||||||
| Weighted average expected share price volatility | % | % | ||||||
| Risk free interest rate | %-% | %-% | ||||||
| Expected life of Options | - years | - years | ||||||
Options Outstanding | Options Exercisable | Expiry Date | Exercise Price $ | Intrinsic Value $ | ||||||||||||
| August 19, 2025 | ||||||||||||||||
| January 26, 2026 | ||||||||||||||||
| February 25, 2026 | ||||||||||||||||
| September 29, 2026 | ||||||||||||||||
| October 25, 2026 | ||||||||||||||||
| January 20, 2027 | ||||||||||||||||
| August 8, 2028 | ||||||||||||||||
| August 14, 2029 | ||||||||||||||||
| December 4, 2029 | ||||||||||||||||
| March 18, 2030 | ||||||||||||||||
| April 24, 2030 | ||||||||||||||||
RSUs
A RSU is an Award that upon settlement, entitles the recipient participant to receive one Common Share. The number, terms, and vesting conditions of RSUs awarded will be determined by the Board of Directors from time to time. The Company uses the fair value method of accounting for the recording of RSU grants, and the fair value of the RSUs was determined based on the closing price of the Company’s Common Shares on the grant date.
During the six months ended June 30, 2025, the Company granted an aggregate of RSUs to employees, directors, officers and consultants with each RSU vesting in full on the first anniversary of the date of grant.
| Six months ended | Year ended | |||||||||||||||
| June 30, 2025 | December 31, 2024 | |||||||||||||||
Number Outstanding
| Weighted Average Grant-Date Fair Value Per Award $ | Number Outstanding
| Weighted Average Grant-Date Fair Value Per Award $ | |||||||||||||
| Outstanding, beginning of the year | ||||||||||||||||
| Granted | ||||||||||||||||
| Outstanding, end of the period | ||||||||||||||||
For the three and six months ended June 30, 2025, a total of $ (three months ended June 30, 2024 – $) and $ (six months ended June 30, 2024 - $), respectively, was recorded as share-based compensation expense and credited to additional paid-in capital related to RSUs.
| 23 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
DSUs
DSUs are granted annually by the Board of Directors and outstanding DSUs are settled in cash upon redemption. The number and vesting conditions of DSUs awarded will be determined by the Board of Directors from time to time. Each director may elect to receive any part or all of their director fees in DSUs.
The DSUs credited to the account of a director may only be redeemed following the date upon which the holder ceases to be a director but prior to the end of the calendar year following the year in which the holder ceases to be a director.
The following is a continuity of the DSUs:
| Number of Awards | Price(1) $ | Fair Value $ | ||||||||||
| DSUs outstanding at December 31, 2023 | ||||||||||||
| Granted | ||||||||||||
| Fair value adjustment | ( | ) | ||||||||||
| DSUs outstanding at December 31, 2024 | ||||||||||||
| Redeemed | ( | ) | ( | ) | ||||||||
| Fair value adjustment | ||||||||||||
| DSUs outstanding at June 30, 2025 | ||||||||||||
| Less: current portion | ||||||||||||
| Non-current portion | ||||||||||||
Note:
| (1) |
During the six months ended June 30, 2025, the Company did not grant DSUs. During the three and six months ended June 30, 2025, the Company recorded a fair value adjustment gain of $ and $, respectively, on the outstanding DSUs. During the three and six months ended June 30, 2024, the DSU compensation, net of fair value adjustments, was $ and $, respectively.
The DSUs are classified as a derivative financial liability measured at fair value, with changes in fair value recorded in profit or loss. The fair value of the DSUs was determined based on the closing price of the Company’s Common Shares on the respective balance sheet date. As at June 30, 2025, the Company reassessed the fair value of the DSUs at $ and recorded the amount as a DSU liability (December 31, 2024 - $).
| 24 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
11. RELATED PARTY TRANSACTIONS
The following amounts due to related parties are included in trade payables and accrued liabilities (Note 7).
June 30, 2025 $ | December 31, 2024 $ | |||||||
| Directors and officers of the Company | ||||||||
Included
in the amounts due to related parties at December 31, 2024, is $
These amounts are unsecured, non-interest bearing and have 30-day fixed terms of repayment with the exception of the retirement payment, as noted above.
| (a) | Related party transactions |
During
2024, EdgePoint and its affiliates, related parties of the Company, subscribed for
On
March 18, 2025, the Company closed the March 2025 Financing which included the conversion of its Term Loan held by EdgePoint and its
affiliates to equity (Note 8). The Company issued to EdgePoint and its affiliates an aggregate of Settlement Units. As of June
30, 2025, EdgePoint and its affiliates beneficially owned an aggregate of Common Shares and warrants, representing
approximately % of the outstanding Common Shares (approximately
In
connection with the Private Placement (Note 10(a)), certain insiders of the Company subscribed for an aggregate of
For
the three and six months ended June 30, 2025, the Company paid interest of $ (three months ended June 30, 2024 - $
| 25 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
| (b) | Key management personnel are defined as members of the Board of Directors and certain senior management. |
Key management compensation was related to the following:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2025 $ | 2024 $ | 2025 $ | 2024 $ | |||||||||||||
| Salaries and management fees | ||||||||||||||||
| Site operations and administration | ||||||||||||||||
| Director fees, net of DSU fair value movements | ||||||||||||||||
| Share-based compensation | ||||||||||||||||
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
ASC 820 - Fair Value Measurement establishes a three-tier fair value hierarchy. The fair value hierarchy’s three tiers are based on the extent to which inputs used in measuring fair value are observable in the market, and are as follows:
| Level 1: | Quoted prices (unadjusted) in active markets for identical assets or liabilities; |
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and |
| Level 3: | One or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability. |
Determination of fair value and the resulting hierarchy requires the use of observable market data whenever available. The classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.
The carrying value of cash and cash equivalents, trade payables and accrued liabilities approximate their fair value due to their short-term nature and therefore have been excluded from the table below. A summary of the carrying value and fair value of other financial instruments were as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||
| Classification | Carrying Value $ | Fair Value $ | Carrying Value $ | Fair Value $ | ||||||||||||||||
| DSU liability | Level 1 | |||||||||||||||||||
| Vehicle financing | Level 2 | |||||||||||||||||||
| Term loan | Level 3 | |||||||||||||||||||
| NSR option liability | Level 2 | |||||||||||||||||||
DSU liability – the fair value of the DSUs is measured using the closing price of the Company’s Common Shares at the end of each reporting period.
Vehicle financing – the fair values approximate carrying values as the interest rates are comparable to current market rates.
Term loan – the term loan was carried at amortized cost. The fair value measurement of the term loan was based on an income approach.
NSR option liability – The fair value of the NSR options is determined using a valuation model that incorporates such factors as discounted cash flow projections, metal price volatility, and risk-free interest rate. As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at June 30, 2025 and December 31, 2024 is $.
| 26 |
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2025 and 2024
(Expressed in Canadian dollars)
13. SEGMENTED INFORMATION
The Company has identified its Chief Executive Officer as its Chief Operating Decision Maker (“CODM”). The CODM evaluates the Company’s performance and segmented results based on Loss for the Period Before Other Items. The significant segment expenses reviewed by the CODM are consistent with the expense line items presented in Loss for the Period Before Other Items in the Company’s unaudited condensed interim consolidated statements of operations and comprehensive loss. The CODM uses Loss for the Period Before Other Items to assess segment performance against the Company’s planned results, and to allocate capital investment.
The
Company operates in
June 30, 2025 $ | December 31, 2024 $ | |||||||
| Current assets | ||||||||
| Canada | ||||||||
| Barbados | ||||||||
| Botswana | ||||||||
| Total | ||||||||
| Exploration and evaluation assets | ||||||||
| Botswana | ||||||||
| Property, plant and equipment | ||||||||
| Botswana | ||||||||
14. CONTINGENT LIABILITIES
There are no environmental liabilities associated with the Mines as at the acquisition dates as all liabilities incurred prior to the acquisitions are the responsibility of the sellers, BCL and TNMC. The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of June 30, 2025, there were no material rehabilitation costs for which the Company expects to incur, and management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.
15. GENERAL AND ADMINISTRATIVE EXPENSES
Details of the general and administrative expenses are presented in the following table:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2025 $ | 2024 $ | 2025 $ | 2024 $ | |||||||||||||
| Advisory and consultancy | ||||||||||||||||
| Filing fees | ||||||||||||||||
| General office expenses | ||||||||||||||||
| Insurance | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Salaries and management fees | ||||||||||||||||
| Share-based compensation | ||||||||||||||||
| Total | ||||||||||||||||
| 27 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following management’s discussion and analysis (this “MD&A”) of our financial condition and results of operation should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company and accompanying notes thereto for the quarters ended June 30, 2025 and 2024 (the “Quarterly Financial Statements”) appearing elsewhere in this Report. This discussion and analysis below includes forward-looking statements within the meaning of applicable securities laws that are subject to risks, uncertainties and other factors described in the “Risk Factors” section in Part I, Item 1A of this Report that could cause actual results to differ materially from those anticipated in these forward-looking statements as a result of various factors. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We caution you to read the “Cautionary Note Regarding Forward-Looking Statements” section of this Report.
This MD&A is intended to assist the reader to assess material changes in the financial condition of the Company during the quarter ended June 30, 2025, and the results of operations of the Company for the three-month and six-month periods ended June 30, 2025 and June 30, 2024. The Quarterly Financial Statements and the financial information contained in this MD&A were prepared in accordance with US GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.
In this MD&A, unless the context otherwise requires, references to “the Company” or “NEXM” refer to NexMetals Mining Corp. and its consolidated subsidiaries. All monetary amounts in the discussion are expressed in Canadian dollars unless otherwise indicated.
Company Overview
NEXM is a mineral exploration and development company focused on the discovery and advancement of high-quality nickel-copper-cobalt-platinum group elements (“Ni-Cu-Co-PGE”) resources. The principal assets of the Company are the Selebi Main and Selebi North nickel-copper-cobalt (“Ni-Cu-Co”) mines in Botswana and related infrastructure (together, the “Selebi Mines”), as well as the Ni-Cu-Co-PGE Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licenses (collectively, the “Selkirk Mine” and together with the Selebi Mines, the “Mines”). NEXM is committed to governance through transparency, accountability, and open communication among NEXM’s team and stakeholders.
The Company’s principal business activity is the exploration and evaluation of the Mines.
The Selebi and Selkirk Mines are permitted with 10-year mining licences, granted in 2022, and renewable upon the submission of approved mine plans and other customary conditions, and benefit from significant local infrastructure. The Company’s Selebi Mines include two shafts, the Selebi Main and Selebi North shafts, and related infrastructure such as rail, power and roads.
