17)

Taxes

a) Tax (expense) recovery

		Year ended
		December 31, 2025			December 31, 2024
Income tax recovery		-			2,813
Deferred income tax (expense) recovery		(17,063	)		17,867
Total	$	(17,063	)	$	20,680

The major items causing the Company's income tax expense to differ from the Canadian combined federal and provincial statutory rate of 26.50% (2024 - 26.50%) were:

		Year Ended
		December 31, 2025			December 31, 2024
Net loss before tax	$	(51,675	)	$	(71,245	)
Expected income tax recovery based on statutory rate		13,694			18,880
Adjustments to expected income tax (expense) recovery:
Permanent differences and other		(134	)		(2,382	)
Tax effect of unrecognized temporary differences and tax losses		(34,104	)		(1,690	)
Tax incentives and tax loss benefit not previously recognized		-			2,914
Effect of tax rates in foreign jurisdictions		1,173			3,331
Foreign exchange and other		2,308			(373	)
Income tax (expense) recovery	$	(17,063	)	$	20,680

b) Changes in deferred tax assets and liabilities

	Year ended		2024
	December 31, 2025		December 31, 2024
Net deferred income tax asset, beginning of the year	22,075		7,495
Deferred income tax (expense) recovery	(17,063	)	17,867
Effect of foreign exchange	-		(3,287	)
Net deferred income tax asset, end of the year	5,012		22,075

	December 31, 2025	December 31, 2024
Deferred income tax asset	5,012	22,075
Net deferred income tax asset	5,012	22,075

For the year ended December 31, 2025, the Company has derecognized the deferred tax asset held by the Company's subsidiary, Largo Vanádio de Maracás S.A. The deferred tax asset related to deductible temporary differences, tax losses, and unused tax credits. The derecognition was made due to the subsidiary's history of operating losses.

c) Deferred income tax balances

		December 31, 2025			December 31, 2024
Brazil
Recognized deferred tax assets:
Non-capital losses	$	15,343		$	28,493
Mine properties		1,422			1,235
Recognized deferred tax liabilities:
Transitional tax regime		(12,099	)		(6,985	)
Provisions		(4,666	)		(4,124	)
	$	-		$	18,619
Canada
Recognized deferred tax assets:
Non-capital losses	$	4,991		$	3,433
U.S.
Recognized deferred tax assets:
Non-capital losses	$	7		$	1,038
Provisions and other		21			23
Recognized deferred tax liabilities:
Mine properties, plant and equipment		(7	)		(1,038	)
	$	21		$	23

Net deferred income tax asset	$	5,012		$	22,075

Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

		December 31, 2025		December 31, 2024
Canada
Non-capital loss carry-forwards	$	24,358	$	32,408
Mine properties, plant and equipment		18,394		17,574
Capital losses		12,260		12,260
Vanadium assets		6,168		6,608
ITCs		284		270
Share issue costs		520		214
Ireland
Non-capital loss carry-forwards	$	34,294	$	24,715
Mine properties, plant and equipment	$	1	$	1
U.S.
Non-capital loss carry-forwards	$	76,743	$	59,845
Inventory		-		7,116
Provisions and other		2,702		1,180
Mine properties, plant and equipment		-		501

The Company has non-Canadian resident subsidiaries that have undistributed earnings of $2,370 at December 31, 2025. These undistributed earnings are not expected to be repatriated in the foreseeable future, and the Company has control over the timing of such repatriations. Accordingly, taxes that may apply on repatriation have not been provided for.

The non-capital losses in the United States, Brazil and Ireland carry forward indefinitely. The non-capital losses in Canada expire as follows: