| Income Taxes |
24.Income Taxes Reconciliation of Effective Tax Rate The Company is subject to Canadian federal statutory tax for the estimated assessable profit for the years ended December 31, 2025 at a rate of 25%. The Company has made no assessable profit during the abovementioned years. The tax expense at statutory rates for the Company can be reconciled to the reported loss for the years 2025 and 2024 per the statement of loss and comprehensive loss as follows: | | | | | | | | | | | | | | December 31, 2025 | | December 31, 2024 (1) | | | | Amount | | Percent | | Amount | | Percent | | Net income (loss) before tax | | $ | (319,700) | | — | | $ | (81,895) | | — | | Canadian federal statutory tax rates | | $ | (79,925) | | 25.0 | % | | — | | — | | State and local income taxes, net of federal income tax effect | | | | | | | | | | | | Provincial and local rates (net of federal income tax effects) | | | (2,271) | | 0.7 | % | | — | | — | | Total federal, state and local income tax | | | (82,196) | | 25.7 | % | | (21,882) | | 26.7 | % | Foreign tax effects | | | | | | | | | | | | United States | | | | | | | | | | | | Statutory tax rate difference between United States and Canada | | $ | 1,232 | | (0.4) | % | | — | | — | | Other foreign jurisdictions | | | | | | | | | | | | Statutory tax rate difference between other jurisdictions and Canada | | | (22) | | — | | | — | | — | | Total foreign tax effects | | $ | 1,210 | | (0.4) | % | $ | 14,424 | | (17.6) | % | | | | | | | | | | | | | Effect of changes in tax laws or rates enacted in the current period | | | | | | | | | | | | | | | | | | | | | | | | Non-taxable or Non-deductible Items | | | | | | | | | | | | Stock based compensation | | $ | 21,819 | | (6.8) | % | | — | | — | | Change in fair value of warrant liability | | | 13,487 | | (4.2) | % | | — | | — | | Change in fair value of royalty liability | | | 32,750 | | (10.2) | % | | — | | — | | Other | | | 902 | | (0.3) | % | | — | | — | | Total Non-taxable or non-deductible items | | $ | 68,958 | | (21.6) | % | $ | 2,502 | | (3.1) | % | | | | | | | | | | | | | Prior year’s adjustments relating to tax provision and tax returns | | | 30 | | 0.0 | % | | — | | — | | Change in unrecognized deferred tax assets | | | 14,699 | | (4.6) | % | | 5,004 | | (6.2) | % | Other adjustments | | | (2,557) | | 0.8 | % | | — | | 0.0 | % | Income tax expense | | $ | 144 | | — | | $ | 48 | | (0.1) | % |
| (1) | The Company adopted ASU 2023-09 prospectively in 2025, as permitted by the standard. Accordingly, the prior period comparative information has not been recast to conform to the current presentation. |
The majority (>50%) of the statutory tax impact on state and local tax expense arises from taxation in Canada, the United States and NORI: | | | | Jurisdiction | | Statutory rate | | Canada | | 25.00 | % | United States | | 21.00 | % | NORI | | 25.00 | % |
The Company currently has no uncertain tax positions and is therefore not reflecting any adjustments. Components of the Company’s deferred income tax assets (liabilities) are as follows: | | | | | | | | | December 31, 2025 | | December 31, 2024 | Deferred Tax Assets | | | | | | | Non-capital losses | | $ | 38,685 | | $ | 24,270 | Investments | | | 169 | | | 111 | Equipment | | | 226 | | | 227 | Share issuance costs | | | 2,737 | | | 1,804 | Total deferred income tax assets | | $ | 41,817 | | $ | 26,412 | Valuation allowance | | | (41,111) | | | (26,412) | Deferred tax asset recognized | | $ | 706 | | $ | — | | | | | | | | Deferred Tax Liabilities | | | | | | | Difference between the book value and the tax basis of the TOML exploration contract (Note 11) | | $ | (10,675) | | $ | (10,675) | Investments | | | (706) | | | — | Deferred tax liabilities recognized | | $ | (11,381) | | $ | (10,675) | | | | | | | | Net deferred tax assets (liabilities) | | $ | (10,675) | | $ | (10,675) |
In assessing the recoverability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. A valuation allowance is provided against deferred income tax assets where it is not more likely than not that the Company will realize its benefits. Deductible temporary differences, unused tax losses and unused tax credits are as follows: | | | | | | | | | | | December 31, 2025 | | December 31, 2024 | | Expiry Date Range | | | | | | | | | | Non-capital losses | | $ | 161,312 | | $ | 100,995 | | See below | Investments | | $ | 1,422 | | $ | 829 | | Not applicable | Equipment | | $ | 839 | | $ | 841 | | Not applicable | Share issuance costs and others | | $ | 7,369 | | $ | 3,649 | | 2026-2029 | Restricted interest and financing expenses | | $ | 2,797 | | $ | 3,102 | | Not applicable |
As at December 31, 2025, the Company had non-capital loss carry-forwards of $161.3 million that may be used to offset future taxable income. These losses, if not utilized, will expire as follows: | | | | | | | | | | | | | | | | | | Canada | | Singapore | | United States | | Nauru | | Tonga | 2028 | | $ | — | | $ | — | | $ | 2 | | $ | 17,924 | | $ | — | 2035 | | | — | | | — | | | — | | | — | | | — | 2041 | | | 3,709 | | | — | | | — | | | — | | | — | 2042 | | | 13,227 | | | — | | | 1 | | | — | | | — | 2043 | | | 11,888 | | | — | | | 3 | | | — | | | — | 2044 | | | 10,642 | | | — | | | 179 | | | — | | | — | 2045 | | | 15,217 | | | — | | | 20,410 | | | — | | | | No expiry | | | — | | | 21,962 | | | — | | | — | | | 46,148 | Loss carry-forwards | | $ | 54,683 | | $ | 21,962 | | $ | 20,595 | | $ | 17,924 | | $ | 46,148 |
The Company files income tax returns in Canada, the United States, Singapore and Tonga, and is subject to examination in these jurisdictions for all years since the Company’s inception in 2011. As at December 31, 2025, all tax years are subject to examination by the tax authorities and no tax authority audits are currently underway. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years which have been carried forward and may be audited in subsequent years when utilized. The timing of the resolution, settlement and closure of any income tax audits is highly uncertain, and the Company is unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. It is possible that the balance of gross unrecognized tax benefits could significantly change in the next twelve months. As at December 31, 2025, the 2025 tax year filings for the Company and its subsidiaries (where applicable) remain unfiled and have not been assessed by the relative tax authorities.
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