NEXM is headquartered in Toronto, Ontario, Canada and its common shares (the “Common Shares”) are publicly traded on the Nasdaq Capital Market (the “Nasdaq”) and the TSX Venture Exchange (the “TSXV”) under the symbol “NEXM”. Prior to June 11, 2025, the Company traded on the TSXV under its previous name and symbol, Premium Resources Ltd. and PREM, respectively.
| 28 |
Highlights and Key Developments:
| ● | On January 31, 2025, the Company filed the Selkirk Mineral Resource Estimate (“MRE”) in conformance with the SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary, entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” (the “Selkirk TRS”) and dated January 8, 2025 (with an effective date of November 1, 2024) for its Selkirk Mine. The Selkirk MRE provides a solid foundation for advancing the Selkirk deposit to an economic study. | |
| ● | On March 18, 2025, the Company closed a significant recapitalization (the “March 2025 Financing”) of the Company which included a $46.0 million non-brokered equity private placement (the “Private Placement”) and the equity conversion of its $20.9 million three-year term loan (the “Debt Conversion”) with Cymbria Corporation (“Cymbria”). The March 2025 Financing has resulted in the successful deleveraging of the Company’s balance sheet and has provided the Company with the funds necessary to advance its new strategic direction. On March 20, 2025, Morgan Lekstrom was appointed as the Company’s Chief Executive Officer. For a summary of the transactions, see “Liquidity & Capital Resources — Financings”. | |
| ● | The Company announced the following appointments to the board of directors (the “Board of Directors” or the “Board”): |
| ○ | Chris Leavy on March 25, 2025 | ||
| ○ | André van Niekerk on April 24, 2025; and | ||
| ○ | Philipa Varris on July 23, 2025. | ||
| The Company also appointed Paul Martin to Chairman of the Board, previously serving as Director and Interim Chief Executive Officer, on March 20, 2025. James K. Gowans retired as Chairman of the Board but continues as a director of the Company. The Company also announced the retirements of William O’Reilly, Don Newberry, and Norman MacDonald as directors of the Company. | |||
| ● | On April 10, 2025, the Company announced a new strategic direction for the Mines. The Company’s strategic direction is aimed at rapidly demonstrating the size potential of the Selebi North and Selebi Main deposits. The Company is aggressively executing a carefully designed exploration drilling program at the Selebi Mines while concurrently finalizing metallurgical work to identify the optimal mineral processing method to consider in a future economic study. In addition, the Company is advancing the Selkirk Mine through ongoing work programs focused on resource expansion and metallurgical flowsheet development. For more information relating to the planned activities, see “Exploration and Evaluation Activities and Mineral Properties” below. | |
| ● | On June 3, 2025, shareholders approved the Company’s adoption of a new “rolling up to 10%” long-term omnibus incentive plan which replaces the Company’s existing stock option plan, restricted share unit plan, and deferred share unit plan. | |
| ● | On June 9, 2025, the Company announced that it changed its name from “Premium Resources Ltd.” to “NexMetals Mining Corp.” On June 11, 2025, the Company’s Common Shares commenced trading on the TSXV under the new name and new stock ticker symbol, “NEXM”. | |
| ● | On June 16, 2025, the Company announced the appointment of Brett MacKay as Senior Vice President & Chief Financial Officer. | |
| ● | On June 20, 2025, the Company’s Common Shares were consolidated on the basis of twenty (20) pre-consolidated shares for every one (1) post-consolidation share in connection with the Company’s listing on the Nasdaq which requires a minimum bid price of US$4.00 per share under its initial listing requirements. | |
| ● | On July 16, 2025, the Company’s Common Shares began trading on the Nasdaq under the symbol “NEXM”. |
| ● | On July 17, 2025, the Company announced that it had received a non-binding letter of interest (“LI”) from the Export-Import Bank of the United States (“EXIM”). The LI indicates the potential for up to US $150 million in financing, with a maximum 15-year repayment tenor, to support the re-development of the Company’s Mines. |
Corporate Social Responsibility
The Company is committed to conducting its business in a socially responsible and sustainable manner, with a focus on environmental stewardship, health and safety, community engagement and ethical conduct. The Company has established policies and procedures in its Code of Business Conduct and Ethics to ensure compliance with applicable laws and regulations, as well as industry standards for responsible mining. NEXM recognizes the importance of stakeholder engagement and works closely with local communities, indigenous groups and other stakeholders to ensure their concerns and perspectives are heard and addressed.
Exploration and Evaluation Activities
The following table outlines the key milestones, estimated timing and costs related to each of the Mines, based on the Company’s reasonable expectations, intended courses of action and current assumptions and judgement, with information based as of June 30, 2025.
| Key Milestones for Project | Expected Timing of Completion | Anticipated Costs | ||
| Exploration and Development | ||||
| Selebi Mines and Selkirk drill programs | Ongoing, costs to September 30, 2025 | $3.3 million to $3.7 million | ||
| Selebi Mines underground development | Ongoing, costs to September 30, 2025 | $0.6 million to $0.9 million | ||
| Capital expenditures(1) | Ongoing, costs to September 30, 2025 | $0.8 million to $1.2 million | ||
| Studies & Operating Costs | ||||
| Advancing project economics(2) | Ongoing, costs to September 30, 2025 | $2.4 million to $2.8 million | ||
| Operating costs | Ongoing, costs to September 30, 2025 | $3.6 million to $3.9 million |
Notes:
| (1) | Includes mobile equipment refurbishments and electrical and communications equipment in support of drill programs and underground development. | |
| (2) | Includes advancing project economics through further metallurgical sampling and testing, evaluation of XRT (“X-ray Transmission”) pre-concentration sorting, and related flowsheet design. |
| 29 |
Readers are cautioned that the above represents the opinions, assumptions and estimates of management considered reasonable at the date the statements are made and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those described above. See “Cautionary Note Regarding Forward Looking Statements”.
Mineral Properties
The information that follows relating to the Selebi Mines is derived from, and in some instances is an extract from, the Selebi Technical Report Summary entitled “S-K 1300 Technical Report Summary Selebi Mines, Central District, Republic of Botswana” with an effective date of June 30, 2024 and a signature date of December 17, 2024 prepared by SLR Consulting (Canada) Ltd. (the “Selebi TRS”), prepared in compliance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K.
The information that follows relating to the Selkirk Mine is derived from, and in some instances is an extract from, the Selkirk Technical Report Summary entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” with an effective date of November 1, 2024 and a signature date of January 8, 2025 prepared by SLR Consulting (Canada) Ltd., prepared in compliance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K.
The qualified persons of SLR Consulting (Canada) Ltd. meet the qualifications specified under the definition of “qualified person” under Item 1300 of Regulation S-K. Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the Selebi TRS and Selkirk TRS, which have been included as Exhibit 96.1 and 96.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, respectively. In the event that we determine that any modifying factors, estimates and other scientific and technical information in the reports materially change, we may update or file a new technical report in the future. The Selebi Mines and Selkirk Mine are exploration stage properties.
Selebi Mines, Botswana
The Selebi Mines are located in Botswana approximately 150 km southeast of the city of Francistown, and 410 km northeast of the national capital Gaborone. The Selebi Mines are readily accessed via paved and gravel roads from the town of Selebi-Phikwe, located just north of the mining licence. With a population of approximately 43,000, the town is accessed via a well-maintained paved road that branches due east from the major A1 highway at the town of Serule, 57 km from the Selebi Mines.
The Selebi Mines infrastructure includes two previously operating mines, Selebi Main (#2 Shaft) and Selebi North (#4 Shaft), and associated surface infrastructure.
The Selebi Mines consist of a single mining licence covering an area of 11,504 hectares. The mining licence is centred approximately at 22°03’00”S and 27°47’00”E. Mining licence 2022/1L was granted to PNRPL on January 31, 2022, over the Selebi Mines deposits discovered under mining licence 4/72. The original licence which had been granted to BCL Limited (“BCL”) on March 7, 1972, which covered both Selebi and Phikwe project areas, was amended several times and renewed once, and was set to expire on March 6, 2022. The current mining licence is limited to the Selebi Main and Selebi North deposits and their surrounding areas, expires May 26, 2032, and excludes the Phikwe mines and associated infrastructure.
Selebi Mines Mineral Resource Estimate, June 30, 2024
| Tonnage | Grade | Contained Metal | ||||||||||||||||||||
| Classification | Deposit | (Mt) | (% Cu) | (% Ni) | (000 t Cu) | (000 t Ni) | ||||||||||||||||
| Indicated | Selebi North | 3.00 | 0.90 | 0.98 | 27.1 | 29.5 | ||||||||||||||||
| Total Indicated | 3.00 | 0.90 | 0.98 | 27.1 | 29.5 | |||||||||||||||||
| Inferred | Selebi Main | 18.89 | 1.69 | 0.88 | 319.2 | 165.5 | ||||||||||||||||
| Selebi North | 5.83 | 0.90 | 1.07 | 52.5 | 62.4 | |||||||||||||||||
| Total Inferred | 24.72 | 1.50 | 0.92 | 371.7 | 227.9 | |||||||||||||||||
The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the Selebi TRS. Readers are cautioned not to assume that all or any part of Indicated Mineral Resources will ever be converted into Mineral Reserves as defined by S-K 1300. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.
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Selebi North
In 2023, an underground resource and exploration drilling program at Selebi North was initiated. The program was a combination of infill and exploration drilling to follow the extension of the mineralization down-dip and down-plunge. The Company reported the final assays from the 2023/2024 in-fill drill program on April 17, 2025. Supplementary infill drilling has been strategically moved into later work programs.
In March 2025, the Selebi North Underground Resource Expansion Drilling program commenced with one drill rig targeting Borehole Electromagnetic (“BHEM”) plates located down-dip and down-plunge from the N3, N2, and South Limbs. During the second quarter of 2025, drill hole SNUG-25-184 intersected mineralization in the South Limb 183 metres down-plunge from the Selebi Mines MRE, and in the N2 Limb 300 metres down-plunge of the MRE. Highlights from this hole included 13.50 metres of 3.68% CuEq1 (1.13% Cu, 1.24% Ni, 0.06% Co) in the South Limb and 6.25 metres of 2.16% CuEq1 (0.62% Cu, 0.75% Ni, 0.04% Co) in the N2 Limb. A BHEM survey completed in SNUG-25-184 revealed strong off-hole conductors, confirming the South Limb and N2 zones remain open down-plunge.
Follow-up hole SNUG-25-186 was drilled to test these conductors and intersected South Limb mineralization 132 metres down-plunge of SNUG-25-184. Highlights from this hole included 16.25 metres of 3.06% CuEq1 (1.13% Cu, 0.94% Ni). As a result, South Limb mineralization has been extended 315 metres down-plunge beyond the 2024 Selebi Mines MRE, representing an increase in the Selebi North South Limb plunge extent by 35%.
During the quarter, new mineralization was also discovered in recently completed drill hole SNUG-25-189 which includes 5.20 metres of mineralization at South Limb and 15.50 metres of mineralization at N2 Limb. Assays for SNUG-25-189 are pending.
During 2025 and up to the date of this Report, the Company has drilled approximately 5,123 metres in 8 holes as part of the Selebi North Underground Resource Expansion Drilling program. Assays for a total of approximately 38,139 metres across 86 completed holes at Selebi North have not been accounted for in the 2024 Selebi Mines MRE. All core is sampled and sent to ALS Chemex in Johannesburg for analysis. All holes are surveyed with a gyro instrument and selected holes are surveyed with BHEM geophysical tools.
Selebi Main
The Company has implemented a surface drilling program at Selebi Main to investigate BHEM responses beyond the end of several holes, interpreted to be caused by a potential third parallel mineralized horizon beneath the two known zones. The initial drill testing has been through the extension of historic drill holes, to target a large conductor interpreted to lie 150 to 200 metres beneath the Selebi Main resource. During 2025 and up to the date of this Report, the Company has extended 3 historic drillholes by approximately 768 metres. Although a thick zone of altered amphibolite host rock was intersected, no mineralization was present in the original target area. Subsequent BHEM surveys indicate that the conductor has a steeper dip than the known resources; follow-up drilling is planned. With this work, the Company is investigating the potential of a new mineralized horizon. The modeled BHEM plate is situated outside the initial Selebi Mines MRE extents.
1CuEq was calculated using the formula CuEq=Cu+2.06*Ni assuming long-term prices of US$10.50/lb Ni and US$4.75/lb Cu, and nickel and copper recoveries of 72.0% and 92.4%, respectively, derived from metallurgical studies which consider a conceptual bulk concentrate scenario.
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Selebi Hinge
During the quarter, the Company commenced the surface drilling program targeting BHEM plates in the 2-kilometre gap zone between the Selebi North and Selebi Main deposits known as the “Hinge”. The program is designed to rapidly demonstrate the broader scale potential of the Selebi Mines and to further support the Company’s core thesis that these deposits are larger than previously recognized.
