Rare Element Resources Ltd 10-K for FY2025
Rare Element Resources Ltd (REEMF)
About this 10-K
Rare Element Resources Ltd filed this 10-K on March 12, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $0
- Net loss
- $4.9M
- compared with a net loss of $18.45M a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.04 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended | ||
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| 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) |
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(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) | | (Zip Code) |
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(Registrant’s Telephone Number, including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
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Common Shares, No Par Value |
Title of Each Class |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
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.
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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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
As of June 30, 2025, the aggregate market value of the registrant’s voting common shares held by non-affiliates of the registrant was approximately $
The number of the registrant’s common shares outstanding as of March 6, 2026 was
TABLE OF CONTENTS
PRELIMINARY NOTES
As used in this Annual Report on Form 10-K (“Annual Report”), references to “Rare Element,” the “Company,” “we,” “our,” or “us” mean Rare Element Resources Ltd., our predecessors, and consolidated subsidiary, or any one or more of them, as the context requires.
Rare Element is focused on advancing our Bear Lodge rare earth elements project (the “Bear Lodge REE Project”), including demonstrating the technical and economic feasibility of our proprietary rare earth elements processing and separation technology through the operation of a demonstration-scale processing and separation plant (the “Demonstration Plant”) and continuing the Bear Lodge REE Project licensing and permitting process. The Bear Lodge REE Project includes the mineral deposit and the planned processing and separation commercial plant.
The Company previously explored gold mineralization adjacent to the Bear Lodge REE Project (the “Sundance Gold Project”). The Company holds a 100% interest in the Sundance Gold Project which contains a historical inferred mineral resource primarily composed of three gold targets within the area of the Bear Lodge Property (as defined below). The Sundance Gold Project has been on hold since 2011 and will likely remain so for the foreseeable future, although with the recent rise in the price of gold, the Company may explore options to advance or monetize this asset.
Both the Bear Lodge REE Project and the Sundance Gold Project are located primarily on the Bear Lodge Property, near the town of Sundance in the state of Wyoming (the “Bear Lodge Property”). See “Part I, Item 1. Business.”
Financial information in this Annual Report is presented in accordance with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) and, unless otherwise specified, all dollar amounts are expressed in thousands of U.S. dollars (“$” or “US$”).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “forward-looking information” within the meaning of Canadian securities laws (collectively, “forward-looking statements”). Any statements that express or involve discussions with respect to business prospects, predictions, expectations, beliefs, plans, intentions, projections, objectives, strategies, assumptions, future events, performance or exploration and development efforts using words or phrases (including negative and grammatical variations) such as, but not limited to, “expects,” “anticipates,” “plans,” “estimates,” “intends,” “forecasts,” “likely,” “projects,” “believes,” “seeks,” or stating that certain actions, events or results “may,” “could,” “would,” “should,” “might” or “will” be taken, occur or be achieved, are not statements of historical fact and may be forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in these forward-looking statements are reasonable, we cannot be certain that these plans, intentions, and expectations will be achieved. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained in this Annual Report. Forward-looking statements in this Annual Report include, but are not limited to, statements regarding the following:
| ● | our business, prospects, and overall strategy; |
| ● | progress in the development and operation of our Demonstration Plant and the timing of that progress; |
| ● | our ability to successfully operate the Demonstration Plant, and the timing and cost to complete operating activities; |
| ● | planned or estimated expenses and capital expenditures, including the Demonstration Plant’s expected costs of commissioning, operation, decommissioning, and the sources of funds to pay for such costs; |
| ● | availability of funds and capital resources; |
| ● | our ability to achieve the full committed amount of funding from the Department of Energy (“DoE”) through the remainder of the Demonstration Plant project; |
| ● | the securing and timing of an amendment to the Cost Share Agreement (as defined below), if required, between the Company and General Atomics, whose affiliate, Synchron, is the Company’s majority shareholder; |
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| ● | our ability to complete a novation of the Demonstration Plant funding agreement with the DoE and replace General Atomics as the prime contractor; |
| ● | our ability to secure additional funding (in addition to the previously awarded or obtained funding) relating to the Demonstration Plant project or any further initiatives or advancements that may be undertaken relating to the Demonstration Plant; |
| ● | our ability to receive the remaining uncollected funds in connection with the Wyoming Energy Authority (the “WEA”) grant for the Demonstration Plant; |
| ● | our ability to operate the Demonstration Plant, including in a manner to meet project objectives within our available funding and estimated timeline; |
| ● | our estimates regarding the source, quality, costs, and timing of materials, equipment, supplies and resources, including human resources, for the commissioning, operation, and decommissioning of the Demonstration Plant; |
| ● | the Sundance Gold Project remaining on hold for the foreseeable future and our ability to advance or monetize it in the future; |
| ● | plans for our projects or other interests, operations or rights; |
| ● | our plans and strategies during and following the completion of operations of the Demonstration Plant, including the potential for further operation of the Demonstration Plant to meet additional objectives and advancement opportunities; |
| ● | our plans and strategies relating to the advancement of the Bear Lodge REE Project, including the completion of the permitting and licensing process; |
| ● | our plans and strategies to secure further funding for our longer-term business plans, including the advancement of the Bear Lodge REE Project through permitting and licensing, and, if feasible, ultimate construction and operations of a commercial mine and plant for sourcing, processing and separation of rare earth elements; |
| ● | the potential impact of governmental policies, directives, laws, and regulations; and |
| ● | our success in obtaining, and the timing for receipts of, necessary governmental permits and approvals for our business and current or planned projects. |
Forward-looking statements are based on our current expectations and assumptions that are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, risks associated with:
| ● | our majority shareholder’s significant influence on, or ability to control the outcome of, certain of our major corporate decisions, including our business strategies and financing options to meet our capital needs; |
| ● | our ability to protect our intellectual property rights; |
| ● | the ability of our Demonstration Plant to successfully operate and produce information that would support a decision by the Company to proceed with a potential commercial-scale production facility; |
| ● | the uncertain nature of demand for and supply of rare earth elements, and their effect on prices for rare earth products; |
| ● | technological advancements, substitutes, and the establishment of new uses and markets for rare earth products; |
| ● | the development of new, lower cost sources of supply of rare earth products; |
| ● | development, construction and operational hazards related to our Demonstration Plant, as well as our ability to obtain necessary regulatory approvals; |
| ● | our reliance on the skill and expertise of third-party service providers; |
| ● | the ability of third-party service providers to meet their contractual obligations, including as a result of supply chain disruptions and the effects those disruptions could have on our timelines and costs; |
| ● | government regulations and changes in legislation and regulations relating to the mining and rare earth industries, including environmental laws and regulations that impose material compliance costs and liabilities; |
| ● | difficulty in obtaining necessary governmental permits, licenses, and approvals for our Bear Lodge REE Project; |
| ● | governmental interventions in the mining and rare earth industries, including increases in barriers to domestic production and international trade; |
| ● | the impact of current and potential new and/or increased tariffs and other trade restrictions on the global trade industry; |
| ● | uncertainties regarding our ability to maintain sufficient liquidity and attract sufficient capital resources to implement our projects and strategies; |
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| ● | our ability to attract and retain key personnel; |
| ● | the impact of inflation on our business, including the costs of and our ability to complete the Demonstration Plant commissioning, operations and decommissioning, and the Bear Lodge REE Project; |
| ● | the impact of external financial sector factors including the security of our bank and investment account deposits; |
| ● | uncertainties inherent in estimates of future operating results; |
| ● | changes in competitive factors, including the development or expansion of other projects that are competitive with ours; |
| ● | China’s dominance of the rare earth supply chain and its ability to significantly impact market supply, demand and prices; |
| ● | our ability to complete financings and other transactions; |
| ● | pandemics, epidemics or other disease outbreaks on supply chains and any resulting disease containment measures implemented by various governments; |
| ● | the availability and costs of goods and services we need to achieve our plans and goals resulting from military conflicts or wars such as in Russia/Ukraine and the Middle East; |
| ● | information technology system and/or data disruptions, damage, theft, failures, or cyber-attacks; |
| ● | uncertainties associated with litigation matters and opposition to our plans and operations by third parties; |
| ● | share price volatility; |
| ● | whether we deregister our common shares under the Exchange Act and/or list our common shares on a securities exchange other than the QTCQB Venture Marketplace; |
| ● | foreign and domestic government actions impacting supply, demand and/or pricing for rare earth products, including changes in the actual or perceived supply and demand for rare earths due to foreign government export controls; |
| ● | the OTCQB Venture Marketplace standards and the “penny stock” rules and the impact on trading volume and liquidity due to our trading on the OTCQB Venture Marketplace; |
| ● | the consequences of Synchron, the Company’s majority shareholder, discontinuing its support for the Company; |
| ● | risk factors discussed in this Annual Report; and |
| ● | other factors, many of which are beyond our control. |
This list is not exhaustive of the factors that might affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further under the section headings “Item 1. Business”, “Item 1A. Risk Factors”, and elsewhere in this Annual Report. Although we have attempted to identify important factors that could cause actual results, performance, or achievements to differ materially from those described in forward-looking statements, there may be other factors that could cause results, performance, or achievements not to be as anticipated, estimated, intended, or expected. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance, or achievements may vary, possibly materially, from those anticipated, estimated, intended, or expected. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Except as required by law, we disclaim any obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. We qualify all of the forward-looking statements contained in this Annual Report by the foregoing cautionary statements. We advise you to carefully review the reports and documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”) and with the Canadian securities regulatory authorities. The reports and documents filed by us with the SEC are available at www.sec.gov and with the Canadian securities regulatory authorities under the Company’s profile at www.sedarplus.ca.
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GLOSSARY OF TERMS
Conversion Factors and Abbreviations
All units in this Annual Report are stated in metric measurements and their imperial measurement equivalents. For ease of reference, the following conversion factors are provided:
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To Convert Imperial Measurement Units | | To Metric Measurement Units | | Multiply by |
Acres | | Hectares | | 0.4047 |
Feet | | Meters | | 0.3048 |
Miles | | Kilometers | | 1.6093 |
Tons (short) | | Tonnes | | 0.9071 |
Definitions
bastnasite – a mixed lanthanide fluoro-carbonate mineral (LaCO3F) that currently provides the bulk of the world’s supply of the LREEs. Bastnasite and monazite are the two most common sources of cerium and other REEs. Bastnasite is found in carbonatites, carbonate rocks of igneous derivation.
beneficiation – operations that concentrate and separate mineral values in ore from waste material, and typically include, but are not limited to, crushing, grinding, washing, filtration, and leaching.
cerium (“Ce”) – a soft, silvery, ductile metallic element that easily oxidizes in air. Ce is the most abundant of the REEs and is found in a number of minerals, including monazite and bastnasite. Ce has two relatively stable oxidation states (Ce3+ and Ce4+), enabling both the storage of oxygen and its widespread use in catalytic converters. Ce is also widely used in glass polishing.
concentrate – a mineral beneficiation product that generally describes the material that is produced after crushing and grinding ore, effecting significant separation of gangue (waste) minerals from the desired metal and/or metallic minerals, and discarding the waste minerals. The resulting “concentrate” of minerals typically has an order of magnitude higher content of minerals than does the beginning ore material.
CREE – critical rare earth elements – Nd, Pr, Dy, and Tb were identified by the DoE as “critical” in its 2023 Critical Materials Assessment. CREEs are those projected by the DoE to have the greatest economic importance for clean energy development and the highest risk of supply disruption.
Dy – dysprosium (a soft metallic element of the lanthanide series, mainly used in high-performance, permanent magnets). Dy has a high melting point and absorbs neutrons well. It is therefore also used in nuclear control rods to help control nuclear reactions. Dy is also used in laser generating materials.
Eu – europium (a very rare metallic element that is the softest member of the lanthanide series). It is used in making color television tubes and lasers and as a neutron absorber in nuclear research. It is desirable due to its photon emission. Excitation of the Eu atom, by absorption of electrons or by UV radiation, results in changes in energy levels that create a visible emission. Almost all practical uses of Eu utilize this luminescent behavior.
fault – a surface or zone of rock fracture along which there has been displacement.
Feasibility Study (“FS”) – a comprehensive study of a mineral deposit in which all geological, engineering, legal, operating, economic, social, environmental, and other relevant factors are considered in sufficient detail that it could reasonably serve as the basis for a final decision to develop the deposit for mineral production.
FMR – Ferro-Manganese Rich – mineralization that includes iron oxide, manganese oxide and REE.
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Gd – gadolinium (a malleable, ductile metallic element of the lanthanide series that has seven natural isotopes and 11 artificial isotopes). Two of the natural isotopes, Gd 155 and Gd 157, are the best-known neutron absorbers. Gd is used to improve the heat and corrosion resistance of iron, chromium, and various alloys in medicine as a contrast medium for magnetic resonance imaging and as a radioisotope in bone mineral analysis.
geochemical – related to the distribution and amounts of the chemical elements in minerals, ores, rocks, solids, water and the atmosphere.
GHG – greenhouse gases.
grade – quantity of metal per unit weight of host material.
HREEs – heavy rare earth elements – defined as the elements Tb, Dy, Ho, Er, Tm, Yb, Lu and Y.
La – lanthanum (the first metallic element of the lanthanide series). La is a strategically important rare earth element due to its use in fluid cracking catalysts (“FCC”), which are used in the production of transportation and aircraft fuel. La is also used in fuel cells and batteries.
LREEs – light rare earth elements, defined as the elements La, Ce, Pr, Nd, Pm, Sm, Eu and Gd.
mineral – a naturally occurring, inorganic crystalline material having a definite chemical composition.
mineralization – a natural accumulation or concentration of one or more minerals in rocks or soil. Also, the process by which minerals are introduced or concentrated in rocks or soil.
monazite – a reddish-brown rare earth phosphate mineral. Monazite-group minerals are typically accompanied by elevated concentrations of uranium and thorium. This has historically limited the processing of monazite. However, this mineral is becoming more attractive because it typically has elevated concentrations of HREEs.
Nd – neodymium (a metallic element of the lanthanide series, occurring principally in REE fluorocarbonate and monazite minerals). Nd is a key constituent of Neodymium-Iron-Boron (“NdFeB”) permanent magnets and an additive to capacitor dielectrics. NdFeB magnets maximize the power/weight ratio and are found in a large variety of motors, generators, sensors, and hard disk drives. Capacitors containing Nd are found in cellular telephones, computers and nearly all other electronic devices. A minor application of Nd is for lasers.
NdFeB – Neodymium-Iron-Boron compound used to manufacture permanent rare earth magnets.
NI 43-101 – National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.
open pit – surface mining in which the ore is extracted from a pit or quarry. The geometry of the pit will vary with the characteristics of the ore body.
ore – mineral-bearing rock.
ore body – a mostly solid and fairly continuous mass of mineralization.
Ox – oxide mineralization.
OxCa – oxide carbonate.
oxide – for purposes of the deposits found at the Bear Lodge Property, rare earth bearing mineralized material that results from the complete oxidation by natural processes of sulfide-bearing material.
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PFS – preliminary feasibility study or pre-feasibility study. Each means a comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established and an effective method of mineral processing and/or beneficiation has been determined. It includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, economic, social, and environmental factors and the evaluation of other relevant factors that are sufficient for a Qualified Person, acting reasonably, to determine if all or part of any mineral resource may be classified as a Mineral Reserve under NI 43-101 standards.
Pr – praseodymium (a metallic element that constitutes about 4% of the lanthanide content of bastnasite and has a few specific applications, based mainly on its optical properties). It is a common coloring pigment, and is used in photographic filters, airport signal lenses, and welder’s glasses. Because it chemically and magnetically is so similar to its periodic chart neighbors Nd and La, Pr is typically found in small amounts in applications where Nd and La are important, such as NdFeB magnets and catalysts. These latter applications are actually the largest uses for Pr because the magnet and catalyst markets are so large. Thus, Pr plays an important role in extending the availability of the more widely used Nd and La.
RC (reverse circulation) drilling – a rotary drilling method using either a hammer or a tri-cone bit to produce rock cuttings that are forced upward from the bottom of the drill hole to the surface through an inner tube, using liquid and/or air pressure moving downward through an outer tube.
recovery – the percentage of contained metal actually extracted from ore in the course of processing and/or beneficiating such ore.
REEs – rare earth elements. A group of metallic elements with unique chemical, catalytic, magnetic, metallurgical, and phosphorescent properties.
Sm – samarium (a metallic element of the lanthanide series predominantly used to produce Sm cobalt magnets). Although Sm cobalt magnets are slightly less powerful than NdFeB magnets at room temperature, these magnets can be used over a wider range of temperatures and are less susceptible to corrosion.
stockwork – complex system of structurally controlled or randomly oriented veins that can be standalone ore bodies or occur on the periphery of larger veins. They are also referred to as “stringer zones.”
strike – the direction or trend that a structural surface (e.g., an ore bedding or fault plane) takes as it intersects the horizontal.
sulfide – a mineral combining sulfur and base metals, such as iron and less commonly copper, lead, zinc and/or molybdenum; metallic sulfur bearing mineral associated with primary REE mineralization.
Tb – Terbium is a rare earth metal used in solid state devices as well as magnets in loudspeakers.
Technical Report – the technical report of the Company dated April 12, 2024 prepared in accordance with Canada’s NI 43-101 - Standards of Disclosure for Mineral Projects and titled “Technical Report on the Bear Lodge REE Project located in Crook County, Wyoming, USA” by authors Alan C. Noble of Ore Reserves Engineering, Monica Barrero Bouza of EurGeol and Jaye T. Pickarts, Consultant.
TREO – Total Rare Earth Oxide (expressed in wt.%) and consisting of the fourteen (14) individually assayed rare earth element oxides plus yttrium oxide: La2O3, Ce2O3, Pr2O3, Nd2O3, Sm2O3, Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3, and Y2O3.
TRS – the technical report summary, dated February 29, 2024, relating to the Bear Lodge REE Project prepared in compliance with Item 601(b)(96) and Subpart 1300 of Regulation S-K, which was filed as Exhibit 96.1 to the Company’s Current Report on Form 8-K filed on March 4, 2024 and is incorporated by reference in this Annual Report.
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vein – a sheet like body of mineralized rock. On many properties, veins may consist largely of quartz gangue. However, on the Bear Lodge Property, veins can contain a variable assemblage that includes, but is not limited to, gangue minerals like iron and manganese oxides, quartz, calcite, clay, apatite and/or potassium feldspar with or without ore minerals.
Y – Yttrium is primarily recovered from monazite resources and is used with iron in the manufacture of microwave communication equipment.
PART I
ITEM 1. BUSINESS
Rare Element was incorporated under the laws of the Province of British Columbia, Canada on June 3, 1999 as Spartacus Capital Inc. We are currently governed under the Business Corporations Act (British Columbia) (the “BCBCA”). Our executive office address is P.O. Box 80, Firestone, Colorado 80520. The telephone number for our executive office is (720) 278-2460. We maintain a corporate website at www.rareelementresources.com.
Originally organized as a “capital pool” company whose activities were focused on the identification and completion of a qualifying transaction as required by the rules of the TSX Venture Exchange (“TSX-V”), we transitioned to a “venture company” on July 25, 2003, coincident with (1) the completion of a reverse takeover acquisition of Rare Element Holdings Ltd. (the qualifying transaction), (2) a name change of “Spartacus Capital Inc.” to “Rare Element Resources Ltd.”, and (3) the completion of a private placement. The Company’s main assets include its proprietary rare earth processing and/or beneficiation and separation technology and its 100% interest in a group of unpatented mining claims and ownership of adjacent private property, together known as the Bear Lodge Property, owned through a wholly owned subsidiary, Rare Element Resources, Inc., a Wyoming corporation.
SUBSIDIARIES
We have one direct wholly owned subsidiary, Rare Element Resources, Inc., incorporated in 1997 in the state of Wyoming, USA, formerly known as Paso Rico (USA), Inc. (“Paso Rico”).
DESCRIPTION OF BUSINESS
We are currently focused on demonstrating the technical and economic feasibility of our proprietary processing and separation technology through the operation of a Demonstration Plant and advancing the Bear Lodge REE Project through permitting and licensing. The Bear Lodge REE Project consists of several large, disseminated REE deposits in northeast Wyoming, near the town of Sundance, and a planned hydrometallurgical plant that may be located near Upton, Wyoming. The Bear Lodge REE Project is one of the highest-grade REE deposits identified in North America containing a favorable distribution of CREE.
In its development efforts for the Bear Lodge REE Project, the Company has done extensive laboratory bench-scale and pilot plant testing on metallurgical processes to recover saleable rare earth products and has been granted two patents on its metallurgical processing innovations. More specifically, the Company has pilot tested and received patent protection for the removal of thorium from a rare earth element (REE)-containing acidic solution, as well as the selective extraction of REEs using oxalic acid. In accordance with our Intellectual Property Rights Agreement with Synchron, these patented processes have been further advanced through a trade secret process alongside General Atomics, an affiliate of Synchron, the Company’s majority shareholder.
Our near-term focus is on the operation of the Demonstration Plant and the permitting and licensing of the Bear Lodge REE Project as further described below. Assuming operation of the Demonstration Plant is successful, the Company plans to evaluate the feasibility of commercial operations through production of separated rare earth oxides utilizing ore from the Bear Lodge REE Project, as well as rare earth oxides from other sources on a commercial scale.
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During the first quarter of 2016, we placed the Bear Lodge REE Project under care-and-maintenance due to financial resource constraints and market conditions, and all permitting and licensing activities were suspended at that time. With improved market conditions and the availability of necessary financial resources, we recently restarted these permitting and licensing efforts. We now anticipate that all permits and licenses for the Bear Lodge REE Project could be received within the next 24 months under the U.S. federal government’s recently implemented streamlining measures.
If and when the decision to resume the Bear Lodge REE Project development activities is made, our plan, subject to the availability of the necessary financial resources, is to commence detailed engineering for the mine and commercial processing plant. Additionally, our ability to begin construction activities on the Bear Lodge Property will be subject to various factors, including (i) the availability of adequate capital, (ii) positive results from the Demonstration Plant’s operations, (iii) an affirmative feasibility analysis, (iv) securing off-take agreements with customers at adequate prices, (v) obtaining necessary permits and licenses, and (vi) approval from the Company’s board of directors (the “Board of Directors” or the “Board”).
The Bear Lodge REE Project deposit is located near excellent mining infrastructure, including good road access and power lines within two kilometers (1.2 miles) of the Bear Lodge Property. Geographically, the Bear Lodge Property is located 100 kilometers (62.1 miles) east of Gillette, Wyoming, a major infrastructure, support, and logistics center for coal mines in the Powder River Basin that should provide ready access to many of the required production supplies and materials as well as skilled labor. Additionally, the deposit is situated only 64 kilometers (39.8 miles) from the nearest railhead at Upton, Wyoming, where the Demonstration Plant is sited and the proposed hydrometallurgical plant may also be sited, allowing access to major distribution channels via the adjacent railhead as well as convenient access to utilities and other infrastructure.
Additional information regarding the Bear Lodge REE Project and the Bear Lodge Property is included under the section heading “Item 2. Properties” in this Annual Report.
RECENT CORPORATE DEVELOPMENTS
Rare Earth Demonstration Plant Project
Construction, Commissioning and Operation of the Demonstration Plant
In January 2021, a consortium of companies, of which the Company is a part, received notice from the DoE that the consortium had been selected for negotiation of a potential financial award for the engineering, construction and operation of a rare earth separation and processing demonstration plant. The consortium of companies is led by General Atomics, an affiliate of Synchron, the Company’s majority shareholder, and includes certain of General Atomics’ affiliates, the Company, and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor. A formal proposal was submitted by the consortium in response to a published Funding Opportunity Announcement in mid-2020 for the construction and operation of a rare earth separation and processing plant utilizing the Company’s proprietary technology to produce commercial-grade products. The DoE finalized the award, and an agreement was executed by the DoE’s grants/agreement officer on September 27, 2021, with an effective date of October 1, 2021. The Company, as a subrecipient of the award, along with the other consortium members, commenced work on the planning and design of the Demonstration Plant project in November 2021, with the Company’s contractual arrangement with General Atomics finalized in December 2021 (“Cost Share Agreement”). The DoE’s original funding commitment was in the amount of $21,900 and represented approximately one-half of the originally estimated costs for the Demonstration Plant.
In September 2024, the DoE issued its final Project Continuation Notice, confirming the Demonstration Plant’s readiness for operations. This notice, along with the U.S. Nuclear Regulatory Commission’s (the “NRC”) approval of operations received in October 2024, cleared the path for operations of the Demonstration Plant to formally commence, with operations to process and separate REEs from the previously stockpiled Bear Lodge Property mineral sample. At this time, the DoE increased its funding commitment to $24,200.
Since inception, the General Atomics-led consortium has seen increases in the Demonstration Plant’s project costs, including its final equipment costs, due to, among other factors, inflation. As a result of these cost pressures, General
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Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant construction and operations budget in 2024 of approximately $53,600, which was approximately 22% higher than the original budget of approximately $43,800. In response, the DoE pledged an additional commitment of $2,400 (increasing its total commitment to approximately $24,200) in September 2024 to help fund a portion of this budget increase, with the balance to be funded by the Company, including any amounts in excess of the $53,600 revised budget total, now estimated to be approximately $77,500, inclusive of operating cost estimates through December 31, 2026.
As of December 31, 2025, approximately $3,700 of the DoE’s total funding commitment of $24,200 remained outstanding.
Wyoming Energy Authority Financial Award
In June 2023, the Company entered into the WEA Funding Agreement for its previously announced award of a $4,400 grant from the WEA to be used toward the advancement of the Demonstration Plant. This award, along with funds contributed by the Company and the DoE, is being used to fund the Demonstration Plant’s construction and operating costs. As of December 31, 2023, the Company had met the conditions allowing for the invoicing of $2,000 of the $4,400 WEA grant total. This $2,000 was subsequently received on January 31, 2024. By September 30, 2024, the Company had met the conditions allowing for the invoicing of an additional $2,000, which was subsequently received in November 2024. The remaining $400 of the $4,400 grant total, which is conditioned on the operations of the Demonstration Plant and a final report submittal, will be invoiced to the WEA upon submission of the final report, which is currently expected to occur mid-2026.
Bear Lodge Permitting and Licensing Restart
In early 2016, we placed the Bear Lodge REE Project on care-and-maintenance, and all licensing and permitting activities were suspended, including the National Environmental Policy Act (“NEPA”) process, state permitting, and the NRC source material license process. The Company continued to hold the Bear Lodge REE Project on care-and-maintenance through 2023. In 2024, we resumed certain of these activities, including certain environmental data collection and technical report updates. In early 2026, the Company formally restarted the licensing and permitting of the Bear Lodge REE Project for both federal and state permitting.
Financing Activities
As a result of its financing needs, the Company commenced a rights offering on February 6, 2026, in which each holder of the Company’s common shares as of the record date of January 30, 2026, was eligible to participate. On March 4, 2026, the Company closed the rights offering for gross proceeds of approximately $30,900 (the “2026 Rights Offering”).
Even with the funds currently on hand, the funds raised in the 2026 Rights Offering and the expected receipt of the remainder of the DoE financial support and WEA grant monies, the Company will not have sufficient funds to progress certain activities, including the engineering, development, and construction of its Bear Lodge REE Project. In the event the Company cannot secure additional financial resources or complete a strategic transaction in the longer term relating to the development of its Bear Lodge REE Project, it may need to suspend its operational plans or liquidate its business interests, and investors may lose all or part of their investment.
Current External Factors Impacting our Business
Throughout 2025, we continued to monitor the general U.S. political climate and actions taken by the U.S. government to secure a domestic rare earth supply chain. Due to the dominance of China over the REE supply chain, the U.S. federal government has issued several Presidential Executive Orders, under the Biden Administration and the first and second Trump Administrations, to encourage and support the establishment of a domestic REE supply chain and to strengthen the defense industrial base with respect to critical minerals, including REEs. In 2025 and into early 2026, the Trump Administration has continued the federal government’s focus on advancing a robust domestic critical mineral and rare earth supply chain, through agency regulatory actions and financial support initiatives directed to industry participants.
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Presidential and Administrative Critical Mineral Initiatives
On January 20, 2025, President Trump issued the “Unleashing American Energy” Executive Order, which included: (1) several urgent critical mineral and rare earth directives, including the immediate review of all agency actions that potentially burden the development of domestic energy resources with particular attention to critical minerals; (2) directing the Secretary of Energy to ensure that critical mineral projects, including the processing of critical minerals, receive consideration for federal support; (3) directing the Secretary of Defense to consider the needs of the U.S. in supplying and maintaining the national defense stockpile to provide a robust supply of critical minerals; and (4) establishing the U.S. position as the leading producer and processor of REEs, which will create jobs and prosperity at home, strengthen supply chains for the U.S. and its allies, and reduce the global influence of malign and adversarial states.
In March 2025, President Trump issued the “Immediate Measures to Increase American Mineral Production” Executive Order. In this Executive Order, President Trump directed the federal agencies, including the Export-Import Bank (“EXIM Bank”), to unlock the permitting, funding and issuance of off-take agreements for critical minerals, including REEs. The Executive Order includes near-term actions to be determined and implemented by the federal agencies to fast-track permits, mobilize capital for mineral producers and create off-take agreements for the strategic stockpiling of minerals critical to the United States’ defense, technology and energy.
In April 2025, President Trump directed the U.S. Department of Commerce to initiate a Section 232 investigation into whether imports of processed critical minerals and derivative products threaten national security, with a focus on REEs essential for defense and technology applications. This action was aimed at enhancing economic resilience and reducing reliance on foreign supplies.
In August 2025, the DoE announced new initiatives to secure the American critical minerals and materials supply chain, including the establishment of a Critical Minerals and Materials Accelerator program to support domestic production and processing.
In November 2025, the U.S. Department of the Interior, through the U.S. Geological Survey (USGS), published the Final 2025 List of Critical Minerals. The updated list expanded to 60 minerals, including the addition of copper and uranium, while reaffirming the “highest cost” status of REEs to the U.S. economy in the event of supply disruptions.
In December 2025, the DOE announced $134 million in specialized funding targeted at strengthening the domestic REE supply chain. This initiative prioritizes projects capable of separating and refining HREEs and producing high-strength permanent magnets, aiming to bridge the "midstream gap" between domestic mining and end-product manufacturing.
In January 2026, following the completion of the Section 232 investigation initiated in April 2025, President Trump issued a Presidential Proclamation on Adjusting Imports of Processed Critical Minerals. The Proclamation identified current import levels of processed REEs as a threat to national security. It directed the U.S. Trade Representative to negotiate “Critical Mineral Trade Agreements” with allied nations to establish a “minerals-secure” trade bloc and possible future implementation of minimum import prices for specific refined REE products to protect domestic producers from predatory foreign pricing.
In early January 2026, the administration proposed a G7-level “Price Floor” mechanism for neodymium-praseodymium (NdPr) and other magnet-related rare earths. The proposal is intended to help insulate Western REE projects from price volatility associated with China’s regulated market, and to support the economic viability of domestic facilities during periods of global oversupply.
In February 2026, President Trump signed an Executive Order launching “Project Vault,” a landmark $12 billion U.S. Strategic Critical Minerals Reserve. Unlike traditional stockpiles, Project Vault is structured as a public-private partnership, backed by a $10 billion direct loan from the EXIM Bank. The reserve is designed to act as a “buyer of last resort” for domestic producers, providing a guaranteed offtake for U.S.-processed REEs and shielding the domestic industrial base from sudden foreign export restrictions.
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Tariffs and Trade Restrictions for Critical Minerals
Since early 2025 and continuing into early 2026, the Trump Administration has announced several potential new and/or increased tariffs and other trade restrictions on imports to the United States in response to China’s export and licensing restrictions. In December 2023, China announced that it had banned the export of technology to make rare earth magnets, adding to its previous export ban of critical material extraction and separation technology. In December 2024, China further banned the export of certain critical minerals, including gallium, germanium, and antimony, which have widespread military applications. In February 2025, China expanded its export licensing requirements to include five additional minerals: tungsten, indium, bismuth, tellurium, and molybdenum. In April 2025, China imposed export restrictions on an additional seven REEs (samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium) as well as related magnets and processing technologies used in defense, energy, and automotive sectors, requiring exporters to obtain licenses from China’s Ministry of Commerce. As U.S.-China trade negotiations continued, including a temporary 90-day suspension of non-tariff countermeasures in May 2025, and a June 2025 framework agreement to expedite shipments and create a “green channel” for trusted U.S. companies, these restrictions were partially eased for non-military uses. However, a Chinese REE licensing system remains in place, controlling the export of REEs and related technologies.
