As at December 31, 2025, 15,000,000 Public Warrants were outstanding: there were no exercises or issuances during 2025 (December 31, 2024 – 15,000,000). Each whole Public Warrant entitles the holder to purchase one common share at a price of $11.50 per share beginning on October 9, 2021, subject to restrictions as described further. Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will expire on September 9, 2026 or earlier upon redemption or liquidation. Public Warrant holders do not have the rights or privileges of holders of common shares nor any voting rights until they exercise their warrants and receive common shares.

The Company will not be obligated to deliver any common shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act of 1933, as amended (“Securities Act”) with respect to the common shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrants will be exercisable and the Company will not be obligated to issue a common share upon exercise of a Public Warrant unless the common share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Public Warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any Public Warrants. In the event that a registration statement is not effective for the exercised Public Warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the common share underlying such unit.

If the Company calls the Public Warrants for redemption in certain circumstances, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, by surrendering the Public Warrants for a number of common shares per warrant equal to the lesser of:

As at December 31, 2025, the value of outstanding Public Warrants of $19.5 million (2024: $19.5 million) was recorded in additional paid-in capital.

As at December 31, 2025, 9,500,000 Private Warrants were outstanding (December 31, 2024 – 9,500,000). The Private Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its permitted transferees:

The Private Warrants are subject to the Company’s redemption option at the price of $0.01 per warrant, if not held by the Sponsor or any of its permitted transferees, provided that the other conditions of such redemption are met, as described above. If holders of the Private Warrants elect to exercise the warrants on a cashless basis, the holder would pay the exercise price by surrendering their Private Warrants for a number of common shares equal to:

If the Private Warrants are held by a holder other than the Sponsor or any of its permitted transferees, the Private Warrants are redeemable by the Company in all redemption scenarios applicable to the Public Warrants and exercisable by such holders on the same basis as the Public Warrants. The Private Warrants will expire on September 9, 2026.

The Company evaluated the Private Warrants under ASC 815-40, in conjunction with the SEC Statement, and concluded that they do not meet the criteria to be classified in shareholders’ equity. Specifically, the terms of the warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrants should be classified as a liability.

The Private Warrants were valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected volatility of the Company’s common shares. The expected volatility was estimated using a binomial model that assigned equal weight to the implied volatility of the Company’s Public Warrants, adjusted for the call feature triggered at prices above $18.00 over 20 trading days within any 30- day period, and the historical volatility of the common share price.

As at December 31, 2025, the fair value of outstanding Private Warrants of approximately $13.4 million is recorded as warrants liability. The following table presents the changes in the fair value of warrants liability:

As at December 31, 2025, the fair value of the Private Warrants was estimated using the following assumptions:


		December 31, 2025			December 31, 2024
Exercise price		$	11.50		$	11.50
Share price		$	6.17		$	1.12
Volatility			124.72	%		108.97	%
Term			0.69	years		1.69	years
Risk-free rate			3.49	%		4.14	%
Dividend yield			0.0	%		0.0	%

As at December 31, 2025, 4,317,500 Class A warrants, which we issued as part of a registered direct offering in 2023, were outstanding (the “Class A Warrants”). Each whole Class A Warrant entitles the holder to purchase one common share at an exercise price of $2.00 per share and will expire on December 31, 2027.

The Class A Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 30 consecutive trading days exceeds $6.50, and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation of the unexercised warrants, offering $0.0001 per Warrant Share. If conditions for the call are met, the unexercised portion of these warrants will be cancelled ten trading days after the call notice is received.

The Class A Warrants were not determined to be liabilities under ASC 480 as they were not required to be redeemed. The Company classified the Class A Warrants as equity (per ASC 815), as the warrants entailed physical settlement and were also considered to be indexed to the Company’s share, wherein, upon exercise, a fixed number of common shares would be issued on payment of a fixed exercise price.