The two company-owned underground U5 drills were converted into surface A5 drills and commenced drilling the first two holes of the deep drilling program, with one drill testing large BHEM plates located down-plunge and down-dip from the Selebi Main mine horizon and trending toward the Selebi North deposit, and the second drill testing BHEM plates located 500 metres down-plunge and down-dip from the Selebi North deposit and trending toward Selebi Main. A large drill capable of drilling to depths of 2,500 metres (NQ core) arrived on site in July and is currently extending one of these two holes to its final target depth. To date, a total of 2,700 metres in 2 holes have been completed.
Further information on assay results can be found in the Company’s news releases which are available on the Company’s website (https://nexmetalsmining.com/) (the Company’s website is not incorporated in this Report). Assay results are publicly released as they are received and confirmed by the Company.
Studies
The historical BCL operations consisted of an integrated mining, concentrating and smelting complex which operated for over 40 years over the Selebi Phikwe project area. The smelter processed Selebi and Phikwe concentrates and toll treated nickel concentrates received from the Nkomati Nickel Mine and the Phoenix Mine. The concentrator plant and smelter were placed on care and maintenance in 2016 and are located adjacent to the Selebi Mines at the historical Phikwe Mine.
NEXM intends to use pre-concentration methods to separate the minerals from waste materials to produce a mill feed and flotation to produce a concentrate for commercial sale, or for further refining, and does not plan to restart the existing concentrator or smelter.
Metallurgical sampling and testing iterations from Selebi flotation studies are ongoing. On July 28, 2025, the Company reported initial results from its bulk test work using XRT pre-concentration sorting at the Selebi Mines. The initial results demonstrated the potential to significantly reduce the amount of waste rock being sent to the mill and enhance the head grade by over 15% from previous tests. By reducing the volume of waste into the mill, the waste volume directed to grinding and flotation circuits is substantially reduced. This is expected to have a positive impact on processing including energy, reagent and water usage, reduced downstream tailings, and lower expected operating costs. XRT pre-concentration sorting has the potential to be applied at both the Selebi Mines and Selkirk Mine.
The Company also commenced the hydrometallurgical test program during the quarter, the first phase of which will test the recoverability of Selebi concentrates.
Structural reviews are underway along with 3D modelling for the lower levels of the Selebi Mines to optimize drillhole positioning.
During the three and six months ended June 30, 2025, the Company incurred $8,620,305 (three months ended June 30, 2024 - $6,223,952) and $14,614,458 (six months ended June 30, 2024 - $12,693,881), respectively, in exploration and evaluation expenditures on the Selebi Mines. The Company incurred $8,735,401 to acquire the Selebi Mines, and has incurred a further $83,911,034 in exploration and evaluation expenditures project-to-date as at June 30, 2025.
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Outlook
The Selebi North Underground Resource Expansion Drilling program is expected to continue throughout the remainder of the year for further testing of the BHEM plates. Drill hole SNUG-25-192, currently in progress, is targeting the southern strike extent between SNUG-25-184 and SNUG-25-186 to further evaluate the continuity and scale of both the South Limb and N2 mineralized systems.
The Selebi Hinge drilling offers a strategic opportunity for potential substantial resource expansion. With the pre-collaring of the holes well underway and the recent mobilization of the more powerful deep drill to extend these holes to final target depths, the Company expects to make significant progress on the program through the remainder of the year. Drilling is expected to consist of approximately 12,500 metres in 6 holes over an estimated period of 7 months.
In addition to the drilling, the Company is advancing metallurgical studies including hydrometallurgical test work. Flowsheet designs are in progress, taking into consideration the ongoing XRT pre-concentration sorting evaluations. The Company plans to continue advancing the 3D modelling work to continually optimize drill hole placement.
Selkirk Mine, Botswana
The Selkirk Mine is located in the northeast of Botswana approximately 28 km southeast of the city of Francistown, and 450 km northeast of the national capital Gaborone.
The Selkirk Mine is accessed year-round via paved and gravel roads from Gaborone and Francistown. The Selkirk Mine infrastructure includes relict surface infrastructure supporting the historical underground mine, and the original decline.
The Selkirk Mine consists of a single mining licence covering an area of 1,458 hectares (14.58 km2) and four prospecting licences covering a total of 12,670 hectares (126.7 km2). The mining licence, 2022/7L, is centred approximately at 21°19’13” S and 27°44’17” E and is held by PNGPL, a subsidiary of NEXM. The mining licence was renewed for ten years commencing on May 27, 2022, ending on May 26, 2032. The four prospecting licences (PL050/2010, PL051/2010, PL210/2010, and PL071/2011) were renewed during the first quarter of 2025 and will expire March 31, 2027.
Exploration
On January 31, 2025, the Company filed the Selkirk MRE in conformance with the SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary, entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” and dated January 8, 2025 (with an effective date of November 1, 2024) for its Selkirk Mine.
Selkirk Mine Mineral Resource Estimate, November 1, 2024:
| Classification | Tonnage | Grade | Contained Metal | ||||||||||||||||||||||||||||||||||
| (Mt) | (% Cu) | (% Ni) | (g/t Pd) | (g/t Pt) | (000 t Cu) | (000 t Ni) | (000 oz Pd) | (000 oz Pt) | |||||||||||||||||||||||||||||
| Inferred | 44.2 | 0.30 | 0.24 | 0.55 | 0.12 | 132 | 108 | 775 | 174 | ||||||||||||||||||||||||||||
The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the Selkirk TRS. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.
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The Selkirk MRE provides a solid foundation for advancing the Selkirk deposit to an economic study. It was prepared using results from 232 surface and 10 underground historical drillholes drilled between 2003 and 2016, five 2016 drillholes sampled by NEXM in 2021, and 17 historical drillholes resampled in 2024. Analytical results from NEXM re-sampling showed higher platinum group element values compared to historic results. Cobalt, a potentially valuable by-product, has not been included in the Selkirk MRE as cobalt analyses are not consistently available throughout the deposit. Planned metallurgical studies will determine payability of cobalt at the Selkirk Mine.
During the quarter, the Company commenced a 12-hole surface drilling program. The two drill rigs were focused on twinning 11 historical holes to validate legacy data and one hole to fill a gap in the resource. The surface drilling program was collecting fresh HQ-sized core to support metallurgical flowsheets, generate material for preliminary XRT pre-concentration sorting tests, and to support the potential expansion and upgrade of the resource. In July 2025, the Company commenced a 3-hole exploration program targeting untested historical Versatile Time-Domain Electromagnetic (“VTEM”) anomalies located immediately south of the Selkirk resource. The Company has completed the 12-hole surface drilling program which consisted of 3,903 metres. Up to the date of this Report, the Company has drilled 139 metres in 2 exploration holes.
The Company continued its re-sampling program of historic drill core throughout the first half of 2025, targeting both resource expansion and reclassification in an updated MRE and to obtain complete PGE analysis. An additional 34 historical holes have been identified for resampling. To date, 29 of 34 holes have been processed, relogged and resampled for a total of 8,707 metres. The 2025 program has confirmed high-grade mineralization including 8.69% CuEq2 and elevated Rhodium outside of the Selkirk MRE.
Studies
Metallurgical studies are ongoing, focused on supporting the development of a modern metallurgical flowsheet including the potential for XRT pre-concentration. Sample preparation works for separate copper and nickel concentrate testing are also underway. This work will be incorporated into an updated Mineral Resource Estimate and future economic evaluations.
During the three and six months ended June 30, 2025, the Company incurred $1,603,705 (three months ended June 30, 2024 - $322,642) and $1,705,673 (six months ended June 30, 2024 - $519,139), respectively, in exploration and evaluation expenditures on the Selkirk Mine. The Company incurred $327,109 to acquire the Selkirk Mine, and has incurred a further $4,764,175 in exploration and evaluation expenditures project-to-date as at June 30, 2025.
Outlook – Selkirk
The Company has expanded the exploration efforts to include a targeted electromagnetic (“EM”) program. With the metallurgical drilling program completed, the Company has advanced to the next phase of exploration. This next phase focuses on outlining high-grade mineralization through BHEM, the same technology used at the Selebi Mines, and drilling of untested historical VTEM anomalies located immediately south of the Selkirk resource.
The BHEM surveys were completed in July 2025 in all metallurgical holes. Two drills are currently targeting modeled VTEM conductors, previously defined by a historical 2012 heliborne geophysical survey with no indication of drill testing. These conductors are situated near known mineralization within the existing mining license and represent potential new satellite discoveries.
2 CuEq% calculated using the formula Cu% + Ni%*(55.605/53.913) + Pd g/t*(22.948/53.913) + Pt g/t*(14.891/53.913) from the Selkirk Technical Report.
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Other Properties
Canadian Nickel Projects - Sudbury, Ontario
Post Creek Property
The Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 64 unpatented mining claim cells, covering a total area of 847 hectares held by the Company. The Company acquired the property through an option agreement in April 2010, which was subsequently amended in March 2013. As at the date of this Report, the Company holds a 100% interest in the Post Creek property and is obligated to pay advances on a net smelter return of $10,000 per annum, which will be deducted from any payments to be made under the net smelter return.
The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall deposits and accounts for a significant portion of all ore mined in the Sudbury nickel district and, as such, represents favourable exploration targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks of the Sudbury Igneous Complex which both represent potential controls on mineralization.
No exploration work was completed in the first half of 2025 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing until 2030. No material expenditures or activities are contemplated on the Post Creek property at this time.
Halcyon Property
The Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships and consists of 62 unpatented mining cells for a total of 1,024 hectares. Halcyon is adjacent to the Post Creek property and is approximately two kilometres north of the producing Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this Report, the Company holds a 100% interest in the Halcyon property and is obligated to pay advances on a net smelter return of $8,000 per annum, which will be deducted from any payments to be made under the net smelter return.
No exploration work was completed in the first half of 2025 on the Halcyon Property. The claims are in good standing through 2030. No material expenditures or activities are contemplated on the Halcyon property at this time.
Maniitsoq Nickel-Copper-PGM Project, Southwest Greenland
In December 2024, the Company notified the Government of Greenland that it was relinquishing its licences effective immediately. The Company is expecting final approval from authorities pending the removal of remaining structures. The Company provisioned $140,000 for the three and six months ended June 30, 2025 (three and six months ended June 30, 2024 - $nil) for the remediation work at the property.
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Selected Financial Information and Financial Position
The following amounts are derived from the Company’s unaudited condensed interim consolidated financial statements prepared under US GAAP.
| In Canadian dollars, except number of shares outstanding | Three months ended June 30, | Six months ended June 30, | ||||||||||||||
| Income Statement | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net loss | 15,088,746 | 9,793,192 | 30,317,076 | 19,140,372 | ||||||||||||
| Weighted average number of Common Shares outstanding – basic and diluted | 21,449,318 | 7,748,629 | 16,341,832 | 7,609,994 | ||||||||||||
| Basic and diluted loss per share | 0.70 | 1.26 | 1.86 | 2.52 | ||||||||||||
| As at | ||||||||
| Balance Sheet | June 30, 2025 | December 31, 2024 | ||||||
| Additional paid-in capital | 215,735,416 | 145,025,333 | ||||||
| Common Shares outstanding | 21,449,318 | 9,285,424 | ||||||
| Total assets | 47,053,874 | 24,953,469 | ||||||
| Current liabilities | 5,496,030 | 4,207,753 | ||||||
Net Loss
The net loss of $15,088,746 for the three months ended June 30, 2025 was higher by $5,295,554 compared to the prior year comparable period of $9,793,192, largely due to an increase in general exploration expenses of $3,742,820 and an increase in investor relations and communications of $1,848,659. The net loss of $30,317,076 for the six months ended June 30, 2025 was higher by $11,176,704 compared to the prior year comparable period of $19,140,372, largely due to the loss on the Term Loan extinguishment of $5,982,434, an increase in general exploration expenses of $3,164,138 and an increase in investor relations and communications of $1,983,353.
Total Assets
Total assets as at June 30, 2025 increased by $22,100,405 from the December 31, 2024 balance largely as a result of higher cash balances at June 30, 2025. In March 2025, the Company closed a Private Placement for aggregate gross proceeds of $46,000,000 (see “Liquidity & Capital Resources — Financings”).
Current Liabilities
Current liabilities as at June 30, 2025 increased by $1,288,277 from December 31, 2024 largely due to an increase in trade payables and accrued liabilities of $918,936 as the Company ramped up exploration and evaluation activities in the second quarter of 2025.
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Overall Performance and Results of Operations
As at the date of this Report, the Company has not earned revenue nor proved the economic viability of its projects. The Company’s expenses are not subject to seasonal fluctuations or general trends other than factors affecting costs such as inflation and input prices. The Company’s expenses and cash requirements will fluctuate from period to period depending on the level of activity at the projects, which may be influenced by the Company’s ability to raise capital to fund these activities. Comparisons of activity made between periods should be viewed with this in mind. The Company’s quarterly results may be affected by many factors such as timing of exploration activity, share-based compensation costs, capital raised, marketing activities and other factors that affect the Company’s exploration and evaluation activities.
The following table summarizes the Company’s operations for the three- and six-month periods ended June 30, 2025 and June 30, 2024:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2025 $ | 2024 $ | 2025 $ | 2024 $ | |||||||||||||
| EXPENSES | ||||||||||||||||
| General exploration expenses | 10,337,096 | 6,594,276 | 16,472,873 | 13,308,735 | ||||||||||||
| Depreciation and amortization | 431,322 | 369,674 | 1,067,150 | 733,902 | ||||||||||||
| General and administrative expenses | 1,915,022 | 1,735,268 | 3,575,404 | 2,932,968 | ||||||||||||
| Investor relations and communications | 1,934,047 | 85,388 | 2,143,445 | 160,092 | ||||||||||||
| Director fees | 248,116 | 283,664 | 248,116 | 564,913 | ||||||||||||
| Fair value movement of DSUs | 379,759 | (93,914 | ) | 368,935 | (320,516 | ) | ||||||||||
| Net foreign exchange loss | 31,818 | 147,989 | 283,243 | 214,002 | ||||||||||||
| LOSS FOR THE PERIOD BEFORE OTHER ITEMS | 15,277,180 | 9,122,345 | 24,159,166 | 17,594,096 | ||||||||||||
| Interest (income) expense, net | (188,434 | ) | (99,498 | ) | (252,895 | ) | 15,821 | |||||||||
| Interest expense and accretion on Term Loan | - | 770,345 | 428,371 | 1,530,455 | ||||||||||||
| Loss on Term Loan extinguishment | - | - | 5,982,434 | - | ||||||||||||
| NET LOSS FOR THE PERIOD | 15,088,746 | 9,793,192 | 30,317,076 | 19,140,372 | ||||||||||||
| ● | General exploration expenses increased by $3,742,820 and $3,164,138 for the three and six months ended June 30, 2025, respectively, as the Company ramped up drilling, studies and other evaluation work during the second quarter of 2025 at both the Selebi Mines and Selkirk Mine, aimed at rapidly demonstrating the size potential of the Mines. | |
| ● | Depreciation increased by $61,648 and $333,248 for the three and six months ended June 30, 2025, respectively, due to significant property, plant and equipment acquisitions over the past twelve months. Depreciation for the six months ended June 30, 2025 also includes the acceleration of depreciation on certain software assets. | |
| ● | General and administrative expenses increased by $179,754 and $642,436 for the three and six months ended June 30, 2025, respectively, due to higher share-based compensation expense. The Company granted 287,500 Options and 158,750 RSUs in March 2025, and a further 11,500 Options in April 2025. There were no Options or RSUs granted during the prior year comparable periods. | |
| ● | Investor relations and communications increased by $1,848,659 and $1,983,353 for the three and six months ended June 30, 2025, respectively, a result of the effort to create market awareness about the Company’s new strategic direction and related activities at the Mines. The Company incurred costs attending conferences, meeting with investors and engaging investor and communication services. The increase in spend was the result of a planned expansion of additional marketing strategies in the quarter. |
| ● | Director fees decreased by $35,548 and $316,797 for the three and six months ended June 30, 2025, respectively, primarily due to amendments to the Company’s board compensation plan in 2025 that reduced overall director remuneration. Additionally, only the cash retainer portion of the 2025 director fees has been paid to date, with the issuance of DSUs expected later in 2025. | |
| ● | Fair value movement of DSUs increased by $473,673 and $689,451 for the three and six months ended June 30, 2025, respectively, due to positive mark-to-market adjustments from the Company’s higher Common Share price. | |
| ● | Interest income and expense represents interest earned on cash and cash equivalent deposits and interest incurred on the Company’s vehicle financing and previous lease liabilities. Net interest income increased by $88,936 and $269,716 for the three and six months ended June 30, 2025, respectively. The increase was primarily driven by higher interest income from increased cash balances. In addition, interest expense was lower in 2025 as the final instalments on the drilling equipment and Syringa Lodge leases were paid in Q2 2024 and Q4 2024, respectively, eliminating related lease interest charges in the current periods. | |
| ● | Interest expense and accretion on Term Loan comprises accrued interest on the Company’s now-extinguished Term Loan (see “Liquidity & Capital Resources – Financings” below), as well as the accretion of related transaction costs and fees. The decrease of $770,345 and $1,102,084 for the three and six months ended June 30, 2025, respectively, relates to the conversion of the Term Loan to equity during the first quarter of 2025. | |
| ● | Loss on Term Loan extinguishment represents the difference between the fair value of the Settlement Units (defined in “Liquidity & Capital Resources – Financings”) issued and the carrying amount of the Term Loan on the date it was converted to equity. |
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Cash Flows
The following table summarizes the Company’s cash flows:
Six months ended June 30, | ||||||||
2025 $ | 2024 $ | |||||||
| Cash flows | ||||||||
| Operating activities | (21,685,611 | ) | (16,679,312 | ) | ||||
| Investing activities | (1,510,130 | ) | (1,120,588 | ) | ||||
| Financing activities | 43,715,146 | 26,677,431 | ||||||
| Increase (decrease) in cash and cash equivalents before effects of exchange rate changes | 20,519,405 | 8,877,531 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (161,381 | ) | (41,642 | ) | ||||
| Change in cash and cash equivalents for the period | 20,358,024 | 8,835,889 | ||||||
| Cash and cash equivalents at the beginning of the period | 6,105,933 | 19,245,628 | ||||||
| Cash and cash equivalents at the end of the period | 26,463,957 | 28,081,517 | ||||||
Operating Activities
Net cash used in operating activities for the six months ended June 30, 2025 increased by $5,006,299 compared to the prior year comparable period resulting from: (i) an increase in general exploration expenses as the Company ramped up drilling, studies and other evaluation work during the second quarter of 2025 at both the Selebi Mines and Selkirk Mine; and (ii) an increase in investor relations and communications expenditures in an effort to create market awareness about the Company’s new strategic direction and related activities at the Mines.
Investing Activities
Key investing activities relate to the acquisition of property, plant and equipment. Net cash used in investing activities for the six months ended June 30, 2025 increased by $389,542 compared to the prior year comparable period. The higher spending in 2025 primarily relates to the acquisition of a deep drill for the Selebi Hinge zone, kits for converting two underground U5 drills into surface A5 drills, and light duty vehicles.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2025 increased by $17,037,715 compared to the prior year comparable period. The increase primarily reflects the closing of a Private Placement in March 2025 for gross proceeds of $46,000,000. In the comparative period, the Company closed a financing in June 2024 for gross proceeds of $27,454,421 (see “Liquidity and Capital Resources – Financings”).
Liquidity & Capital Resources
The Company, being in the exploration and evaluation stage, is subject to risks and challenges similar to companies in a comparable stage of exploration and evaluation. These risks include the challenges of securing adequate capital for exploration and advancement of the Company’s material projects, operational risks inherent in the mining industry, and global economic and metal price volatility. There is no assurance management will be successful in its endeavors.
The properties in which the Company currently has an interest are in the pre-revenue stage. Operating cash outflows are highly dependent upon the exploration and evaluation programs taking place at that time. As such, the Company is dependent on external financing to fund its activities and the advancement of its projects. In order to carry out the planned project advancement and cover administrative costs, the Company will need to use its existing working capital and raise additional amounts as needed. Further, the second instalment under the Selebi APA of $34,107,500 (US$25,000,000) is due January 31, 2026 (see “Contractual Obligations and Contingencies”), which may require the Company to raise additional funding as the Company does not currently have sufficient funds to meet this obligation.
As at June 30, 2025, the Company had $26,463,957 in available cash and cash equivalents (December 31, 2024 – $6,105,933), with no source of operating cash flows, nor any significant credit lines in place. As at June 30, 2025, the Company had working capital (calculated as total current assets less total current liabilities) of $23,875,340 (December 31, 2024 – $3,410,490). The increase in working capital is a result of the cash proceeds received from the Private Placement.
Financings
2025
On March 18, 2025, the Company closed a financing transaction which included a non-brokered private placement and the conversion into equity of its $20,882,353 three-year Term Loan with Cymbria, the lender and an affiliate of the Company’s largest shareholder, EdgePoint Investment Group Inc. (“EdgePoint”), which bore interest at a rate of 10% per annum.
The Company issued to Cymbria an aggregate of 3,480,392 units (each, a “Settlement Unit”) at a deemed issue price of $6.00 per Settlement Unit in full satisfaction of the $20,882,353 principal amount outstanding under the Term Loan. Accrued interest under the Term Loan, up to the date of the Debt Conversion, in the amount of $268,896 was settled in cash. Each Settlement Unit consisted of one Common Share of the Company and one Common Share purchase warrant (each, a “Settlement Warrant”) of the Company.
Each Settlement Warrant entitles the holder to acquire one additional Common Share of the Company at a price of $8.00 per Common Share until March 18, 2028. If, at any time prior to the expiry date, the volume-weighted average trading price of the Common Shares is at least $40.00 per Common Share for a period of 20 trading days, the Company may, at its option, accelerate the expiry date with 30 days’ notice to the Settlement Warrant holders.
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The Private Placement consisted of issuing 7,666,667 units (each, a “Private Placement Unit”) of the Company at a price of $6.00 per unit for aggregate gross proceeds of $46,000,000. Each Private Placement Unit consisted of one Common Share of the Company and one-half of one Common Share purchase warrant (each whole warrant, a “Private Placement Warrant”) of the Company. Each Private Placement Warrant entitles the holder to acquire one additional Common Share at a price of $11.00 per share until March 18, 2028.
In connection with the March 2025 Financing, the Company issued: (i) 200,000 Common Shares to TriView Capital Ltd. (“TriView”) for its services as finder; (ii) 450,000 Common Shares to Fiore Management and Advisory Corp. (“Fiore”) and 187,500 Common Shares to Bowering Projects Ltd. (“Bowering”) for certain advisory services; and (iii) 179,335 Common Shares to a financial advisor for financial advisory services. In addition to the Common Shares, the Company incurred various legal, listing and financing fees payable in cash totalling $2,371,203.
As at June 30, 2025, the Company has expended $17,582,633 of the Private Placement net proceeds. While the Company has arranged this additional financing, the proceeds are intended for the advancement of exploration and evaluation activities at the Mines and for general corporate and working capital purposes. Subject to any changes in the Company’s operational plan, this transaction will provide the Company with the funds required to advance its planned activities and cover administrative costs into the first quarter of 2026. Therefore, the Company will need to arrange additional financing to meet its commitments under the asset purchase agreements (see “Contractual Obligations and Contingencies”).
2024
In June of 2024, the Company closed two tranches of a non-brokered private placement offering of units of the Company, pursuant to which the Company issued a total of 1,762,820 units at a price of $15.60 per unit for gross proceeds of approximately $27.5 million (the “June 2024 Financing”). Each unit was comprised of one Common Share and one Common Share purchase warrant. As at June 30, 2025, the Company has expended all the June 2024 Financing.
Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future. Factors that could affect the availability of financing include the progress and results of ongoing exploration and evaluation activities at the Mines, the state of international debt and equity markets, and investor perceptions and expectations with respect to global commodity markets. If necessary, depending on the amount of funding raised, the Company may explore opportunities to defer the timing of certain discretionary expenditures and the Company’s planned initiatives and other work programs may be postponed, or otherwise revised.
Going Concern
The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable operations and its ability to obtain adequate financing. The Company incurred a net loss of $15,088,746 and $30,317,076 for the three and six months ended June 30, 2025, respectively (net loss of $9,793,192 and $19,140,372 for the three and six months ended June 30, 2024, respectively). To date, the Company has not generated profitable operations from its resource activities. It is not possible to predict whether future financing efforts will be successful or if the Company will attain a profitable level of operations. These material uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities, and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material. In assessing whether a going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the date of this Report.
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Contractual Obligations and Contingencies
As of June 30, 2025, the Company had commitments for capital expenditures over the next 12 months of $7,180 and the following other contractual obligations and commitments:
Selebi Mines
As per the Selebi APA, the aggregate purchase price payable to the seller for the Selebi Mines is the sum of US$56,750,000 which amount shall be paid in three instalments:
| ● | US$1,750,000 payable on the closing date. This payment has been made. The Company also made care and maintenance funding contributions in respect of the Selebi Mines from March 22, 2021, to the closing date of US$5,178,747. |
| ● | US$25,000,000 upon the earlier of: (i) approval by the Botswana Ministry of Mineral Resources, Green Technology and Energy Security (“MMRGTES”) of the Company’s Section 42 and Section 43 applications (for the further extension of the mining licence and conversion of the mining licence into an operating licence, respectively); and (ii) January 31, 2026, the expiry date of the study phase. |
| ● | The third instalment of US$30,000,000 is payable on the completion of mine construction and production start-up by the Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications. |
As per the terms and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and return the Selebi Mines to the liquidator if the Company determines that the Selebi Mines are not economical. The Company also has an option to pay in advance the second and third payments if the Company determines that the Selebi Mines are economical. The Company’s accounting policy is to measure and record contingent consideration when the conditions associated with the contingency are met. As of June 30, 2025, none of the conditions of the second and third instalments have been met, hence these amounts are not accrued in the Financial Statements.
In addition to the Selebi APA, the purchase of the Selebi Mines is also subject to a royalty agreement as well as a contingent consideration agreement with the liquidator. The royalty agreement consists of a net smelter royalty (“NSR”) of 2% on the net value of sales of concentrate or other materials with respect to production from the Selebi mining licence, of which the Company has the right to buy-back 50%. The contingent consideration agreement consists of two components: (i) a sliding scale payment of US$0.50/tonne of ore up to US$1.40/tonne of ore with respect to the discovery of new mineable deposits greater than 25 million tonnes of ore from a base case of 15.9 million tonnes, with a minimum grade of 2.5% nickel equivalent, accrued at the time of a decision to mine; (ii) price participation of 15% on post-tax net earnings directly attributable to an increase of 25% or more in commodity prices, on a quarterly basis, for a period of seven years from the date of first shipment of concentrate or other materials.
Both the Selebi Mines and Selkirk Mine are subject to a royalty payable to the Botswana Government of 5% of all precious metals sales and 3% of all base metals sales.
Phikwe South and the Southeast Extension
In August 2023, the Company announced that it had entered into a binding commitment letter with the liquidator of BCL to acquire a 100% interest in two additional deposits, Phikwe South and the Southeast Extension, located adjacent to and immediately north of the Selebi North historical workings. The agreement has since lapsed and on August 11, 2025, the Company informed the liquidator of BCL that it would no longer be pursuing the acquisition of the Phikwe South and the Southeast Extension deposits.
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Selkirk Mine
In regard to the Selkirk Mine, the purchase agreement does not provide for a purchase price or initial payment for the purchase of the assets. The Selkirk purchase agreement provides that if the Company elects to develop Selkirk first, the payment of the second Selebi instalment of US$25 million would be due upon the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications (for the further extension of the Selkirk mining licence and conversion of the Selkirk mining licence into an operating licence, respectively). For the third Selebi instalment of US$30 million, if Selkirk were commissioned earlier than Selebi, the payment would trigger on Selkirk’s commission date. The Selkirk APA provides for a three-year study phase expiring August 17, 2025, which can be extended for one year with written notice to the liquidator. The Company has submitted the written notice and, as of August 13, 2025, is awaiting formal acceptance by the liquidator.
In addition to the Selkirk purchase agreement, the purchase of the Selkirk Mine is also subject to a royalty agreement as well as a contingent consideration agreement with the liquidator. The royalty agreement consists of an NSR of 1% on the net value of sales of concentrate or other materials with respect to production from the Selkirk mining licence, which the Company has the right to buy-back in full. The contingent consideration agreement is on similar terms as the Selebi Mines contingent consideration.
NSR Option
The Company received $2,750,000 (the “Option Payment”) from Cymbria for their right to participate in the Company’s right to repurchase one-half of the Selebi NSR and the entirety of the Selkirk NSR. Cymbria also has the right: (i) at any time following the date of any buyback exercise notice from PNRP and/or PNGP and prior to the first anniversary of sale of product, to terminate the option and receive from PNRP and/or PNGP a refund of the related option price paid by Cymbria; (ii) upon receipt from PNRP and/or PNGP of any termination, settlement or waiver of the buyback right or royalty agreement and prior to the first anniversary of sale of product, to exercise the option or terminate the option, and if terminated PNRP and/or PNGP shall refund the related option price paid by Cymbria; (iii) to exercise the option and compel PNRP and/or PNGP to exercise the buyback right at any time within the first nine months immediately following the first anniversary of sale of product and not less than 60 days prior to the date of exercise of the buyback right; and (iv) to require PNRP and/or PNGP to repurchase the option from Cymbria for an amount equal to the option price at any time commencing on the first anniversary of sale of product, provided PNRP and/or PNGP have not provided a buyback exercise notice or notice of any termination, settlement or waiver of the buyback right or royalty agreement to Cymbria.
Contingencies
There are no environmental liabilities associated with the Mines as at the acquisition dates as all liabilities incurred prior to the acquisitions are the responsibility of the sellers, BCL and Tati Nickel Mining Company (“TNMC”). The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of June 30, 2025, there were no material rehabilitation costs for which the Company expects to incur, and management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.
The Company’s exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions in which the Company operates. It is not possible to estimate any future contingent liabilities and the impact on the Company’s operating results due to future changes in the Company’s development of its projects or future changes in such laws and environmental regulations.
Related Party Transactions
Key management personnel
Key management (defined as members of the Board of Directors and certain senior management) compensation was related to the following:
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2025 $ | 2024 $ | 2025 $ | 2024 $ | |||||||||||||
| Salaries and management fees | 264,405 | 235,691 | 460,509 | 492,182 | ||||||||||||
| Site operations and administration | 408,543 | 596,559 | 835,457 | 1,179,596 | ||||||||||||
| Director fees, net of DSU fair value movements | 627,875 | 189,750 | 617,051 | 244,397 | ||||||||||||
| Share-based compensation | 416,601 | 220,998 | 745,137 | 441,996 | ||||||||||||
| 1,717,424 | 1,242,998 | 2,658,154 | 2,358,171 | |||||||||||||
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Other related parties
On March 18, 2025, the Company closed the March 2025 Financing which included the conversion of its Term Loan held by EdgePoint and its affiliates to equity. The Company issued to EdgePoint and its affiliates an aggregate of 3,480,392 Settlement Units. As of June 30, 2025, EdgePoint and its affiliates beneficially owned an aggregate of 4,672,053 Common Shares and 4,166,208 warrants, representing approximately 21.8% of the outstanding Common Shares (approximately 34.5% on a partially-diluted basis assuming the exercise of all warrants held by EdgePoint).
In connection with the Private Placement, certain insiders of the Company subscribed for an aggregate of 196,833 Private Placement Units for gross proceeds of $1,181,000.
During 2024, EdgePoint and its affiliates, related parties of the Company, subscribed for 384,615 units as part of the June 2024 Financing. As of December 31, 2024, EdgePoint and its affiliates beneficially owned 1,191,661 Common Shares and 685,815 warrants, representing approximately 12.8% of the issued and outstanding Common Shares (approximately 18.8% on a partially-diluted basis assuming the exercise of all warrants held by EdgePoint).
For the three and six months ended June 30, 2025, the Company paid interest of $nil (three months ended June 30, 2024 - $519,206) and $268,896 (six months ended June 30, 2024 - $1,038,412), respectively, to Cymbria Corporation. For the three and six months ended June 30, 2025, the Company recognized a loss on the Debt Conversion of $nil (three months ended June 30, 2024 - $nil) and $5,982,434 (six months ended June 30, 2024 - $nil), respectively.
Segmented Disclosure
The Company operates in one reportable operating segment, being that of the acquisition, exploration and evaluation of mineral properties, in three geographic segments, being Canada, Barbados, and Botswana. The Company’s geographic segments are as follows:
June 30, 2025 $ | December 31, 2024 $ | |||||||
| Current assets | ||||||||
| Canada | 19,907,057 | 4,066,121 | ||||||
| Barbados | 5,314,105 | 89,446 | ||||||
| Botswana | 4,150,208 | 3,462,676 | ||||||
| Total | 29,371,370 | 7,618,243 | ||||||
| Exploration and evaluation assets | ||||||||
| Botswana | 8,794,678 | 8,846,421 | ||||||
| Property, plant and equipment | ||||||||
| Botswana | 8,887,826 | 8,488,405 | ||||||
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The Company’s exploration and evaluation activities are assessed at the individual project level. The Selebi and Selkirk projects below make up the Botswana geographic segment.