In October 2025, China announced further expansions to cover five additional REEs (holmium, erbium, thulium, europium, and ytterbium), bringing the total to 12 out of 17 REEs under restriction, along with (i) extraterritorial requirements for foreign-produced items containing even 0.1% Chinese-origin REEs or made using Chinese refining equipment, originally set to become effective December 1, 2025, and (ii) prohibiting exports for military applications. Following a meeting between President Trump and Chinese President Xi Jinping on October 30, 2025, China agreed to suspend the October 2025 export controls, along with certain other related curtailments, for one year as part of a broader trade truce, providing a pause on further escalations. While Nd and Pr are not subject to the enhanced dual-use export controls applied to 12 other REEs, all Chinese rare earth exports (including NdPr) remain subject to a general licensing regime, and downstream NdFeB magnets incorporating controlled HREEs continue to face licensing requirements.
As of February 2026, the one-year suspension of China’s October 2025 export controls remains in effect, with no new restrictions announced on REEs. Rare earth export volumes from China increased in late 2025 following the implementation of streamlined licensing and the broader trade truce. Geopolitical tensions and supply chain uncertainties persist, however, as demonstrated by ongoing U.S. initiatives to diversify sources and China’s emphasis on the strategic importance of REEs. The Company continues to monitor these developments closely, as they may impact the timing and economics of domestic REE projects.
The impact of the Trump Administration’s tariffs and other trade restrictions, and China’s continued use of export controls and restrictions, is currently unknown and could have an impact on the REE supply chain and/or our business operations.
U.S. Government Critical Mineral Investments
In response to global market volatility and the concentration of critical mineral production in certain adversarial foreign states, the U.S. government significantly accelerated its direct investment in the domestic REE and critical minerals supply chain throughout 2025 and early 2026. This approach transitioned from foundational framework agreements with key allies to aggressive financial participation, characterized by the federal government taking direct equity positions or warrant stakes in industry participants. Support for technical infrastructure further intensified in December 2025, with the DoE’s commitment of up to $134 million for commercial-scale REE demonstration facilities, while diplomatic efforts culminated in the February 2026 inaugural Critical Minerals Ministerial, which established the Forum on Resource Geostrategic Engagement (FORGE) and new bilateral action plans with Mexico and the European Union. Central to this strategy was the concurrent launch of “Project Vault,” a $12 billion Strategic Critical Minerals Reserve supported by a $10 billion EXIM Bank loan facility designed to act as a “buyer of last resort.” By providing guaranteed offtake and stockpiling mechanisms, these initiatives serve as a strategic backstop for domestic producers, insulating the U.S. industrial base from foreign export restrictions and predatory pricing. The Company continues to evaluate opportunities for participation in these evolving federal programs.
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Other External Factors
The impacts of certain external influences, such as the COVID-19 pandemic, the Russia/Ukraine war, and conflicts in the Middle East, have also contributed to the U.S. government’s focus on implementing secure domestic supply chains, including for REEs.
TRENDS AND DESCRIPTION OF THE REE MARKET
Uses for REE Products
Due to variations in physical, chemical, molecular and application characteristics, different rare earth metals possess their own market uses, drivers and challenges. REEs are used in computers, cellular telephones, television screens, wind turbines, fuel cells, automobiles, magnetic refrigeration, energy-efficient lighting, petroleum-refining catalysts, and numerous other modern specialty technologies, including military applications. Lately, the major driver for the rare earth metals market has been increasing consumption in the manufacture of permanent NdFeB rare earth magnets, in which rare earth metals such as Nd, Pr, Tb, and Dy are used. Specifically, these REEs are used in hybrid and electric vehicle motors as well as in wind turbines. Ce, La, and other REEs are widely used in applications such as metallurgy, catalysts, glass, ceramics, optical instruments, and polishing.
Trends Affecting REE Supply, Demand and Prices
According to the research and advisory firm Benchmark Mineral Intelligence, a U.K.-based mine-to-grid supply chain intelligence and forecast service (“Benchmark”), rare earth mine production in 2025 increased by approximately 4% to 403,134 tonnes (444,379 tons) TREO relative to 2024. TREO mine production from China (+12,410 tonnes or 13,679 tons) and the U.S. (+2,603 tonnes or 2,869 tons) were the main contributors to this increase. Refined TREO supply in 2025 was estimated to be 372,390 tonnes (410,489 tons), an approximate 1% increase from 2024. Despite production increases from the U.S. (mainly from the Mountain Pass mine in California and new refining and separation providers, including Energy Fuels), China still dominates the global supply of REEs at both the mined and refined stages, accounting for approximately 70% of global mine production and approximately 91% of refined production in 2025.
In the rest of the world, specifically in the United States and Australia, certain competitors form a second tier of rare earth concentrate producing companies, with 48,458 tonnes (53,415 tons) TREO mine production coming from North America and approximately 11,716 tonnes (12,914 tons) TREO coming from Oceania, in each case in 2025. A facility in Malaysia produces separated rare earths from TREO mined primarily in Australia.
The growth in demand for certain REEs, specifically Nd and Pr, has been driven in part by permanent magnet synchronous motor adoption used in electric motors and generators. According to Ember Energy and MMR Statistics, global demand for wind turbines (which increased by 8%) in 2025 and electric vehicle sales reached 18 million units, representing a 20% increase from 2024. This growth translated into increased rare earth magnet consumption, although overall demand was tempered by economic headwinds in China, supply chain diversification efforts in the United States and other regions, and emerging recycling initiatives that offset certain raw material needs. Overall, rare earth magnets accounted for about 41% of total TREO volume demand (76,903 tonnes or 84,771 tons) but over 80% of global REE market value (approximately $67.2 billion), according to Persistence Market Research and Research Nester, market research and industry intelligence firms, underscoring their disproportionate economic impact amid ongoing supply vulnerabilities and geopolitical tensions.
NdPr oxide prices have trended upward, with end-of-year 2025 prices around $90/kg, compared to 2024 prices of approximately $70/kg. In the medium-term, NdPr oxide prices are projected to decrease, dropping back to the $70/kg price range by 2028. Many projects are expected to become operational during this time, which could add to a market surplus between 2027 and 2029. According to Benchmark, price volatility is expected to stabilize through 2029, reflecting a more stable market. Longer term, prices are expected to increase to around $120/kg by 2030 as a supply gap begins to take hold and existing visible sources of supply become more strained to match strong demand growth.
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Benchmark forecasts that magnet applications will continue to increase their share of overall demand for TREO rising from 41% in 2025 to 49% by 2030. Further, according to Benchmark, electric vehicle sales have grown, going from 2.1% of global market penetration in 2018, to 22.5% in 2025, and are expected to achieve 38% penetration by 2030.
Supply and demand factors for REE products that could positively impact future REE prices include, among other factors, the following:
| ● | the use of Nd, Pr, Tb and Dy in high-strength magnets that are critical to multiple defense applications, hybrid and electric vehicles and wind power generation facilities, particularly large offshore installations; |
| ● | the use of high-strength NdFeB magnets in the miniaturization of electronic products, including consumer devices, robotics, and emerging AI/data center technologies; |
| ● | the use of La in the fluid catalytic cracking process used by refineries in the processing of lower quality crude oil that consumes greater quantities of the catalysts; |
| ● | the increased use of REEs to reduce global carbon emissions, driven by accelerating EV adoption, expanding wind energy capacity, and broader clean energy transitions; |
| ● | China’s ongoing consolidation of its REE industry, including efforts to close or regulate small, inefficient, and polluting producers, alongside production quotas and tighter export controls on key elements; |
| ● | geopolitical tensions and trade policies, including China’s export restrictions or production caps on REEs, magnets, and related technologies, along with potential changes in U.S. tariffs, import/export duties, or incentives for domestic supply chains; |
| ● | the rising costs in China due to stricter environmental regulations, compliance requirements, and increasing wages, which contribute to higher production expenses and pricing; |
| ● | the strategic importance of REEs in defense modernization and high-tech sectors, amplifying demand for secure, non-Chinese sources amid supply vulnerabilities; |
| ● | the use of Ce in glass, ceramics, glass polishing, and advanced water filtration applications; |
| ● | the continued research and commercialization of new applications for REE products; and |
| ● | the U.S. government’s Project Vault created in February 2026, is a $12 billion strategic critical minerals reserve designed to create new demand via stockpiling, reduce reliance on Chinese supply chains, and provide price support for domestic and allied producers. |
Supply and demand factors for REE products that could negatively impact future REE prices include, among other factors, the following:
| ● | the potential for oversupply of certain REEs due to new production inside and outside of China and/or increased exports from China; |
| ● | government policy changes (U.S. or elsewhere) that would curtail incentives for electric vehicle adoption and/or wind energy development; |
| ● | development or enhancements of alternative electric motor or generator technologies that use less or no REE magnet materials; |
| ● | strong demand for selected REEs, such as magnet materials, driving overproduction of other co-product REEs and creating oversupply conditions for non-magnet REEs; |
| ● | the potential substitution of other materials for higher-priced REEs; |
| ● | the development of new, lower cost sources of supply that could reduce the market prices for REEs; |
| ● | economization by intermediate and end-users to reduce the usage of REEs in end-products; |
| ● | the potential for increased recycling of higher-priced REEs; |
| ● | fluctuating or lower fossil fuel prices (oil, gas, and coal) that could reduce the demand for technologies using REEs; |
| ● | static or lower global economic growth, reducing overall demand growth for REEs; |
| ● | potential recovery of REEs from coal mine waste and other mineral waste stockpiles; and |
| ● | potential by-product production of REEs that may increase supply irrespective of the economics of REE production from primary mines. |
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The feasibility of the Bear Lodge REE Project and our ability to raise additional funds to develop the Bear Lodge REE Project will likely be impacted by global supply and demand and future prices of REEs.
SEASONALITY
At this stage, seasonality in the state of Wyoming is not a material factor to our exploration, development, and operating activities on the Bear Lodge Property. Snowfall or extreme temperature in the winter may temporarily limit (i) our access to the Bear Lodge Property, (ii) work activities on the Demonstration Plant or (iii) future work on a commercial-scale processing facility, from time to time, during the months of November through June.
COMPETITION
The industry in which we operate is highly competitive. We compete with other mining and exploration companies, both within the U.S. and internationally, for the exploration and development of mineral properties and production of REEs as well as funding for our projects. There is competition for the limited number of opportunities, some involving companies having substantially greater financial resources, staff, and facilities than we do, and some with rare earth operational experience. We also compete with other mining and exploration companies in our efforts to hire and retain experienced professionals. As a result, we may have difficulty attracting or retaining key personnel or securing outside technical resources.
In 2025, China accounted for an estimated 70% of global REE mine production and 91% of global refined production. Benchmark has forecasted that China will remain the primary source of mine supply, although China’s share of global mine production is projected to decline to 54% by 2030. China is also expected to remain the largest contributor of refined supply, but China’s share of total refined production is projected to decrease to 68% by 2030. Demand is projected to remain Asia-driven, with China maintaining a dominant position. This gives the Chinese producers a continued competitive advantage in controlling the supply and processing of REEs and an opportunity to influence prices to discourage competition. Additionally, any increase in the quantities of REEs exported from other nations will likely only increase supply and may result in price reductions, reduced margins, and loss of potential market share, any of which could materially and adversely affect our business. As a result of these factors, the Company may not be able to compete effectively against current and future competitors. See “Item 1A. Risk Factors” of this Annual Report.
PATENTS, TRADEMARKS AND LICENSES
We rely on a combination of trade secret protection, nondisclosure agreements, trademarks, and patents to establish and protect our proprietary intellectual property rights in our rare earth technology.
As of December 31, 2025, we had a patent portfolio which includes two issued U.S. patents and one pending U.S. divisional patent application, and fifteen issued foreign patents across thirteen foreign jurisdictions. The patent claims are generally directed to (1) selective recovery of REEs from mixed chloride leach solutions using oxalic acid, and (2) separation of thorium from bulk REEs in a solvent extraction (“SX”) process. These patents claim priority to provisional applications filed in 2013 and 2014. The issued U.S. patents have a term of 20 years measured from the filing date of the utility patent applications. We licensed our intellectual property, including patents and related technical information, to our majority shareholder, Synchron, in October 2017, and the license became exclusive to Synchron and its affiliates in October 2019. The Company retains a limited right to use its intellectual property and any enhancements thereto. Several of these technologies may have potential value for application in other industries. See “Item 1A. Risk Factors” of this Annual Report.
ENVIRONMENTAL REGULATION
Our exploration and planned development, mining and processing activities are subject to extensive and demanding environmental laws and regulations under various federal, state, county and local laws relating to the protection of the environment, which generally includes air and water quality, hazardous waste management, radionuclide handling and reclamation. Failure to comply with these requirements can result in civil and/or criminal liability and governmental fines and penalties. Also, developments or changes in the law could require us to make environmental expenditures significantly
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greater than those we currently expect that could materially or adversely affect us. Environmental laws historically have evolved in a manner that requires stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. Current and future laws, regulations and permits could impose significant costs, liabilities or obligations and could limit or prevent our ability to continue operations or undertake new operations. While there is presently a trend toward streamlining the licensing and permitting process, a future change in the U.S. presidential administration or in the composition of the Congress could result in more stringent environmental review and regulation of our operations. In addition, under various federal, state and local laws and regulations, a current or former owner or operator of a property may be liable for the cost to remove or remediate contamination resulting from the presence or discharge of hazardous or toxic substances, wastes or products on, under or from such property. Costs to address contamination can be substantial and liability under such laws may attach without regard to whether the owner or operator caused or was responsible for such contamination, and the liability may be joint and several. Moreover, the presence of contamination could expose us to third-party liability (e.g., for cleanup costs, bodily injury or property damage), subject our properties to liens in favor of the government, impose restrictions on the manner in which a property may be used, or materially or adversely affect our ability to sell, lease or develop properties.
Our Bear Lodge Property is subject to federal and state environmental laws, regulations, and permits. The federal agency with primary regulatory jurisdiction is the U.S. Forest Service (the “USFS”) Bear Lodge Ranger District, Sundance, Wyoming. The state agency with regulatory jurisdiction is the Wyoming Department of Environmental Quality (the “WDEQ”). We operate under approvals and permits granted by these two agencies and have established surety bonds to ensure environmental reclamation of areas disturbed. As of December 31, 2025, the Company holds surety bonds with the state of Wyoming totaling $185. Prior to operating, we will require several other permits and licenses, including those issued by the NRC, U.S. Army Corps of Engineers, and others.
Our Demonstration Plant is subject to federal, state, county and local licenses and permits, including an NRC source material possession license, USFS road use permit, and WDEQ air quality and storm water permits, among others. As of December 31, 2025, the Company held a surety bond, totaling $917 and secured by cash collateral of $202, with the state of Wyoming for the reclamation of the Demonstration Plant.
MINERALS EXPLORATION REGULATION
Mining operations and exploration and development activities are subject to various federal, state, county and local laws and regulations in the U.S. that govern prospecting, exploration, development, mining, production, processing, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances, and other matters. The Company believes that it is in compliance in all material respects with applicable mining, health, safety and environmental statutes and regulations. There are no current orders or notices of violations relating to the Company under applicable laws and regulations.
Compliance with these laws and regulations may impose substantial costs on the Company and could subject it to significant potential liabilities. Changes in these laws or regulations could require us to expend significant resources to comply with new laws or regulations, or changes to current requirements, and could have a material adverse effect on our business operations.
MINE SAFETY AND HEALTH REGULATIONS
Pursuant to Section 1503(a) of the Dodd–Frank Wall Street Reform and Consumer Protection Act (the “Dodd–Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the U.S. are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the year ended December 31, 2025, our Bear Lodge Property was not subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.
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EMPLOYEES
As of December 31, 2025, we had nine full-time employees and no part-time employees. Our employees are not covered by any collective bargaining agreements. When required, we will engage the services of third parties under consulting or service agreements.
AVAILABLE INFORMATION
We make available, free of charge, on or through our Internet website, at www.rareelementresources.com, our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. Our website and the information contained therein or connected thereto are not intended to be, and are not, incorporated into this Annual Report.
Our reports and other information can be inspected on the SEC’s website at www.sec.gov. The Company also files reports under Canadian regulatory requirements on the System for Electronic Document Analysis and Retrieval+ (“SEDAR+”). The Company’s reports which are filed on SEDAR+ can be found under the Company’s SEDAR+ profile at www.sedarplus.ca.
ITEM 1A. RISK FACTORS
The following sets forth certain risks and uncertainties that could have a material adverse effect on our business, financial condition and/or results of operations and the trading price of our common shares, which may decline, and investors may lose all or part of their investment. Additional risks and uncertainties that we do not presently know or that we currently deem immaterial may also impair our business operations. We cannot assure you that we will successfully address these risks. Our risk factors are grouped into the following categories:
| ● | Risks Related to Our Business; |
| ● | Risks Related to the Mineral Exploration, Development, Mining and Processing Industries; |
| ● | Risks Related to Our Common Stock; and |
| ● | General Risk Factors. |
Risks Related to Our Business
We may not be able to operate our Demonstration Plant project for a sufficient period of time to gather the information required for a commercialization decision and we do not have direct control over the DoE relationship for its cost-share funding.
We are subject to the impact of inflation on wages, capital equipment, general supplies and reagents in the operation of our Demonstration Plant. If the additional funds required by these inflationary cost measures were to prevent us from having or being able to secure the funds to operate the Demonstration Plant for a sufficient amount of time to gather the information required for a commercial-scale plant decision, this could have an adverse impact on our development plans. Additionally, the contracting for some services relating to the Demonstration Plant, including engineering and construction services, was completed by another consortium member and any disputes, including over cost increases, are not controlled by us and may result in contractor payment disputes, liens or other delays to the project. Further, the DoE agreement is with General Atomics, and we do not have direct control over the DoE relationship, invoicing and disposition of the equipment post-operations.
The operation of our Demonstration Plant comes with several inherent risks, any of which, could result in the disruption of plant operations and/or unplanned expenses.
Operations at our Demonstration Plant involve the use of acids and other toxic chemicals, the handling and storage of radioactive materials, and other workplace risks typical of an industrial operation of this kind. Although we consider health, safety, and environmental stewardship a core value of our operations, certain events may occur which could result
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in injury or harm to human health or the environment, resulting in significant fines and penalties and/or the possible suspension of our operations.
We have no revenues from operations and expect to incur losses for a significant period of time. Any future revenues and profits are uncertain.
We have incurred losses since our inception, and further losses are anticipated in the development of our business. As of December 31, 2025, we had cash and cash equivalents of $19,315. During the year ended December 31, 2025, we consumed cash of $7,410 between our operating and investing activities.
Even with the funds already on hand, the funds raised in the 2026 Rights Offering, the expected receipts of the final $400 in grant monies from the WEA in mid-2026, and the final $3,700 remaining under the DoE cost share award, we will not have sufficient funds to progress our longer-term activities, including the development, and construction of our Bear Lodge REE Project. Therefore, the achievement of these activities will be dependent upon the receipt of additional funds through one or more of the following: financings, off-take agreements, joint ventures, strategic transactions, or sales of various assets. Ultimately, in the event that we cannot secure additional financial resources, or complete a strategic transaction in the longer term, we may need to suspend our operational plans or liquidate our business interests, and investors may lose all or part of their investment.
Our largest shareholder beneficially owns a majority of our common shares, has significant influence on, and control over the outcome of, our major corporate decisions, including veto power over some matters, and could take actions that may not be viewed favorably by certain other shareholders, any of which actions could adversely affect the market price of our common shares.
As of March 6, 2026, Synchron owned approximately 71.4% of the issued and outstanding common shares of the Company. Additionally, Synchron has approval rights for certain corporate actions and the right to nominate three of seven directors to the Board. Pursuant to the investment agreement, dated October 2, 2017, by and between the Company and Synchron (“the Investment Agreement”), Synchron has significant influence on, and control over the outcome of, certain of our major corporate decisions and matters requiring shareholder approval, including the election of directors, mergers, consolidations and acquisitions, the sale of all or substantially all of our assets and other decisions affecting our capital structure, the amendment of our certificate of incorporation and articles, and our winding up and dissolution. These rights, along with the concentration of ownership and voting power with Synchron, (i) may make it more difficult for any other holder or group of holders of our common shares to significantly influence the way we are managed or the direction of our business, and (ii) may make it more difficult for another company to acquire us and for shareholders to receive any related takeover premium unless Synchron approves the acquisition. The interests of Synchron with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings, and other corporate opportunities, and attempts to acquire us, may conflict with the interests of our other shareholders.
By granting a license in our intellectual property rights, we may be limited in our ability to protect our intellectual property rights, which could adversely impact our competitive position or results of operations.
On October 2, 2017, we entered into an Intellectual Property Rights Agreement with Synchron pursuant to which Synchron and its affiliates were granted certain perpetual rights to the intellectual property of the Company relating to its rare earths’ patents and related technical information. Upon the exercise of its option on October 16, 2019, Synchron and its affiliates’ intellectual property rights became exclusive, subject to the Company’s ownership and limited use rights in the intellectual property and any improvements made thereon. As a result of the Intellectual Property Rights Agreement, we may be forced to enforce or defend our intellectual property rights against infringement and unauthorized use, and to protect our trade secrets. Further, by granting a license to use our intellectual property, we may be limited in our ability to protect our intellectual property rights by legal recourse or otherwise. In defending our intellectual property rights, we may place our intellectual property at risk of being invalidated, held unenforceable, narrowed in scope, or otherwise limited, any of which could have a material adverse effect on our business and financial condition. Our inability to preserve or maintain an interest in certain intellectual property rights could adversely impact our competitive position or results of operations.
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We have restarted our federal and state licensing, permitting progression for our Bear Lodge REE Project, and there is a risk to the completion of those efforts in a timely and cost-effective manner.
During the first quarter of 2016, we placed the Bear Lodge REE Project on care-and-maintenance, and all licensing and permitting activities were suspended, including the environmental impact statement (“EIS”) process, state permitting, and the NRC licensing process. The Company continued to hold the Bear Lodge REE Project on care-and-maintenance through 2023. In 2024, we resumed certain of these activities, including certain environmental data collection and technical report updates. In early 2026, the Company formally restarted the licensing and permitting of the Bear Lodge REE Project for both federal and state permitting; however, our ability to complete the permitting and licensing on terms that support the project is uncertain.
We have no history of producing mineral products from our properties.
We have no history of mining, recovering, or refining any mineral products, and our Bear Lodge REE Project is not in development or production. There can be no assurance that the Bear Lodge REE Project will be successfully developed and placed into production, produce minerals or products in commercial quantities or otherwise generate operating earnings. Advancing properties from the exploration stage into development and commercial production requires significant capital and time and will be subject to further feasibility studies, permitting and licensing requirements and construction of the mine, processing plants, roads and related works and infrastructure. We will continue to incur losses until such time, if ever, when our mining activities successfully reach commercial production levels and generate sufficient revenue to fund continuing operations. There is no certainty that we will produce revenue from any source, operate profitably, or provide a return on investment in the future. If we are unable to generate revenues or profits, our shareholders may not be able to realize returns on their investment in our common shares.
The planned development of our Bear Lodge REE Project involves numerous uncertainties that could affect the feasibility or profitability of the project.
Mine development projects typically require a number of years and significant expenditures during the exploration and development phases before production is possible. The economic feasibility of exploration and development projects is based on many factors, such as the following:
| ● | completion of feasibility studies to evaluate mineral resources and mineral reserves and commercial viability; |
| ● | the timing and cost, which can be considerable, of further exploration, licensing, permitting and construction of infrastructure, mining, processing and/or beneficiation facilities; |
| ● | our ability to utilize our proprietary process technologies, which could encounter problems, prove to be uneconomical or result in other unexpected complications during scale-up; |
| ● | securing commercially viable sales outlets for our REE products; |
| ● | the potential need to enter into a joint venture or other partnership arrangement to develop the Company’s projects; |
| ● | the availability and costs of equipment, supplies and skilled labor; |
| ● | the availability and cost of appropriate processing and/or refining arrangements, if required; |
| ● | compliance with environmental and other governmental approval, licensing and permit requirements; |
| ● | the availability of funds to finance exploration, development, and construction activities; |
| ● | future prices for rare earth minerals; |
| ● | potential opposition from non-governmental organizations, environmental, indigenous, or local groups or inhabitants that may delay or prevent development activities; |
| ● | potential increases in exploration, engineering, construction, operating, and decommissioning costs due to changes in the cost of labor, fuel, power, materials, or supplies; |
| ● | potential shortages of mineral processing and/or beneficiation, construction or other facilities-related equipment or supplies; and |
| ● | the ability to attract and retain talent for development and operation of the Bear Lodge REE Project. |
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It is common in exploration programs and in development, construction, and mine start-ups to experience unplanned problems, delays, and substantial cost overruns. Accordingly, our activities may not result in profitable mining operations, and we may not succeed in establishing mining operations or profitably producing minerals from our projects at all or in a reasonable timeframe.
Joint ventures and other partnerships may expose us to risks.
We will require additional capital through investment, off-take agreements, joint ventures and/or other partnership arrangements with current investors or other parties for the development of our projects. Although such arrangements may lessen our financial burden in exploring and developing the projects, they will likely also dilute our interest therein or affect our ability to control the development and/or operation of any of our projects. Our ability to attract additional capital may be limited by our majority shareholder Synchron, as it holds certain contractual approval rights pursuant to the Investment Agreement, and its approval may be required. In addition, Synchron has significant influence on, or the ability to control the outcome of, certain of our major corporate decisions and matters requiring shareholder approval. Any failure of an off-take partner, joint venture partner, or other partner to meet its obligations to us or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the off-take agreement, joint venture, or other partnership arrangement and, in turn, on our business performance and on our ability to develop and/or operate our projects.
Subject to further financing, and progression and outcome of the Demonstration Plant, we may commence a FS on our Bear Lodge REE Project, and the results of this FS are uncertain.
In October 2014, we completed a PFS for our Bear Lodge REE Project that updated our mineral resource estimate and refined plans for our process technology. We subsequently updated the mineral resource and completed a TRS (See “Item 2. Properties” of this Annual Report) and Technical Report for the Bear Lodge REE Project; however, the economic assessment of the Bear Lodge REE Project has not been progressed through an updated FS. Subject to further financing and the results of the Demonstration Plant, we may resume work on a FS. Whether the Company undertakes a FS in the future and, if so, the results of any such study, are uncertain and may indicate project economics that are more or less favorable than those previously reported in 2014 or in the TRS or Technical Report. As our project optimization efforts continue, we cannot ensure that the FS, if one is undertaken, will be based upon all of the same inputs used in the PFS and TRS. As a result, we may need to update our processing and/or beneficiation technology, and/or project development plans to enhance economics or further study aspects of the Bear Lodge REE Project. This could result in significant additional delays and expenses or could make financing efforts with respect to such efforts more difficult or not possible. In addition, there is a risk that the Company may not resume work on a FS.
Our viability as a rare earth company depends, in large part, on the financing, licensing, permitting, development and operation of our Bear Lodge REE Project, which is our only rare earth project.
Our only rare earth project at this time is the Bear Lodge REE Project. Our continued viability is based, in large part, on successfully implementing our strategy, including completion of licensing, permitting and construction of a mine and processing and/or beneficiation facilities in a reasonable timeframe. If we are unable to secure additional capital or enter into a strategic transaction and implement our strategy, or in the event of the imposition of significant additional regulatory burdens or delays or a significant deterioration of the market for rare earth products, our ability to develop a sustainable or profitable business would be materially adversely affected. If the Bear Lodge REE Project does not proceed, then the viability of the Company may depend upon the ability to process REE from sources other than our Bear Lodge REE Project using our proprietary technology assuming the technology is successfully proven through the operation of the Demonstration Plant.
Increased costs could affect our ability to bring the Bear Lodge REE Project into production and, once in production, to be profitable.
We estimated the initial capital costs required to bring the Bear Lodge REE Project into commercial production in our historical PFS, dated October 9, 2014, at approximately $290,000. We did not evaluate the capital cost estimates in our 2024 TRS or Technical Report for the Bear Lodge REE Project. A future FS, if and when completed, is expected to show
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our capital and operating costs will be materially higher than those we previously anticipated, which could make it more difficult to finance the Bear Lodge REE Project or to successfully establish mining operations.
We anticipate that our future operating costs at the Bear Lodge REE Project will vary from year to year due to a number of factors, such as changing grade, metallurgy, and revisions to mine plans in response to the physical shape and location of the ore body. In addition, costs are affected by the price of commodities such as oil, gas, reagents/chemicals, steel, rubber, and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production less profitable or not profitable at all. A material increase in costs could also impact our ability to commence or maintain future development of mining operations.
External influences, like a pandemic or other world health crisis, may have an adverse impact on our business.
A future pandemic or similar public health issues, as seen in the COVID-19 pandemic, could have a material adverse effect on our ability to raise capital, construct or operate our Demonstration Plant, mine, or production facility, or execute our business plans. In addition, preventive measures we may voluntarily put in place may have a material adverse effect on our business for an indefinite period of time, such as decreased employee or contractor availability, unavailability of needed products or services, or disruptions to the businesses of our contracted service providers and others. Our suppliers may also face these and other challenges, which could lead to a disruption or delay in their services. Any pandemic and resulting economic slowdown may also impact the supply and demand for rare earths domestically and globally. Although these disruptions may continue to occur, the long-term economic impact and near-term financial impacts of a pandemic, its ongoing variants, and other possible public health threats cannot be reasonably estimated at this time due to the uncertainty of future developments.
We expect to rely on our proprietary technology and processes to further our Bear Lodge REE Project.
We rely on a combination of trade secret protection, nondisclosure agreements, trademarks, and patents to establish and protect our proprietary intellectual property rights in our rare earth technology. As of December 31, 2025, we had a patent portfolio which includes two issued U.S. patents and one pending U.S. divisional patent application, and fifteen issued foreign patents across thirteen foreign jurisdictions. The patent claims are generally directed to (1) selective recovery of REEs from mixed chloride leach solutions using oxalic acid, and (2) separation of thorium from bulk REEs in a solvent extraction (“SX”) process. These patents claim priority to provisional applications filed in 2013 and 2014. The issued U.S. patents have a term of 20 years measured from the filing date of the utility patent applications. We licensed our intellectual property, including patents and related technical information, to our majority shareholder, Synchron, in October 2017, and the license became exclusive to Synchron and its affiliates in October 2019. The Company retains a limited right to use its intellectual property and any enhancements thereto. Several of these technologies may have potential value for application in other industries. The success of our business depends, in part, on our ability to utilize our proprietary process technologies, and we could encounter unforeseen problems or costs, or both, in scaling up our technologies to commercial applications.
Our mineral resource estimate may be inaccurate and any material change in this estimate could affect the viability of placing our property into production.
In March 2024, the Company published a mineral resource estimate based on maximizing the recovery of La and the key magnet materials of Nd, Pr, Tb, and Dy. The estimate was focused on the Bull Hill deposit at the Bear Lodge REE Project with long-term upside existing in the Carbon, Whitetail, and Taylor deposits. Unless otherwise indicated, our mineral resources are based upon estimates made by independent geologists. When making determinations about whether to advance the Bear Lodge REE Project to development, we must rely upon such estimated calculations as to the quantity and grades of mineralization contained in the property. Until mineralized material is actually mined and processed, mineral resources and grades of such mineralization must be considered estimates only, which may be unreliable. Because we have not completed a FS on the Bear Lodge REE Project and have not commenced actual production, the mineral resource estimate for the Bear Lodge REE Project may require adjustments or downward revisions. In addition, the grade of material ultimately mined, if any, may differ from that indicated in our mineral resource estimate or in future feasibility studies. Our mineral resource estimate has been determined based on assumed cut-off grades that depend upon estimated REE prices and recovery rates. Any significant increase in cut-off grades could reduce our estimates of mineralization, or the
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amount of mineralization to be extracted, and could have a material adverse effect on our share price and the value of our Bear Lodge REE Project.
The historical mineral resource estimates for our Sundance Gold Project are not considered current, need to be updated, and should not be relied upon.
The 2011 historical mineral resource estimates for our Sundance Gold Project have not been updated and, as such, should not be relied upon. The Sundance Gold Project is in the early exploration stage and has been on hold since 2011. We have not done sufficient work to classify the historical mineral estimates for our Sundance Gold Project as a current estimate of mineral resources, and we are not treating the historical mineral resource estimates as current estimates of mineral resources.
We depend on key personnel, and the absence of any of these individuals could adversely affect our business.
Our success is currently largely dependent on the performance, retention and abilities of our directors, President and Chief Executive Officer (“CEO”), other officers and personnel. The loss of the services of these persons could have a material adverse effect on our business and prospects. There is no assurance that we can maintain the services of our directors, CEO, other officers, or other qualified personnel and consultants required to operate our business. Failure to do so could have a material adverse effect on us and our prospects.
U.S. investors may not be able to enforce their civil liabilities against us or our directors, controlling persons and officers.
It may be difficult to bring and enforce suits against us. We are incorporated in the province of British Columbia, Canada under the BCBCA. Some of our directors may be residents of Canada, and a substantial portion of their assets are located outside of the U.S. As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the U.S. or to recover in the U.S. on judgments rendered against them. In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the U.S., or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the U.S.
We believe that we were a “passive foreign investment company” (“PFIC”) for the year ended December 31, 2025, and could be a PFIC in subsequent years, which could have adverse U.S. federal income tax consequences for U.S. shareholders.
An investor in our common shares that is a U.S. taxpayer (referred to as a U.S. shareholder) should be aware that we believe that we were a PFIC for the year ended December 31, 2025. We also expect that we will be a PFIC for the year ending December 31, 2026 and that we may be a PFIC in subsequent years. The tests for determining PFIC status are dependent upon a number of factors, some of which are beyond our control and can be subject to uncertainties. Accordingly, we cannot provide certainty that we were or were not a PFIC for the year ended December 31, 2025, or that we will or will not be a PFIC for the year ending December 31, 2026, or for any future year. We will use commercially reasonable efforts to provide information regarding our status as a PFIC, and the PFIC status of any subsidiary in which the Company owns more than 50% of such subsidiary’s total aggregate voting power, to U.S. shareholders who make a written request for such information. Adverse rules apply to U.S. shareholders who own our common shares if we are a PFIC. Each U.S. shareholder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, and U.S. state and local tax consequences of the PFIC rules and the acquisition, ownership, and disposition of our common shares if we are or become a PFIC. For additional information regarding PFIC tax consequences, see “Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Certain U.S. Federal Income Tax Considerations—Passive Foreign Investment Company Rules.”
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Risks Related to the Mineral Exploration, Development and Mining Industries
We may be adversely affected by fluctuations in demand for, and prices of, rare earth products.
Because our primary focus is currently the advancement and development of the Demonstration Plant and ultimately the Bear Lodge REE Project, changes in demand for, and the market price of, REE products could significantly affect our ability to develop or finance the Bear Lodge REE Project and eventually attain commercial production or profitability. REE product prices may fluctuate and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation, deflation, fluctuation in the relative value of the U.S. dollar against foreign currencies on the world market, global and regional supply, and demand for REE products, and the political and economic conditions of countries that produce and use REEs. Protracted periods of low prices for REE products could significantly reduce our ability to develop the Bear Lodge REE Project and, if we attain commercial production, to maintain profitable operations.
Demand for REE products is impacted by demand for downstream products incorporating rare earths, including hybrid and fully electric vehicles, wind power equipment and other clean technology products, as well as demand in the general automotive and electronics industries. Lack of growth in these markets or the introduction of substitute products could adversely affect the demand for REE products, which would have a material adverse effect on our Bear Lodge REE Project and our business. In contrast, periods of high REE prices are generally beneficial to us; however, strong REE prices, as well as real or perceived disruptions in the supply of REE, also create economic pressure to identify or create non-REE alternate technologies that ultimately could reduce future long-term demand for REE products, and at the same time, may incentivize the development of otherwise marginal mining properties or the development of new, lower cost sources of supply that could reduce or eliminate the market for REEs altogether. For example, automobile manufacturers have announced plans to develop motors for electric and hybrid cars that do not require REE products due to concerns about the available supply of REEs. If the automobile industry or other industries reduce their reliance on REE products, the resulting change in demand could have a material adverse effect on our business. In particular, if prices or demand for REEs were to decline, our share price would likely decline, and this could impair our ability to obtain the funding needed for our operations and our ability to find purchasers for our products at prices acceptable to us or at all.
An increase in the global supply of rare earth products, dumping and/or predatory pricing by our competitors may materially and adversely affect our ability to raise capital, develop our Bear Lodge REE Project or operate profitably.
The pricing and demand for REE products is affected by a number of factors beyond our control, including growth of economic development and the global supply and demand for REE products. REE supply markets continue to be dominated by production from China, which produced an estimated 70% of the global REE mine production and 91% of refined product in 2025. China also dominates the manufacture of metals, NdFeB magnets and other products from REEs. The threat of increased competition may lead our competitors to engage in predatory pricing behavior or manipulation of the available supply of REEs. Advanced technology in recycling REEs may also impact supply and prices. Any increase in the amount of REE products exported from other nations and increased competition may result in price reductions, reduced margins, or loss of potential market share, any of which could materially adversely affect our business. As a result of these factors, we may not be able to compete effectively in the market.
The success of our business may depend, in part, on the establishment of new uses and markets for rare earth products.
The success of our business may depend, in part, on the establishment of new markets for certain rare earth products. Although we plan to produce rare earth products for use in end-products such as NdFeB magnets, which are used in critical existing and emerging technologies (hybrid and fully electric vehicles, wind power turbines, robotics, and AI data centers), as well as other REE applications such as oil refining catalysts, the success of our business may depend on the creation of new markets in addition to the successful commercialization of REE products in existing and emerging markets. Any unexpected costs or delays in the commercialization of any of the foregoing products or applications could have a material adverse effect on our ability to develop our Bear Lodge REE Project or operate our business profitably.
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We are subject to significant governmental regulations, including permitting, licensing and approval processes, that affect our operations and could impact the cost and timing of conducting our business.
Our current and future activities will be governed by laws and regulations, including the following, among others:
| ● | laws and regulations governing mineral concession acquisition, prospecting, development, mining, processing, production, and decommissioning; |
| ● | laws and regulations related to exports, taxes, and fees; |
| ● | labor standards and regulations related to occupational health and mine safety; |
| ● | laws and regulations relating to environmental protections concerning, among other things, waste management, greenhouse gas emissions, transportation, and disposal of toxic and radioactive substances, land use, water, air, and the protection of threatened and endangered species. |
We believe that we hold, or are in the process of obtaining, all licenses and permits necessary to carry on the activities that we currently are conducting or propose to conduct in the near term under applicable laws and regulations. Such licenses and permits are subject to changes in regulations and changes in various operating circumstances. There is no guarantee that we will be able to obtain all necessary licenses and permits that may be required for future exploration, development and mining activities, including constructing mines and/or processing and/or beneficiation facilities, and commencing operations at the Bear Lodge REE Project. In addition, if we proceed to production on the Bear Lodge REE Project, we will be required to obtain and comply with permits and licenses that may contain specific operating or other conditions. There can be no assurance that we will be able to obtain such permits and licenses or that we will be able to comply with any such conditions. Our Sundance Gold Project, previously in the exploration stage, but on hold since 2011, does not have any of the permits or licenses that would be necessary to carry on further activities on the project. Costs related to applying for and obtaining permits and licenses may be prohibitive and could delay planned exploration and development activities. Failure to comply with applicable laws, regulations and permitting and licensing requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.
Parties engaged in mining operations may be required to compensate those suffering loss or damage relating to mining activities and may be subject to civil or criminal liability, fines or penalties imposed for violations of applicable laws or regulations. Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on our operations, cause increases in capital expenditures or production costs, or require abandonment or delays in the exploration or the development of our projects.
Our activities are subject to environmental risks and compliance with environmental laws and regulations that are increasing and costly.
Our business is subject to environmental regulation in the jurisdictions in which we operate. Environmental laws and regulations at the local, state, and federal level could evolve in a manner that may impose stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors, and employees. These laws address, among other issues, emissions into the air, discharges into water, management of waste and hazardous substances, protection of natural resources, antiquities, endangered species, and reclamation of lands disturbed by mining operations. Compliance with environmental laws and regulations at the local, state, and federal level and future changes in these laws and regulations may require significant capital outlays and may cause material changes or delays in our current and planned operations and future activities. It is possible that future changes in these laws or regulations could have a significant adverse impact on our projects or some portion of our business, causing us to reevaluate those activities at that time.
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Examples of some of the current U.S. federal laws that may affect our business and planned operations include, but are not limited to, the following:
| ● | NEPA requires federal agencies to integrate environmental considerations into their decision-making processes by evaluating the environmental impacts of proposed actions, including issuance of permits to mining facilities, and assessing alternatives to those actions. Under NEPA, a federal agency must prepare an EIS detailing the environmental impacts of “major federal actions significantly affecting the quality of the human environment.” If no significant impacts are found, the federal agency may conduct an Environmental Assessment (“EA”) finding no significant impact. |
| ● | We began, in 2012, to undertake the NEPA process for the Bear Lodge REE Project with the USFS as the lead agency. However, in 2016, we placed the Bear Lodge REE Project under care-and-maintenance, and all permitting and licensing activities were suspended, including the NEPA process. The NEPA process can cause delays in issuance of required permits or result in changes to a project to mitigate potential environmental impacts, which in turn can impact the economic feasibility of a proposed project, including the ability to construct or operate the Bear Lodge REE Project or other projects entirely. Recent, federal agency regulatory and legislative changes, along with a recent Supreme Court decision, may have the impact of lessening the administrative burden imposed by NEPA and other federal permitting requirements, but the exact impacts of these changes to longstanding practices are still unknown. |
| ● | The NRC, pursuant to its authority under the Atomic Energy Act of 1954, as amended (the “Atomic Energy Act”), oversees the regulatory framework governing the control of radioactive materials, including processing and/or beneficiation of REE that contain radioactive source materials such as uranium and thorium. The NRC is responsible for issuing licenses for source material involving concentrations of uranium or thorium that exceed 0.05% by weight. If a proposed action, including waste generation, results in materials with concentrations of uranium and thorium that equal or exceed 0.05% by weight, a license to receive title to, possess, use, transfer, or deliver source and byproduct materials may be required. As our operations are expected to exceed this concentration, we are required to follow the regulations pertaining to a license application for the Demonstration Plant project and the Bear Lodge REE Project. The Demonstration Plant project received the necessary NRC license in the third quarter of 2023. Commending in 2026, the WDEQ will have primacy for source material licensing in Wyoming, including the oversight of the Demonstration Plant NRC license. The licensing process, including NEPA review relating to the NRC licensing, when initiated for the Bear Lodge REE Project, will be completed by the WDEQ pursuant to that primacy delegation. That licensing may cause delays or result in changes to the Bear Lodge REE Project design to mitigate impacts as required under the license. |
| ● | Under the Comprehensive Environmental Response, Compensation, and Liability Act, as amended (“CERCLA”) and similar state laws, responsibility for the entire cost of cleanup of a contaminated site, as well as natural resource damages, can be imposed upon current or former site owners or operators, or upon any party who released one or more designated “hazardous substances” at the site, regardless of the lawfulness of the original activities that led to the contamination or whether the owner or operator caused or knew of the release. CERCLA also authorizes the EPA and, in some cases, third parties to take actions in response to threats to public health or the environment and to seek to recover from the potentially responsible parties the costs of such actions. We may also be an owner or operator of facilities at which hazardous substances have been released by previous owners or operators. We may be responsible under CERCLA for all or part of the costs of cleaning up facilities at which such substances have been released and for natural resource damages. We have not, to our knowledge, been identified as a potentially responsible party under CERCLA, nor are we aware of any prior owners or operators of our properties that have been so identified with respect to their ownership or operation of those properties. |
| ● | The Resource Conservation and Recovery Act, as amended (“RCRA”), and comparable state statutes, regulate the generation, transportation, treatment, storage, and disposal of “solid” and “hazardous” waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. Although certain mining, mineral processing and/or beneficiation wastes currently are exempt from regulation as hazardous wastes under RCRA, the EPA has limited the disposal options for certain wastes designated as hazardous wastes under RCRA. It is possible that certain wastes generated by our potential future operations that currently are exempt from regulation may in the future be designated as hazardous wastes and may therefore become subject to more rigorous and costly management, disposal, and clean-up requirements. |
| ● | The Clean Air Act, as amended (“CAA”), and comparable state statutes, restricts the emission of air pollutants from many stationary and mobile sources, including mining, processing and/or beneficiation activities. Our |
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| planned mining operations may produce air emissions, including fugitive dust and other air pollutants, from stationary equipment, storage facilities, and the use of mobile sources such as trucks and heavy construction equipment that are subject to review, monitoring, control requirements and emission limits under the CAA and state air quality laws. New facilities may be required to obtain permits before work can begin, and existing facilities may be required to incur capital costs to remain in compliance. In addition, permitting and licensing rules and issued permits may impose limitations on production levels or result in additional capital expenditures to comply with such rules or permits. In certain circumstances, private citizens may also sue sources of pollutants for alleged violations of the CAA. |
| ● | The Clean Water Act, as amended (“CWA”), and comparable state statutes impose restrictions and controls on the discharge of pollutants into waters of the U.S. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or an analogous state agency. These controls generally have become more stringent over time, and it is possible that additional restrictions will be imposed in the future. A 2025 U.S. Supreme Court decision provided additional guidance regarding agency determination of regulated waters and the requirement for CWA permits, which may lessen the requirements for these permits for resource projects in the future. Violation of the CWA and similar state regulatory programs can result in civil, criminal, and administrative penalties for unauthorized discharges of hazardous substances and other pollutants. They also can impose substantial liability for the costs of removal or remediation associated with such discharges. The CWA also requires the implementation of a Stormwater Pollution Prevention Plan establishing best management practices, training, periodic monitoring of covered activities, and monitoring and sampling of stormwater run-off. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill material in wetlands and other waters of the U.S. unless authorized by a permit issued by the U.S. Army Corps of Engineers. |
| ● | The Safe Drinking Water Act, as amended (“SDWA”), and the Underground Injection Control (“UIC”) program promulgated thereunder regulate the drilling and operation of subsurface injection wells. The program requires that a permit be obtained before drilling a disposal well. The EPA directly administers the UIC program in some states, and in others the responsibility for certain aspects of the program has been delegated to the state. Violation of these regulations and/or contamination of groundwater by mining related activities may result in fines, penalties, and/or remediation costs, among other sanctions and liabilities under the SDWA and state laws. |
| ● | The Endangered Species Act (“ESA”) regulates activities that could have an adverse effect on threatened and endangered species, including the habitat and ecosystems upon which they depend. The ESA protects threatened and endangered species primarily by prohibiting the unauthorized “taking” of listed species, which includes harassing or harming members of such species or significantly modifying their habitat. The ESA also requires consultation with other agencies in certain circumstances. Compliance with ESA requirements can significantly delay, limit, or even prevent the development of projects, including the development of mining claims, and can also result in increased development costs. In addition, the ESA authorized both civil and criminal penalties for ESA violations and authorizes citizen suits against any person alleged to be in violation of the ESA. |
Regulations and pending legislation governing issues involving climate change could result in increased operating costs that could have a material adverse effect on our business.
A number of governments or governmental bodies have adopted or are contemplating regulatory changes in response to the potential impact of climate change. In the U.S., on December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the earth’s atmosphere and other climate changes. Based on these findings, the EPA developed and implemented regulations that restrict GHG emissions under existing provisions of the CAA. The EPA rescinded its endangerment finding on February 12, 2026, prompting immediate legal challenges. The EPA’s ability and obligation to regulate GHG emissions is therefore in legal flux at the moment, creating regulatory uncertainty.
In addition, both houses of Congress have considered legislation to reduce GHG emissions, and many states have already taken measures to reduce GHG emissions, primarily through the development of GHG inventories, GHG emission fees, GHG permitting and/or regional GHG “cap and trade” programs. Most of these “cap and trade” programs work by requiring major sources of emissions to acquire and surrender emission allowances, with the number of allowances available for purchase reduced each year until the overall GHG emission-reduction goal is achieved. It is likely that, in the
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absence of federal regulation over GHG following the EPA’s recission of the endangerment finding, certain states will pass additional legislation regulating GHG emissions at the state level.
Legislation and increased regulation regarding climate change could impose significant costs on us and/or our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring, and reporting and/or other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such regulations. Alternatively, climate change legislation could potentially benefit our business by driving demand for products utilizing rare earth containing products. We cannot predict how legislation and regulation will affect our financial condition, operating performance, or ability to compete. Even without such regulation, increased awareness, or any adverse publicity in the global marketplace about the rare earth industry’s potential impacts on the environment could harm our reputation and business. The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the geographic circumstances in the areas in which we operate. These may include changes in precipitation, storm patterns and intensities, water shortages and changing temperatures. These factors may have an adverse impact on the cost, production, or financial performance of our operations.
A shortage of equipment and supplies could adversely affect our ability to operate our business.
We currently do and likely will depend on various supplies and equipment to carry out our activities, including those for the Demonstration Plant, and, if warranted, future exploration, development, mining, and processing operations. A shortage of such supplies, equipment or parts could have a material adverse effect on our ability to carry out our planned activities or increase our operating costs and expenses.
Mineral exploration and development and mining are potentially hazardous and subject to conditions or events beyond our control, which could have a material adverse effect on our business or plans.
Mineral exploration, development and mining involve various types of risks and hazards, including, but not limited to, the following:
| ● | environmental hazards; |
| ● | power outages; |
| ● | metallurgical and other processing problems; |
| ● | unusual or unexpected geological formations or conditions; |
| ● | personal injury, flooding, fire, explosions, cave-ins, earthquakes, landslides, and rock-bursts; |
| ● | mineral exploration, transportation, or mining accidents; |
| ● | concentrate losses; |
| ● | fluctuations in exploration, development, and production costs; |
| ● | labor disputes; |
| ● | supply interruptions; |
| ● | unanticipated variations in grade; |
| ● | mechanical equipment failure; |
| ● | periodic interruptions due to inclement or hazardous weather conditions; and |
| ● | regulatory delays, curtailments, or shutdowns. |
These risks could result in damage to, or destruction of, mineral properties, production equipment, facilities or other properties, personal injury, environmental damage, delays in mining, increased production costs, monetary losses, or possible legal liability. We may not be able to obtain insurance to cover these risks at economically feasible premiums or at all. Insurance against certain environmental risks, including potential liability for pollution or other hazards resulting from the disposal of waste products from production, may be prohibitively expensive or not available. Any losses we incur related to any significant events that are not covered by insurance policies may have a material adverse effect on our business.
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Mineral exploration and development is highly speculative, and certain inherent risks could have a negative effect on our business.
Our long-term success depends primarily on our ability to develop mineral deposits on existing properties that can be developed into commercially viable mining operations. Resource exploration is a highly speculative business, characterized by a number of significant risks, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. Substantial expenditures are required to establish proven and probable mineral reserves through drilling and analysis, to develop metallurgical processes to extract metal, and to develop the mining, processing and/or beneficiation facilities and infrastructure at any site chosen for mining. The marketability of minerals discovered by us may be affected by numerous factors that are beyond our control and cannot be accurately predicted, such as market pricing fluctuations, the proximity and capacity of milling facilities, mineral markets demand, available supply and processing equipment, and other factors such as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Any one or a combination of these factors may result in a failure to receive an adequate return on our investment capital. The decision to abandon a project may have a material adverse effect on the market value of our common shares or our ability to complete future financings.
Title to our Bear Lodge Property may be subject to other claims, or we may lose our interest in our claims, which could affect our property rights and claims.
There are risks that title to our Bear Lodge Property may be challenged or impugned. Our Bear Lodge Property is located in the state of Wyoming and may be subject to prior unrecorded agreements, transfers or native land claims, and title may be affected by undetected defects. There may be valid challenges to the title of our Bear Lodge Property which, if successful, could impair or result in the cessation of development and/or operations.
The vast majority of the mineral rights to our Bear Lodge Property consist of “unpatented” mining claims created and maintained in accordance with the U.S. General Mining Act of 1872 (“U.S. General Mining Law”). Unpatented mining claims are unique property interests and are generally considered to be subject to greater title risk than are other real property interests because the validity of unpatented mining claims can be uncertain. This uncertainty arises, in part, out of the complex federal and state laws and regulations an owner of an unpatented mining claim must comply with to locate and maintain a valid claim. Also, unpatented mining claims are always subject to possible challenges by third parties or validity contests by the federal government. The validity of an unpatented mining claim, in terms of both its location and its maintenance, is dependent on strict compliance with not only a complex body of U.S. federal and state statutory law, but also administrative and judicial decisions interpreting those statutes and case law. In addition, there may be limitations as to the completeness of public records that determine prior claimants that could impact the validity or ownership of unpatented mining claims. The Company’s right to continue activities on the Bear Lodge Property is dependent upon our ability to pay annual claim maintenance fees.
Our operations are subject to significant uninsured risks that could negatively impact future profitability as we maintain limited insurance against our operations.
Any exploration or operation of our Bear Lodge Property will entail certain risks, including unexpected or unusual operating conditions, such as rockslides, cave-ins, flooding, fire, and earthquakes. It is not always possible to insure against these risks. Should events such as these arise, they could reduce or eliminate our assets and shareholder equity as well as result in increased costs and/or a decline in the value of our assets or common shares. We expect to maintain general liability, director and officer insurance, and some insurance against our assets but not with the expectation of full replacement value. We may decide to update or amend our insurance portfolio in the future if coverage is available at economically viable rates.
Increased competition could adversely affect our ability to attract necessary capital funding.
The mining industry is intensely competitive, and we must compete with other individuals and companies, many of which have greater financial resources, operational experience, and technical capabilities than we have. This competition from
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other mining companies could adversely impact our efforts to hire experienced professionals. Competition for resources at all levels can be very intense, particularly affecting the availability of manpower, drill rigs, mining equipment and production equipment. Increased competition could adversely affect our ability to attract necessary capital funding or attract or retain key personnel or outside technical resources.
Land reclamation requirements for our properties may be burdensome or expensive.
Although land reclamation requirements vary depending on the location and governing authority, such requirements generally are imposed on mineral exploration companies as well as companies with mining and processing operations to minimize long-term effects of land disturbance.
Reclamation requirements may include the following, among other things:
| ● | control dispersion of potentially deleterious effluents; |
| ● | manage and control mine tailings and other processing wastes; |
| ● | reduce open pit mine slope angles; |
| ● | treat ground and surface water to drinking water standards; and |
| ● | reasonably re-establish pre-disturbance vegetation and land forms. |
To carry out reclamation obligations imposed on us in connection with the potential future development activities at the Demonstration Plant and the Bear Lodge Property, we must allocate financial resources that might otherwise be spent on further exploration and future development programs. We have set up a provision for reclamation obligations as currently anticipated for exploration completed on the Bear Lodge Property and operations conducted at the Demonstration Plant, as appropriate, but these provisions may not be adequate. If we are required to carry out unanticipated reclamation work, our financial position could be adversely affected.
Legislation and regulations have been proposed that would significantly affect the mining industry and our business.
The U.S. Congress from time to time has considered proposed revisions to the U.S. General Mining Law. If Congress again considers and enacts any such revisions, such legislation could change the cost of holding unpatented mining claims or significantly impact our ability to develop mineralized resources on unpatented mining claims. Changes in the U.S. presidential administration or changes in the composition of Congress from time to time may increase the likelihood that Congress considers such revisions at some point. Past bills have proposed, among other things, to (i) impose a federal royalty on production from unpatented mining claims, (ii) impose a fee on the amount of material displaced at a mine, (iii) impose time limits on the effectiveness of plans of operation that may not coincide with mine life, (iv) impose more stringent environmental compliance and reclamation requirements on activities on unpatented mining claims, (v) establish a mechanism that would allow states, localities and Native American tribes to petition for the withdrawal of identified tracts of federal land from the operation of the U.S. General Mining Law, (vi) replace the location of mining claims with federal leases for locatable minerals, and (vii) allow for administrative determinations that mining would not be allowed where undue degradation of the federal lands in question could not be prevented. Although we cannot predict what legislated royalties might be, the enactment of a federal royalty or other provisions contained in any such proposed bills could adversely affect the potential for development of our unpatented mining claims, our ability to operate, or our financial performance. The effect of any proposed revision of the U.S. General Mining Law on operations cannot be determined until enactment. However, it is possible that revisions would materially increase the carrying and operating costs of mineral properties located on federal unpatented mining claims.
Risks Related to Our Common Stock
We may elect to deregister our common shares under the Exchange Act. Deregistration would result in less disclosure about us and may negatively affect the liquidity and trading prices of our common shares.
Due to the relatively high cost of being a public company in the U.S., our Board of Directors may elect to voluntarily deregister our common shares under the Exchange Act and suspend our reporting obligations in the U.S., possibly in combination with an effort to list our common shares on a securities exchange other than the OTCQB Venture Marketplace.
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No Board approval of deregistration has taken place, but in the future, the Board may authorize the Company to file with the SEC a Form 15 to voluntarily deregister our common shares under Section 12(g) of the Exchange Act and suspend our reporting obligations under Section 15(d) of the Exchange Act. If the Board approves such deregistration, we would file a Form 15 and our obligations to file periodic reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, would be suspended immediately upon the filing of the Form 15 with the SEC, and our proxy statement, Section 16 and other Section 12(g) reporting responsibilities would terminate effective 90 days after the filing of the Form 15. We believe that we are eligible to deregister under the Exchange Act. If we were to file a Form 15, we expect that our common shares, which currently trade on the OTCQB Venture Marketplace, would not continue to be quoted on the OTCQB Venture Marketplace. Following any deregistration, we would not expect to publish periodic financial information or furnish such information to our shareholders except as may be required by applicable laws, including Canadian securities laws, or stock exchange rules. As a result of the foregoing factors, deregistration may result in less disclosure about us and may negatively affect the liquidity and trading prices of our common shares.
We do not currently intend to pay cash dividends.
We have not declared any dividends since our incorporation and do not anticipate that we will do so in the foreseeable future. Our present policy is to retain all available funds for use in our business development and operations. Payment of future cash dividends, if any, will be at the discretion of the Board of Directors and will depend on our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that the Board of Directors considers relevant. In the absence of dividends, investors will only see a return on their investment if the value of our common shares appreciate.
Future sales of our securities in the public or private markets could adversely affect the trading price of our common shares or our ability to continue to raise funds in new equity offerings.
It is possible that we will sell common shares, or securities exercisable or convertible into common shares, in order to finance our planned development activities. Future sales of substantial amounts of our securities in the public or private markets could potentially dilute our existing shareholders and potentially adversely affect the trading prices of our common shares or could impair our ability to raise capital through future offerings of securities. Alternatively, we may rely on debt financing and assume debt obligations that require us to make substantial interest and principal payments that could adversely affect our business or future growth potential.
Price volatility of our publicly traded securities could adversely affect investors’ portfolios.
In recent years and months, the securities markets in the U.S. and Canada have experienced high levels of price and volume volatility, and the market prices of securities of many companies have experienced wide fluctuations that have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continual fluctuations in the market price of our common shares will not occur. It may be anticipated that any quoted market for the common shares will be subject to market trends and conditions generally, notwithstanding any potential success we have in creating revenues, cash flows or earnings. The price of our common shares has been subject to price and volume volatility in the past and will likely continue to be subject to such volatility in the future.
Because our common shares are not listed on a national securities exchange, a broker-dealer may find it more difficult to trade our common shares, and an investor may find it more difficult to acquire or dispose of our common shares in the secondary market.
We are subject to the so-called “penny stock” rules. The SEC has adopted regulations that define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange. For any transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions. A broker-dealer may find it more difficult to trade, and an investor may find it more difficult to acquire or dispose of our common shares on the OTCQB Venture Marketplace. Additionally, our trading volume on the over-the-counter exchange fluctuates and has a limited volume, which can impact on the price and trading, and our majority shareholder holds approximately 71% of the shares, which further limits our public float and access to liquidity on our trading platform. These factors could significantly
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negatively affect the market price of our common shares and our ability to raise capital and may deter other potential investors from investing in our common shares.
General Risk Factors
Market factors outside of our control could have significant adverse impacts on our business, operations and/or prospects.
Operating in the volatile and cyclical natural resource industry subjects us to numerous market factors outside of our control that could have significant and sometimes adverse impacts on our business. Such factors could include significant price declines for key rare earth materials, inflationary impacts on capital and operating costs, public opposition, poor financial and operating performance of other companies in the same industry sector, environmental incidents from resource projects, major technological advances that reduce demand for key rare earth products, unforeseen regulation, military conflict, such as the Russia/Ukraine war, the conflicts in the Middle East, terrorism, banking institution stability, or other geopolitical events that broadly impact the global or domestic economy or natural resource industry. To the extent that such events affect attitudes toward investments in the natural resource sector generally or the rare earths industry specifically, or impact the overall economic climate, could affect our ability to raise the additional capital needed to continue to advance our projects and business plan.
Global and regional political and economic conditions could adversely impact our business.
Political and economic shifts, both domestic and international, may create uncertainty and pose risks to our operations. Policies related to populism, protectionism, economic nationalism, and attitudes toward multinational corporations could result in regulatory changes, trade barriers, or investment restrictions. Additionally, international trade disputes, including tariffs, counter-tariffs, export controls, sanctions, and currency regulations, may increase costs and disrupt supply chain, operating model, and customer relationships.
Further, market volatility, driven by shifts in U.S. and foreign trade policies, fluctuating interest rates, or currency controls may affect REE prices, capital availability, and investor confidence. Even the perception of these risks could lead to reduced investment, higher production costs, and operational challenges. If such trends continue, they may have a material adverse effect on our business and financial performance.
Our directors, officers and consultants may be engaged in other businesses.
Some of our directors and officers are or may become directors or officers of other entities engaged in other business ventures. As a result of their other business endeavors, our directors, officers, and consultants may not be able to devote sufficient time to our business affairs, which may negatively affect our ability to conduct ongoing operations or to generate revenues.
We are subject to the risk of litigation, the causes and costs of which are not always known.
We are subject to litigation arising in the normal course of business and may be involved in disputes that may result in litigation. Although we are not aware of any material pending or threatened litigation or of any legal proceedings known to be contemplated which are, or would be, likely to have a material adverse effect upon us or our operations, taken as a whole, the causes of potential future litigation cannot be known and may arise from, among other things, business activities, environmental and health and safety concerns, share price volatility or failure to comply with disclosure obligations. The results of litigation cannot be predicted with certainty but could include costly damage awards or settlements, fines, and the loss of licenses, concessions, or rights, among other things. If we are unable to resolve a dispute favorably, either by judicial determination or settlement, it may have a material adverse effect on our financial condition, cash flows or results of operations.
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We depend upon information technology systems, which are subject to cyber-attacks, disruption, damage, or failure and have risks associated with implementation and integration.
We depend upon information technology systems in the conduct of our operations. Our information technology systems are subject to disruption, damage, or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks, natural disasters, and defects in design. Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, financial losses, unauthorized releases of confidential or otherwise protected information or the corruption of data. Furthermore, as artificial intelligence capabilities improve and are increasingly adopted, we may see cyber-attacks created through artificial intelligence. Various measures have been implemented to manage our risks related to information technology systems and network disruptions. However, given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations. See “Item 1C. Cybersecurity” of this Annual Report for more information about the systems and processes we use to manage these risks.
ITEM 1B. UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 1C. CYBERSECURITY
We face cybersecurity risks due to the breadth of networks and systems we must defend against cybersecurity attacks and threat actors seeking to inflict harm on us; and the substantial level of harm that could occur to us were we to suffer impacts of a material cybersecurity incident. We are committed to maintaining robust governance and oversight of these risks and to implementing mechanisms, controls, technologies, and processes designed to help us assess, identify, and manage these risks. In the year ended December 31, 2025,
We aim to incorporate industry best practices, consistent with other companies our size, throughout our cybersecurity program. Our cybersecurity strategy focuses on
Our Board of Directors has ultimate oversight of our cybersecurity risk, which it manages as part of our enterprise risk management program. That program is utilized in making decisions with respect to Company priorities, resource
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allocations, and oversight structures.
In 2025,
ITEM 2. PROPERTIES
Information concerning our mining property in this Annual Report has been prepared in accordance with the SEC requirements of CFR Title 17, Subpart 229, Item 1300-1305 of Regulation S-K, which requires us to disclose our mineral resources and reserves as of the end of our most recently completed fiscal year for our material mining property.
As used in this Annual Report, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” “inferred mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with Subpart 229, Item 1300 of Regulation S-K. Under Subpart 1300 of Regulation S-K and NI 43-101, mineral resources may not be classified as “mineral reserves” unless the determination has been made by a qualified person that the indicated and measured mineral resources can be the basis of an economically viable project. We currently have no mineral reserves, and you are specifically cautioned not to assume that any part or all of the mineral resources will ever be converted into mineral reserves, as defined by the SEC. See “Item 1A. Risk Factors” of this Annual Report.
You are cautioned that, except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources are estimates based on limited geological evidence and sampling and have too high of a degree of uncertainty as to their existence to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. It should not be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may be upgraded to a higher category. Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be considered when assessing the economic viability of a mining project, or that it will ever be upgraded to a higher category. Likewise, you are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted to mineral reserves. See “Item 1A. Risk Factors” of this Annual Report.
The information that follows relating to the Bear Lodge REE Project is derived from, and in some instances is an extract from, the TRS. Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Annual Report. We also completed the Technical Report, which is NI 43-101 compliant for the Bear Lodge REE Project, and there are no material differences between the Technical Report and the information set forth below and contained in the TRS.
Qualified Persons
The scientific and technical disclosures about the Bear Lodge REE Project in this Annual Report are derived from the TRS and the Technical Report and have been reviewed and approved by:
| ● | Mr. Alan C. Noble, Professional Engineer, Ore Reserves Engineering; |
| ● | Ms. Monica Barrero Bouza, Geologist, EurGeol; and |
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| ● | Mr. Jaye Pickarts, Professional Engineer, consultant to the Company and former Chief Operating Officer (from October 2024 to December 2025). |
Mr. Noble and Ms. Bouza are both independent of the Company and all three are qualified persons as defined by Regulation S-K (Subpart 229, Item 1300) and NI 43-101 (Standard of Disclosure for Mineral Projects). Mr. Pickarts, as prior Chief Operating Officer of the Company, is not deemed independent of the Company. For a description of the key assumptions, parameters and methods used to estimate mineral resources included in this Annual Report, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, sociopolitical, marketing or other relevant factors, please review the TRS on the Bear Lodge REE Project (as described below), which is incorporated by reference in this Annual Report, as well as the Technical Report available under the Company’s profile at www.sedarplus.ca.
Individual Property Disclosure
Bear Lodge Property
The Bear Lodge Property, which is located in central Crook County, Wyoming, contains two projects, the Bear Lodge REE Project and the Sundance Gold Project. The Bear Lodge REE Project consists of the Bull Hill and Whitetail Ridge REE deposits and the exploration targets of East Taylor (“Taylor”) and Carbon Hill (“Carbon”), all of which are located near Sundance, Wyoming. The Bear Lodge REE Project also incorporates the proposed processing and separation plant as well as the Demonstration Plant (under construction) in Upton, Wyoming. See the property location map below. Additional details on each of these areas are set forth below under the heading “Bear Lodge REE Project.” We hold our interest in the Bear Lodge Property through our wholly-owned subsidiary, Rare Element Resources, Inc., a Wyoming corporation.
Bear Lodge Property – Location Map
We control 100% of the mineral rights at the Bear Lodge Property, consisting of unpatented mining claims and an adjacent property (hereinafter referred to as the “Section 16 property”) owned by the Company. We hold 499 unpatented mining claims located on land administered by the USFS. The Bear Lodge Property is located within parts of Sections 5, 6, 7, 8, 9, 14, 15, 16, 17, 18, 19, 21, 22, 23, 26, 27, 28, 29, 30, 31, 32, 33, 34 and 35 in Township 52 North and Range 63 West, Sixth Principal Meridian, Crook County, Wyoming. All of the public property mining claims are unpatented, such that the paramount title to the land is held by the U.S. All of the mineral resources identified in the TRS are located on mining claims that we hold.
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Our 100% interest in the 499 unpatented mining claims was, in part, acquired from Phelps Dodge Exploration Company (now a subsidiary of Freeport-McMoRan Copper and Gold Inc. (“Freeport”)) by way of a Mineral Lease and Option for Deed in 2000, and 404 claims were transferred from Newmont Mining Corporation (“Newmont”) to us in May 2010.
Some of our mining claims and a portion of a defined area of influence surrounding the claims were previously subject to a production royalty of 2% of net smelter returns (“NSR”) royalty payable to Freeport, but the Company purchased the NSR royalty in March 2009. We hold an unencumbered REE project, including all 499 unpatented mining claims, free of third-party royalties for REE production.
In order to maintain all claims in good standing, the Company is responsible for the payment of annual federal claim maintenance fees (currently $200/claim) and the recording of the annual claim maintenance and intent to hold notice with Crook County, Wyoming. All 499 unpatented claims included in the project are located on both federal and private lands and are subject to annual maintenance fees payable to the United States Bureau of Land Management. Mineral rights on the mining claims and the approximately 640-acre Section 16 property provide the Company with mineral and surface rights to explore, develop, and mine the Bear Lodge Property, subject to the prior procurement of required operating permits and approvals and compliance with applicable federal, state, and local laws, regulations, and ordinances.
Infrastructure
Exploration has been conducted on the Bear Lodge Property since 1949. In addition to Freeport, several mining companies have conducted exploration and drilling programs at or near the Bear Lodge Property since the discovery of mineralization. No mining operations were conducted at the Bear Lodge Property by any of the prior owners.
Motels, restaurants, gas stations, and other services are available at Sundance, Upton, and other nearby towns, and a greater variety of accommodations are available to the east in Spearfish, South Dakota. All necessary infrastructure, such as housing, food, fuel, etc. would be available in these towns or further to the west in Gillette and southeast in Newcastle. Water rights at the mine site are available through permitting by the Wyoming State Engineer’s Office; these water rights have not been secured at the time of reporting. Near the mine site, a power line, which requires upgrading, runs within a mile of the Bear Lodge Property.
Supplies can be trucked to the Bear Lodge Property 60 miles (100 kilometers) from Gillette, which is located on both U.S. Interstate Highway 90 and rail lines. A Burlington Northern Santa Fe rail transport line is also located at Moorcroft, 34 miles (54 kilometers) west of Sundance, and at Upton, 40 miles (64 kilometers) south. The Powder River Basin contains multiple power plants, and Gillette, the largest city in the basin, would be a major logistics center for any development at the Bear Lodge Property. The current size of the mine property is sufficiently large to support a mining operation, with no foreseeable obstacles to expansion, subject to a favorable outcome regarding permitting.
Condition of the Property
We are not aware of any outstanding environmental liabilities associated with the Bear Lodge Property, except for the required reclamation work associated with our exploration and drilling activities. Previous activities were approved by both the USFS and WDEQ. We have an approved reclamation plan and have posted surety bonds to cover the required reclamation. Certain of these reclamation activities were completed in 2024, and we are now awaiting final WDEQ approval for the removal of these obligations from our reclamation liability.
Additional local, state, and federal licenses and permits will be required for exploration, mining, processing and/or beneficiation operations, if we decide to proceed with further exploration or mine development and operations.
The Bear Lodge Property is an exploration stage property with no proven or probable reserves. There has been no historical production from the property.
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The Bear Lodge REE Project
The Bear Lodge REE Project is located in central Crook County, northeastern Wyoming, in the northwestern portion of the Black Hills uplift. The property is situated in the central Bear Lodge Mountains, a relatively small northwesterly trending range. The project is flanked to the west by the Powder River Basin, famous for its extensive coal mining, and is adjoined by the Great Plains to the southeast. See the property location map below.
The Bear Lodge REE Project lies about seven air miles (11 kilometers) or 12 road miles (19 kilometers) northwest of the town of Sundance (Wyoming), approximately 22 air miles (35 kilometers) west of the South Dakota state line, 55 air miles (89 kilometers) east of Gillette (Wyoming), and 230 miles (370 kilometers) north of Cheyenne, the Wyoming state capital. Gillette is the headquarters for much of the Wyoming coal mining industry.
General Property Location Map
Geological Setting
The Bear Lodge Mountains of northeast Wyoming are part of the Black Hills Uplift, which has a northwesterly orientation and extends from the western South Dakota – Nebraska border through northeastern Wyoming into southeastern Montana. The exposed basement consists of Precambrian schist, gneiss, and granite overlain by Paleozoic and Mesozoic clastic and carbonate sedimentary rocks eroded from higher elevations. Eocene (Tertiary) alkaline intrusive and extrusive bodies in the northern Black Hills form an N70°-80°W trending belt that extends from Bear Butte in South Dakota through the Bear Lodge Mountains, Devil’s Tower, and Missouri Buttes in northeastern Wyoming. These alkaline igneous rocks are represented by dikes, sills, stocks, laccoliths, diatremes, and ring complexes are associated with REE-enriched carbonatite dikes in the Bear Lodge alkaline-igneous complex.
The Bear Lodge alkaline-igneous complex is a northwest-trending alkaline intrusive dome with dimensions of approximately 10 kilometers (6.2 miles) NW-SE by six kilometers (3.7 miles) NE-SW. The complex consists predominantly of multiple intrusions of phonolite, trachyte, and other alkaline igneous rocks, and a variety of associated breccias and diatremes.
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Exploration and Drilling
The Bear Lodge Mountains were initially prospected for gold during the late nineteenth and early twentieth centuries. Rare earth mineralization was first discovered in approximately 1949. Various companies conducted sporadic exploration of the area from the 1970s through the 1990s, both for rare earths and for gold. We conducted REE exploration activities and from 2004 through 2013, a total of more than 48,768 meters (160,000 feet) of drilling was completed in over 200 core holes. These exploration activities included geochemical, geophysical, geological, and mineralogical modeling of the district and individual deposits.
The 2013 drilling program involved infill drilling at the Whitetail Ridge deposit, including 14 core holes for a total of 3,556.5 meters (11,698 feet). The second phase consisted of 21 core holes totaling 3,247 meters (10,651 feet) and six reverse circulation (“RC”) twin holes totaling 832 meters (2,730 feet). The RC twin holes were drilled using a center return hammer with the objective of minimizing hole erosion and obtaining assay data directly correlative to that from the adjacent core holes.
The 2014 program consisted of excavating a test trench along the southwestern flank of Bull Hill in August. The main mineralized zone was exposed and exploited to collect geological information, including dike dimension and structural continuity, grade variation, ore and gangue mineralogy, pit slope stability engineering and confirmation of parameters utilized in ore resource calculations. The program netted approximately 630 tonnes (695 tons) of sample materials that will be utilized in the Demonstration Plant.
No exploration drilling was conducted from 2013 through the end of 2025, and no drilling or exploration activities are currently planned for 2026.
Mineralization
The Bear Lodge REE Project comprises two main areas represented by the Bull Hill and Whitetail Ridge deposits, as well as the exploration targets of the Carbon Hill and East Taylor deposits (see map below). All the deposits have carbonatite-related dikes and veins that range in size from hairline fracture veinlets to dikes that may exceed 80 feet (24.4 meters) in width. Lower-grade stockworks of veinlets commonly surround the higher-grade REE-bearing dikes and veins. Oxidized mineralization (FMR and OxCa) extends to depths of 500 to 600 feet (152 to 183 meters). Oxide zone REE mineralization is dominated by REE minerals of the bastnäsite group, with variable and typically subordinate quantities of monazite and cerianite. Oxide-carbonate mineralization contains a variable mix of bastnäsite group minerals and ancylite, with varied and subordinate amounts of monazite and cerianite.
Bull Hill District Grade Shells
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REE mineralization is widespread on the property. However, the area proximal to the Bull Hill and Whitetail diatreme bodies is believed to be the most prospective for significant REE mineralization.
Bull Hill and Whitetail Ridge Deposits
The Bull Hill deposit mineralized bodies occur as steeply dipping, FMR-carbonatite dike swarms, and associated stockwork. Geological interpretation of results from the 2010–2014 drill and trench programs indicates that the Bull Hill deposit area is dominated by northwest-striking mineralized bodies in the southern two-thirds of the resource area, while the northern part of the resource area exhibits a transitional change in strike from a north-westerly to a north-easterly direction. The dike swarm primarily intrudes heterolithic intrusive breccia of the Bull Hill diatreme and adjacent trachytic and phonolitic intrusive rocks. Carbonatite dikes at depth are interpreted to transition toward the surface into OxCa and FMR bodies. The mineralized structures range in size from veinlets to large dikes more than 30 meters (98 feet) in width. The Bull Hill deposit consists of one dominant dike set and several subsidiary dike sets in a swarm that has dimensions of more than 457 meters (1,499 feet) along strike and less than 100 meters (328 feet) in width. The dikes appear to pinch and swell in both strike and dip directions, and they can be traced in drill holes more than 305 meters (1,001 feet) down dip.
The Whitetail Ridge deposit occurs about 700 meters (2,297 feet) northwest of the Bull Hill deposit. The REE mineralization consists of northwest- and north-striking FMR dikes, and an FMR stockwork zone that is also elongated northeasterly, with dimensions of roughly 380 meters by 290 meters (1,247 feet by 951 feet). The enveloping gravity and radiometric geophysical anomalies and coincident soil geochemical anomalies are larger and may indicate a broader distribution of REE mineralization beneath the extensive soil and colluvial cover. Drilling conducted from 2011 through 2013 indicates that much of the mineralization is confined within the volume of the Whitetail Ridge diatreme.
Other Exploration Target Areas at the Bear Lodge REE Project
The discovery of high-grade REE mineralization at the East Taylor and the Carbon target areas expanded the area of known REE mineralization outside of the Bull Hill and Whitetail Ridge deposits. The data indicates that the Bear Lodge REE Project area covers a crudely elliptical area that extends approximately 1,750 meters (5,741 feet) northwest-southeast by 1,300 meters (4,265 feet) northeast-southwest. The Carbon exploration target area is located northwest of the Bull Hill deposit, and the East Taylor target area is located west of the Bull Hill deposit. Drill assay data from the East Taylor and the Carbon target areas identify these areas as zones of HREE-enrichment relative to the Bull Hill deposit. These two exploration target areas, along with the Whitetail Ridge deposit, are peripheral to the Bull Hill deposit. The discovery of these target areas indicates good potential for additional deposits of high-grade REE in the western half of the Bear Lodge REE Project, and those deposits appear to be particularly enriched in HREE.
Permitting and Licensing
The USFS is the lead agency in the NEPA process to prepare an EIS on the Bear Lodge REE Project. This process is essential to securing the permits and approvals necessary to move into production. In early 2012, we submitted the plan of operations for the Bear Lodge REE Project, which the USFS accepted as complete in May 2013. The USFS selected a project manager and prime contractor for the preparation of the draft EIS, published notice in the Federal Register and completed necessary scoping work. The USFS issued a draft EIS on January 15, 2016, outlining plan alternatives and proffering a preferred alternative. The U.S. Army Corps of Engineers and the appropriate state and local government agencies were involved in the EIS process as cooperating agencies. On January 22, 2016, our Board of Directors decided to conserve cash due to the difficult market conditions at the time and suspended all permitting and licensing efforts, including the EIS process. We notified the USFS and cooperating agencies, the NRC, and the state of Wyoming of our decision to suspend permitting and licensing efforts, and the parties acknowledged receipt of the notice. During 2022, the Company undertook environmental sampling to update the baseline environmental data for the Bear Lodge REE Project and in late 2025 re-started the previously suspended permitting and licensing efforts. These permitting and licensing efforts are expected to continue through 2027.
The Company will be required to obtain permits and licenses to further develop the Bear Lodge REE Project from the USFS, the WDEQ (Land Quality Division, Air Quality Division, and Water Quality Division), the NRC, and Crook County, among others.
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Processing and Decommissioning
The Company is proceeding with the operations of a rare earth processing and separation Demonstration Plant. The Demonstration Plant construction was substantially completed in late 2025, with the start of plant operations having commenced in early 2026. The Demonstration Plant is expected to advance the Company’s proprietary processing and separation technology and generate the operational and economic data necessary for the design of a commercial-scale facility.
Reclamation of mining-related facilities are planned to occur during mine operations, where applicable, and upon completion of mining and stockpiling of materials. Other facilities would be reclaimed as soon as the stockpiled materials are depleted.
Mineral Resource Estimate
In March 2024, the Company announced the completion of a new mineral resource estimate based on maximizing the recovery of La and the key magnet materials of Nd, Pr, Tb, and Dy. The estimate was focused on the oxide zone of the Bull Hill deposit at the Bear Lodge REE Project with long-term upside existing in the Carbon, Whitetail, and Taylor deposits. The resource estimate was based on 252 core holes drilled between 2009 and 2013, including 20,491 assay intervals that totaled 186,712 feet (56,910 meters) of drilling from the Company’s drill hole database. The estimate also used the economic data generated from the 2021 pilot plant testing of the Company’s proprietary processing and separation technology. The resource estimate focuses on the Ox and OxCa zones of the Bull Hill deposit, which are considered the best plant feed and are expected to have the best recoveries and costs by utilizing the Company’s innovative technology.
The Bull Hill deposit estimates of measured, indicated, and inferred mineral resources, based on a base-case cutoff grade for resource reporting of 2.18% TREO, are summarized in Table 1 below. As noted in the TRS, the effective date of the mineral resource estimate is December 31, 2023. The Company has determined that the assumptions included in the mineral resource estimate are reasonable as of December 31, 2025 and that there has been no change in the mineral resource estimate from that which is contained in the TRS and the Technical Report.
Table 1. Bull Hill TREO Mineral Resource Summary for the Total Oxide (Ox & OxCa)
at the End of the Fiscal Year Ended December 31, 2025
Resource Class | Cutoff %TREO | Metric Tonnes | %TREO | Contained TREO Metric Tonnes | Recovered TREO Metric Tonnes | Recovered NdPr Metric Tonnes |
(millions) | (000’s) | (000’s) | (000’s) | |||
Measured mineral resources | 2.18 | 2.04 | 4.53 | 92.4 | 60.6 | 18.4 |
Indicated mineral resources | 2.18 | 3.98 | 3.85 | 153.1 | 99.9 | 31.3 |
Measured & indicated (M&I) mineral resources | 2.18 | 6.02 | 4.08 | 245.5 | 160.5 | 49.7 |
Inferred mineral resources | 2.18 | 1.90 | 3.61 | 68.5 | 44.9 | 14.4 |
Notes: 1. Mineral resources do not have demonstrated economic viability. There is no guarantee that any part of the mineral resource will be converted to mineral reserves in the future. All figures in the above table have been rounded to reflect the accuracy of the grade and tonnage estimates. 2. This mineral resource estimate is reported in accordance with Regulation S-K (CFR Title 17 Part 229 Items 1300–1305) at a cut-off grade of 2.18% TREO. 3. Only certain rare earth elements (La, Nd, Pr, Dy, and a heavy rare earth element mixed oxide, including Yb, Tm, Tb, Er, Ho, Lu) are considered payable for pit optimization purposes. 4. The estimated overall NdPr process recovery is 90%. 5. The point of reference for mineral resource is in situ mineralization. 6. See Table 2 for metallurgical recoveries, pay factors, and commodity price assumptions used for the purposes of preparing mineral resource estimates. | ||||||
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At December 31, 2025, we had no proven or probable mineral reserves. The metallurgical recoveries, pay factors, and commodity price assumptions used in the preparation of the mineral resource estimate are shown in Table 2 below. Additional information about these assumptions is provided in Chapter 11 of the TRS and in the Technical Report.
Table 2. Pay Factors, Hydromet Plant Recoveries and Rare-Earth Elements Prices
Element | Pay Factor | Hydromet Plant Recoveries | Prices (US $ /Kg) |
La (Lanthanun) | 1 | 0.907 | 0.93 |
Nd (Neodymium) | 1 | 0.898 | 77.25 |
Pr (Praseodymium) | 1 | 0.902 | 76.48 |
Dy (Dysprosium) | 0.75 | 0.835 | 320 |
*HREE (Yb+Tm+Tb+Er+Ho+Lu) | 0.5 | 0.816 | 1200 |
Ce (Cerium) | 0 | 0.336 | 0 |
Sm (Samarium) | 0 | 0.912 | 0 |
Eu (Europium) | 0 | 0.913 | 0 |
Gd (Gadolinium) | 0 | 0.924 | 0 |
Y (Ytrrium) | 0 | 0.788 | 0 |
*HREE (Heavy Rare Earth Elements) = Ytterbium (Yb)+Thulium (Tm)+ Terbium (Tb)+ Erbium (Er)+Holmium (Ho)+Lutetium (Lu)
Data Verification
The Company obtained the geological, exploration, and drilling data package from Phelps Dodge and Newmont Corporation, covering most of the work done on the property by various companies and claim owners through 1996. From 2006 until spring 2010, the Company conducted its own REE drilling programs throughout the Bear Lodge Property under a joint venture agreement with the Newmont Mining Corporation (“Newmont”), with the Company maintaining a separate database of REE drilling results. While the Company continued focusing on the exploration for REEs, Newmont’s efforts continued in gold exploration. Separation of the two exploration drilling programs for REEs and gold, and their respective drilling data continued through the 2009 drill season when the Company assumed control of the program with the termination of Newmont’s interest in the property in May 2010.
Drill hole data prior to 2008 has not been used for resource estimates.
From 2008 through 2010, the Company compiled analytical data in Excel, Access, and Datamine for use in GIS and 3D mapping software. Between 2010 and 2011, a drill data management system was implemented by EDM Solutions. The drill data management database was built on an MS SQL SERVER platform and was hosted on a secure “Cloud” server with restricted access. Security and backup features were built into the system and were considered industry standard. The data is currently maintained in the Company’s archives.
All on-site drilling programs conducted by the Company were supervised by experienced geology professionals. Company geologists and consultants from Ore Reserves Engineering conducted extensive reviews and verified data from the 2009 – 2013 drilling programs, for use in the TRS resource estimate.
Drill hole collar surveys for all 2008 through 2013 core holes were surveyed by Bear Lodge Ltd., professional engineers and land surveyors based in Sundance, Wyoming. Down-hole surveys were conducted on all core holes drilled by Company personnel from the 2008 through 2013 drill programs.
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REE assays for the 2009, 2012, and 2013 programs were conducted by Activation Laboratories of Ancaster, Ontario, and assays for the 2010 and 2011 drill programs were done by ALS Laboratories. Both laboratories are independent, ISO 9001 accredited and operate to standards consistent with ISO 17025 methods.
Dr. Jeffrey Jaacks of Geochemical Applications International Inc. conducted a review of the results for the quality assurance and quality control (QA/QC) program used in rare earth element assaying for the Bear Lodge exploration drill programs (2009-2013). Dr. Jaacks, in his review, concluded that the 2009-2013 drill program analysis/assays to be of an acceptable quality and appropriate for resource estimation.
Rare Earth Processing and Separation Demonstration Plant Project
During 2021, a consortium of companies, of which the Company is a member, and which is led by General Atomics, secured with the DoE an assistance agreement for the engineering, construction, operation and decommissioning of a rare earth separation and processing demonstration plant to be located in Upton, Wyoming at a leased industrial site near infrastructure (the “Demonstration Plant”). The consortium created by General Atomics, an affiliate of Synchron, includes certain of General Atomics’ affiliates, the Company, and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor. The Company, as a subrecipient of the award, along with the other consortium members, commenced work on the planning and design of the demonstration project in November 2021.
The purpose of the Demonstration Plant is to process and separate certain REEs from previously stockpiled high-grade sample materials from the Bear Lodge REE Project, utilizing the Company’s proprietary extraction and separation processes. The Demonstration Plant has been designed as a demonstration-scale facility that will produce high-purity NdPr, as well as other rare earth oxides. Successful operation will serve as a precursor to a future full-scale production facility.
As of December 31, 2025, construction of the Demonstration Plant was substantially complete with operations formally commencing in early 2026, which are expected to continue through December 31, 2026. During the operations phase, the Demonstration Plant is expected to produce up to 10 tons of NdPr oxide.
Demonstration Plant Permitting and Licensing
On July 31, 2023, the NRC issued the Company a Source Material License. This license is necessary to allow the processing of previously stockpiled material from the Bear Lodge REE Project at the Demonstration Plant. In November 2023, the DoE’s Office of Energy Efficiency and Renewable Energy finalized its NEPA review of the Demonstration Plant issuing a finding of no significant impact (also known as a “FONSI”), completing the federal permitting activity required for construction of the Demonstration Plant. On December 21, 2023, the DoE’s Office of Energy Efficiency and Renewable Energy issued a Project Continuation Notice following its approval of the budget for construction of the Demonstration Plant. This approval, along with the completion of the DoE’s NEPA review, allowed for the commencement of the construction of the Demonstration Plant.
The Demonstration Plant will encompass the physical processing of the sample materials followed by chemical processing to extract selected elements. All chemicals will be managed in accordance with federal, state, and local environmental and safety regulations. The Company has obtained a source materials possession license from the NRC as well as an air quality permit from the WDEQ. A road use permit was secured from the USFS to improve the access road to the sample storage location. All licenses and permits required for the construction of the Demonstration Plant have now been secured.
As part of the project licensing with the NRC, the Company has secured and maintains, on behalf of the Demonstration Plant project, a reclamation bond in the amount of $917 and has posted cash collateral of $202 as security for the bond. The ultimate clean-up and any associated decommissioning costs of the Demonstration Plant are the responsibility of the Company and payment of these costs will be handled through the Cost Share Agreement.
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Demonstration Plant Project Schedule
To achieve the Demonstration Plant project objectives, the schedule was divided into three distinct performance periods, which commenced on October 1, 2021. During the performance periods, there were three DoE go/no-go decision points.
| ● | Performance Period 1: Design, Permitting and Licensing Commencement |
| ● | Performance Period 2: Procurement and Construction |
| ● | Performance Period 3: Operations |
The objective of Performance Period 1, which was achieved in December 2022, was the completion of the design of the facility and the establishment of requirements and standards to support the subsequent procurement of process equipment, as well as commencement of permitting and licensing. Licensing and permitting was extended into Performance Period 2 and achieved in early 2024. The objective of Performance Period 2, now complete, was the final procurement of the process equipment and construction of the Demonstration Plant. The objective of Performance Period 3 is the actual operation of the Demonstration Plant itself in accordance with all local, state, and federal permits, licenses, and regulations.
In December 2022, the Demonstration Plant achieved its final engineering design milestone, marking the DoE’s first go/no-go decision point. A second go/no-go gating milestone was achieved in December 2023 with the issuance by the DoE of a Project Continuation Notice, allowing for the construction of the Demonstration Plant. In September 2024, the DoE issued its final Project Continuation Notice confirming the Demonstration Plant’s readiness for operations. This notice, along with the NRC operations approval under its previously issued license (received in October 2024), allowed for the commencement of Demonstration Plant operations. In November 2024, the Company commenced equipment shakedown and plant commissioning activities. These activities were subsequently paused to allow for a comprehensive review of the as-built Demonstration Plant to support efficient and safe operation. Following completion of the review and related rework activities, plant operations formally commenced in early 2026.
End-of-Project Goals
The goal of the project is to build and operate a permitted and licensed Demonstration Plant that:
| ● | demonstrates the separation of NdPr at commercially required purity levels; |
| ● | produces commercial-purity NdPr as well as mixed light/medium REE concentrate, subject to further refining; |
| ● | provides a path for the separation of other rare earths, including Sm, Dy and other essential HREEs; |
| ● | provides a basis for economic scale-up to future commercial capacity; |
| ● | provides a basis for the demonstration of improved separation economics with expected fewer process steps and a smaller closed-cycle plant as compared with traditional processing methods; and |
| ● | demonstrates a process which may be capable of processing feed from other sources, either from the U.S. or other allied countries. |
Sundance Gold Project
The Sundance Gold Project is the second project located on our Bear Lodge Property. The Sundance Gold Project consists of 288 unpatented lode mining claims adjacent to the Bear Lodge REE Project in Crook County, Wyoming. In 2011, we published an NI 43-101 compliant technical report that now contains historical estimates of inferred mineral resources on the Sundance Gold Project. As a result of the Company’s current focus on the Bear Lodge REE Project, no drilling or exploration on the Sundance Gold Project has been conducted since the end of 2011 and none is currently planned. We have not done sufficient work to classify the historical estimate as a current estimate of mineral resources, mineral reserves, or exploration results, and we are not treating the estimate as a current estimate of mineral resources, mineral reserves, or exploration results.
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ITEM 3. LEGAL PROCEEDINGS
We are not aware of any material pending or threatened litigation or of any proceedings known to be contemplated by governmental authorities which are, or would be, likely to have a material adverse effect on the Company or our operations, taken as a whole. There are no material proceedings pursuant to which any of our directors, officers or affiliates or any owner of record or beneficial owner of more than 5% of our securities or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company.
ITEM 4. MINE SAFETY DISCLOSURES
We consider health, safety, and environmental stewardship to be a core value for the Company.
Pursuant to Section 1503(a) of the Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the U.S. are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Mine Safety and Health Administration pursuant to the Federal Mine Safety and Health Act of 1977 (the “Mine Safety and Health Act”). During the year ended December 31, 2025, the Company was not subject to any regulation by the Mine Safety and Health Administration under the Mine Safety and Health Act.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION
Our common shares currently trade on the OTCQB Venture Marketplace under the ticker symbol “REEMF.” As of March 6, 2026, we had approximately 42 shareholders of record who hold 645,368,390 issued and outstanding common shares.
DIVIDEND POLICY
We do not anticipate that we will declare any dividends in the foreseeable future. Payment of any future dividends, if any, will be at the discretion of the Board of Directors after taking into account many factors, including our operating results, financial conditions, and anticipated cash needs.
REPURCHASES OF EQUITY SECURITIES
During the quarter ended December 31, 2025, neither the Company nor any affiliate of the Company repurchased any common shares of the Company registered under Section 12 of the Exchange Act.
RECENT SALES OF UNREGISTERED SECURITIES
There were no sales of unregistered securities during the year ended December 31, 2025 that were not previously included in a Current Report on Form 8-K or Quarterly Report on Form 10-Q of the Company.
EQUITY COMPENSATION PLAN INFORMATION
As of December 31, 2025, we had two equity compensation plans under which our common shares had been authorized for issuance to our officers, directors, employees, and non-employee consultants: our 10% Rolling Stock Option Plan, as amended and restated (the “2011 Plan”), and our 2022 Equity Incentive Plan (the “2022 Plan”), which was approved by our Board on June 22, 2022 and adopted by our shareholders on August 23, 2022. Stock options are no longer available for grant by the Company under the 2011 Plan.
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The following table sets out those securities of the Company which have been authorized for issuance under each equity compensation plan at December 31, 2025:
Equity Compensation Plan Information
| | | | | | | Number of securities remaining |
| | Number of securities to be | | Weighted average | | available for future issuance | |
| | issued upon exercise of | | exercise price of | | under equity compensation plans | |
| | outstanding options and | | outstanding options and | | (excluding securities reflected in | |
| | rights | | rights | | column (a)) | |
Plan category | | (a) | | (b) | | (c) | |
Equity compensation plans approved by security holders | | | | | | | |
2011 Plan |
| 2,685,000 | | $ | 1.67 |
| Nil |
2022 Plan |
| 1,020,000 | | $ | 0.38 |
| 15,966,689 |
Total |
| 3,705,000 | | $ | 1.32 |
| 15,966,689 |
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a general summary of the material U.S. federal income tax consequences of the ownership and disposition of our common shares by a holder of our common shares that is a U.S. Holder (as defined below). This summary is general in nature and does not address the effects of any state or local taxes, U.S. federal estate, gift, or generation-skipping taxes, or the tax consequences in jurisdictions other than the U.S. In addition, this discussion does not discuss all aspects of U.S. federal income taxation that may be material to investors subject to special treatment under U.S. federal income tax law. For example, this discussion does not address all U.S. federal income tax aspects that may be material to U.S. Holders who own or have owned, directly or by the application of certain constructive ownership rules, 10% or more of the outstanding shares of the Company by either vote or by value, U.S. expatriates, insurance companies, tax-exempt entities, financial institutions, persons subject to the alternative minimum tax, or the base erosion and anti-abuse tax, regulated investment companies, securities broker-dealers or dealers, traders in securities who elect to apply a mark-to-market method of accounting, partnerships or other pass-through entities and investors in such an entity, persons holding our securities as part of a larger integrated transaction, persons who acquire our securities as compensation, persons who may be subject to the tax on global intangible low-taxed income, persons who may be eligible for a deduction for a portion of foreign-derived intangible income or global intangible low-tax income, and persons whose functional currency is not the U.S. dollar. This summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the regulations promulgated thereunder, court decisions and published rulings of the Internal Revenue Service (the “IRS”), as in effect on the date hereof, and the Convention between the U.S. and Canada with Respect to Taxes on Income and on Capital signed on September 26, 1980, as amended and currently in force (the “Treaty”), and does not take into account the possible effect of future legislative or administrative changes or court decisions. We do not anticipate requesting any rulings from the IRS or obtaining any opinions from counsel on the tax consequences described below, or on any other tax issues. The IRS or a court might reach a contrary conclusion with respect to the issues addressed herein if the matter were to be contested. Future legislative or administrative changes or court decisions may significantly change the conclusions expressed herein, and any such changes or decisions may have a retroactive effect with respect to the matters discussed herein.
YOU SHOULD CONSULT YOUR OWN ADVISOR REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON SHARES IN LIGHT OF YOUR PARTICULAR CIRCUMSTANCES.
Definition of a U.S. Holder
As used herein, the term “U.S. Holder” means a beneficial owner of our securities that is (a) an individual citizen or resident of the U.S. for U.S. federal income tax purposes; (b) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or any state thereof or the District of Columbia; (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (d) a trust, if (i) a court within the U.S. can exercise primary supervision over the administration of the trust and one or more
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U.S. persons are authorized to control all substantial decisions of the trust or (ii) a valid election is in effect under applicable Treasury Regulations to treat such trust as a U.S. person.
Passive Foreign Investment Company Rules
We will be classified as a passive foreign investment company (a “PFIC”) in any taxable year in which, after taking into account the income and assets of certain subsidiaries, either (i) at least 75% of our gross income is passive income, or (ii) at least 50% of the average value of our assets is attributable to assets that produce or are held for the production of passive income. Whether we will be classified as a PFIC in any taxable year is a factual determination and will depend upon our assets, the market value of our common shares, and our activities in each year and is therefore subject to change.
We believe that we were a PFIC for the year ended December 31, 2025. We expect that we will be a PFIC for the year ending December 31, 2026, and that we may also be a PFIC for subsequent years. The tests for determining PFIC status are dependent upon a number of factors, some of which are beyond our control and can be subject to uncertainties. Accordingly, we cannot provide certainty that we were or were not a PFIC for the year ended December 31, 2025, or that we will or will not be a PFIC for the year ending December 31, 2026, or for any future year. We will use commercially reasonable efforts to provide information as to our status as a PFIC and the PFIC status of any subsidiary in which the Company owns more than 50% of such subsidiary’s total aggregate voting power to U.S. Holders who make a written request for such information.
If we are classified as a PFIC for any taxable year, the so-called “excess distribution” regime will apply to any U.S. Holder of our common shares that does not make a QEF election or mark-to-market election, as described below. Under the excess distribution regime, (i) any gain the U.S. Holder realizes on the sale or other disposition of our common shares (possibly including a gift, exchange in a corporate reorganization, or grant as security for a loan) and any “excess distribution” that we make to such U.S. Holder (generally, any distributions to such holder in respect of our common shares during a single taxable year that are greater than 125% of the average annual distributions received by such U.S. Holder in the three preceding years or, if shorter, such holder’s holding period for such common shares), will be treated as ordinary income that was earned ratably over each day in such U.S. Holder’s holding period for such common shares; (ii) the portion of any such gains or distributions allocated to the current year or prior years before the first day of the first taxable year beginning after December 31, 1986, in which we became a PFIC would be includible by the U.S. Holder as ordinary income in the current year; (iii) the portion of such gain or distribution that is allocable to prior taxable years during which we were a PFIC will be subject to tax at the highest rate applicable to ordinary income for the relevant taxable years, regardless of the tax rate otherwise applicable to such U.S. Holder and without reduction for deductions or loss carryforwards; and (iv) the interest charge generally applicable to underpayments of tax will be imposed with respect of the tax attributable to each such year. The interest charge discussed above generally will be non-deductible interest expense for individual U.S. Holders.
Certain elections may be available with respect to our common shares (the so-called “QEF,” “mark-to-market,” and “deemed sale” elections) if we are a PFIC, but these elections may accelerate the recognition of taxable income and may result in the recognition of ordinary income. If the Company is a PFIC for any tax year during which a U.S. Holder holds our common shares, and no such elections have been made, the Company will continue to be treated as a PFIC with respect to such U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent years.
If a U.S. Holder makes a timely election to treat the Company as a “qualifying electing fund” or “QEF” (a “QEF election”) with respect to such U.S. Holder’s interest therein, the above-described rules regarding the excess distribution regime generally will not apply. Instead, the electing U.S. Holder would include annually in its gross income its pro rata share of our ordinary earnings and any net capital gain for each taxable year regardless of whether such income or gain was actually distributed. Special rules apply to U.S. Holders who own their interests in a PFIC through intermediate entities or persons.
A U.S. Holder may make a QEF election only if the U.S. Holder receives certain information (known as a “PFIC annual information statement”) from us annually. We will use commercially reasonable efforts to make available to U.S. Holders, upon written request, an accurate PFIC annual information statement for each year in which the Company is a PFIC. A QEF election with respect to our common shares is generally timely filed only if it is made on a timely filed federal income tax return for the first year in the U.S. Holder’s holding period for our common shares in which we were a PFIC. A U.S.
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Holder for whom a QEF election would otherwise be untimely may be able to make a special “deemed sale” election pursuant to which the U.S. Holder recognizes any gain inherent in the U.S. Holder’s common shares and restarts the U.S. Holder’s holding period in our common shares for purposes of making a QEF election. A deemed sale election generally can be made only if the U.S. Holder owns common shares on the first day of our taxable year in which the election is to be effective.
Alternatively, a U.S. Holder of our common shares may elect to recognize any gain or loss on its common shares on a mark-to-market basis at the end of each taxable year, so long as our common shares are regularly traded on a qualified exchange. The OTCQB Venture Marketplace, on which our common shares currently trade, may not be a qualified exchange for this purpose. Therefore, we cannot provide assurance that our common shares are regularly traded on a qualified exchange for PFIC purposes, and we provide no assurance that our common shares will be regularly traded on a qualified exchange for this or any subsequent year in which we may be a PFIC.
If a mark-to-market election is made, the excess distribution regime will not apply to amounts received with respect to our common shares from and after the effective time of the election, and any mark-to-market gains or gains on disposition will be treated as ordinary income. Mark-to-market losses and losses on disposition will be treated as ordinary losses to the extent of the U.S. Holder’s unrecovered prior net mark-to-market gains. Losses in excess of prior net mark-to-market gains will generally not be recognized. The mark-to-market election must be made by the due date (as may be extended) for filing the U.S. Holder’s federal income tax return for the first year in which the election is to take effect. A mark-to-market election applies to all future years of an electing U.S. Holder during which the stock is regularly traded on a qualifying exchange, unless revoked with the IRS’s consent.
The QEF election and mark-to-market election rules are complex. U.S. Holders should consult their tax advisor regarding the availability and procedure for making these elections.
Special adverse rules apply to U.S. Holders of our common shares for any year in which we are a PFIC and own or dispose of shares in another corporation that is also a PFIC (a “lower-tier PFIC”). A U.S. Holder who owned our common shares while we were a PFIC will be deemed to own its proportionate share of any lower-tier PFIC, and will be subject to U.S. federal income tax on (i) a distribution on the shares of a lower-tier PFIC and (ii) a disposition of shares of a lower-tier PFIC, both as if the U.S. Holder directly held the shares of such lower-tier PFIC. Moreover, a QEF election or mark-to-market election that is made for our common shares would not apply to a lower-tier PFIC. While a separate QEF election may be made for a lower-tier PFIC, we do not undertake to provide the financial information to U.S. Holders that would allow them to make a QEF election for any lower-tier PFIC. A mark-to-market election generally may not be made with respect to a lower-tier PFIC.
A U.S. Holder who makes a QEF election for our common shares but not for shares of a lower-tier PFIC will be taxable under the excess distribution regime on gain that we recognize on the sale of shares of any such lower-tier PFIC. Any U.S. Holder who makes a mark-to-market or deemed sale election for our common shares could be subject to the PFIC rules with respect to income of a lower-tier PFIC, even though the value of such lower-tier PFIC already was subject to tax via mark-to-market or deemed sale adjustments.
The IRS has issued proposed regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by a U.S. Holder that has not made a timely QEF election or mark-to-market election that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases, the basis of our common shares in the hands of the transferee and the basis of any property received in the exchange for those shares would be increased by the amount of gain recognized. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder should consult a tax advisor with respect to how the PFIC rules affect their tax situation prior to transferring PFIC shares.
Special adverse rules that impact certain estate planning goals could apply to our common shares if we are a PFIC. Special rules apply with respect to the calculation of the amount of the foreign tax credit with respect to excess distributions by a PFIC.
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Each U.S. Holder that has a direct or indirect interest in our common shares for a year for which we were a PFIC, generally would be required to file an IRS Form 8621 (“Form 8621”), if, during such year, the U.S. Holder received distributions or recognized gain with respect to our common shares, or was deemed to receive an indirect distribution from a lower-tier PFIC or to recognize gain on an indirect disposition of lower-tier PFIC stock, or in such other situations as the IRS may require. Form 8621 is also used to make certain elections with respect to PFICs, including a QEF election and a mark-to-market election. Each U.S. Holder should consult its tax advisor regarding these and any other relevant information or other reporting requirements.
If we are a PFIC in the taxable year in which we pay a dividend or the immediately preceding taxable year, dividends on our common shares will not be “qualified dividend income,” and such dividends received by individual U.S. Holders generally will be taxed at ordinary income tax rates, subject to the tax rules that apply to excess distributions from PFICs, as discussed above.
Sale or Other Disposition of Our Common Shares
The tax treatment of a sale or other disposition of our common shares by a U.S. Holder will differ based upon whether the PFIC rules apply and whether the U.S. Holder has made any of the elections described above.
If the excess distribution regime discussed above applies to the sale or disposition of our common shares, the rules regarding the taxation of excess distributions will generally apply upon a sale or other disposition of the common shares.
If the excess distribution regime discussed above does not apply to the sale or disposition of our common shares, the difference between the amount received and the adjusted tax basis of the common shares will be a gain or loss. If, as usually is the case, the common shares are a capital asset in the hands of the U.S. Holder, such gain or loss will be a capital gain or loss. If the U.S. Holder has made a QEF election with respect to the shares, the adjusted basis will be increased by the U.S. Holder’s proportionate share of income and capital gains taken into account each year as a result of the QEF election. If the U.S. Holder has made a mark-to-market election with respect to the shares, the adjusted basis will be increased by the net income recognized on the common shares as a result of the mark-to-market election. Capital gain or loss with respect to common shares generally will be long-term capital gain or loss if the holding period for the shares giving rise to such gain or loss exceeds one year. Under current law, long-term capital gains realized by individual U.S. Holders are taxed at reduced rates. Short-term capital gains are taxed at ordinary income rates. The deductibility of capital losses is subject to significant limitations.
Distributions
We do not expect to pay dividends in the foreseeable future. However, subject to the PFIC rules discussed below, a U.S. Holder must include in gross income as dividend income the gross amount of any distribution (including the amount of any Canadian withholding tax thereon) paid by the Company out of its current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) with respect to our common shares. A distribution on our common shares in excess of current or accumulated earnings and profits will be treated as a tax-free return of capital to the extent of the U.S. Holder’s adjusted basis in such common shares (thus reducing, but not below zero, the adjusted tax basis of such common shares), and thereafter as gain from the sale or exchange of common shares. See “Sale or Other Disposition of Our Common Shares” above.
If we are a PFIC in the taxable year in which we pay a dividend or the immediately preceding taxable year, dividends received by individual U.S. Holders generally will be taxed at ordinary income tax rates, subject to the rules that apply to excess distributions from PFICs, as discussed above.
If we are not a PFIC in the taxable year in which we pay a dividend or the immediately preceding taxable year, dividends received by individual U.S. Holders will be taxed to such U.S. Holder at the rates applicable to long-term capital gains as “qualified dividend income” if (i) we are eligible for benefits of the Treaty or (ii) our common shares are readily tradable on an established securities market. We have not determined if we are eligible for such benefits, and our common shares are not currently readily tradable on an established securities market. However, dividend income will not be qualified
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dividend income (and will be taxed at ordinary income rates) if the U.S. Holder has not held its common shares for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date (or as noted above, if we are a PFIC for the taxable year in which the dividend is paid or in the preceding taxable year).
Dividends paid to a corporate U.S. Holder will be taxed as ordinary income and will not generally be eligible for the dividends received deduction.
Surcharge on Net Investment Income; Other Tax Rules
A surtax of 3.8% (the “unearned income Medicare contribution tax”) is imposed on the “net investment income” of certain U.S. citizens and resident aliens, and on the undistributed “net investment income” of certain estates and trusts, in each case in excess of a threshold amount. Net investment income generally includes dividends and net gain from the disposition of property (other than property held in a “non-passive” trade or business). Net investment income is reduced by deductions that are properly allocable to such income. Special rules determine when the unearned income Medicare contribution tax applies to distributions or income with respect to PFICs. U.S. Holders should consult with their U.S. tax advisors concerning how these rules would apply to an investment in our common shares.
Foreign Currency Transactions
Generally, amounts received by a U.S. Holder in foreign currency (including dividends paid in foreign currency) will be valued at the rate of exchange on the date of receipt. The subsequent disposition of any foreign currency received (including an exchange for U.S. currency) will generally give rise to ordinary gain or loss should the rate of exchange subsequently change.
Foreign Tax Credit or Deduction
A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of our common shares may be entitled, at the election of the U.S. Holder, to either receive a deduction or a tax credit for U.S. federal income tax purposes with respect to such foreign tax paid or withheld. Significant and complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s U.S. income tax liability that the U.S. Holder’s “foreign source” income bears to his or its worldwide taxable income. In applying this limitation, the various items of income and deduction must be classified as either “foreign source” or “U.S. source.” Complex rules govern this classification process.
In lieu of a credit, a U.S. Holder who itemizes deductions may elect to deduct all of such holder’s foreign taxes in the taxable year. A deduction does not reduce U.S. tax on a dollar-for-dollar basis like a tax credit, but the deduction for foreign taxes is not subject to the same limitations applicable to foreign tax credits. U.S. Holders are urged to consult their own tax advisors regarding the availability of foreign tax credits.
A U.S. Holder’s ability to use foreign tax credits could be adversely affected if we are a PFIC.
Information Reporting and Backup Withholding
Certain U.S. Holders are required to report information relating to an interest in our common shares, subject to certain exceptions, by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in our common shares or warrants. U.S. Holders are urged to consult their own tax advisors regarding information reporting requirements relating to their ownership of our common shares.
Dividend payments made with respect to our common shares and proceeds from the sale or other disposition of our common shares may be subject to information reporting requirements and to U.S. backup withholding.
In general, backup withholding will apply, currently at a rate of 24%, with respect to reportable payments made to a U.S. Holder unless (i) the U.S. Holder is a corporation or other exempt recipient, and if required, demonstrates such exemption,
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or (ii) the U.S. Holder furnishes the payor with a taxpayer identification number on IRS Form W-9 in the manner required, certifies under penalty of perjury that such U.S. Holder is not currently subject to backup withholding and otherwise complies with the backup withholding requirements.
Backup withholding is not an additional tax. Rather, the amount of any backup withholding imposed on a payment to a holder will be allowed as a refund or a credit against such holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth in “Item 1A. Risk Factors” and elsewhere in this Annual Report.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and accompanying notes included in Item 8 of this Annual Report. This Management’s Discussion and Analysis (this “MD&A”) has been prepared based on information known to management as of March 12, 2026. This MD&A is intended to help the reader understand the consolidated audited financial statements of the Company.
All currency amounts are expressed in thousands of U.S. dollars, except per share and common share amounts, unless otherwise noted.
OVERVIEW AND OUTLOOK
Our primary focus has been and continues to be the engineering, permitting, licensing, construction, and operation of the Demonstration Plant, and as of late 2025, the resumption of licensing and permitting activities for our Bear Lodge REE project. The licensing and permitting efforts are expected to continue through 2027.
If successful, the Demonstration Plant will show that our proprietary extraction technology is able to process and separate certain REEs from high grade sample materials extracted from our Bear Lodge REE Project in a more efficient and economical manner than traditional REE processing methods and will serve as a precursor to inform the design and estimated cost for a full-scale production facility.
In September 2024, the DoE issued its final Project Continuation Notice, confirming the Demonstration Plant’s readiness for operations. This notice, along with the NRC’s approval of operations received in October 2024, cleared the path for operations of the Demonstration Plant to formally commence, with operations to process and separate REEs from the previously stockpiled high-grade sample materials from the Bear Lodge REE Project to follow the completion of construction and pre-operation activities. During the year ended December 31, 2025, the Company continued work on the Demonstration Plant project as described below, and this work is expected to continue until the completion of the Demonstration Plant’s operations.
In early 2025, several design and equipment issues were identified during the Demonstration Plant’s equipment testing phase. As a result of these issues, we conducted an as-built design review in April 2025. Following the review and related project rework, Demonstration Plant operations formally commenced in early 2026 and are expected to continue through December 31, 2026. During the operations phase, the Demonstration Plant is expected to produce up to 10 tons of NdPr oxide.
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In June 2023, the Company entered into the WEA Funding Agreement for its previously announced award of a $4,400 grant from the WEA to be used toward the advancement of the Demonstration Plant. This award, along with funds contributed by the Company and the DoE, is being used to fund the Demonstration Plant’s construction and operating costs. As of December 31, 2023, the Company had met the conditions allowing for the invoicing of $2,000 of the $4,400 WEA grant total. This $2,000 was received on January 31, 2024. By September 30, 2024, the Company had met the conditions allowing for the invoicing of an additional $2,000, which was received in November 2024. The remaining $400 of the $4,400 grant total, which is conditioned on Demonstration Plant operations and a report to the WEA, will be invoiced to the WEA once that final milestone has been achieved, which is currently expected in mid-2026.
Since inception, the General Atomics-led consortium has seen increases in the Demonstration Plant’s project costs, including final equipment costs, due to, among other factors, inflation. As a result of these cost pressures, General Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant construction and operations budget of approximately $53,600, which was approximately 22% higher than the original budget of approximately $43,800. In response, the DoE pledged an additional commitment of $2,400 to help fund a portion of this budget increase, with the balance to be funded by the Company, including any amounts in excess of the $53,600 revised DoE approved budget total. The Company currently estimates the total cost of the Demonstration Plant from inception, inclusive of operating costs estimates through December 31, 2026, to be approximately $77,500.
Through December 31, 2025, the DoE had made payments totaling approximately $20,500 towards its commitment of approximately $24,200, leaving a balance of approximately $3,700 to be collected from the DoE under the current cost share award.
To fund the Company’s share of these cost increases, in February 2026, the Company commenced a rights offering (the “2026 Rights Offering”) for gross proceeds of approximately $30,900, in which each holder of the Company’s common shares as of the record date of January 30, 2026, was eligible to participate. The 2026 Rights Offering closed on March 4, 2026, generating net proceeds of approximately $30,500. These funds, in conjunction with the funds already on hand will be used to progress the Company’s business strategy, which includes (i) the continuation of the operation of the Demonstration Plant for a sufficient time to provide the information to support a commercialization decision, (ii) the advancement of projects for the as-constructed Demonstration Plant beyond the current NdPr separation objectives, including applying the technology to the separation of HREEs and possibly to third party feed sources, (iii) the completion of federal and state permitting and licensing for the Bear Lodge REE Project, and (iv) other general corporate purposes.
Even with the funds already on hand, the funds raised in 2026 Rights Offering, and the expected receipt of the remaining WEA grant monies and DoE funds, the Company will still require additional funding to design, construct, and operate the Bear Lodge REE Project.
Ultimately, in the event the Company cannot secure additional financial resources or complete a strategic transaction, the Company may need to curtail its plans for the Demonstration Plant, suspend permitting and development of the Bear Lodge REE Project or other initiatives, or potentially liquidate its business interests, and investors may lose all or part of their investment.
RESULTS OF OPERATIONS
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024
Summary
Our consolidated net loss for the year ended December 31, 2025 was $4,899, or $0.01 per share, compared with our consolidated net loss of $18,451, or $0.04 per share, for the year ended December 31, 2024. See our discussion below for the primary drivers of this change. As an exploration stage company, we had no properties in production and generated no revenues during either year.
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Exploration and Evaluation
Our exploration and evaluation costs totaled $2,887 for the year ended December 31, 2025, compared with $18,479 for the year ended December 31, 2024. This decrease of $15,592 was largely attributable to (i) the activities associated with our Demonstration Plant as we shifted from the more expensive equipment acquisition and installation activities during 2024 to the less expensive plant rework and equipment upgrades in 2025, and (ii) the decision to include certain past Demonstration Plant expenses (formerly excluded from our billings under the Cost Share Agreement) in our billings to the DoE under the Cost Share Agreement. This change to include certain previously excluded costs from the Cost Share Agreement reduced the Company’s share of these costs as partial reimbursement is now expected to be received from the DoE. See Note 4 to the Consolidated Financial Statements for a discussion of the Cost Share Agreement.
Corporate Administration
Our corporate administration costs increased by $147 on a comparative year-over-year basis, increasing from $2,666 in the year ended December 31, 2024 to $2,813 for the year ended December 31, 2025. The majority of these expenses relate to costs associated with our public company compliance and reporting obligations.
Interest Income
For the years ended December 31, 2025 and 2024, the Company generated interest income of $1,009 and $1,182, respectively, on investments of its excess cash balances. This change was largely attributable to our larger excess cash balances available for investment during 2024 as compared to 2025 due to the rights offering that closed in March 2024 (the “2024 Rights Offering”).
Grant Income
During 2024, the Company recognized grant income of $2,000 with the achievement of the second milestone under the WEA Funding Agreement. There was no similar transaction during the year ended December 31, 2025. See Note 5 to the Consolidated Financial Statements for a discussion of the WEA Funding Agreement.
Accretion Expense
For the year ended December 31, 2025, we recorded accretion expense of nil compared to $236 for the year ended December 31, 2024, with the accretion expense recorded during 2024 being related to the Company’s option to repurchase approximately 640 acres (257 hectares) of real property in Wyoming. With the Company’s repurchase of this land in October 2024, the Company discontinued its recording of accretion expense and will not incur further accretion expense in future periods related to this repurchase option.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
Operating Activities
Net cash used in operating activities was $7,121 for the year ended December 31, 2025, compared with $10,619 for the year ended December 31, 2024. The decrease of $3,498 was primarily attributable to lower exploration and evaluation expenditures, as activities shifted from Demonstration Plant equipment acquisitions and installation in 2024 to plant rework activities and equipment upgrades in 2025. This decrease was partially offset by the receipt of $2,000 in WEA grant offset funds in 2024. Excluding the $2,000 in WEA grant funds, net cash used in operating activities for the year ended December 31, 2024 would have been $12,619.
Investing Activities
Net cash used in investing activities of $289 for year ended December 31, 2025 was for the purchase of buildings and equipment. For the year ended December 31, 2024, our investing activities consumed cash of $1,559, with the majority of the spending related to the repurchase of property from Whitelaw Creek LLC in the amount of $1,507.
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Financing Activities
Net cash provided by financing activities of $35,286 for the year ended December 31, 2024, stemmed from the receipt of the net proceeds from the 2024 Rights Offering. There were no similar transactions during the year ended December 31, 2025.
Liquidity and Capital Resources
At December 31, 2025, we had a working capital balance of $19,666, which represented a decrease of $5,155 from our December 31, 2024 working capital balance of $24,821. This decrease was largely the result of the reduction in our cash and cash equivalents balance, which decreased by $7,417 from $26,732 at December 31, 2024, to $19,315 at December 31, 2025, partially offset by an increase of $2,509 in our related party balance, which changed from a $895 liability at December 31, 2024, to an asset of $1,614 at December 31, 2025.
In June 2023, the Company entered into the WEA Funding Agreement for its previously announced award of a $4,400 grant from the WEA to be used toward the advancement of the Demonstration Plant. Following the achievement of the first milestone under the WEA Funding Agreement, the Company received in January 2024 the first $2,000 of the $4,400 grant. In September 2024, a second funding request of $2,000 was submitted to the WEA with the achievement of the second milestone under the WEA Funding Agreement. The collection of this second $2,000 tranche was received in November 2024, with the remainder, or the $400 retainer, forecasted for collection in mid-2026.
Due to inflationary cost pressures on labor, equipment, and consumables, as well as cost increases associated with certain optimized plant engineering and design parameters, General Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant project budget of approximately $53,600, which was approximately 22% higher than the original budget of approximately $43,800. In response, the DoE pledged an additional commitment of $2,400 (increasing its total commitment to approximately $24,200) in September 2024 to help fund a portion of this budget increase, with the balance to be funded by the Company, including any amounts in excess of the $53,600 revised budget total, now estimated to be approximately $77,500 inclusive of operating cost estimates through December 31, 2026.
Through December 31, 2025, the DoE has paid a total of approximately $20,500 towards its commitment of approximately $24,200, leaving a balance of approximately $3,700 to be invoiced and collected from the DoE under the current cost share award.
Early in 2025, we identified several design and equipment issues during the Demonstration Plant’s equipment testing phase, which followed the completion of construction activities. After identifying these issues, we initiated an as-built design review in April 2025, which continued through December 31, 2025. As a result of this as-built design review, Demonstration Plant operations did not formally commence until early 2026.
The funds raised by the Company in the 2026 Rights Offering, in conjunction with the funds already on hand will be used to progress the Company’s business strategy, which includes (i) the continuation of the operation of the Demonstration Plant for a sufficient time to provide the information to support a commercialization decision, (ii) the advancement of projects for the as-constructed Demonstration Plant beyond the current NdPr separation objectives, including applying the technology to the separation of HREEs and possibly to third party feed sources, (iii) the completion of federal and state permitting and licensing for the Bear Lodge REE Project, and (iv) other general corporate purposes. However, even with these funds and the expected receipt of the remaining WEA grant monies and DoE funds, the Company will still require substantial additional funds to complete the design, construction, and operation of a commercial mine and plant for the Bear Lodge REE Project.
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Ultimately, in the event the Company cannot secure additional financial resources or complete a strategic transaction, the Company may need to curtail its plans for the Demonstration Plant, suspend permitting and/or development of the Bear Lodge REE Project or other initiatives, or potentially liquidate its business interests, and investors may lose all or part of their investment.
Off-Balance Sheet Arrangements
None.
Contractual Obligations
Financial Assistance Agreement – Related Party
In September 2025, at the Company’s request, General Atomics and the Company formally requested a novation of the financial assistance agreement between General Atomics and the DoE, under which General Atomics’ interests under the agreement would be transferred to the Company. Once the novation process is complete, the Company will be named the recipient of the award under the agreement and certain conditions are expected to be confirmed, including the potential for additional DoE funding support for further advancements of the Demonstration Plant.
Intellectual Property Rights – Related Party
During October 2017, the Company and Synchron executed an intellectual property rights agreement, whereby Synchron received rights to use and improve the Company’s intellectual property relating to the Company’s patents and related technical information. The Company retains the right to use any such improvements. See “Item 1A. Risk Factors” of this Annual Report.
CRITICAL ACCOUNTING POLICIES
For a summary of our significant accounting policies, including those discussed below, see Note 3 to our Consolidated Financial Statements.
CRITICAL ACCOUNTING ESTIMATES
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Reclamation Obligations
Our mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance will occur. We reclaim the disturbance from our exploration programs on an ongoing basis and, therefore, the portion of our reclamation obligation corresponding to our exploration programs that are expected to be settled in the near term are classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven and probable reserves as defined by Item 1300 of Regulation S-K or NI 43-101, the timing of these reclamation activities is uncertain as the reclamation areas will be utilized once the project is operating. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the reclamation obligation associated with our properties.
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Our Bear Lodge REE Project reclamation obligation is secured by a surety bond held for the benefit of the state of Wyoming in an amount determined by the applicable federal or state regulatory agency. We also maintain a surety bond for the decommissioning and reclamation of the Demonstration Plant property.
Accounting for reclamation and remediation obligations requires management to make estimates unique to each mining and processing operation of the future costs the Company expects to incur to complete the reclamation and remediation work required to comply with existing laws and regulations. These estimates require considerable judgment and are sensitive to changes in underlying inputs and assumptions. Such changes, including, but not limited to, (i) changes to environmental laws and regulations, which could increase the scope and extent of work required, (ii) changes in the timing of reclamation and remediation activities, which could occur over an extended future period and (iii) changes in the methods and technology utilized to settle reclamation and remediation obligations, could have a material impact on our business, financial condition, results of operations and cash flows.
Income Taxes
The Company applies the provisions of Financial Accounting Standards Board Accounting Standard Codification (“ASC”) 740 Income Taxes. The Standard requires an asset and liability approach for financial accounting and reporting for income taxes and the recognition of deferred tax assets and liabilities for the temporary differences between the financial reporting basis and tax basis of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. Due to losses from inception, the Company has no tax liability. Currently, the Company has no deferred taxes arising from temporary differences between income for financial reporting and income tax purposes as a full valuation allowance has been recorded against the deferred tax assets.
The Company classifies tax-related penalties and net interest on income taxes as income tax expense. As of December 31, 2025 and 2024, no income tax expense had been incurred or accrued.
New Accounting Pronouncements
As of December 31, 2025, the Company had adopted all accounting pronouncements affecting the Company.
Improvements to Income Tax Disclosures
Issued in December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, focuses on the rate reconciliation and income taxes paid. This ASU requires disclosure, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, the ASU requires disclosure of income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. The new standard is effective for the Company for 2025, with early adoption permitted. Amendments in this ASU may be applied prospectively for the revised disclosures for the period ended December 31, 2025 and continuing to provide the pre-ASU disclosures for the prior periods or may be applied retrospectively by providing the revised disclosures for all periods presented. The adoption of this ASU only impacted our disclosures, with no impacts to our results of operations, cash flows, and financial condition.
Disaggregation of Income Statement Expenses
Issued by FASB in November 2024, ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. While early adoption is permitted, we do not plan to adopt this standard early. This ASU will likely
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result in additional disclosures being included in our consolidated financial statements once adopted. We are currently evaluating the provisions of this ASU.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following Consolidated Financial Statements and Reports of Independent Registered Public Accountants are filed as part of this Item 8 and are included in this Annual Report.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Rare Element Resources Ltd.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Rare Element Resources Ltd. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Cost Share Agreement – Refer to Note 4 to the Financial Statements
As discussed in Note 4 to the financial statements, the Company is a member of a consortium of companies, led by General Atomics, a related party, who are developing a Demonstration Plant (the “project”) that will process high-grade rare-earth material. In connection with the arrangement, the Company entered into a Cost Share Agreement with General Atomics, in which the Company agreed to assume and pay for 50% of those costs incurred by, and on behalf of, General Atomics, as leader of the consortium, for the project.
We consider management’s assessment and accounting of the Cost Share Agreement as a significant audit matter because of the significant judgements required by management to determine the activity completed in accordance with the agreements. This required a high degree of auditor judgement and an increased extent of effort to address these matters.
Addressing the matter involved gaining an understanding of the process to account for the Cost Share Agreement. We obtained and interpreted the Cost Share Agreement and subcontracts to ensure the amounts were consistently applied. We evaluated management’s analysis and compared that to applicable accounting guidance. Finally, we obtained the
56
Company’s fund flows and examined the costs used in their calculation to ensure they were in accordance with the agreements.