As at December 31, 2025, the value of the outstanding 4,317,500 Class A Warrants (December 31, 2024: 6,230,770) amounting to $3.6 million (December 31, 2024: 5.3 million) was recorded in additional paid-in capital.

As a part of the 2024 Registered Direct Offering (Note 14), the Company issued an aggregate of 9,950,000 Class B Warrants for the purchase of common shares at an exercise price of $2.00 per share. The Class B Warrants expire 5 years from the issuance date. The valuation of the Class B Warrants was determined using a Monte Carlo simulation as on the date of issuance as per below.

 

November 14,

 

January 29,

 

January 30,

 

February 6,

2024

2025

Units issued

7,450,000

900,000

650,000

950,000

Fair value per warrant

0.60

0.98

1.11

1.22

Assumptions used:

Exercise price

2.00

Share price

0.96

1.48

1.65

1.82

Call price threshold

5.00

Volatility

109.38

107.66

Term (years)

5.00

—

Risk-free rate

4.23

Dividend yield

0.0

The Class B Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 30 consecutive trading days exceeds $5.00, and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation the unexercised warrants, offering $0.0001 per Warrant Share. If conditions for the call are met, the unexercised portion of these warrants will be cancelled ten trading days after the call notice is received.

As the Class B Warrants had the same features as the above-mentioned Class A Warrants, the Company classified the Class B Warrants as equity (per ASC 815) and recorded the fair value of the Class B Warrants amounting to $7.2 million as additional paid-in capital.

On June 17, 2025, the Company waived the limitation set forth in the Class B Warrants with respect to the cashless exercise thereof so that the holders of the Class B Warrants may now exercise the Class B Warrants through a cashless exercise, whether or not a registration statement registering the issuance of the common shares underlying the Class B Warrants under the Securities Act, is then effective or available. As a result of the waiver, each Class B Warrant may now be immediately exercised by way of a cashless exercise, meaning that the holder may elect to not pay a cash purchase price upon exercise and instead receive upon such exercise the net number of common shares determined according to the formula set forth in the Class B Warrants, subject to the other terms and conditions of the Class B Warrants.

As at December 31, 2025, the value outstanding of 15,000 Class B Warrants (December 31, 2024 - 7,450,000 Class B Warrants) amounting to $9 thousand (December 31, 2024 - $4.5 million) was recorded in additional paid-in capital.

As a part of the 2025 Registered Direct Offering (Note 14), the Company issued an aggregate of 12,333,333 Class C Warrants to purchase common shares at an exercise price of $4.50 per share with an expiration date of May 12, 2028. The valuation of the Class C Warrants issued was determined using a Monte Carlo simulation on the date of issuance.


		May 22,			June 10,		June 25,		July 1,
		2025			2025		2025		2025
Units Issued			2,333,333		6,666,666		1,003,334		2,330,000
Fair value per warrant		$	2.18		2.15		3.88		3.01

Exercise price		$	4.50		4.50		4.50		4.50
Share price		$	4.30		4.24		7.49		5.94
Volatility			118.49	%	118.49	%	101.14	%	106.26	%
Term			2.92 years		2.92 years		2.88 years		2.88 years
Risk-free rate			3.87	%	3.87	%	3.67	%	3.68	%
Dividend yield			0.0	%	0.0	%	0.0	%	0.0	%

The Class C Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 20 consecutive trading days exceeds $7.00, and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation of the unexercised warrants, offering $0.0001 per Warrant Share. If conditions for the call are met, the unexercised portion of these warrants may be cancelled ten trading days after the call notice is received.

As the Class C Warrants had the same features as the above-mentioned Class A Warrants and Class B Warrants, the Company classified the Class C Warrants as equity (per ASC 815) and recorded the value amounting to $12.5 million in additional paid-in capital.

⁽¹⁾During 2025, 2,330,000 Class C Warrants were exercised for which the Company received the exercise amount of $10.5 million.

As at December 31, 2025, the value of the outstanding 10,003,333 Class C Warrants amounting to $10.2 million was recorded in additional paid-in capital.