| Three months ended June 30, 2025 | ||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||
| Drilling | 3,034,485 | 703,233 | - | 3,737,718 | ||||||||||||
| Site operations, administration & overhead | 1,362,912 | 344,208 | 113,086 | 1,820,206 | ||||||||||||
| Infrastructure & equipment maintenance | 731,349 | - | - | 731,349 | ||||||||||||
| Geology | 451,862 | 303,536 | - | 755,398 | ||||||||||||
| Mine development | 708,170 | - | - | 708,170 | ||||||||||||
| Electricity | 865,329 | 4,296 | - | 869,625 | ||||||||||||
| Engineering & technical studies | 495,977 | 15,915 | - | 511,892 | ||||||||||||
| Geophysics | 242,959 | 20,939 | - | 263,898 | ||||||||||||
| Freight, tools, supplies & other consumables | 392,598 | 76,638 | - | 469,236 | ||||||||||||
| Health & safety | 127,031 | 3,630 | - | 130,661 | ||||||||||||
| Environmental, social & governance | 86,371 | - | - | 86,371 | ||||||||||||
| Share-based compensation | 121,262 | 131,310 | - | 252,572 | ||||||||||||
| Total | 8,620,305 | 1,603,705 | 113,086 | 10,337,096 | ||||||||||||
| Six months ended June 30, 2025 | ||||||||||||||||
Selebi $ | Selkirk $ | Other $ | Total $ | |||||||||||||
| Drilling | 3,718,577 | 703,233 | - | 4,421,810 | ||||||||||||
| Site operations, administration & overhead | 2,294,239 | 386,470 | 152,742 | 2,833,451 | ||||||||||||
| Infrastructure & equipment maintenance | 1,442,278 | - | - | 1,442,278 | ||||||||||||
| Geology | 1,019,837 | 330,071 | - | 1,349,908 | ||||||||||||
| Mine development | 1,376,789 | - | - | 1,376,789 | ||||||||||||
| Electricity | 1,729,242 | 8,652 | - | 1,737,894 | ||||||||||||
| Engineering & technical studies | 1,338,749 | 27,595 | - | 1,366,344 | ||||||||||||
| Geophysics | 469,768 | 20,939 | - | 490,707 | ||||||||||||
| Freight, tools, supplies & other consumables | 522,793 | 87,602 | - | 610,395 | ||||||||||||
| Health & safety | 220,615 | 3,630 | - | 224,245 | ||||||||||||
| Environmental, social & governance | 160,780 | - | - | 160,780 | ||||||||||||
| Share-based compensation | 320,791 | 137,481 | - | 458,272 | ||||||||||||
| Total | 14,614,458 | 1,705,673 | 152,742 | 16,472,873 | ||||||||||||
Financial Instruments
ASC 820 - Fair Value Measurement establishes a three-tier fair value hierarchy. The fair value hierarchy’s three tiers are based on the extent to which inputs used in measuring fair value are observable in the market, and are as follows:
| Level 1: | Quoted prices (unadjusted) in active markets for identical assets or liabilities; | |
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and | |
| Level 3: | One or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability. |
Determination of fair value and the resulting hierarchy requires the use of observable market data whenever available. The classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.
The carrying value of cash and cash equivalents, trade payables and accrued liabilities approximate their fair value due to their short-term nature and therefore have been excluded from the table below. A summary of the carrying value and fair value of other financial instruments were as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||
| Classification | Carrying Value $ | Fair Value $ | Carrying Value $ | Fair Value $ | ||||||||||||||||
| DSU liability | Level 1 | 1,120,153 | 1,120,153 | 941,664 | 941,664 | |||||||||||||||
| Vehicle financing | Level 2 | 342,711 | 342,711 | 246,137 | 246,137 | |||||||||||||||
| Term Loan | Level 3 | - | - | 18,983,212 | 20,862,478 | |||||||||||||||
| NSR option liability | Level 2 | 2,750,000 | 2,750,000 | 2,750,000 | 2,750,000 | |||||||||||||||
DSU liability - the fair value of the DSUs is measured using the closing price of the Company’s Common Shares at the end of each reporting period.
Vehicle financing - the fair values approximate carrying values as the interest rates are comparable to current market rates.
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Term Loan – the Term Loan is carried at amortized cost. The fair value measurement of the Term Loan was based on an income approach.
NSR option liability – The fair value of the NSR options is determined using a valuation model that incorporates such factors as discounted cash flow projections, metal price volatility, and risk-free interest rate. As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at June 30, 2025 and December 31, 2024 is $nil.
The Company’s financial instruments are exposed to certain risks as discussed below:
Interest Rate Risk
The Company’s exposure to interest rate risk arises from the interest rate impact on its cash and cash equivalents and debt facilities. Interest payable on the vehicle financing is based upon a variable base rate, being the lending institution’s prime lending rate, plus a fixed rate margin.
Foreign Currency Exchange Risk
The Company primarily operates in Canada, Barbados and Botswana and undertakes transactions denominated in foreign currencies such as the US dollar and Botswana pula, and consequently is exposed to exchange rate risks. The value of cash and other financial assets and liabilities denominated in foreign currencies can fluctuate with changes in currency exchange rates. Exchange risks are managed by matching levels of foreign currency balances with the related obligations and by maintaining operating cash accounts in non-Canadian dollar currencies.
The following table illustrates the estimated impact a 5% USD and BWP change against the CAD would have on net loss before tax as a result of translating the Company’s foreign denominated financial instruments:
| Currency | Change | Effect on Net Loss (Earnings) Before Tax $ | Change | Effect on Net Loss (Earnings) Before Tax $ | |||||||||||||
| USD | +5% | (340,895 | ) | -5% | 340,895 | ||||||||||||
| BWP | +5% | 56,906 | -5% | (56,906 | ) | ||||||||||||
Credit Risk
The Company’s credit risk is primarily associated with its cash and cash equivalents. The Company’s exposure to credit risk arises from the potential default of the counterparty to its cash and cash equivalents, and the maximum exposure is limited to the carrying value of these instruments. The Company limits exposure to credit risk on its cash and cash equivalents by holding these instruments at highly-rated financial institutions.
Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company manages the liquidity risk inherent in these financial obligations by regularly monitoring actual cash flows against its budget, which forecasts expected cash availability to meet future obligations. The Company will defer discretionary expenditures, as required, in order to manage and conserve cash required for current liabilities.
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The following table shows the Company’s undiscounted contractual obligations as at June 30, 2025:
Less than 1 year $ | 1 - 2 years $ | 2 - 5 years $ | Total $ | |||||||||||||
| Trade payables and accrued liabilities | 4,812,152 | 292,182 | - | 5,104,334 | ||||||||||||
| Vehicle financing | 180,949 | 105,480 | 56,282 | 342,711 | ||||||||||||
| 4,993,101 | 397,662 | 56,282 | 5,447,045 | |||||||||||||
The DSU liability of $1,120,153 is not presented in the above liquidity analysis as management considers it not practical to allocate the amounts into maturity groupings.
The above table does not include the second instalment under the Selebi APA of $34,107,500 (US$25,000,000) which is due January 31, 2026 (see “Contractual Obligations and Contingencies”) as the liability has not yet been recognized. This instalment payment may require the Company to raise additional funding as the Company does not currently have sufficient funds to meet this obligation.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements as at June 30, 2025.
Share Capital Information
As of the date of this Report, the fully diluted share capital of the Company, including Common Shares issuable upon exercise of securities of the Company, is as follows:
| Securities | Common Shares | |||
| Common Shares | 21,451,442 | |||
| Preferred shares(1) | 657 | |||
| DSUs | 88,901 | |||
| Warrants | 9,428,996 | |||
| Stock options | 1,023,423 | |||
| RSUs | 208,750 | |||
| Fully diluted share capital | 32,202,169 | |||
Note:
| (1) | The 118,186 outstanding preferred shares are convertible into Common Shares at a 180:1 ratio. |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Quantitative and qualitative disclosures about market risk have been omitted as permitted under rules applicable to smaller reporting companies.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025. Based on the evaluation of these disclosure controls and procedures, management concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We have no knowledge of any material, active, pending or threatened legal, administrative or judicial proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation.
Item 1A. Risk Factors
The business of the Company being the exploration and evaluation of mineral properties in Botswana and Canada is speculative and involves a high degree of risk. These risks may have a material and adverse impact on the future operations, financial performance and condition of the Company and the value of the Common Shares. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised to date or in the future.
An investment in the Company’s Common Shares involves a high degree of risk. The following discussion highlights the risks and uncertainties we believe are material to the Company, but the following discussion does not necessarily include all the risks we may face and an investor in the Company’s Common Shares should not interpret the disclosure of a risk in the following discussion to state or imply that the risk has not already materialized. In evaluating an investment in the Company, the risks and uncertainties described below should be carefully considered. If any such risks occur, the business, financial condition and/or liquidity and results of operations of the Company could be materially adversely affected. In this event, the value of the Common Shares could decline and shareholders could lose all or part of their investment.
Further, the Company’s view of risks is not static, and readers are cautioned that there can be no assurance that all risks to the Company, at any point in time, can be accurately identified, assessed as to significance or impact, managed or effectively controlled or mitigated. There can be additional new or elevated risks to the Company that are not described herein or in the Company’s public filings to date.
The summary and risks that follow are organized under headings as determined to be most applicable, but such risks also may be relevant to other headings.
I. RISKS RELATED TO EXPLORATION & EVALUATION PROJECTS
The failure of the Company to comply with all post-closing covenants, study phase requirements, and contingent milestone payments relating to the Mines could materially adversely affect the business, operations and financial conditions of the Company
In January and August of 2022, the Company closed the acquisitions of the Selebi Mines and Selkirk Mine, respectively. Pursuant to the terms of the acquisitions, the Company has to comply with certain milestone payments which, if not satisfied, will result in the Mines reverting to the liquidators. There are approximately US$55 million in contingent post-closing milestone payments due to the liquidators in connection with the Mines, with (i) US$25 million due on January 31, 2026, and (ii) another US$30 million due upon the earlier of the commissioning and start of production or four years from the mining licence renewal date for either the Selebi Mines or Selkirk Mine. Further, the Selkirk APA provides for a three-year study phase expiring August 17, 2025, which can be extended for one year with written notice to the liquidator. The Company has submitted the written notice and, as of the date of this Report, is awaiting formal acceptance by the liquidator. The failure of the Company to comply with all the post-closing covenants, study phase requirements, and contingent milestone payments relating to the Mines, if and when those milestones are achieved, could materially adversely affect the business, operations and financial conditions of the Company, including the requirement to return the Selebi Mines or Selkirk Mine to the liquidators, and impact the market price of the Common Shares.
Inherent risks associated with discovering commercially-viable deposits
The Company’s projects are in their exploration and evaluation stages. The exploration of mineral deposits involves significant financial risks over a prolonged period of time, and most exploration projects do not result in the discovery of economically-viable deposits. The commercial viability of exploiting any precious or base-metal deposit is dependent on a number of factors including infrastructure and governmental regulation, in particular those relating to environment, taxes and royalties. No assurance can be given that minerals will be discovered of sufficient quality, size and grade on any of the Company’s properties to justify a commercial operation.
Development of the Company’s properties can only occur only after obtaining satisfactory exploration results. Although the Company’s properties were past producing, there is no assurance that the Company’s mineral exploration activities will result in the confirmation of a body of commercial ore on its exploration properties. Several years or more may pass between the discovery and development of commercial mineable mineralized deposits.
Exploration projects also face significant operational risks including but not limited to an inability to obtain access rights to properties, accidents, equipment breakdowns, labour disputes (including work stoppages and strikes), the impact of health epidemics and other outbreaks of communicable diseases and other potential or unanticipated interruptions.
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Inherent risks associated with the economics of developing mineral properties
Substantial expenses are required to establish and upgrade mineral resources and mineral reserves through drilling, to develop metallurgical processes to extract metal from ore, and to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operation or that the funds required for development can be obtained on a timely basis.
The marketability of any minerals acquired or discovered may be affected by numerous factors which are beyond the Company’s control and many of which cannot be predicted, such as market fluctuations, the proximity and capacity of milling and smelting facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, permitted production levels, importing and exporting of minerals, and environmental protection. Depending on the price of minerals produced, the Company may determine that it is impractical to commence commercial production.
Inherent risks associated with the estimation of the Company’s Mineral Resources
The Company’s Mineral Resources are estimates only and no assurance can be given that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realized or that Mineral Resources will be upgraded to categories of greater certainty. Estimating Mineral Resources involves both objective data and subjective judgment. The accuracy of these estimates depends on the amount and quality of available information, as well as the assumptions and interpretations applied in the geological and engineering evaluations. Mineral Resource estimates are largely derived from interpretations of geological data obtained through drilling and other sampling methods. However, actual mineralization or geological structures may differ from these interpretations.