Haynie & Company Salt Lake City, Utah March 12, 2026 We have served as the Company’s auditor since 2022. |
57
RARE ELEMENT RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S. Dollars, except shares outstanding)
| | December 31, | ||||
| | 2025 | | 2024 | ||
ASSETS: | | | |
| | |
CURRENT ASSETS | | | |
| | |
Cash and cash equivalents | | $ | | | $ | |
Due from related party (Note 4) | | | | | | — |
Prepaid expenses and other | |
| | |
| |
Total Current Assets | |
| | |
| |
| | | | | | |
Building, net | | | | | | — |
Equipment, net | |
| | |
| |
Restricted cash | | | | | | |
Right of use asset (Note 6) | | | | | | |
Land | |
| | |
| |
Total Assets | | $ | | | $ | |
| | | | | | |
LIABILITIES: | |
| | |
| |
CURRENT LIABILITIES | |
| | |
| |
Accounts payable and accrued liabilities | | $ | | | $ | |
| | — | | | | |
Lease liability, current (Note 6) | | | | | | |
Total Current Liabilities | |
| | |
| |
| | | | | | |
Reclamation obligation | |
| | |
| |
Lease liability, long-term (Note 6) | | | | | | |
Other long-term liabilities | | | | | | |
Total Liabilities | |
| | |
| |
| | | | | | |
Commitments and Contingencies (Note 12) | |
| | |
| |
| | | | | | |
SHAREHOLDERS’ EQUITY: | |
| | |
| |
Common shares, | |
| | |
| |
Additional paid-in capital | |
| | |
| |
Accumulated deficit | |
| ( | |
| ( |
Total Shareholders’ Equity | |
| | |
| |
| | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | | | $ | |
The accompanying notes are an integral part of these audited consolidated financial statements.
58
RARE ELEMENT RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of U.S. Dollars, except per share and common share amounts)
| | Year Ended December 31, | | ||||
| | 2025 | | 2024 | | ||
Operating expenses: | | | |
| | | |
Exploration and evaluation (See Note 4 for related party costs) | | $ | ( | | $ | ( | |
Corporate administration | |
| ( | |
| ( | |
Depreciation and amortization | |
| ( | |
| ( | |
Total operating expenses | |
| ( | |
| ( | |
| | | | | | | |
Non-operating income (expense): | |
| | |
| | |
Interest income | |
| | |
| | |
Grant income | | | — | | | | |
Accretion expense | |
| — | |
| ( | |
Interest expense | |
| ( | |
| ( | |
Loss on land repurchase | | | — | | | ( | |
Gain on sale of equipment | |
| — | |
| | |
Gain on lease termination | |
| | |
| — | |
Total non-operating income | |
| | |
| | |
| | | | | | | |
Net loss | | $ | ( | | $ | ( | |
| | | | | | | |
Loss per share - basic and diluted | | $ | ( | | $ | ( | |
| | | | | | | |
Weighted average number of shares outstanding | |
| | |
| | |
The accompanying notes are an integral part of these audited consolidated financial statements.
59
RARE ELEMENT RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S. Dollars)
| | For the year ended December 31, | ||||
| | 2025 | | 2024 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | |
| | |
Net loss | | $ | ( | | $ | ( |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | |
| |
Depreciation and accretion expense | |
| | |
| |
Right of use asset amortization | |
| | |
| |
Stock-based compensation | |
| | |
| ( |
Reclamation obligation | | | — | | | |
Gain on lease termination | | | ( | | | — |
Other | | | ( | | | |
| |
| ( | |
| ( |
| | | | | | |
Changes in working capital: | |
| | |
| |
Due to (from) related party | | | ( | | | |
Grant collection | | | — | | | |
Prepaid expenses and other | |
| ( | |
| |
Accounts payable and accrued liabilities | |
| | |
| |
Lease liability | |
| ( | |
| ( |
Net cash used in operating activities | |
| ( | |
| ( |
| | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | |
| |
Proceeds from the sale of equipment | | | — | | | |
Purchase of equipment | | | ( | | | ( |
Land purchase (Note 8) | | | — | | | ( |
Net cash used in investing activities | |
| ( | |
| ( |
| | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | |
| |
Financing transaction, net | |
| — | |
| |
Net cash provided by financing activities | |
| — | |
| |
| | | | | | |
Net change in cash, cash equivalents and restricted cash | |
| ( | |
| |
Cash, cash equivalents and restricted cash- beginning of the period | |
| | |
| |
Cash, cash equivalents and restricted cash- end of the period | | $ | | | $ | |
| | | | | | |
Supplemental cash flow disclosures: | | | | | | |
Cash paid for taxes | | $ | — | | $ | — |
Cash paid for interest | | $ | — | | $ | — |
Non-cash common shares issued in land repurchase (Note 8) | | $ | — | | $ | |
| | | | | | |
| | As of December 31, | ||||
| | 2025 | | 2024 | ||
Reconciliation of amounts in the Balance Sheet to amounts in the Cash Flow Statement | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Restricted cash, long-term | | | | | | |
Total of cash, cash equivalents and restricted cash - end of period | | $ | | | $ | |
The accompanying notes are an integral part of these audited consolidated financial statements.
60
RARE ELEMENT RESOURCES LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Expressed in thousands of U.S. Dollars, except number of shares)
| | | | | | | Additional | | | | | | | |
| | | | | | | Paid in | | Accumulated | | | | ||
| | Number of Shares | | Amount | | Capital | | Deficit | | Total | ||||
Balance, December 31, 2023 |
| | | $ | | | $ | | | $ | ( | | $ | |
2024 Rights Offering |
| | |
| | |
| — | |
| — | |
| |
Stock option exercise | | | | | — | | | — | | | — | | | — |
Stock-based compensation | | — | | | — | | | ( | | | — | | | ( |
Land repurchase | | | | | | | | — | | | — | | | |
Net loss |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balance, December 31, 2024 |
| | | $ | | | $ | | | $ | ( | | $ | |
Stock option exercises |
| | |
| — | |
| — | |
| — | |
| — |
Stock-based compensation |
| — | |
| — | |
| | |
| — | |
| |
Net loss |
| — | |
| — | |
| — | |
| ( | |
| ( |
Balance, December 31, 2025 |
| | | $ | | | $ | | | $ | ( | | $ | |
The accompanying notes are an integral part of these audited consolidated financial statements.
61
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
1. NATURE OF OPERATIONS
Rare Element Resources Ltd. (“we,” “us,” “Rare Element” or the “Company”) was incorporated under the laws of the Province of British Columbia, Canada, on June 3, 1999.
Rare Element holds a
If and when developed, the Bear Lodge REE Project will likely consist of a mine and a separation plant to produce a commercial NdPr product. As market conditions dictate, the Company will decide whether it is prudent to develop and put into production the mine and separation plant independent of each other or whether linking the two production processes into a single project is the more prudent path.
The Company also holds a
The Company is currently focused on the advancement of a rare earth processing and separation demonstration-scale plant (the “Demonstration Plant”) project and the permitting and licensing of the Bear Lodge REE Project. The Demonstration Plant will process already stockpiled high-grade sample materials from the Bear Lodge REE Project.
In January 2021, a consortium of companies, of which the Company is a part, received notice from the Department of Energy (“DoE”) that the consortium had been selected for negotiation of a potential financial award for the engineering, construction and operation of a rare earth separation and processing demonstration plant, which is now the Demonstration Plant project. The consortium of companies is led by General Atomics, an affiliate of Synchron, the Company’s majority shareholder, and includes certain of General Atomics’ affiliates, as well as the Company and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor. The Company, as a subrecipient of the award, along with the other consortium members, commenced work on the planning and design of the Demonstration Plant project in November 2021, with the Company’s contractual arrangement with General Atomics finalized in December 2021.
To address the Company’s funding needs, including the funding required for the Demonstration Plant, the Company completed rights offerings in December 2021 (the “2021 Rights Offering”) and March 2024 (the “2024 Rights Offering”) for gross proceeds of approximately $
Since inception, the General Atomics-led consortium has seen increases in the Demonstration Plant’s project costs, including its final equipment costs, due to inflation, among other factors. As a result of these cost pressures, General Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant construction and operations budget in 2024 of approximately $
62
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
$
In December 2022, the Demonstration Plant achieved its final engineering design milestone, marking the DoE’s first go/no-go decision point. A second go/no-go gating milestone was achieved in December 2023 with the issuance by the DoE of a Project Continuation Notice, allowing for the construction of the Demonstration Plant.
In September 2024, the DoE issued its final Project Continuation Notice following its approval of the revised project budget of $
Early in 2025, the Company identified several design and equipment issues during the Demonstration Plant’s equipment testing phase, which followed the completion of construction activities. After identifying these issues, we initiated an as-built design review in April 2025, which continued through December 31, 2025. As a result of this as-built design review, Demonstration Plant operations did not formally commence until early 2026.
The Company has incurred losses since its inception, and further losses are anticipated in the development of its business. As of December 31, 2025, the Company had cash and cash equivalents of $
The Company currently estimates that with (i) the net proceeds of approximately $
2. BASIS OF PRESENTATION
Principles of Consolidation
These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and are inclusive of the accounts of Rare Element Resources Ltd. and its directly held wholly owned subsidiary, Rare Element Resources, Inc. All numbers in the consolidated financial statements are presented in U.S. dollars (in thousands), unless otherwise denoted.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results
63
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
could differ from those estimates. The amounts that involve estimates include our lease obligations, reclamation obligations and stock-based compensation.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and liquid investments with an original maturity of three months or less. At December 31, 2025 and 2024, cash and cash equivalents consisted of $
The Company continually monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. The Company maintains balances in various U.S. financial institutions in excess of U.S. federally insured limits.
Restricted Cash
The Company periodically maintains cash deposits that are held and earmarked for a specific purpose. At December 31, 2025 and 2024, the Company had $
Mineral Properties and Exploration and Evaluation Costs
Mineral property acquisition costs, including indirectly related acquisition costs, are capitalized when incurred. Acquisition costs include cash considerations, and the fair market value of the Company’s common shares issued as consideration. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are capitalized as mineral property acquisition costs at such time as the payments are made. Exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable mineral reserves, as defined by the Securities and Exchange Commission (“SEC”) Item 1300 of Regulation S-K or National Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators (“NI 43-101”), development costs related to such reserves and incurred after such determination will be considered for capitalization. The establishment of proven and probable reserves is based on results of feasibility studies. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Capitalized amounts relating to a property that is abandoned or otherwise considered uneconomic for the foreseeable future will be written off.
The Company currently has no proven and probable reserves, and it should not be assumed that any part or all of our mineral resources will ever be converted into mineral reserves, as defined by the SEC or NI 43-101. See “Item 1A. Risk Factors” of this Annual Report.
Research & Development (“R&D”) Expenditures
Materials, equipment, and facilities acquired or constructed for R&D activities associated with the Demonstration Plant project are expensed as incurred. These materials, equipment and facilities are not expected to have an alternative future use beyond the end of the current Demonstration Plant project.
Impairment Assessment of Long-Lived Assets
Carrying values of long-lived assets, other than mineral properties, are evaluated for impairment when information becomes available that indicates the carrying value may not be recoverable. If it is determined that the fair value is less than the carrying value an impairment charge equal to the difference between the fair value and the carrying value will be recorded in our Consolidated Statements of Operations.
64
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
Reclamation Obligations
The Company’s mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance is expected to occur. The Company reclaims the disturbance from its exploration programs on an ongoing basis; therefore, the portion of its reclamation obligation corresponding to its exploration programs expected to be settled in the near term is classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven or probable mineral reserves as defined under Item 1300 of Regulation S-K, the timing of these reclamation activities is uncertain as the reclamation areas will only be utilized once the Bear Lodge REE Project is operating. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the reclamation obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the reclamation obligation associated with our Bear Lodge Property.
The Company’s reclamation obligation is secured by surety bonds held for the benefit of the state of Wyoming in amounts determined by the applicable federal or state regulatory agencies. The Company’s reclamation obligation was $
Depreciation
Depreciation is computed using the straight-line method. The Company depreciates , and and geological equipment over a period of to
Stock-based Compensation
The fair value of stock-based compensation awards is measured at the date of grant and amortized over the requisite service period, which is generally the vesting period, with a corresponding increase in additional paid-in capital. The Company uses the Black-Scholes option valuation model to calculate the fair value of awards granted.
In the case of a share-based compensation award that is either cancelled or forfeited prior to vesting, the amortized expense associated with the unvested awards is reversed. The Company has elected to account for forfeitures as they occur.
Leases
The Company accounts for leases in accordance with ASC 842 – Leases. This accounting standard requires all lessees to record the impact of leasing contracts on the balance sheet as a right to use asset and corresponding liability. This is measured by taking the present value of the remaining lease payments over the lease term and recording a right to use asset and corresponding lease obligation for lease payments. Rent expense is realized on a straight-line basis and the lease obligation is amortized based on the effective interest method. The amounts recognized reflect the present value of the remaining lease payments for all leases that have a lease term greater than 12 months. The discount rate used is an estimate of the Company’s incremental borrowing rate based on information available at lease commencement in determining the present value of lease payments.
In considering the lease asset value, the Company considers fixed or variable payment terms, prepayments, and options to extend, terminate or purchase. Renewal, termination, or purchase options affecting the lease term are used for determining lease asset value only if the option is reasonably certain to be exercised.
65
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
Income Taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that the entire or some portion of the deferred tax asset will not be recognized.
Loss per Share
Loss per share is computed using the weighted average number of shares outstanding during the period. To calculate diluted loss per share, the Company uses the treasury stock method and the if-converted method. Diluted loss per share in our case is not presented, as the effect on the basic loss per share would be anti-dilutive. At December 31, 2025 and 2024, we had
Fair Value
GAAP defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price) and establishes a fair-value hierarchy that prioritizes the inputs used to measure fair value using the following definitions (from highest to lowest priority):
| ● | Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
| ● | Level 2 — Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. |
| ● | Level 3 — Prices or valuation techniques requiring inputs that are both significant to the fair-value measurement and unobservable. |
Financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used in such measurements by major security type as of December 31, 2025 and 2024 are presented in the following table:
Fair value at December 31, 2025 | ||||||||||||
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
Assets: |
| | |
| | | | | |
| | |
Money market funds | | $ | | | $ | | | $ | — | | $ | — |
| | | | | | | | | | | | |
Fair value at December 31, 2024 | ||||||||||||
| | Total | | Level 1 | | Level 2 | | Level 3 | ||||
Assets: |
| | |
| | | | | |
| | |
Money market funds | | $ | | | $ | | | $ | — | | $ | — |
66
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
Money market funds are valued at cost, which approximates fair value. These amounts are included on the balance sheet in cash and cash equivalents at December 31, 2025 and 2024.
Recently Issued Accounting Pronouncements
Improvements to Income Tax Disclosures
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amended guidance enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information. This guidance requires disclosure of specific categories in the effective tax rate reconciliation and further information on reconciling items meeting a quantitative threshold. In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amended guidance is effective for annual periods beginning January 1, 2025. The guidance can be applied either prospectively or retrospectively.
The adoption of this ASU only impacted our disclosures, with no impacts to our results of operations, cash flows, or financial condition.
Disaggregation of Income Statement Expenses
Issued by FASB in November 2024, ASU 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), requires a public business entity to disclose disaggregated information about certain income statement expense line items and information about selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted.
While early adoption is permitted, we do not plan to adopt this standard early. When adopted, this ASU may result in additional disclosures being included in our consolidated financial statements, but we are still in the process of evaluating the provisions of this ASU.
4. RELATED PARTY
Cost Share Agreement with General Atomics
In January 2021, a consortium of companies, of which the Company is a part, received notice from the DoE that the consortium had been selected for negotiation of a potential financial award for the engineering, construction, and operation of the Demonstration Plant. This consortium of companies is led by General Atomics, an affiliate of Synchron (the Company’s majority shareholder), and includes certain of General Atomics’ affiliates, as well as the Company and LNV, an Ardurra Group, Inc. company, as engineering and construction subcontractor. A formal proposal was submitted by the consortium in response to a published Funding Opportunity Announcement in mid-2020 for the construction and operation of the Demonstration Plant utilizing proprietary technology to produce commercial-grade products. Under this original proposal, the DoE’s share of the Demonstration Plant project funding was estimated at $
67
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
costs for the Demonstration Plant were to be funded on a cost-share basis,
On November 30, 2021, the Company and General Atomics entered into a Cost Share Funding Assumption Agreement (the “Cost Share Agreement”) pursuant to which the Company agreed to assume and pay for the
On March 17, 2022, the Company executed a subcontract purchase order in the amount of $
Due to inflationary cost pressures on labor, equipment, and consumables, as well as cost increases associated with certain optimized plant engineering and design parameters, General Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant project budget of approximately $
On May 16, 2024, the Company and General Atomics entered into an extension agreement to the Cost Share Agreement (the “Extension Agreement”) under which the Company agreed to make additional cash advances, of up to $
In September 2025, at the Company’s request, General Atomics and the Company formally requested a novation of the financial assistance agreement between General Atomics and the DoE, under which General Atomics’ interests under the agreement would be transferred to the Company. The novation process, which is underway and is expected to be completed during the first half of 2026, will not change the intellectual property rights held by Synchron and its affiliates in the Company’s intellectual property. Once the novation process is complete, the Company will be named the recipient of the award under the agreement and certain conditions are expected to be confirmed, including the potential for additional DoE funding for further advancements of the Demonstration Plant.
The DoE has allowed the novation process to progress even though the financial assistance agreement’s term expired on September 30, 2025. If a novation is not completed, the DoE award to General Atomics could be terminated, and final disposition of the assets and decommissioning activities would be negotiated with the DoE. Although the Company expects the novation process to be completed in the first half of 2026, there is no assurance of the process progressing in a timely manner or being completed at all.
68
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
Since inception, the Company has (i) advanced $
The following table summarizes transactions under the Cost Share Agreement for the years ended December 31, 2025 and 2024:
| | 2025 | | 2024 | ||
Balance of funds owing to (remaining on deposit with) General Atomics as a related party balance at beginning of year | | $ | | | $ | ( |
Funds transferred to General Atomics during the year | | | — | | | ( |
Funds returned by General Atomics during the year | | | — | | | |
The Company's share of Demonstration Plant project costs incurred during the year (1) | | | ( | | | |
Balance of funds owing to (due from) General Atomics as a related party balance at end of year | | $ | ( | | $ | |
(1) As of December 31, 2025, the Company has a receivable from General Atomics due to the Company invoicing amounts during the third quarter of 2025 for certain Demonstration Plant expenses incurred in prior periods under the Cost Share Agreement. These expenses were initially excluded from the Company’s billings under the Cost Share Agreement because the Company believed at the time that including them would cause the original $
The following table summarizes the related party receivable activity with General Atomics for reimbursable costs incurred by the Company under the Cost Share Agreement for the years ended December 31, 2025 and 2024:
| | | 2025 | | | 2024 |
Balance of receivables due from General Atomics at beginning of year | | $ | — | | $ | |
Reimbursable costs incurred by the Company during the year | | | | | | |
Reimbursements received from General Atomics during the year | | | — | | | ( |
Balance of receivables due from General Atomics at end of year | | $ | | | $ | — |
5. WYOMING ENERGY AUTHORITY GRANT
In June 2023, the Company, and the WEA entered into a Funding Agreement (the “WEA Funding Agreement”) pursuant to which the WEA agreed to fund, subject to certain conditions, a $
69
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
The WEA Funding Agreement will terminate when the funding has been fully disbursed, but no later than June 30, 2026, unless terminated sooner by either party in accordance with the terms of the WEA Funding Agreement. The WEA Funding Agreement may be terminated (i) by either party if the WEA does not receive the requested funding from the ERC or if the grant funds are not allocated or available for the continued performance of the WEA Funding Agreement, or (ii) by the WEA immediately for cause if the Company fails to perform in accordance with the terms of the WEA Funding Agreement.
By December 31, 2023, the Company had met the conditions allowing for the invoicing of $
The following table summarizes transactions under the WEA Funding Agreement for the years ended December 31, 2025 and 2024:
| | | 2025 | | | 2024 |
Grant receivable due from the WEA at beginning of year | | $ | — | | $ | |
Grant amounts invoiced to the WEA during the year | | | — | | | |
Grant reimbursements received from the WEA during the year | | | — | | | ( |
Grant receivable due from the WEA at end of year | | $ | — | | $ | — |
Because there is no specific guidance under U.S. GAAP that addresses the recognition and measurement of government assistance received by non-government entities, the Company has elected to account for the WEA grant by analogy to the guidance provided under U.S. GAAP for government assistance to non-business entities. Under this guidance, any recognition of the grant is deferred and only gets recorded in the grantee’s financial statements if and when the applicable gating condition(s) have been substantially met. Accordingly, the Company has not yet recognized as grant income the final $
6. LEASES
Effective September 21, 2021, the Company entered into a lease agreement (the “Property Lease”) for real property, including land and buildings in Upton, Wyoming for the Demonstration Plant. The Property Lease, which had an initial
On May 14, 2024, the Company entered into a second lease agreement for modular office units for use at its Demonstration Plant site in Upton, Wyoming (the “Office Lease”). The Office Lease, which was for an initial
70
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
For purposes of the following table, payments under the Property Lease are assumed to run through September 30, 2027. If the completion of the Demonstration Plant operations dictates further extensions beyond this date, the Company may seek to extend the term of the Property Lease.
Total future minimum lease payments under the Property Lease as of December 31, 2025 were as follows:
2026 | | $ | |
2027 | | | |
Total lease payments | | | |
Less interest | | | ( |
Present value of lease payments(1) | | $ |
| (1) | As of December 31, 2025, $ |
For the years ended December 31, 2025 and 2024, $
For the years ended December 31, 2025 and 2024, the Company incurred interest expense on lease liabilities of $
As of December 31, 2025 and 2024, the weighted average lease terms for the Company’s operating leases were
7. MINERAL PROPERTIES
Bear Lodge Property, Wyoming, USA
The Company, through its wholly owned subsidiary, Rare Element Resources, Inc., holds a
8. EQUIPMENT, BUILDINGS AND LAND
Equipment and Buildings
At December 31, 2025 and 2024, equipment and buildings consisted of the following:
| | December 31, 2025 | | December 31, 2024 | ||||||||||||||
| | | | | Accumulated | | Net book | | | | | Accumulated | | Net book | ||||
| | Cost | | depreciation | | value | | Cost | | depreciation | | value | ||||||
Equipment | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Buildings | |
| | |
| | |
| | |
| — | |
| — | |
| — |
Depreciation expense for the years ended December 31, 2025 and 2024 was $
71
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
such assets might be impaired.
Land
On October 25, 2021, the Company and Whitelaw Creek LLC, a Wyoming limited liability company (“Whitelaw Creek”), entered into an amendment (the “Amendment”) to the asset purchase agreement dated October 20, 2016 between the Company and Whitelaw Creek (the “APA”). The Amendment modified certain provisions of the APA related to the terms and conditions of the Company’s option to repurchase (the “Repurchase Option”) approximately
Pursuant to the terms of the APA, the Company exercised its option to repurchase the Section 16 Property, and on October 21, 2024, entered into a purchase agreement with Whitelaw Creek to repurchase the property (the “Land Repurchase”). The Land Repurchase closed on October 25, 2024 (the “Closing Date”). As consideration for the Land Repurchase, on the Closing Date, the Company (i) issued
For accounting purposes, the Company had treated the APA as a financing arrangement under which the then-$
For the year ended December 31, 2024, the Company recorded accretion expense of $
9. RETIREMENT PLAN
Beginning on January 1, 2024, the Company began sponsoring a qualified tax-deferred savings plan in accordance with the provisions of Section 401(k) of the U.S. Internal Revenue Code, which was available to permanent, full-time employees. Employees may contribute up to
72
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
10. SHAREHOLDERS’ EQUITY
Stock-based Compensation
As of December 31, 2025 and 2024, the Company had issued and outstanding stock options of
The 2011 Plan was replaced in 2022 by the 2022 Plan, and as such,
Under the 2022 Plan, as approved by our shareholders at the annual meeting of shareholders on August 23, 2022, the Board is authorized to grant stock options, stock appreciation rights, restricted stock units, performance stock units and other cash and share-based awards to eligible directors, officers, employees, or consultants up to a maximum of
The Company estimates the fair value of its stock option grants using the Black-Scholes option valuation model and the closing price of our common shares on the business day prior to the grant date. The Company did not grant any stock options during the years ended December 31, 2025 and 2024.
The following table summarizes our stock option activity for the years ended December 31, 2025 and 2024:
| | Year Ended December 31, | |||||||||
| | 2025 | | | 2024 | ||||||
| | | | Weighted | | | | | Weighted | ||
| | | | Average | | | | | Average | ||
| | Number of Stock | | Exercise | | | Number of Stock | | Exercise | ||
| | Options | | Price | | | Options | | Price | ||
Outstanding, beginning of period |
| | | $ | | |
| | | $ | |
Exercised |
| ( | | $ | | |
| ( | | $ | |
Cancelled/Expired |
| ( | | $ | | |
| ( | | $ | |
Outstanding, end of period |
| | | $ | | |
| | | $ | |
| | | | | | | | | | | |
Exercisable, end of period |
| | | $ | | |
| | | $ | |
Non-vested, end of period |
| — | | $ | — | |
| | | $ | |
| (1) | The |
The following table summarizes the intrinsic value and weighted average remaining life for stock options as of December 31, 2025:
| | | | | Weighted |
| | | | | Average |
| | | | | Remaining |
As of December 31, 2025: | | | Intrinsic Value (1) | | Life (Years) |
Stock options outstanding | | $ | | | |
Stock options exercisable | | $ | | |
73
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
| (1) | Intrinsic value is a measure of the value of those in-the-money stock options at December 31, 2025, where (i) in-the-money value is determined by comparing the option’s exercise price to the Company’s closing stock price on December 31, 2025 and (ii) only options having an exercise price less than the Company’s closing stock price on December 31, 2025 are deemed to have an intrinsic or inherent value. |
Stock-based compensation is included in corporate administration expenses within the Company’s consolidated statements of operations. For the years ended December 31, 2025 and 2024, the Company recognized compensation expense of $
As of December 31, 2025, all outstanding stock options were fully vested and exercisable.
The intrinsic value of stock options exercised during the years ended December 31, 2025 and 2024 was $
2024 Rights Offering
On March 11, 2024, the Company completed the 2024 Rights Offering for gross proceeds of approximately $
The net proceeds from the 2024 Rights Offering have been and are being used to support the operations of the Demonstration Plant related to gathering the information necessary for a commercialization decision as well as to support the Company’s other general corporate purposes.
See Note 15 for a discussion of the 2026 Rights Offering.
11. INCOME TAX
The Company recognizes future tax assets and liabilities for each tax jurisdiction based on the difference between the financial reporting and tax bases of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is provided against net future tax assets for which the Company does not consider the realization of such assets to meet the required “more likely than not” standard.
74
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
The Company’s future tax assets and liabilities at December 31, 2025 and 2024 include the following components:
| | As of December 31, | ||||
| | 2025 | | 2024 | ||
Deferred tax assets: |
| | |
| | |
Noncapital loss carryforwards, Canada | | $ | | | $ | |
Capital loss carryforwards, Canada | |
| | |
| |
Net operating loss carryforwards, U.S. | |
| | |
| |
Mineral properties | |
| | |
| |
Reclamation provision | |
| | |
| |
Equipment | |
| — | |
| |
Share based compensation | |
| | |
| |
Research and development | |
| — | |
| |
Deferred tax assets | |
| | |
| |
Valuation allowance | |
| ( | |
| ( |
Net | | | | | | — |
| | | | | | |
Non-current: | | | | | | |
Equipment | | | ( | | | — |
Deferred tax liabilities | | | ( | | | — |
Net deferred tax asset/(liability) | | $ | — | | $ | — |
The composition of the Company’s valuation allowance by tax jurisdiction is summarized as follows:
| | As of December 31, | ||||
| | 2025 | | 2024 | ||
Canada | | $ | | | $ | |
United States | |
| | |
| |
Total valuation allowance | | $ | | | $ | |
The valuation allowance increased by $
At December 31, 2025, the Company had total U.S. federal net operating loss (“NOL”) carryforwards of approximately $
As a result of the Tax Cuts and Jobs Act, U.S. federal NOL carryforwards generated in years ending after 2017 have an indefinite carryforward period (no expiration date) rather than the 20-year carryforward period that applied to those NOL carryforwards generated in 2017 and earlier years.
Section 382 of the Internal Revenue Code could apply and limit our ability to utilize a portion of our U.S. federal NOL carryforwards. However, since no Section 382 study has been completed, the actual usage of U.S. federal NOL carryforwards has not been determined.
At December 31, 2025, the Company also had Canadian non-capital loss carryforwards of approximately C$
75
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
For financial reporting purposes, loss from continuing operations before income taxes consists of the following components:
| | For the year ended December 31, | ||||
| | 2025 | | 2024 | ||
Canada | | $ | ( | | $ | ( |
United States | |
| ( | |
| ( |
| | $ | ( | | $ | ( |
A reconciliation of expected income tax on net income at statutory rates is as follows:
| As of December 31, |
| ||||||||||
| 2025 | | 2024 |
| ||||||||
Canadian federal statutory tax rate | | % | | $ | ( | | | % | | $ | ( | |
Domestic state and local income taxes, net of federal income tax effect | % | | | — | | % | |
| — | | ||
Domestic federal: | | | | | | | | | | | | |
Changes in valuation allowance | ( | % | |
| | | | % | |
| ( | |
Other | | % | | | ( | | ( | % | | | | |
Foreign tax Effects: | | | | | | | | | | | | |
United States: | | | |
| | | | | |
| | |
Statutory tax rate difference between United States and Canada | | % | |
| ( | | | % | |
| ( | |
Nontaxable/nondeductible items | ( | % | |
| | | % | |
| ( | | |
Change in valuation allowance | ( | % | |
| | | ( | % | |
| | |
Other | ( | % | | | | | ( | % | | | | |
% | | $ | — | % | | $ | — | | ||||
On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”), which includes a broad range of elective tax law items available in 2025 and prescribed tax law changes in 2026, was signed into law in the United States. The Company has reflected the impact of the OBBB’s elective tax law items in its financial statements for the period ending December 31, 2025.
The Company does not have any unrecognized income tax benefits. Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and operating expense, respectively.
Rare Element files income tax returns in the Canadian federal and provincial jurisdictions, while its wholly owned subsidiary, Rare Element Resources, Inc., files U.S. federal and state tax returns. The years still open for audit are generally the current year plus the previous three. However, because the Company has NOL carryforwards, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax losses carried forward to open years.
12. COMMITMENTS AND CONTINGENCIES
Potential Environmental Contingency
The Company’s exploration and development activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally have become more restrictive. The Company conducts its operations to protect public health and the environment and believes that its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. The ultimate amount of reclamation and other future site restoration costs associated with the Company’s existing mining interests is uncertain and may exceed current estimates. As of December 31, 2025 and 2024, these costs were estimated at $
76
RARE ELEMENT RESOURCES LTD.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2025
(all amounts stated in thousands of U.S. dollars except share and per share amounts)
Contract Commitment – Related Party
Pursuant to the Cost Share Agreement between the Company and General Atomics, as extended and as expected to be amended in the first half of 2026, if required, and as discussed in Note 4, the Company has agreed to assume and pay for certain allowable costs under the DoE-approved Demonstration Plant budget incurred by General Atomics and the other consortium members for the design, construction, operation, and decommissioning of the Demonstration Plant.
13. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
The Company did not have any significant non-cash transactions during the year ended December 31, 2025. During October 2024, the Company issued
14. SEGMENT INFORMATION
The Company operates in a operating segment; that segment being minerals exploration and development. The Company’s sole minerals exploration property is its Bear Lodge Property, located near the town of Sundance in the state of Wyoming. The segment, which includes the Demonstration Plant project, does
15. SUBSEQUENT EVENTS
2026 Rights Offering
The Company completed a rights offering in early March 2026, generating gross proceeds of approximately $
77
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The principal executive officer and principal financial officer, with the supervision of the Board of Directors and Audit Committee and participation of management, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act), as of December 31, 2025. Based on the evaluation, the principal executive officer and principal financial officer concluded that the disclosure controls and procedures in place are effective to ensure that information required to be disclosed by the Company in reports that the Company files or submits under the Exchange Act is recorded, processed, summarized, and reported within time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting of the Company. Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, and effected by our Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:
| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of their inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used the criteria set forth in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on management’s assessment, we have concluded that, as of December 31, 2025, our internal control over financial reporting was effective. Because we are a smaller reporting company and a non-accelerated filer, our independent registered public accounting firm is not required to attest to or issue a report on the effectiveness of our internal control over financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 9B. OTHER INFORMATION
Insider Trading Arrangements and Policies
During the quarter ended December 31, 2025, none of our directors or executive officers
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
The following sets forth certain information about each of the Company’s seven directors. The table below sets out the names and ages of the Company’s directors; their provinces or states and country of residence; the offices they hold within the Company, if any; their occupations; and the dates since which they have served as directors of the Company: There are no family relationships among any directors or officers of the Company.
| | |
Name, age, province or state and country of residence and current positions, if any, held in the Company | | Unless otherwise indicated below, served as director since |
GERALD W. GRANDEY, 79 (1)(2) | | August 2, 2013 |
CRAIG S. BARTELS, 77 (3) | | April 4, 2024 |
BARTON S. BRUNDAGE, 63 (1) | | December 18, 2019 |
NICOLE J. CHAMPINE, 55 (3) | | March 31, 2022 |
PAUL J. HICKEY, 75 (3) | | August 22, 2023 |
KENNETH J. MUSHINSKI, 63 | | May 1, 2024 |
PAMELA L. SAXTON, 73 (1)(3) | | August 20, 2024 |
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(1) | Current member of the Company’s Audit Committee. Mr. Brundage is the Chair. |
(2) | Gerald W. Grandey was elected Chairman of the Board of Directors on June 10, 2015. |
(3) | Current member of the Nominating, Corporate Governance and Compensation Committee (the “NCG&C Committee”). Ms. Champine is the Chair. |
The following are brief biographies of the Company’s directors:
Gerald W. Grandey has over 40 years of executive leadership in the mining industry. He is the former Chief Executive Officer of Canadian-based Cameco Corporation, one of the world’s largest uranium producers. In 2010, Harvard Business Review recognized Mr. Grandey as being one of the Top 100 CEOs in the world because of the value created for shareholders during his tenure at Cameco. After 18 years with Cameco, he retired as Chief Executive Officer and as a director in 2011. Previously, he held senior executive positions with Concord Services and Energy Fuels Nuclear. Mr. Grandey was recognized in 2014 for leadership in the nuclear industry with the U.S. Nuclear Energy Institutes’ William S. Lee Award; inducted into the Canadian Mining Hall of Fame in 2013; awarded the Canadian Nuclear Association’s Ian McRae Award in 2012 for his work in advancing nuclear energy in Canada; and was nominated for the 2011 Oslo Business for Peace Award in recognition of his efforts to facilitate nuclear disarmament. He is Chairman Emeritus for the London-based World Nuclear Association, the former Chairman of the Colorado School of Mines Board of Governors and a former board member of Nutrien Ltd. (2018–2019), Potash Corporation of Saskatchewan (2011–2018), Cameco Corporation (1999–2011), Centerra Gold Inc. (2004–2010), Inmet Mining Corporation (2012–2013), Sandspring Resources Ltd. (2010–2015), Bruce Power Corporation (2002–2011) and Canadian Oil Sands Limited (2011–2016). He has a degree in geophysical engineering from the Colorado School of Mines and a law degree from Northwestern University.
Craig S. Bartels has over 50 years of experience in the hydrocarbon, mineral extraction and processing industries and has played a leadership role in developing some of the key technology used globally to optimize In Situ Recovery (ISR) of uranium. He has served as the President and Chief Executive Officer of General Atomics Uranium Resources LLC since May 2024 and previously served as its Senior Vice President and Chief Operating Officer (November 2022–May 2024), which owns the stock of several General Atomics affiliated uranium companies. These affiliates include Rio Grande Resources Corporation and Nuclear Fuels Corporation, which have uranium properties in the United States and market uranium worldwide; Baywood Holdings Inc., which owns the Australian uranium mining and exploration companies Heathgate Resources Pty Ltd (“Heathgate”) and Quasar Resources Pty Ltd; and General Atomics Energy Services, Inc., which is a partner in ConverDyn. Mr. Bartels was the President of Heathgate from June 2010 to October 2022, and he has served as a director of Heathgate since 2010. From December 2004 to June 2010, he served in various roles for Uranium Resources, Inc. and its subsidiaries, including as Senior Vice President of Technology (November 2008–June 2010), Vice President of Operations – In Situ for URI, Inc. (February 2007–November 2008), and President of HRI, Inc. (December 2004–January 2007). Mr. Bartels graduated from the Montana School of Mines with a B.S. in Petroleum Engineering in 1972.
Barton S. Brundage has served since May 2021 as President of Cordillera Corporation (“Cordillera”), an affiliate of General Atomics and Synchron. In his current role and prior position of Executive Vice President (June 2007–May 2021), Mr. Brundage is and has been responsible for the day-to-day management of Cordillera’s real estate operations in Colorado, Utah, and California. Since June 2007, he has served as Chairman of the board of directors of jetCenters, Inc. (“JCI”), an aviation fueling company and a subsidiary of Cordillera. Since January 2021, Mr. Brundage has served as Chairman of the board of directors of Ohio Gas Company, a regulated gas utility company based in Bryan, Ohio, that is affiliated with Cordillera. Since 2007, Mr. Brundage has also served as a director and/or executive officer for several other Cordillera-affiliated companies, including San Miguel Valley Corporation, Silver Cliff Land And Cattle Company, Colorado Barns Corporation, First City Investment Corporation, Lamartine Consolidated Mines Corporation, Boston Commons, Inc., Oceanic Exploration Company, Oceanic International Properties Corporation, and Sorrento West Properties, Inc. Since February 2025, Mr. Brundage has served as a Vice President of a General Atomics affiliated company, Rio Grande Resources Corporation. In addition, Mr. Brundage served as the Chief Financial Officer (July 1996–May 2007) of JCI. Prior to his position with JCI, he was employed by Brundage & Company (June 1985–July 1996), a regional investment banking firm specializing in mergers and acquisitions and long-term corporate financing. At
80
Brundage & Company, he was employed in various capacities in the family-managed business, including Vice President, Senior Financial Analyst, and Analyst. He continues to serve as a member of Brundage & Company’s board of directors (since 1980). Mr. Brundage received his Bachelor of Arts in Business Administration from Fort Lewis College and his Master of Business Administration from the University of Denver.
Nicole J. Champine has served as Vice President and General Counsel of Cordillera (since July 2007) and as Vice President of Rio Grande Resources Corporation (since February 2025), both affiliates of General Atomics. Ms. Champine previously served as Cordillera’s Legal Counsel (July 2001–July 2007). She has served as the President and a director of San Miguel Valley Corporation, a subsidiary of Cordillera, since June 2007 and July 2009, respectively. Since February 2025, Ms. Champine has served as a Vice President of a General Atomics affiliated company, Rio Grande Resources Corporation. In addition, since May 2010, Ms. Champine has served as the President and a director of Oceanic Exploration Company, an oil and gas exploration company affiliated with Cordillera. From May 1998 to June 2001, she was a real estate and land development lawyer at the law firm of Otten, Johnson, Robinson, Neff & Ragonetti, P.C. From June 1993 to August 1995, Ms. Champine served as a project engineer for Peter Kiewit & Sons in Utah and Colorado on heavy-highway projects. She received her Bachelor of Science in Structural Engineering from the University of Texas at Austin and her Juris Doctorate from the University of Denver.
Paul J. Hickey is a Wyoming attorney whose practice has focused on energy and natural resource issues. From 1976 to 2022, he was a partner with the law firm of Rooney & Horiskey, which later became Hickey & Evans, LLP. Since June 2022, he has served as a consultant to Rare Element Resources, Inc., a subsidiary of the Company. Over the years of his practice, Mr. Hickey was a leading energy law attorney in the Rocky Mountain region. He represented regulated utilities in Wyoming, Utah and Idaho. In addition, he has represented natural gas producers, trona mine operators, interstate natural gas pipelines, renewable energy projects and interstate transmission projects. Mr. Hickey represented the State of Wyoming before the Federal Energy Regulatory Commission (FERC) in the certification proceedings for the Kern River Interstate natural gas pipeline. During his career, Mr. Hickey served numerous leadership roles in state and local bar associations. He has served on the University of Wyoming Law School Advisory Committee since 2002 and was Chairman of that Committee until 2022. Mr. Hickey helped develop the Summer Trial Institute at the University of Wyoming College of Law and continues to teach at this Institute. In 2009, Mr. Hickey was made an Honorary Member of the Order of the Coif by the Faculty of the University of Wyoming College of Law. From 1997 to 1998, he served as President of the Wyoming Bar Association. In 2021, the Wyoming Bar presented Mr. Hickey the Gerald R. Mason Professionalism Award. In 2019, he was recognized as a Distinguished Alumni of the University of Wyoming College of Law. Mr. Hickey also was recognized by the American College of Trial Lawyers for his service as a Regent on its National Board of Regents. Following his graduation from the University of Wyoming College of Law, Mr. Hickey served as a Law Clerk to the Honorable James E. Barrett, United States Court of Appeal Tenth Circuit. He has served as the Wyoming Representative on the Tenth Circuit Court of Appeals’ Advisory Committee. He also served as a Director and President of the Historical Society of the Tenth Circuit Court of Appeals. Mr. Hickey graduated from the University of Wyoming with a Bachelor of Arts in History in 1972 and a Juris Doctorate in 1975.
Kenneth J. Mushinski currently serves as President and Chief Executive Officer (“CEO”) of the Company. Mr. Mushinski has served as the Chairman of the board of directors of Anfield Energy Inc. since September 2022. He previously served as a director of the Company (November 2017–March 2022), Chairman of Cotter Corporation N.S.L. (October 2011–March 2022), and a management committee member for the Honeywell/General Atomics ConverDyn partnership (June 2016–March 2022). In addition, Mr. Mushinski was the President of Synchron (September 2017–March 2022); Vice President, Corporate Planning and Acquisitions of General Atomics Technologies Corporation (February 2014–March 2022); President of Quasar Resources Pty Ltd (November 2014–March 2022); Vice President, Sales and Marketing of Nuclear Fuels Corporation (June 2006–March 2022); Engineering Manager for General Atomics Electronics Systems (2002–2006); Lead Mechanical Engineer for Electronic Systems, Inc. (1995–2002); and Senior Reactor Operator at General Atomics (1989–2012). Mr. Mushinski received a Bachelor of Science in Mechanical Engineering (summa cum laude) and a Master’s in Business Administration, both from San Diego State University.
Pamela L. Saxton is an experienced mining company executive and director. She currently serves as a director of Arizona Metals Corp. and as Audit Committee Chair since September 2025 and serves as a director and the Audit Committee Chair of Bunker Hill Mining Corp. since October 2020. Previously, she served as a director and the Audit Committee Chair of Timberline Resources Corporation (May 2021–August 2024) and Pershing Gold Corporation (November 2017–
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April 2019), as a director of Aquila Resources Inc. (June 2019–December 2021), and on the North American Advisory Board of Damstra Technology–Damstra Holdings Limited (February 2021–October 2022). As an executive, she served as the Executive Vice President and Chief Financial Officer of Thompson Creek Metals Company (August 2008–October 2016) and as the Chief Financial Officer of NewWest Gold Corporation (April 2006–December 2007). Having started her professional life working as an auditor at Arthur Andersen in Denver, Colorado, her career has included senior finance appointments in the American natural resources industry, including serving as the Vice President of Finance for Franco-Nevada Corporation’s U.S. operations.
Executive Officers
The Company’s current executive officers, their state and country of residence, the offices they hold within the Company, and the dates since which they have served as officers of the Company are as follows:
Name, age, province or state and country of residence and positions, current and former, if any, held in the Company | | Served as officer since |
KENNETH J. MUSHINSKI, 63 | | May 1, 2024 |
WAYNE E. RICH, 61 | | March 28, 2022 |
KELLI C. KAST, 59 | | July 1, 2024 |
Kenneth J. Mushinski. See “Item 10. Directors, Executive Officers and Corporate Governance—Directors” above for biographical information regarding Mr. Mushinski.
Wayne E. Rich served as Vice President of Finance, Treasurer and Corporate Secretary of Eden Innovations LLC from August 2017 to March 2022. He served as Chief Financial Officer of Star Mountain Resources, Inc. from November 2015 to January 2017 and as Chief Financial Officer of Northern Zinc, LLC from May 2015 to November 2015, when it was acquired by Star Mountain Resources, Inc., which filed for Chapter 11 bankruptcy protection in February 2018. Mr. Rich served in various capacities at Prospect Global Resources, Inc., a publicly traded mining company, including as Chief Financial Officer and Vice President of Finance (September 2011–December 2012) and Senior Vice President of Accounting and Treasury (December 2012–May 2014). From October 2008 to September 2011, he served as Treasurer and Director of Corporate Finance of Thompson Creek Metals Inc., a publicly traded metals and mining company. Prior to that, he served in several capacities at The Doe Run Resources Corporation, an integrated mining and metals manufacturing company, from August 1998 to October 2008, including as Treasurer (April 2007–October 2008) and Assistant Treasurer (July 2004–April 2007). Mr. Rich began his career with KPMG Peat Marwick. Mr. Rich holds a Master’s in Business Administration from Illinois State University and a Bachelor of Science in Accountancy from Eastern Illinois University.
Kelli C. Kast has nearly 30 years of in-house legal experience, including seven years as a top legal officer in the precious metals industry, and over 12 years in the rare earth industry. Ms. Kast has served as a director and Chair of the Corporate Governance and Nominating Committee of Bunker Hill Mining Corp. since October 2024. She served as a consultant to Rare Element Resources, Inc., a subsidiary of the Company from June 2015 to June 30, 2024 and served as the interim President and CEO of the Company from March 2024 to May 2024. Ms. Kast additionally served as a director of the Company from August 2022 to August 2024. From July 2012 to May 2015, Ms. Kast served as the Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary of the Company. Prior to her tenure with the Company, she served as Coeur d’Alene Mine Corporation’s Vice President, General Counsel and Corporate Secretary from May 2005 to March 2009 and as its Chief Administrative Officer from March 2009 to March 2012. From 2004 to 2005, Ms. Kast served as Corporate Counsel for HealtheTech Inc. From 1997 to 2003, she served as the Assistant General Counsel and
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Corporate Secretary for Global Water Technologies Inc. and Psychrometric Systems, Inc. Ms. Kast earned her Juris Doctor from the University of South Dakota School of Law and her Bachelor’s degree from the University of Idaho.
Corporate Cease Trade Orders or Bankruptcies
To the knowledge of the Company, no director of the Company is, or within the 10 years prior to the date of this Annual Report has been, a director or executive officer of any company that (i) was subject to a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days (any of the foregoing being an “order”), that was issued while he or she was acting in the capacity of director, chief executive officer or chief financial officer of that company; or (ii) was subject to an order that was issued after he or she ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while he or she was acting in that capacity.
To the knowledge of the Company, no director of the Company is, or within the 10 years prior to the date of this Annual Report has been, a director or executive officer of any company that (i) was bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or became subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold his or her assets; or (ii) within one year of his or her ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets
Individual Bankruptcies
No director of the Company has, within the 10 years prior to the date of this Annual Report, become bankrupt or made a proposal under any legislation relating to bankruptcy or insolvency, or been subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of that individual.
Penalties or Sanctions
None of the directors has (i) been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority, (ii) entered into a settlement agreement with a securities regulatory authority or (iii) been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable security holder making a decision about whether to vote for the proposed director or in making an investment decision.
Indebtedness of Directors and Executive Officers
None of the current or former directors or executive officers of the Company, nor any associate or affiliate of the foregoing persons, are or have been indebted to the Company since the beginning of the fiscal year ended December 31, 2025.
Management Contracts
No management functions of the Company are, to any substantial degree, performed by a person or company other than the directors or executive officers of the Company, in their roles as such.
Corporate Governance
Ethical Business Conduct
The Board has adopted a Code of Conduct, which is based on the fundamental principles of honesty, loyalty, fairness, forthrightness, and use of common sense in general. The Code of Conduct is available on the Company’s website at www.rareelementresources.com and on the Canadian System for Electronic Document Analysis and Retrieval (“SEDAR+”) at www.sedarplus.ca. The Code of Conduct applies to all directors, officers and employees, including the
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principal executive, financial and accounting officers. The Audit Committee is responsible for setting the standards of business conduct contained in the Code of Conduct, and it annually reviews the Code of Conduct.
The Board, through the NCG&C Committee, is responsible for monitoring compliance with the Code of Conduct. The NCG&C Committee reviews, with management, any issues with respect to compliance with the Code of Conduct. The Board discloses on the Company’s website any waiver from a provision of its Code of Conduct that applies to any of its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions that relates to any element of its Code of Conduct. No waivers were granted from the requirements of the Company’s Code of Conduct during the fiscal year ended December 31, 2025, or during the subsequent period through to the date of this Annual Report.
The Board ensures that the directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest. The Code of Conduct sets out the procedure with respect to reporting conflicts of interest. Actual or potential conflicts of interests are reported to the Chair of the NCG&C Committee. Members of the NCG&C Committee are required to be particularly vigilant in reviewing and approving conflicts of interests.
Standing Board Committees
Audit Committee
The Company has a separately designated, standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. Under Canadian securities laws, the Company is required to have an audit committee comprised of not less than three directors. Two of three members of the Audit Committee must meet the independence requirements imposed by applicable Canadian securities law and therefore must not be executive officers, employees or control persons of the Company or affiliates of the Company. The Company’s current Audit Committee consists of Barton S. Brundage (Chair), Gerald W. Grandey and Pamela L. Saxton. The Audit Committee’s functions are to oversee the accounting and financial reporting process and the audit of the annual financial statements of the Company. The Audit Committee met five times during the fiscal year ended December 31, 2025.
Audit Committee Charter
The Audit Committee, under the guidance of the Audit Committee Charter approved by the Board, assists the Board in fulfilling its oversight responsibilities by reviewing (i) the financial statements, reports and other information provided to shareholders, regulators and others; (ii) the independent auditor’s qualifications, independence and performance; (iii) the internal controls that management and the Board have established; (iv) the audit, accounting and financial reporting processes generally; (v) the completeness and effectiveness of the risk management program; and (vi) compliance by the Company with legal and regulatory requirements. The text of the Audit Committee’s Charter is furnished with this Annual Report as Exhibit 99.1 hereto and is also available on the Company’s website at www.rareelementresources.com.
Independence
The Board has determined that two of the members of the Audit Committee are independent within the meaning of National Instrument 52-110 – Audit Committees (“NI 52-110”) of the Canadian Securities Administrators. The Board determined that Mr. Grandey and Ms. Saxton are independent, but that Mr. Brundage is not independent based upon his employment with an affiliate of Synchron, the Company’s majority shareholder. As a result, the Audit Committee is comprised of a majority of independent directors. The Company has relied on section 6.1 of NI 52-110 in respect of having an Audit Committee that is not composed entirely of independent directors.
Audit Committee Financial Expert
The Board has determined that Barton S. Brundage, Chair of the Audit Committee, satisfies the requirement of an “audit committee financial expert,” as defined under Item 407 of Regulation S-K, and each of Messrs. Brundage and Grandey and Ms. Saxton is “financially literate” within the meaning thereof set forth in NI 52-110. See above under Part III,
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Item 10. “Directors, Executive Officers and Corporate Governance—Directors” for a description of the relevant education and experience of each of the Audit Committee members.
Nominating, Corporate Governance, and Compensation Committee
The current members of the NCG&C Committee are Nicole J. Champine (Chair), Craig S. Bartels, Paul J. Hickey, and Pamela L. Saxton. Three of the current members of the NCG&C Committee are not considered to be independent directors within the meaning of National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”). The Board determined that Ms. Champine and Mr. Bartels are not independent based upon their employment with an affiliate of Synchron, the Company’s majority shareholder. The Board determined that Mr. Hickey is not independent based upon his position as, among other things, a consultant to a subsidiary of the Company. During the fiscal year ended December 31, 2025, the NCG&C Committee met formally three times and informally on at least two other occasions.
NCG&C Committee Charter
The NCG&C Committee is governed by a charter which sets forth the NCG&C Committee functions, which are, among other things, to establish procedures for the director nomination process and recommend nominees for election to the Board; to develop and periodically review the effectiveness of the Board’s corporate governance guidelines; and to determine and recommend to the independent members of the Board the base salaries and annual incentive awards, including cash and any equity-based incentive awards for the CEO, and where applicable, in consultation with the CEO, for other senior officers, on an annual basis. The NCG&C Committee Charter is available on the Company’s website at www.rareelementresources.com.
Board Nominating Procedures
The NCG&C Committee believes that candidates for the Board should have (i) the ability to exercise objectivity and independence in making informed business decisions; (ii) extensive knowledge, experience and judgment; (iii) integrity; (iv) loyalty to the interests of the Company and its shareholders; (v) a willingness to devote the extensive time necessary to fulfill a director’s duties; (vi) the ability to contribute to the diversity of perspectives present in board deliberations; and (vii) an appreciation of the role of the Company in society. The NCG&C Committee considers candidates meeting these criteria who are suggested by directors, management, shareholders and search firms hired to identify and evaluate qualified candidates.
Shareholders may submit recommendations in writing by letter addressed to the CEO of the Company or the Chair of the NCG&C Committee. The NCG&C Committee will carefully consider each shareholder recommendation, evaluating each shareholder-recommended candidate for director under the same standards as candidates identified by any other method.
Gender Diversity on the Board
The NCG&C Committee and the Board do not currently have a formal policy with regard to the consideration of gender diversity in identifying director nominees. While the Board recognizes the benefits of diversity and inclusion at all levels within its organization, it does not currently have any targets, rules or formal policies that specifically require the identification, consideration, nomination or appointment of female board nominees or candidates for executive management positions or that would otherwise force the composition of the Board or the Company’s executive management team. Board nominations and appointments are assessed solely based upon the merits of the candidates, in the context of the skills, experience and independence which the Board requires in order to be effective; however, the NCG&C Committee encourages candidate diversity, including gender diversity, in the process of identifying and vetting all candidates. When searching for candidates for senior management positions, the Board focuses on attracting and retaining experienced and highly skilled individuals who can add value to its business, while also encouraging diversity. Currently, the Company has two female Board members, and one female executive officer.
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Term Limits and Board Composition
The NCG&C Committee and the Board do not currently have a formal policy with regard to director term limits or retirement age in connection with individuals nominated for election as it does not believe that such policies would be in the best interests of the Company. The Company operates in a unique industry, making it difficult to find qualified directors with the appropriate background and experience, and the introduction of a director term limit or retirement policy would impose further difficulty. Notwithstanding the foregoing, the NCG&C Committee annually reviews and makes recommendations regarding the size, composition, operation, practice and tenure policies of the Board, with a view to effective oversight and decision making. The NCG&C Committee believes that when selecting candidates to serve on the Board, it is in the best interests of the Company to consider the diversity of experience of the Board and review candidates who possess a range of skills, expertise, personality, education, background and other qualities for nomination. The Board strives to achieve a balance between the desirability to have a depth of experiences from its members and the need for renewal and new perspectives. The NCG&C Committee assesses the effectiveness of this approach as part of its annual review of its charter.
The NCG&C Committee reviews the size of the Board annually. The Board must have enough directors to carry out its duties efficiently, while presenting a diversity of views and experience. The Board believes that its current size of seven members best serves the Company’s needs.
Pursuant to and subject to the terms and conditions of the Investment Agreement, Synchron has the right to designate three directors for appointment or election to the Board, where the Board is comprised of seven directors following such appointment or election.
Compensation Functions
The NCG&C Committee is responsible for reviewing and making recommendations to the Board regarding the Company’s compensation policies and programs as well as salary and benefit levels for individual executive officers. The Board, in turn, gives final approval on compensation matters. The NCG&C Committee does not and cannot delegate its authority to determine and recommend director and executive officer compensation.
Insider Trading Arrangements and Policies
The Company has
ITEM 11. EXECUTIVE COMPENSATION
The following discussion summarizes our compensation program for our named executive officers for the 2025 fiscal year (amounts stated in whole dollars).
Named Executive Officers
“Named Executive Officer” or “NEO” means (a) all individuals who served as CEO of the Company during the fiscal year ended December 31, 2025; (b) each of the two most highly compensated executive officers, or the two most highly compensated individuals acting in a similar capacity, other than the CEO, at the end of the fiscal year ended December 31, 2025; and (c) each individual who would be an NEO under clause (b) above but for the fact that the individual was neither an executive officer of the Company, nor acting in a similar capacity, at the end of that fiscal year.
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During the fiscal year ended December 31, 2025, the Company had three NEOs: Kenneth J. Mushinski, President and CEO; Kelli C. Kast, Vice President, General Counsel and Chief Administrative Officer; and Wayne E. Rich, Chief Financial Officer.
Summary Compensation Table
Set out below is a summary of compensation paid to the Company’s NEOs during the fiscal years ended December 31, 2025 and 2024.
Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | All Other Compensation ($) | | Total ($) |
Kenneth J. Mushinski (1) | | 2025 | $ | 350,000 | $ | 175,000 | $ | 30,000 | $ | 555,000 |
President, CEO and Director | | 2024 | $ | 213,333 | $ | 185,000 | $ | 11,690 | $ | 410,023 |
Kelli C Kast (2) | | 2025 | $ | 316,200 | $ | 85,000 | $ | 28,200 | $ | 429,400 |
VP, General Counsel, CAO | | 2024 | $ | 282,500 | $ | 100,000 | $ | 35,500 | $ | 418,000 |
Wayne E. Rich (3) | | 2025 | $ | 275,000 | $ | 75,000 | $ | 28,200 | $ | 378,200 |
Chief Financial Officer | | 2024 | $ | 250,000 | $ | 70,000 | $ | 18,575 | $ | 338,575 |
(1) Mr. Mushinski was appointed as the President and Chief Executive Officer of the Company on May 1, 2024. During 2024, Mr. Mushinski was paid a $60,000 signing bonus and earned a $125,000 discretionary bonus which was paid in January 2025. During 2025, Mr. Mushinski earned a $175,000 discretionary bonus which was paid in January 2026. During 2024, all other compensation includes a $2,000 cell phone allowance and a $9,690 employer 401K matching contribution. During 2025, all other compensation includes $6,000 healthcare allowance, $3,000 cell phone allowance and $21,000 employer 401K matching contribution.
(2) | From June 2015 to June 30, 2024, Ms. Kast served as a consultant to Rare Element Resources, Inc., a subsidiary of the Company and from August 23, 2022 to August 20, 2024, Ms. Kast served as a director of the Company. As a director and consultant, Ms. Kast received pay of $27,750 and $127,500, respectively, before her hire as a Company employee. From March 2024 to May 2024, Ms. Kast served as the interim President and CEO of the Company and was appointed as the Vice President, General Counsel and CAO of the Company on July 1, 2024. During 2024, Ms. Kast earned a $20,000 bonus for her work as interim President and CEO of the Company and a $80,000 discretionary bonus which was paid in January 2025. During 2025, Ms. Kast earned an $85,000 discretionary bonus which was paid in January 2026. During 2024, all other compensation includes a $7,750 employer 401K matching contribution and $27,750 in director’s fees. During 2025, all other compensation includes a $6,000 healthcare allowance,a $1,200 cell phone allowance and a $21,000 employer 401K matching contribution. |
(3) | Mr. Rich was appointed as the Chief Financial Officer of the Company on March 28, 2022. During 2024, all other compensation includes a $18,575 employer 401K matching contribution. During 2025, all other compensation includes a $6,000 healthcare allowance, a $1,200 cell phone allowance and a $21,000 employer 401K matching contribution. |
Narrative Discussion of Compensation and Plan-Based Awards
Employment Agreements
The Company has historically maintained employment agreements with its executive officers. The material terms of prior employment agreements have included (a) employment for an indefinite term unless employment is terminated as provided in the agreement; (b) severance arrangements, including upon a change in control; (c) a base salary; and (d) participation in the stock option plans of the Company (as described below), the incentive bonus, and the Company’s benefit plans as are from time to time available to executive officers of the Company.
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Kenneth J. Mushinski
Mr. Mushinski entered into an employment agreement with the Company effective May 1, 2024 (the “Mushinski Employment Agreement”). Pursuant to the terms of the Mushinski Employment Agreement, (i) Mr. Mushinski’s initial annual base salary was $320,000 and is subject to adjustment at the Company’s discretion; (ii) Mr. Mushinski will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board; and (iii) Mr. Mushinski will be eligible to participate in the employee benefit programs, if offered, by the Company.
Additionally, Mr. Mushinski is entitled to separation benefits in the event that his employment is terminated by the Company without “cause” or by Mr. Mushinski for “good reason” (in each case, as defined in the Mushinski Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material breach of the Mushinski Employment Agreement by the Company, or a failure by the Company to maintain reasonable D&O insurance, in each case which the Company has failed to cure. The severance payment to be received by Mr. Mushinski upon termination under the circumstances described above, provided that Mr. Mushinski executes a general release in favor of the Company and has been with the Company for a minimum of two years from the effective date of the Mushinski Employment Agreement, will be equal to one year of Mr. Mushinski’s base salary in effect on the date of termination and paid to Mr. Mushinski in a lump sum 60 days after the date of such termination. In addition, Mr. Mushinski equity incentive awards will vest automatically upon such termination.
Kelli C. Kast
Ms. Kast entered into an employment agreement with the Company effective July 1, 2024 (the “Kast Employment Agreement”). Pursuant to the terms of the Kast Employment Agreement, (i) Ms. Kast’s initial annual base salary was $310,000 and is subject to adjustment at the Company’s discretion; (ii) Ms. Kast will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board; and (iii) Ms. Kast will be eligible to participate in the employee benefit programs, if offered, by the Company.
Additionally, Ms. Kast is entitled to separation benefits in the event that her employment is terminated by the Company without “cause” or by Ms. Kast for “good reason” (in each case, as defined in the Kast Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material breach of the Kast Employment Agreement by the Company, or a failure by the Company to maintain reasonable D&O insurance, in each case which the Company has failed to cure. The severance payment to be received by Ms. Kast upon termination under the circumstances described above will be equal to one year of Ms. Kast’s base salary in effect on the date of termination and paid to Ms. Kast in a lump sum 60 days after the date of such termination. In addition, Ms. Kast’s equity incentive awards will vest automatically upon such termination.
Wayne E. Rich
Mr. Rich has had an employment agreement with the Company since March 28, 2022 (the “Rich Employment Agreement”). Pursuant to the terms of the Rich Employment Agreement, (i) Mr. Rich’s initial annual base salary was $215,000 and is subject to adjustment at the Company’s discretion; (ii) Mr. Rich will be eligible to receive an annual performance bonus and such long-term incentive awards as may be determined by the Board; and (iii) Mr. Rich will be eligible to participate in the employee benefit programs, if offered, by the Company.
Additionally, Mr. Rich is entitled to separation benefits in the event that his employment is terminated by the Company without “cause” or by Mr. Rich for “good reason” (in each case, as defined in the Rich Employment Agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material geographic relocation, a material breach of the Rich Employment Agreement by the Company, or a failure by the Company to maintain reasonable D&O insurance, in each case which the Company has failed to cure. The severance payment to be received by Mr. Rich upon termination under the circumstances described above will be equal to one year of Mr. Rich’s base salary in effect on the date of termination and paid to Mr. Rich in a lump sum 60 days after the date of such termination. In addition, Mr. Rich’s equity incentive awards will vest automatically upon such termination.
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Equity Plan
As of March 12, 2026, there were 2,685,000 and 820,000 stock options outstanding, respectively, under the 2011 and 2022 Plans, representing approximately 0.5% of the current outstanding common shares. The 2011 Plan was terminated effective as of August 23, 2022. Then-existing awards granted under the 2011 Plan will remain outstanding in accordance with their terms, but new equity awards are being granted solely under the 2022 Plan.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth the outstanding option awards held by the NEOs of the Company as of December 31, 2025.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | ||||||
Name | | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price ($) | | Option Expiration Date |
Kenneth J. Mushinski | | — | | — | | — | | — |
Kelli C. Kast | | 225,000 | | — | | $ 2.25 | | 4/13/2031 |
| | 500,000 | | — | | $ 1.42 | | 1/5/2032 |
| | 225,000 | | — | $ 0.38 | | 1/4/2033 | |
Wayne E. Rich | | 125,000 | | — | | $ 0.38 | | 1/4/2033 |
| | 125,000 | | — | | $ 1.20 | | 3/28/2032 |
Potential Payments upon Termination
Pursuant to the employment agreements with Mr. Mushinski, Ms. Kast, and Mr. Rich, each NEO is entitled to separation benefits in the event that his or her employment is or was terminated by the Company without “cause” or by such NEO for “good reason” (in each case, as defined in the applicable employment agreement) due to certain reasons, including a material change in title or duties, a material reduction in compensation, a material geographic relocation, or a material breach of such employment agreement by the Company, in each case which the Company has failed to cure. The separation benefits to be received by such NEO upon termination under the circumstances described above must equal such NEO’s base salary in effect on the date of termination. The separation benefits are not contingent upon any change in control and are to be paid to such NEO in a lump sum 60 days after the date of such termination. In addition, such NEO’s equity incentive awards vest automatically upon such termination.
