During the nine months ended March 31, 2026, the Company drilled horizontal sidetracks from two of its existing injection and recovery wells to evaluate the technical feasibility of deploying horizontal wells within the ore body, and also to perform further testing to validate that increased downhole heat improved solubility of the ore. Upon placing the horizontal sidetrack wells into service, the Company transferred approximately $2.1 million of costs incurred that were previously recorded as construction in progress to property, plant and equipment. During the three months ended March 31, 2026, after the initial validation of the horizontal sidetrack wells, the Company encountered difficulty with our downhole fiberglass reinforced production tubing as we applied increasing temperature to our mining operations. In addition, downhole tubing and fiber optic equipment became lodged within one of the horizontal sidetrack wells, and the loss of wellbore continuity in the second sidetrack well led to the inability to access the horizontal portion of the well. The difficulties encountered with the horizontal sidetrack wells did not impact the previously existing vertical sections of the related wells. The Company determined that both horizontal sidetracks were fully impaired as a result of these difficulties and had no remaining fair value. Therefore, the remaining net book value of approximately $1.6 million associated with the horizontal sidetrack wells was written off to impairment expense during the three and nine months ended March 31, 2026.

As discussed within Note 13-Commitments and Contingencies, during the three months ended March 31, 2026, the Company and a former construction contractor that constructed the Company’s Small-Scale Facility (the “SSF”) entered into a settlement agreement to fully resolve the disputes among the parties. The Company had previously accrued $2.8 million for probable amounts owed under the construction contract, and upon settlement, recorded an additional $1.5 million to property, plant and equipment, which will be depreciated prospectively over the remaining useful life of the SSF.

Properties, plant and equipment, net consisted of the following at the end of each period presented.


	Depreciation	Estimated useful	March 31,			June 30,
Asset category	method	life (in years)	2026			2025
			(in thousands)
Land	N/A	—	$	1,533		$	1,533
Small-scale facility — plant	Straight-line	3.75		70,300			69,313
Injection and recovery wells	Straight-line	3.75(1)		6,134			6,134
Buildings	Straight-line	7-15		1,050			979
Vehicles	Straight-line	3-5		305			305
Other plant and equipment	Straight-line	5-10		817			754
				80,139			79,018
Less accumulated depreciation				(40,360	)		(25,360	)
Properties, plant and equipment, net			$	39,779		$	53,658

(1)

Effective July 1, 2025, the estimated useful life of the injection and recovery wells were revised downward from 5 years to 3.75 years to align with the Company’s revised operational and development plans.

The Company recognized depreciation expense of approximately $5.3 million and $5.0 million for the three months ended March 31, 2026 and 2025, respectively.

The Company recognized depreciation expense of approximately $15.9 million and $14.9 million for the nine months ended March 31, 2026 and 2025, respectively.

4. Properties, Plant and Equipment, Net