As part of the Korea Zinc Agreement (Note 14), the Company on June 25, 2025 issued 6,868,181 warrants to Korea Zinc to purchase common shares of the Company at an exercise price of $7.00 per share with an expiration date of June 25, 2028.

The fair value of the warrants issued to Korea Zinc was determined using a Monte Carlo simulation on June 25, 2025, resulting with a fair value of $3.35 per warrant. The fair value of the warrants was estimated using the following assumptions:

The warrants issued to Korea Zinc contain a call provision under which if the VWAP for 20 consecutive trading days exceeds $10, and Korea Zinc does not possess material non-public information provided by the Company, the Company may call for cancellation of the unexercised warrants, offering $0.0001 per warrant Share. If conditions for the call are met, the unexercised portion of these warrants will be cancelled ten trading days after the call notice is received.

Similar to the Class A, Class B and Class C Warrants, the Company classified the warrants issued to Korea Zinc as equity (per ASC 815) and the value of the warrants amounting to $11.5 million was recorded in additional paid-in capital.

A continuity schedule summarizing the movement in Warrants issued to Korea Zinc is below:

In accordance with the revised sponsorship agreement dated May 29, 2025, between the Nauru Seabed Minerals Authority, Nauru and NORI, the Company on May 30, 2025, issued 9,146,268 warrants (“Nauru Warrants”) to Nauru to purchase the common shares of the Company at an exercise price of $4.72 per share with an expiration date of May 30, 2030. The Nauru Warrants cannot be exercised through a cashless or net exercise.

The fair value of the Nauru Warrants was calculated using a Black-Scholes valuation on May 30, 2025, resulting with a fair value of $3.62 per warrant. The fair value of the Nauru Warrants was estimated using the following assumptions:

The Nauru Warrants cannot be exercised until the following conditions have been met:

The Nauru Warrants were not determined to be liabilities under ASC 480 as they were not mandatorily redeemable. The Company classified the Nauru Warrants as equity (per ASC 815), as the warrants require physical settlement and were also considered to be indexed to the Company’s share, wherein, upon exercise, a fixed number of common shares would be issued on payment of a fixed exercise price. As at December 31, 2025, the fair value of the Nauru Warrants amounting to $33.1 million was recorded in additional paid-in capital. Since the Company receives no form of consideration from Nauru in return for issuing the Nauru Warrants, the entire fair value of the Nauru warrants amounting to $33.1 million is recorded as an expense in 2025 under Nauru and Tonga warrant costs in the consolidated statement of loss and comprehensive loss.

In accordance with the revised sponsorship agreement dated August 4, 2025, between the Tonga Seabed Minerals Authority and TOML, the Company issued, on August 4, 2025, 1,000,000 warrants (“Tonga Warrants”) to Tonga to purchase the common shares of the Company at an exercise price of $5.87 per share with an expiration date of August 4, 2033. The Tonga Warrants cannot be exercised through a cashless or net exercise.

The fair value of the Tonga Warrants was calculated on issuance using a Black-Scholes valuation, 2025, resulting with a fair value of $5 per warrant. The fair value of the Tonga Warrants was estimated using the following assumptions:

The Tonga Warrants cannot be exercised until the following conditions have been met:

The Tonga Warrants were not determined to be liabilities under ASC 480 as they were not mandatorily redeemable. The Company classified the Tonga Warrants as equity (per ASC 815), as the warrants require physical settlement and were also considered to be indexed to the Company’s share, wherein, upon exercise, a fixed number of common shares would be issued on payment of a fixed exercise price. As at December 31, 2025, the fair value of the Tonga Warrants amounting to $5 million was recorded in additional paid-in capital. Since the Company receives no form of consideration from the State in return for issuing the Tonga Warrants, the entire fair value of the Tonga Warrants was recorded as an expense in 2025 under Nauru and Tonga warrant costs in the consolidated statement of loss and comprehensive loss.