The table below sets out the estimated payments due to the applicable NEO employed by the Company as of December 31, 2025 on a qualifying termination without cause, assuming termination took place pursuant to such employment agreement.
Name | Base Salary | Total |
Kenneth J. Mushinski | $350,000 | $350,000 |
Kelli C. Kast | $322,400 | $322,400 |
Wayne E. Rich | $275,000 | $275,000 |
Director Compensation
Non-employee directors, other than the Board Chair, Audit Committee Chair, Chair of the Nominating, Corporate Governance and Compensation Committee and the Synchron director designees, were entitled to annual compensation of $58,000 during the fiscal year ended December 31, 2025 while the Board Chair, Audit Committee Chair, and Chair of the
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Nominating, Corporate Governance and Compensation Committee were entitled to total annual compensation of $85,250, $72,000 and $72,000, respectively. In addition, each director was entitled to an additional committee member fee of $2,000 for each committee on which the director served but of which the director was not the committee chair of. Each director’s compensation was paid in cash quarterly and on a pro-rata basis. The Synchron director designees elected not to receive any director compensation.
The following table sets forth information regarding the compensation received by each of the Company’s non-employee directors during the fiscal year ended December 31, 2025:
Director Compensation
| | Fees earned | | Total |
Name | | ($) | | ($) |
Gerald W. Grandey | | 87,250 | | 87,250 |
Bart S. Brundage (1) | | — | | — |
Nicole J. Champine (1) | | — | | — |
Craig S. Bartels (1) | | — | | — |
Pamela L. Saxton | | 62,000 | | 62,000 |
Paul J. Hickey | | 60,000 | | 60,000 |
| (1) | Synchron’s director designees on the Board, Ms. Champine and Messrs. Brundage and Bartels elected not to receive any director compensation, including stock options. |
Policies and Practices for Granting Stock Options and Stock Appreciation Rights
While we do not have a formal written policy in place with regard to the timing of stock option and stock appreciation rights awards in relation to the disclosure of material nonpublic information, the NCG&C Committee does not seek to time equity grants to take advantage of information, either positive or negative, about the Company that has not been publicly disclosed. Previous awards of stock options have generally been made in tandem with and at the same time that the Company has issued other types of equity awards as part of its ordinary annual grant practices. Stock option grants, if made, are effective on the date the award determination is made by the NCG&C Committee, and the exercise price of stock options is the closing market price of the Common Shares on the last trading day immediately preceding the date of grant.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information
As of December 31, 2025, we had two equity compensation plans under which our common shares had been authorized for issuance to our officers, directors, employees, and non-employee consultants. See “Part II, Item 5. Equity Incentive Plan Information” for additional information relating to our equity compensation plans.
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The following table sets forth certain information regarding beneficial ownership, control, or direction, directly or indirectly, of the Company’s common shares, as of March 6, 2026 by (i) the Company’s named executive officers and directors and (ii) the Company’s current executive officers and directors as a group.
| | Amount and Nature of Beneficial Ownership * | ||
Name and Position (1) | | Common Shares (2) | Percentage of Class (3) | |
Gerald W. Grandey – Director and Chairman | | 5,530,943 | (4) | ** |
Kelli C. Kast – Vice President, General Counsel and CAO | | 950,000 | (5) | ** |
Wayne E. Rich – Chief Financial Officer | | 250,000 | (6) | ** |
Paul J. Hickey – Director | | 83,217 | (7) | ** |
Kenneth J. Mushinski - President, CEO and Director | | Nil | | ** |
Pamela L. Saxton – Director | | Nil | | ** |
Craig S. Bartels – Director | | Nil | (8) | ** |
Barton S. Brundage – Director | | Nil | (8) | ** |
Nicole J. Champine – Director | | Nil | (8) | ** |
All executive officers and directors as a group (a total of 9 persons) | | 6,814,160 | | 1.05% |
* | Pursuant to Rule 13d-3 under the Exchange Act, beneficial ownership includes shares as to which the individual has or shares voting power or investment power, and any shares that the individual has the right to acquire within 60 days of March 6, 2026, including through the exercise of any option, warrant, or right. For each individual who holds options, warrants or rights to acquire common shares, the common shares underlying those securities are treated as owned by that holder and as outstanding common shares when that holder’s percentage ownership of common shares is calculated. Those common shares are not treated as outstanding when the percentage ownership of any other holder is calculated. |
** | The percent of class owned is less than 1%. |
(1) | Mailing address for all directors and executive officers is c/o Rare Element Resources, Ltd., P.O. Box 80, Firestone, Colorado 80520. |
(2) Includes Common Shares held as of March 6, 2026, plus common shares which may be acquired pursuant to the exercise of stock options exercisable within 60 days after March 6, 2026.
(3) | In accordance with Rule 13d-3(d)(1) under the Exchange Act, the applicable percentage of ownership for each person is based on 645,368,390 common shares outstanding as of March 6, 2026. |
(4) | Includes 4,780,943 common shares and 750,000 common shares subject to options held by Mr. Grandey personally. |
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(5) | Includes 950,000 common shares subject to options held by Ms. Kast personally. |
(6) | Includes 250,00 common shares subject to options held by Mr. Rich personally. |
(7) | Includes 33,217 common shares and 50,000 common shares subject to options held by Mr. Hickey personally. |
(8) | Excludes common shares owned by Synchron, an affiliate of which each of Ms. Champine and Messrs. Bartels and Brundage is employed by. Pursuant to and subject to the terms and conditions of an Investment Agreement between the Company and Synchron, Synchron has the right to designate three directors for appointment or election to the Board, where the Board is comprised of seven directors following such appointment. Ms. Champine and Messrs. Bartels and Brundage are the three Synchron designees. |
Ownership of Common Shares by Certain Beneficial Owners
The following table sets forth information (as of the date indicated) as to all persons or groups known to the Company to beneficially own, control or direct, directly, or indirectly, 5% or more of the issued and outstanding common shares of the Company as of March 6, 2026:
Name and Address of Beneficial Holder | | Common Shares Beneficially Owned (1) | | Percentage of Class (2) |
Synchron, 3550 General Atomics Court, San Diego, California 92121-1122 | | | | |
General Atomic Technologies Corporation, 3550 General Atomics Court, San Diego, California 92121-1122 | | 460,889,576 | | 71.41% |
Tenaya Corporation, P.O. Box 910304, San Diego, California, 92191-0304 | | | | |
James N. Blue, 3550 General Atomics Court, San Diego, California 92121-1122 | | | | |
| (1) | This information is based on a Schedule 13D/A filed on June 28, 2024 by Synchron, General Atomic Technologies Corporation, Tenaya Corporation and James N. Blue, adjusted to reflect the 100,149,060 common shares purchased by Synchron in the Company’s rights offering completed on March 4, 2026. Synchron has sole voting and dispositive power over the common shares listed. |
| (2) | Calculated based on 645,368,390 common shares outstanding as of March 6, 2026. |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS; AND DIRECTOR INDEPENDENCE
Transactions with Related Persons
Cost Share Agreement with General Atomics
On November 30, 2021, the Company and General Atomics, an affiliate of Synchron, the Company’s majority shareholder, entered into the Cost Share Agreement pursuant to which the Company agreed to assume and pay for the non-government share of funds incurred by, and on behalf of, General Atomics for the design, construction, and operation of the Demonstration Plant.
On May 16, 2024, the Company and General Atomics entered into an extension agreement to the Cost Share Agreement (the “Extension Agreement”) under which the Company agreed to make additional cash advances, up to $2,500, to General Atomics while the parties progressed an amended project funding agreement covering the Company’s share of the additional non-federal project funding needed for the project’s completion.
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In September 2025, at the Company’s request, General Atomics and the Company formally requested a novation of the financial assistance agreement between General Atomics and the DoE, under which General Atomics’ interests under the agreement would be transferred to the Company. The novation process is currently underway and is expected to be completed in mid-2026. Once the novation process is complete, the Company will be named the recipient of the award under the agreement and certain conditions are expected to be confirmed, including the potential for additional DoE funding support for further advancements of the Demonstration Plant.
The DoE has allowed the novation process to progress even though the financial assistance agreement’s term expired on September 30, 2025. During the novation process, the U.S. government failed to finalize a continuing budget resolution, meaning federal workers were furloughed, delaying the novation process. If a novation is not completed, the DoE award to General Atomics could be terminated, and final disposition of the assets would be negotiated with the DoE. Although the Company expects the novation process to be completed in mid-2026, there is no assurance of the process progressing in a timely manner or being completed at all.
See Note 4 to the Consolidated Financial Statements for a more complete discussion of the Cost Share Agreement.
Professional Services Agreement with Ms. Kast
Prior to her employment in July 2024, Ms. Kast had been since June 2015, a consultant of Rare Element Resources, Inc., a subsidiary of the Company, and had served as a Board member since August 2022. From July 2012 to May 2015, Ms. Kast served as the Vice President, General Counsel, Chief Administrative Officer, and Corporate Secretary of the Company. On February 17, 2021, Rare Element Resources, Inc. entered into an updated professional services agreement, effective as of March 1, 2021, with Ms. Kast (the “Professional Services Agreement”) that was subsequently extended on an annual basis and which was terminated on June 30, 2024, with Ms. Kast’s employment. Pursuant to the Professional Services Agreement, Ms. Kast performed business consulting and administrative oversight services for Rare Element Resources, Inc., and the Company. The Professional Services Agreement provided that Ms. Kast be paid a monthly retainer and be eligible for an annual performance bonus at the discretion of the Board. For the fiscal years 2024 (through her employment date) and 2023, Ms. Kast was paid monthly retainers of $21,250 and $20,208, respectively, and received cash bonuses of $20,000 and $82,500, respectively. Ms. Kast received a second cash bonus of $80,000 in 2024 following her hiring as a Company employee.
Ms. Kast is also eligible for stock option grants pursuant to the Company’s equity incentive plan and as approved by the Board. On January 4, 2023, Ms. Kast received a stock option grant of 225,000 that vested (i) 50% each on July 4, 2023, and January 4, 2024.
Legal and Consulting Arrangements with Mr. Hickey
In June 2022, Mr. Hickey was retained as a consultant to Rare Element Resources, Inc., a subsidiary of the Company, and was paid a monthly retainer of $6,000 during fiscal years 2024 and 2025 for business and community relations services. Mr. Hickey serves as an advisor to affiliates of Synchron, the Company’s majority shareholder, in several capacities, including as registered agent in the state of Wyoming. Prior to his retirement as a partner of Hickey & Evans, LLP, he served as counsel to General Atomics (an affiliate of Synchron) and certain of its affiliates for various matters from 1980 through 2022.
Mr. Hickey is also eligible for stock option grants pursuant to the Company’s equity incentive plan and as approved by the Board. On January 4, 2023, Mr. Hickey received a stock option grant of 50,000 that vested (i) 50% on July 4, 2023 and (ii) 50% on January 4, 2024.
Review, Approval or Ratification of Transactions with Related Persons
The Company’s written corporate governance policies generally discourage transactions involving a potential conflict of interest. The NCG&C Committee is generally responsible for overseeing compliance with the Company’s corporate governance policies, which require that transactions that could reasonably be considered to present a conflict of interest be reported to the NCG&C Committee. However, the Audit Committee is responsible for overseeing compliance with the
93
Code of Conduct contained in the Company’s corporate governance policies. Specifically, the Audit Committee is responsible for reviewing and overseeing any transaction or contract exceeding or likely to exceed $120,000 involving the Company and a related party, including transactions subject to disclosure under Item 404 of Regulation S-K. Generally, in reviewing such transactions, the Audit Committee considers the relevant facts and circumstances available and deemed relevant to each determination.
Except for the Cost Share Agreement with General Atomics, the prior Professional Services Agreement with Ms. Kast and the legal and consulting arrangements with Mr. Hickey referenced above, there are no material interests, direct or indirect, of any of the current directors, executive officers, or any shareholder that beneficially owns, directly or indirectly, more than 5% of the outstanding common shares, or immediate family members of such persons, in any transaction since January 1, 2024 or in any proposed transaction in which the amount involved exceeded $120,000.
Director Independence
The Board reviewed and determined independence under NI 58-101 for each current director and director nominee. In making its independence determination, the Board considered the circumstances described below.
The Board determined that Mr. Mushinski is not independent based upon his position as an executive officer of the Company. The Board determined that Ms. Champine and Messrs. Brundage and Bartels are not independent based upon each person’s employment with an affiliate of Synchron, the Company’s majority shareholder. The Board determined that Mr. Hickey is not independent based upon his and his former law firm’s work providing legal services to General Atomics (an affiliate of Synchron) and certain of its affiliates, and his work as a consultant to a subsidiary of the Company.
The Board has concluded that Mr. Grandey and Ms. Saxton are independent. As a result of these analyses, the Board has determined that the proposed seven-member Board would not be comprised of a majority of independent directors. Notwithstanding the above, the Board will carry out its duties under the stewardship of the independent Chairman of the Board, Mr. Grandey, whose role and responsibilities include overseeing the function and effectiveness of the Board and the exercise of independent supervision over management.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit, Audit-Related, Tax, and Other Fees
The following table sets forth the aggregate fees billed or expected to be billed by Haynie (Salt Lake City, UT, PCAOB ID#457), for professional services rendered in connection with the fiscal years ended December 31, 2025 and 2024.
| | 2025 | | 2024 |
Audit Fees | $ | 97,000 | $ | 94,000 |
Audit Related Fees | | 3,500 | | 1,495 |
Tax Fees | | — | | — |
All Other Fees | | — | | — |
Total | $ | 100,500 | $ | 95,495 |
“Audit Fees” represent fees for the audit of the Company’s annual financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.
“Audit-Related Fees” represent fees for professional services. For the fiscal years ended December 31, 2025 and 2024 the audit related fees in each year related to the Company’s Form S-3 and Form S-1 filings, respectively.
“Tax Fees” represent fees for professional services rendered for tax compliance, tax advice and tax planning on actual or contemplated transactions.
94
“All Other Fees” consist of fees for products and services other than the services reported above.
Pre-Approval Policies and Procedures
In accordance with the Audit Committee Charter, the Audit Committee’s responsibilities and powers include pre-approval of permitted non-audit services performed for Rare Element or any of its subsidiaries by the Company’s auditor, subject to any de minimis exception under Section 10A(i)(1)(B) of the Exchange Act any rules promulgated thereunder. Consistent with applicable laws, other than audit, review or attestation services, all other services provided by the Company’s auditor are to be pre-approved by one or more members of the Audit Committee pursuant to authority delegated by the Audit Committee, provided that the Audit Committee is informed of each particular service. All of the engagements and fees discussed above under the heading “Audit, Audit-Related, Tax, and Other Fees” for the fiscal years ended December 31, 2025 and 2024 were pre-approved by the Audit Committee.
Since the commencement of the Company’s most recently completed financial year, the Audit Committee has not made any recommendations to nominate or compensate an external auditor which were not adopted by the Board of the Company.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Documents filed as part of this Annual Report or incorporated by reference:
| (1) | The consolidated financial statements are presented in “Item 8. Financial Statements and Supplementary Data.” |
| (2) | Financial Statement Schedules (omitted because they are either not required, not applicable, or the required information is disclosed in the Notes to the Consolidated Financial Statements or related notes). |
| (3) | Reference is made to the Exhibit Index that follows the signature pages of this report. |
ITEM 16. FORM 10-K SUMMARY
None.
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INDEX TO EXHIBITS
| | |
Exhibit | | Description |
3.1 | | |
3.2 | | |
3.3 | | |
4.1+ | | |
10.1* | | |
10.1.1 | | |
10.2 | | |
10.3 | | |
10.4 | | |
10.4.1 | | |
10.5 | | |
10.6* | | |
10.7* | | |
10.8* | | |
10.9* | | |
10.9.1* | | |
10.9.2* | |
96
10.10* | | |
10.11* | | |
10.12* | | |
14.1 | | |
19.1 | | |
21.1 | | |
23.1+ | | Consent of Registered Public Accounting Firm ( |
23.2+ | | |
23.3+ | | |
23.4+ | | |
31.1+ | | Certification of the Principal Executive Officer pursuant to Rule 13a-14 of the Exchange Act |
31.2+ | | Certification of the Principal Financial Officer pursuant to Rule 13a-14 of the Exchange Act |
32.1++ | | |
32.2++ | | |
96.1 | | |
99.1+ | | |
101.INS+ | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH+ | | XBRL Schema Document |
101.CAL+ | | XBRL Calculation Linkbase Document |
101.DEF+ | | XBRL Definition Linkbase Document |
101.LAB+ | | XBRL Label Linkbase Document |
101.PRE+ | | XBRL Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
| | |
+ Filed herewith.
++ Furnished herewith.
* Indicates a management contract or compensatory plan, contract or arrangement.
97
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RARE ELEMENT RESOURCES LTD.
By: | /s/ Kenneth J. Mushinski | By | : /s/ Wayne E. Rich |
| Kenneth J. Mushinski, President, Chief Executive Officer and Director |
| Wayne E. Rich, Chief Financial Officer |
| (Principal Executive Officer) |
| (Principal Financial Officer) |
| Date: March 12, 2026 |
| Date: March 12, 2026 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Gerald W. Grandey |
|
| Gerald W. Grandey, Chairman of the Board of Directors |
|
| Date: March 12, 2026 |
|
| |
|
By: | /s/ Kenneth J. Mushinski |
|
| Kenneth J. Mushinski, President, CEO and Director (Principal Executive Officer) |
|
| Date: March 12, 2026 |
|
| | |
By: | /s/ Barton S. Brundage |
|
| Barton S. Brundage, Director |
|
| Date: March 12, 2026 |
|
| |
|
By: | /s/ Nicole J. Champine | |
| Nicole J. Champine, Director | |
| Date: March 12, 2026 | |
| | |
By: | /s/ Paul J. Hickey | |
| Paul J. Hickey, Director | |
| Date: March 12, 2026 | |
| | |
By: | /s/ Craig S. Bartels |
|
| Craig S. Bartels, Director |
|
| Date: March 12, 2026 |
|
| | |
By: | /s/ Pamela L. Saxton |
|
| Pamela L. Saxton, Director |
|
| Date: March 12, 2026 |
|
| | |
By: | /s/ Wayne E. Rich | |
| Wayne E. Rich, CFO (Principal Financial Officer) | |
| Date: March 12, 2026 | |
98
DESCRIPTION OF SECURITIES
The following is a description of each class of securities of Rare Element Resources Ltd. (“Rare Element” or the “Company”) that is registered under Section 12 of the Securities Exchange Act of 1934, as amended, and does not purport to be complete. For a complete description of the terms and provisions of such securities, refer to the Company’s Articles, which are incorporated herein by reference to Exhibit 1.3 to the Company’s Form 20-FR filed with the U.S. Securities and Exchange Commission on November 17, 2009. This summary is qualified in its entirety by reference to these documents.
The Company’s Articles authorize Rare Element to issue an unlimited number of common shares, without par value. As of March 11, 2026, 645,368,390 common shares of Rare Element were issued and outstanding. The rights of the holders of common shares of Rare Element are governed by the Business Corporations Act (British Columbia) (the “BCA”), including all amendments thereto and all regulations and amendments thereto made pursuant to the BCA, the Company’s Certificate of Incorporation, as amended, and the Company’s Articles.
Common Shares
All common shares are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.
Dividend Rights
Holders of common shares are entitled to receive such dividends as may be declared from time to time by our board of directors, in its discretion, out of funds legally available therefor.
Voting Rights
Holders of common shares are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.
Election of Directors
In accordance with the BCA, directors are elected by a plurality of the votes cast by the holders of our common shares in a meeting at which a quorum is present. “Plurality” means that the individuals who receive the largest number of votes cast are elected as directors, up to the maximum number of directors to be chosen at the meeting.
Liquidation
Upon liquidation, dissolution or winding up of the Company, holders of common shares are entitled to receive pro rata the assets of the Company, if any, remaining after payments of all debts and liabilities.
Redemption
No shares have been issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.
Other Provisions
Changes to Authorized Share Structure
Under Article 9 of the Company’s Articles, and subject to the BCA, the Company may by ordinary resolution of the shareholders:
Subject to Article 9.2 of the Company’s Articles and the BCA, the Company may by ordinary resolution of the shareholders:
Subject to Article 9.2 of the Company’s Articles and the BCA, the Company may by resolution of the directors subdivide or consolidate all or any of its unissued, or fully paid issued, shares.
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
Rare Element Resources, Ltd.
Littleton, Colorado
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-170022, 333-184983 and 333-267097) and Form S-3 (File No. 333-286231) of Rare Element Resources Ltd. of our report dated March 12, 2026, relating to the consolidated financial statements which appears in this Form 10-K.
/s/ Haynie & Company
Salt Lake City, Utah
March 12, 2026
Exhibit 23.2
Consent of Qualified Person
I, Alan C. Noble, PE, in connection with the Annual Report on Form 10-K for the year ended December 31, 2025 and any amendments or supplements and/or exhibits thereto (collectively, the “Form 10-K”), consent to:
| ● | The filing and use of the Technical Report Summary for the Bear Lodge REE Project with an effective date of 29 February 2024, as an exhibit to the Form 10-K; |
| ● | The use of and references to my name, including my status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission), in connection with the Form 10-K and the Technical Report Summary; and |
| ● | The use of information derived, summarized, quoted, or referenced from the Technical Report Summary, or portions thereof, that was prepared by me, that I supervised the preparation of and/or that was reviewed and approved by me, that is included or incorporated by reference in the Form 10-K. |
I am the qualified person responsible for authoring the following sections of the Technical Report Summary: 1, 2, 11, 22, and 23 and review of sections 3, 4, 5, 6, 7, 8, and 9.
I also consent to the incorporation by reference of the above items in the registration statements of Rare Element Resources, Ltd. filed on Form S-8 (File Nos. 333-170022, 333-184983 and 333-267097) and Form S-3 (File No. 333-286231).
By:/s/ Alan C Noble, PE
Name:Alan C Noble, PE
Title:Owner, Ore Reserves Engineering
Exhibit 23.3
Consent of Qualified Person
I, Monica Barrero Bouza, EurGeol, Q.P., in connection with the Annual Report on Form 10-K for the year ended December 31, 2025 and any amendments or supplements and/or exhibits thereto (collectively, the “Form 10-K”), consent to:
| ● | The filing and use of the Technical Report Summary for the Bear Lodge REE Project with an effective date of February 29, 2024, as an exhibit to the Form 10-K; |
| ● | The use of and references to my name, including my status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission), in connection with the Form 10-K and the Technical Report Summary; and |
| ● | The use of information derived, summarized, quoted, or referenced from the Technical Report Summary, or portions thereof, that was prepared by me, that I supervised the preparation of and/or that was reviewed and approved by me, that is included or incorporated by reference in the Form 10-K. |
I am the qualified person responsible for authoring the following sections of the Technical Report Summary: 1, 2, 3, 4, 5, 6, 7, 8, 9, 11, 22, and 23.
I also consent to the incorporation by reference of the above items in the registration statements of Rare Element Resources, Ltd. filed on Form S-8 (File Nos. 333-170022, 333-184983 and 333-267097) and Form S-3 (File No. 333-286231).
Dated: March 12, 2026
By:/s/ Monica Barrero Bouza
Name:Monica Barrero Bouza, EurGeol.
Title:Consultant
Exhibit 23.4
Consent of Qualified Person
I, Jaye T. Pickarts, P.E. Q.P., in connection with the Annual Report on Form 10-K for the year ended December 31, 2025 and any amendments or supplements and/or exhibits thereto (collectively, the “Form 10-K”), consent to:
| ● | The filing and use of the Technical Report Summary for the Bear Lodge REE Project with an effective date of February 29, 2024, as an exhibit to the Form 10-K; |
| ● | The use of and references to my name, including my status as an expert or “qualified person” (as defined in Subpart 1300 of Regulation S-K promulgated by the U.S. Securities and Exchange Commission), in connection with the Form 10-K and the Technical Report Summary; and |
| ● | The use of information derived, summarized, quoted, or referenced from the Technical Report Summary, or portions thereof, that was prepared by me, that I supervised the preparation of and/or that was reviewed and approved by me, that is included or incorporated by reference in the Form 10-K. |
I am the qualified person responsible for authoring the following sections of the Technical Report Summary: 1, 2, 8, 10, 14, 17, 21, 22, and 23.
I also consent to the incorporation by reference of the above items in the registration statements of Rare Element Resources, Ltd. filed on Form S-8 (File Nos. 333-170022, 333-184983 and 333-267097) and Form S-3 (File No. 333-286231).
By:/s/ Jaye T Pickarts
Name:Jaye T. Pickarts, P.E., Q.P.
Title:Consultant
Exhibit 31.1
CERTIFICATIONS
I, Kenneth J. Mushinski, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of Rare Element Resources Ltd.; |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Kenneth J. Mushinski |
Date: March 12, 2026 | |
| Kenneth J. Mushinski |
Exhibit 31.2
CERTIFICATIONS
I, Wayne E. Rich, certify that:
| 1. | I have reviewed this Annual Report on Form 10-K of Rare Element Resources Ltd.; |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| /s/ Wayne E. Rich |
Date: March 12, 2026 | |
| Wayne E. Rich |
Exhibit 32.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of Rare Element Resources Ltd. (the “Company”) does hereby certify, based on my knowledge, with respect to the Annual Report on Form 10-K of the Company for the period ended December 31, 2025 (the “Report”) that:
| 1. | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Kenneth J. Mushinski |
Date: March 12, 2026 | |
| Kenneth J. Mushinski |
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code). It shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (15 U.S.C. Section 78r) or otherwise subject to the liability of that section. It shall also not be deemed incorporated by reference into any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except to the extent that the Company specifically incorporates it by reference.
Exhibit 32.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of Rare Element Resources Ltd. (the “Company”) does hereby certify, based on my knowledge, with respect to the Annual Report on Form 10-K of the Company for the period ended December 31, 2025 (the “Report”) that:
| 1. | The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Wayne E. Rich |
Date: March 12, 2026 | |
| Wayne E. Rich |
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code). It shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (15 U.S.C. Section 78r) or otherwise subject to the liability of that section. It shall also not be deemed incorporated by reference into any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except to the extent that the Company specifically incorporates it by reference.
Exhibit 99.1
AUDIT COMMITTEE CHARTER
(Revised June 20, 2024)
The Board of Directors (the “Board”) of Rare Element Resources Ltd. (the “Corporation”) has established an Audit Committee (the “Committee”) to fulfill the Board’s oversight responsibilities in reviewing and overseeing:
| ● | the integrity and adequacy of the Corporation’s financial statements reporting; |
| ● | the effectiveness of the Corporation’s internal controls over accounting, computer systems, cybersecurity, and financial reporting; |
| ● | the accounting policies and procedures adopted by management; |
| ● | the Corporation’s compliance with legal and regulatory requirements related to financial reporting; |
| ● | the Corporations establishment of a Code of Ethics and procedures relating to treatment of complaints and monitor compliance thereof; |
| ● | the independent auditor’s qualifications and independence; |
| ● | assessing the performance of the Corporation’s financial management and of the independent auditor; and |
| ● | the Enterprise Risk Management (“ERM”) assessment, analysis, and tracking. |
COMPOSITION
The Committee shall be comprised of at least three members of the Board, with at least two of whom shall be independent as defined in National Instrument 52-110 - Audit Committees of the Canadian Securities Administrators, and any other applicable laws and regulations. To serve, a director must be financially literate (or become so within a reasonable period of time after appointment) and a minimum of one member must qualify as an Audit Committee Financial Expert as defined by applicable laws and regulations and who shall serve as Chair of the Committee. Committee members shall serve until their successors are duly elected or upon removal, with or without cause, by the Board and any vacancy shall be filled by the Board. A majority of members shall constitute a quorum for the transaction of business.
PROCESS
The Committee shall meet at a minimum quarterly and on such other occasions as may be required. Meeting agendas shall be set by the Chair of the Committee in consultation with management. At the Committee’s discretion, the independent auditors may be invited to attend the meetings and to engage with the Committee at these meetings without management present. The Committee will undertake an annual review of this Charter and recommend such changes, amendments, and additions, as in its opinion, are required or appropriate to the Board.
In the performance of its duties and responsibilities, the Committee shall have access to any and all personnel and books and records of the Corporation and its subsidiaries necessary for the execution of the Committee’s obligations and may request from the officers of the Corporation or any of its subsidiaries such records and other matters considered appropriate. The Committee shall also have the ability to form subcommittees and delegate tasks to those subcommittees.
The Committee shall have the power and authority to conduct or authorize studies and investigations into any matter of interest or concern within the scope of its responsibilities that the Committee deems, in its sole discretion, to be appropriate and have the authority to retain independent counsel, consultants or other experts to assist in the conduct of any such study or investigation, including the authority to approve fees payable to such experts and any other terms of retention.
1
SPECIFIC DUTIES
The Committee, in fulfilling its oversight responsibilities, shall have the authority to and shall do the following:
Annual Duties:
| a) | review the annual financial statements and Management Discussion and Analysis in Form 10-K and make recommendations to the Board with respect thereto; |
| b) | Review and approve annual reports of the Committee for inclusion in the proxy circulars for the corporation’s annual meetings; |
| c) | review with management the Corporation's privacy and cybersecurity risk exposure and the policies, procedures, and mitigation plans in place to protect the security and integrity of the Corporation's information systems and data at least annually; |
| d) | review with management the Corporation’s policies and practices respecting insurance at least annually; |
| e) | review at least annually the Corporation’s Business Conduct Policy, and Treatment of Complaints policy, and any other code of ethics adopted; |
| f) | review and evaluate at least annually the Corporation’s policies and procedures for maintaining and investing cash funds as detailed in the corporate investment policy and recommend changes to the Board as appropriate; |
| g) | recommend to the Board the appointment of the independent auditors and review and approve the terms of the audit engagement and the appropriateness of the proposed fee; |
| h) | review and approve the annual audit plan and engagement letter of the independent auditors, including the engagement of review services relating to the Company’s quarterly filings; |
| i) | evaluate the performance of, and confirm the independence of, the independent auditors; |
Quarterly Duties:
| j) | review and approve the quarterly financial statements and Form 10-Q for filing with the Securities and Exchange Commission; |
| k) | meet with the Corporation’s auditors to review audit, financial reporting, and other pertinent matters and to review their recommendations to, or disagreements with, management; |
| l) | review at least quarterly with management the Corporation’s ERM program, implementation, and assessments, including its ERM matrix or other tools used by management to assess the Corporation’s enterprise risks; |
| m) | oversee the adequacy and accuracy of the Corporation’s financial disclosures and obligations in consultation with the independent auditors and confirm appropriate disclosures thereof are set forth in the financial statements and other documents; |
| n) | review significant accounting policies and estimates including issues relating to asset valuations and liabilities, commitments and contingencies and review with management and the independent auditors and, if required, legal counsel, any litigation, claims or other contingencies, including tax assessments that could affect the financial position of the Corporation and the appropriate disclosure thereof in the financial statements; |
| o) | confirm, following discussions with and/or reports from management and the independent auditors, that the Corporation’s internal controls, financial systems and procedures, and management information systems are appropriate and that internal controls are in place and operating effectively; |
Other Duties:
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| p) | consider the areas of financial risk affecting the Corporation and the effectiveness of management in response thereto, as well as any legal issues affecting financial procedures and reporting; |
| q) | review the Corporation’s financial press releases, if any, and reports, opinions, and reviews by the independent auditors, in each case to determine that the financial statements and related disclosures are satisfactory in form and substance to be included in the Corporation’s reports filed with the regulatory bodies having jurisdiction; |
| r) | review and monitor all related party transactions which may be entered into by the Corporation; |
| s) | review related party engagements and disclosures and recommend action to approve, or disapprove, following any conflict review; |
| t) | confirm that management has put into place procedures that facilitate compliance with the provisions of applicable securities laws and regulations relating to insider trading, continuous disclosure, and financial reporting; |
| u) | establish procedures for the confidential and anonymous receipt of, and the retention and treatment of reports received regarding accounting procedures, internal accounting controls or auditing matters, including oversight of financial and other whistleblower reports; and |
| v) | maintain representation on the Board established Investment Committee and report to the Board the actions of the Investment Committee. |
REPORTING
Following each meeting of the Committee, the Chair of the Committee shall report to the Board the issues before the Committee and actions taken by the Committee or recommended to be taken by the Board.
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