Many Mineral Resource estimate assumptions, including metal prices, grades, and recoveries are inherently uncertain and any significant change in these assumptions could result in a material downward or upward revision of current estimates. In addition, recoveries in small scale laboratory testing may be difficult to duplicate in larger scale tests under on-site conditions or sustained during production. As a result, Mineral Resources may not, or ever be, economically viable.
The Company may be unable to establish Mineral Reserves
The Company is a mineral exploration and development company that is focused on the planned redevelopment of the previously producing Mines. To that end, the Company’s properties have no established mineral reserves at this time. While the Selebi and Selkirk projects have mineral resource estimates, the Company has not yet established any proven or probable mineral reserves on the Selebi Mines or Selkirk Mine projects. The lack of established mineral reserves means that the economic viability of the Selebi and Selkirk projects has not been confirmed. There is no assurance that further exploration and engineering studies will lead to the discovery of an economically viable mineral deposit.
Further, there is no assurance that any of the Company’s projects can be mined profitably. Accordingly, it is not assured that the Company will realize any profits in the short to medium term, if at all. Any profitability in the future from the business of the Company will be dependent upon the development and commercial mining of economically viable mineral deposits, which in itself is subject to numerous risk factors.
The exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time that even a combination of management’s careful evaluation, experience and knowledge may not eliminate. Few properties that are explored are ultimately developed into producing mines. Major expenses may be required to establish resources and reserves by drilling and to construct mining and processing facilities at a particular site. It is not possible to ensure that current work programs of the Company will result in profitable commercial mining operations. The profitability of the Company’s operations will be, in part, directly related to the cost and success of its work programs, which may be affected by a number of factors. Substantial expenditures are required to establish mineral reserves that are sufficient to support commercial mining operations.
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II. FINANCIAL RISKS
The impact negative operating cash flow and the reliance on additional financing have on the Company’s ability to continue operations as a going concern
The Company has negative cash flow from operations. As a result of the expected expenditures to be incurred by the Company for the exploration and advancement of the Company’s material projects, the Company anticipates that negative operating cash flows will continue until one or both of the Company’s material projects enters commercial production (if at all). There can be no assurance that the Company will generate positive cash flow from operations in the future.
The Company will require additional capital in order to fund its future activities for its material projects and maintain and grow its operations. Furthermore, additional financing, whether through the issue of additional equity and/or debt securities and/or project level debt, will be required to continue the development of the Company’s material projects and there is no assurance that additional capital or other types of financing will be available or that these financings will be on favourable terms or terms which are at least as favourable to the Company as those previously obtained. Failure to raise such capital could result in the Company ceasing operations or losing its mineral interests.
From time to time, the Company may issue new shares, seek debt financing, dispose of assets, or enter into transactions to acquire assets or shares of other corporations.
The accompanying financial statements, dated June 30, 2025, have been prepared on a going concern basis, meaning management believes the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of operations. The Company’s continued ability to operate depends on securing sufficient funding to meet its current commitments as they become due. Failure to obtain additional financing or to achieve profitability and positive operating cash flows will have a material adverse effect on the Company’s financial condition and results of operations.
III. OPERATIONAL RISKS
The Company is subject to risks associated with operating outside of Canada
The Company’s material mineral projects are located in the Republic of Botswana. The Company’s anticipated operations outside Canada could subject the Company to a variety of additional risks that may negatively impact its business and operations including any of the following: changes in rules and regulations including required royalties; failure of local parties to honour contractual relations; delays in obtaining or the inability to obtain necessary governmental permits; opposition to mining from environmental or other non-governmental organizations; limitations on foreign ownership; limitations on the repatriation of earnings; economic or tax policies; tariffs and trade barriers; regulations related to customs and import/export matters; longer payment cycles; tax issues; currency fluctuations and exchange controls; rates of inflation; challenges in collecting receivables; cultural and language differences; employment regulations; crimes, strikes, riots, civil disturbances, terrorist attacks, and wars; and deterioration of political relations with Canada or other governments or sanctions imposed by Canada or other governments. There will also be currency exchange risks in connection with the operations of the Company’s foreign mineral assets, including the Mines.
In addition, Botswana is considered an emerging market. Emerging market investments generally pose a greater degree of risk than investments in more mature market economies because the economies in the developing world are more susceptible to destabilization resulting from domestic and international developments. The economies and political systems of Botswana should be considered by investors to be less predictable than those in countries in which the majority of investors are likely to be resident. Further, the current, or a future government may adopt substantially different policies, take arbitrary action which might halt exploration or production, re-nationalize private assets or cancel contracts, or cancel mining or exploration rights, any of which could result in a material and adverse effect on the Company’s results of operations and financial condition.
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The Company is dependent on the business and technical expertise of its management team. The failure or loss of such personnel could result in a material adverse effect on the Company’s reputation and results of operations.
The Company is dependent on the business and technical expertise of its management team. If it is unable to rely on this business and technical expertise, or if any of the expertise is inadequately performed, the business, financial condition and results of the operations of the Company could be materially adversely affected until such time as the expertise could be replaced.
The Company’s operations generally involve a high degree of inherent risk that cannot be eliminated and may not be insurable
Mining is capital intensive and subject to a number of risks and hazards, including environmental pollution, accidents or spills, industrial and transportation accidents, labour disputes, changes in the regulatory environment, natural phenomena (such as inclement weather conditions, earthquakes, pit wall failures and cave-ins) and encountering unusual or unexpected geological conditions. Such risks and hazards might negatively impact the Company’s business. Consequently, many of the foregoing risks and hazards could result in damage to, or destruction of, the Company’s mineral properties or future processing facilities, personal injury or death, environmental damage, delays in or interruption of or cessation of exploration or other activities, delay in or inability to receive required regulatory approvals, or costs, monetary losses and potential legal liability and adverse governmental action. The Company may be subject to liability or sustain loss for certain risks and hazards against which it does not or cannot insure or against which it may reasonably elect not to insure because of the cost. This lack of insurance coverage could result in material economic harm to the Company.
The Company may be subject to risks relating to mine closure and reclamation obligations
Pursuant to the Selebi APA and the Selkirk APA, the Company does not have contractual reclamation or closure obligations in respect of the Mines up to the point of acquisition. However, there can be no assurance that this will not be challenged in the future by regulators or the public, or that the counterparty to the Selebi APA and Selkirk APA will not fail to fulfill their closure obligations.
Moreover, the Company may be required to incur significant costs in connection with reclamation activities for its mining sites, which may materially exceed the provisions the Company has made for such reclamation and which are based on the Company’s internal estimates. These estimates take into account any material changes to the Company’s supporting assumptions that occur when reviewed regularly by management. Estimates are reviewed annually and are based on current regulatory requirements and disturbances since the date of acquisition of the Mines. Significant changes in estimates of contamination, restoration standards and techniques may result in additional provisions. In addition, the unknown nature of possible future additional regulatory requirements and the potential for additional reclamation activities create further uncertainties related to future reclamation costs, which may have a material adverse effect on the Company’s financial condition, liquidity or results of operations.
Inherent risks and limitations of Internal Control Over Financial Reporting
The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. Similarly, the Company’s disclosure controls and procedures are intended to ensure that material information required to be disclosed in reports filed with securities regulators is appropriately recorded, processed, summarized, and reported within required timeframes. These controls also aim to ensure that such information is communicated to management, including the Chief Executive Officer and Chief Financial Officer, to facilitate timely decisions regarding required disclosures.
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However, due to inherent limitations, no control system can provide absolute assurance of achieving its objectives. As such, even well-designed and effectively operated controls can only provide reasonable—not absolute—assurance regarding the reliability of financial reporting. Furthermore, failure to maintain effective internal controls over financial reporting could result in the loss of investor confidence in the reliability of the Company’s financial statements. The challenges involved in implementing appropriate internal controls over financial reporting will likely increase with the Company’s redevelopment of the Mines and this will require it to continue improving its internal controls over financial reporting. There can be no assurance that the Company will be able to remediate material weaknesses, if any, identified in future periods, or maintain all the controls necessary for continued compliance, and there can be no assurance that the Company will be able to retain sufficient skilled finance and accounting personnel. No evaluation can provide complete assurance that the Company’s internal control over financial reporting will detect or uncover all failures of persons within the Company to disclose material information otherwise required to be reported.
IV. RISKS RELATED TO OUR COMMON SHARES
Internal and external factors could impact the volatility of the Company’s Common Share price
The price of the Company’s Common Shares may be affected by a number of factors, including global macroeconomic developments and market perceptions of the attractiveness of particular industries and location of the Company’s assets, which may increase the volatility of the Company’s Common Share prices. The price of the Company’s Common Shares will also be affected by the Company’s financial conditions or results of operations as reflected in its liquidity position and earnings reports.
Other factors unrelated to the Company’s operations and performance that may have an effect on the price of the Company’s Common Shares include: reduced trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of shares; the size of the Company’s public float may limit the ability of some institutions to invest in the Company’s securities; and a substantial decline in the price of the Company’s Common Shares that persists for a significant period of time could cause the Company’s securities to be delisted, further reducing market liquidity.
As a result of any of these factors, the market price of the Company’s Common Shares at any given point in time may not accurately reflect the Company’s long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.
V. ECONOMIC AND MARKET RISKS
The volatility of commodity prices could affect the economic viability of the Company’s projects
The advancement of the Company’s properties is dependent on the future prices of minerals and metals. As well, should any of the Company’s properties eventually enter commercial production, the Company’s profitability will be significantly affected by changes in the market prices of minerals and metals.
Base and precious metals prices are subject to volatile price movements, which can be material and occur over short periods of time and which are affected by numerous factors, all of which are beyond the Company’s control. Such factors include, but are not limited to, actual and expected macroeconomic and political conditions, interest and exchange rates, inflation or deflation, fluctuations in the value of the U.S. dollar and foreign currencies, global and regional supply and demand, speculative trading, the costs of and levels of base and precious metals production, the availability and costs of substitutes, investments by commodity funds and other actions of participants in the commodity markets. Such external economic factors are in turn influenced by changes in international investment patterns, monetary systems, the strength of and confidence in the U.S. dollar (the currency in which the prices of base and precious metals are generally quoted), and political developments. The effect of these factors on the prices of base and precious metals, and therefore the economic viability of any of the Company’s exploration projects, cannot be accurately determined. The prices of commodities have historically fluctuated widely, and future price declines could cause the development of, and any future commercial production from, the Company’s properties to be uneconomical. As such, the Company may determine that it is not economically feasible to commence commercial production at some or all of its properties, which could have a material adverse impact on the Company’s financial condition and results of operations. In such a circumstance, the Company may also curtail or suspend some or all of its exploration and evaluation activities.
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The Company is exposed to global economic and political instability
Global financial and geopolitical conditions continue to create uncertainty for the mining industry. Economic disruptions and inflationary pressures have led to rising operating costs and supply chain constraints, all of which may negatively impact the Company’s growth and financial results. The availability and cost of fuel, electricity, equipment, explosives, and labour may remain unpredictable, affecting operational stability. Prolonged market instability or further geopolitical events could also impact investor confidence, access to capital, and financial market liquidity.
The Company is exposed to foreign currency and equity market fluctuations
The Company is exposed to risks relating to its financial instruments and foreign currency. The Company operates in Canada, Barbados and Botswana and undertakes transactions denominated in foreign currencies such as United States dollars, Euros, South African rand, and the Botswanan pula, and consequently is exposed to exchange rate risks. The Company is also exposed to equity price risk; the movements in individual equity prices or general movements in the level of the stock market may potentially have an adverse impact on the Company, including the Company’s ability to raise sufficient capital.
The Company is exposed to the threat of virus outbreaks or infectious diseases
As most recently seen during the COVID-19 pandemic, global economic conditions and markets may be adversely impacted by infectious diseases or virus outbreaks. Depending on the speed and extent of the spread, adverse financial and social impacts may be material. Significant outbreaks, like COVID-19, could result in a widespread crisis that could adversely affect the economies and financial markets of many countries, including those in which the Company operates, resulting in an economic downturn which could adversely affect the Company’s business and the market price of the Company’s Common Shares.
VI. REGULATORY RISKS
The Company may be unable to obtain, retain or comply with necessary permits and licences, which could adversely affect operations
The operations of the Company require licences and permits from various governmental authorities. Such licences and permits are subject to changes in regulations and in various operating circumstances. There can be no guarantee that the Company will be able to obtain all necessary licences and permits that may be required to maintain its mining activities or advance its mineral properties. In addition, if the Company proceeds to production on any exploration property, it must obtain and comply with permits and licences which may contain specific conditions concerning operating procedures, processing, water use, the discharge of various materials into or on land, air or water, waste disposal, spills, environmental studies, abandonment and restoration plans and financial assurances. There can be no assurance that the Company will be able to obtain such permits and licences or that it will be able to comply with any such conditions.
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Challenges, disputes, or termination of the Company’s mining or exploration concessions, property holdings or titles could have a material adverse effect on the Company’s financial condition or results of operations.
The validity of the Company’s mineral rights to the Selebi Mines and Selkirk Mine will always be subject to a degree of uncertainty, and the Company can provide no assurances that such rights will not be challenged or contested. Further, the Company can provide no assurances that there are no title defects affecting its properties. The Company’s mineral properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected defects. Any challenges, disputes, or termination of any one or more of the Company’s mining or exploration concessions, property holdings or titles could have a material adverse effect on the Company’s financial condition or results of operations.
Changes in tax legislation or accounting rules could affect the profitability of the Company
Changes to, or differing interpretation of, taxation laws in Canada, Barbados, Botswana, or any of the countries in which the Company’s assets or relevant contracting parties are located, could result in some or all of the Company’s profits being subject to additional taxation. New taxation rules or accounting policies enacted could result in the Company’s profits being subject to additional taxation and could have a material adverse effect on the Company’s profitability, results of operations, financial condition and the trading price of the Company’s securities. In addition, the introduction of new tax rules or accounting policies, or changes to, or differing interpretations of, or application of, existing tax rules or accounting policies could make acquiring additional resource properties by the Company less attractive to counterparties. Such changes could adversely affect the Company’s ability to acquire new assets or make future investments.
The Company is subject to anti-bribery and anti-corruption laws
The Company and its employees, officers, directors, contractors, and third-party agents are subject to policies governing ethical business conduct and practices, which include compliance with anti-corruption and anti-bribery laws. In recent years, there has been a general increase in both the frequency of enforcement and the severity of penalties under such laws, resulting in greater scrutiny and punishment to corporations convicted of violating such laws. Furthermore, a corporation may be found liable for violations by not only its employees, but also by its contractors and third-party agents.
The measures which NEXM has adopted, including the Company’s Code of Business Conduct and Ethics and Whistle Blowing Policy, may not be effective in ensuring individuals comply with such laws. Enforcement action or violations of such laws may result in significant fines, penalties, and/or sanctions imposed on the Company which could have a material adverse effect on its reputation, business, financial condition and results of operations.
Compliance with laws and regulations, including changes to such laws or regulations, could adversely affect the Company’s results of operations.
Exploration, development, and operations on the Company’s properties will be affected to varying degrees by: (i) government regulations relating to such matters as environmental protection, health, safety and labor; (ii) mining law reform; (iii) restrictions on production, processing, price controls, and tax increases; (iv) maintenance of claims; (v) tenure; and (vi) expropriation of property. There is no assurance that future changes in such regulation, if any, will not adversely affect the Company’s operations. Changes in such regulation could result in additional expenses and capital expenditures, availability of capital, competition, reserve uncertainty, potential conflicts of interest, title risks, dilution, and restrictions and delays in operations, the extent of which cannot be predicted. The Company is at the exploration and evaluation stages on its material properties. Exploration on the Company’s properties requires responsible best-exploration practices to comply with the Company’s policies, government regulations, and maintenance of claims and tenure.
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If any of the Company’s projects advance to the development stage, those operations will also be subject to various laws concerning development, production, processing, taxes, labour standards, environmental protection, mine safety and other matters. In addition, new laws governing operations and activities of mining companies could have a material adverse impact on any project in the mine development stage that the Company may possess.
Compliance with environmental regulations, including changes to such laws or regulations, could adversely affect the Company’s results of operations.
All phases of the Company’s operations are subject to environmental regulation in the jurisdictions in which the Company operates. Environmental legislation is evolving in a manner which has been subject to stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed properties and a heightened degree of responsibility for companies and their officers, directors and employees. There is no assurance that future changes in environmental regulations, if any, will not adversely affect the Company’s operations. The cost of compliance with changes in governmental regulations has the potential to preclude entirely the economic development of a property.
VII. EMERGING MARKETS RISKS
Operations in emerging markets expose the Company to increased levels of political, economic and other risks and uncertainties associated with foreign operations
The Company has its material properties and operating subsidiaries in Botswana. It is possible that operating in Botswana may expose the Company to a certain degree of political, economic and other risks and uncertainties, which could have a material adverse effect on its operations. In conducting its operations in Botswana, the Company has, among other things: (i) engaged and maintained experienced management and technical teams located in Botswana and/or with extensive experience in operating properties in Africa; (ii) ensured that certain members of the Board of Directors and management routinely visit the Company’s Botswana properties; (iii) retained advisors and technical experts in Botswana including its local legal counsel; and (iv) generally maintained robust internal control over its foreign subsidiaries, all of which are more particularly described below.
| i. | Subsidiaries and Operations in Botswana |
The Company’s principal business activity in Botswana is the exploration, evaluation and planned re-development of the Mines.
The establishment and development of local Botswanan legal entities adds an additional regulatory framework within which the Company operates and is supplementary to the regulatory framework existing in Canada. The Company holds its interest in the Selebi Mines and the Selkirk Mine indirectly through its 100% owned subsidiaries PNRPL and PNGPL, respectively.
The Company’s operating entities in Botswana are governed in accordance with applicable local laws and entity-wide governance principles. The directors and management of the Company’s operating entities in Botswana are generally comprised of a majority of senior management employees and where required by local laws, local residents, who are generally longstanding local management level employees, or local corporate counsel. In addition, certain members of the Company’s management have experience conducting business in Botswana, as detailed below, where the Company has maintained operations since 2021. Operating in Botswana requires greater internal controls and adherence to a regulatory framework which creates challenges in relation to decision-making, communication, and compliance. The Company has experienced management and has retained legal advisors and consultants to help facilitate adherence to regulatory requirements in order to meet this challenge.
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| ii. | Experienced Board and Management |
In addition to their experience with the Company, the Board of Directors and management also have extensive experience operating and managing investments and projects in Africa. Furthermore, they bring diverse expertise in areas such as global strategy, finance, exploration, technology, and corporate development. Their collective experience spans several decades and includes successful ventures in both public and private sectors. Certain members of the Board of Directors, management and senior officers of the Company have made trips to Botswana to gain a deeper understanding of the Company’s operations and projects as well as to impart their experience and knowledge of the local business, culture and practices to the other members of the Board of Directors and officers.
The Company’s Chief Executive Officer and Director, Mr. Morgan Lekstrom, has direct mine redevelopment experience in Africa through a previously held role with Golden Star Resources in supporting the redevelopment of an underground mine in Ghana, West Africa. Mr. Lekstrom has a diverse background and an established track record of delivering successes, including most recently, the successful building of NexGold Mining Corp., creating a near term development company with a clear path to building two new gold mines.
The Company also relies on the expertise of its local Botswana-based personnel, Mr. Kneipe Setlhare, Mr. Karabo Monepe, and Mr. Tidimalo Tito and Mr. Boris Kamstra, residing in South Africa, all of whom have extensive mining and government relations experience in Botswana.
Overall, the Company benefits from and relies on the collective wealth of expertise and experience in the Company’s business and operations in Botswana of its Board of Directors, management, locally based personnel and technical teams.
| iii. | Use of and Reliance on Experts and Local Advisors |
The Company has retained local Botswanan law firms to advise on various corporate and regulatory legal issues, including the Company’s right to conduct business in Botswana, title verification over the Botswanan assets, and has relied on advice from local counsel with respect to such matters. Additionally, the Company has retained engineering and geoscientific services firms including SRK Consulting, SLR Consulting, The MSA Group, DRA Global, SGS Mineral Services, and Expert Process Solutions. The Company ensures that any such counsel or provider retained has their credentials vetted and referenced, with considerable diligence and adherence to local licences, professional associations, and regulators.
The Company’s officers and Board of Directors benefit from and rely on the advice and guidance provided by its Botswanan legal advisor as well as personnel based in Botswana of new developments in local mining regimes and new requirements that come into force from time to time, as they pertain to and affect the Company’s business and operations in Botswana. Any material developments are subject to oversight and discussion by the Board of Directors.
| iv. | Language, Cultural Differences and Business Practices |
English is the official language of Botswana, in which the Audit and Risk Management Committee of the Company and the Company’s external auditors are proficient. The most widely spoken language in Botswana is Setswana. The languages spoken by the board, management and technical team of the Company and its subsidiaries include Afrikaans, English and Setswana.
The financial records of the Company and both PNGPL and PNRPL, existing under the laws of Botswana are maintained in English. The Company does not believe that any material language or cultural barriers exist.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table outlines the number of securities that are convertible into Common Shares issued by the Company pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) as a transaction not involving a public offering and Rule 506 promulgated under the Securities Act, during the three months ended June 30, 2025.
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Convertible Securities
| Date of Issuance | Security | Exercise Price per Security ($) |
Number of Securities | ||||||||
| April 24, 2025 | Options(1) | 9.80 | 11,500 | ||||||||
Notes:
| (1) | These Options have a term of 5 years. Of the 11,500 Options granted, 7,000 vested immediately on the date of grant, and 4,500 vest annually in equal thirds beginning on the date of grant. |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Insider Trading Arrangements
During
the three months ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Item 6. Exhibits
| Exhibit No. | Description of Exhibit | |
| 10.1 | Premium Resources Ltd. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on June 6, 2025) | |
| 31.1 | Rule 13a-14(a)/15d-14(a) certification of Chief Executive Officer | |
| 31.2 | Rule 13a-14(a)/15d-14(a) certification of Chief Financial Officer | |
| 32.1 | Section 1350 certification, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101 | Includes the following financial and related information from NexMetals Mining Corp.’s Quarterly Report on Form 10-Q as of and for the quarter ended June 30, 2025, formatted in Inline Extensible Business Reporting Language (iXBRL): (1) Unaudited Condensed Interim Consolidated Balance Sheets, (2) Unaudited Condensed Interim Consolidated Statements of Operations and Comprehensive Loss, (3) Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity (Deficiency), (4) Unaudited Condensed Interim Consolidated Statements of Cash Flows, and (5) Notes to the Unaudited Condensed Interim Consolidated Financial Statements. | |
| 104 | The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL |
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SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: August 13, 2025 | NEXMETALS MINING CORP. (Registrant) | |
| By: | /s/ Morgan Lekstrom | |
| Name: | Morgan Lekstrom | |
| Title: | Chief Executive Officer (principal executive officer) | |
| By: | /s/ Brett MacKay | |
| Name: | Brett MacKay | |
| Title: | Chief Financial Officer (principal financial and accounting officer) | |
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FAQ
What was NexMetals' (NEXM) net loss for Q2 2025?
How much cash did NEXM hold at June 30, 2025?
What financing did NexMetals complete in March 2025?
Does NEXM have any large contractual payments due soon?
How many Common Shares were outstanding as disclosed?
Did NexMetals disclose a going concern warning?
