NOTE 9 – GOVERNMENT GRANT

In March 2026, the Company was awarded a $27.0 million grant by the U.S. Department of War under Title III of the Defense Production Act (“DPA”) to support the expansion and modernization of its domestic antimony processing operations and to fund a portion of the Company’s Alaskan antimony mining operations. The award is administered through the Defense Industrial Base Consortium (“DIBC”), which is managed by Advanced Technology International.

The award is structured as a milestone-based, firm fixed-price arrangement, with $16.2 million representing currently obligated funding associated with initial project milestones and the remaining $10.8 million related to future phases subject to additional authorization by the U.S. government. Payments under the agreement are contingent upon the achievement and formal acceptance of specified milestones, as well as compliance with certain ongoing requirements, including environmental, reporting, and project execution obligations.

As part of those execution obligations, the Company is required to contribute approximately $3.9 million of the total project cost and is responsible for executing the expansion of its Thompson Falls, Montana facility, as well as advancing related mining integration activities in Alaska. The period of performance under the agreement extends through January 4, 2028.

The Company has elected to early adopt ASU 2025-10, Government Grants (Topic 832), effective January 1, 2026, and account for the grant as a non-exchange transaction within the scope of ASC 832. Pursuant to this guidance, management evaluates the recognition of grant funding based on whether it is probable that the Company will comply with the substantive conditions of the agreement and that the grant will be received.

On March 25, 2026, the Company received formal approval from the DIBC confirming the achievement of three project milestones associated with $12.8 million of committed funding. Management concluded that the recognition criteria under ASC 832 had been satisfied because the related performance conditions had been met and receipt of the funding was probable. As a result, during the first quarter of 2026, the Company recognized a $12.8 million government grant receivable, which was collected in April 2026. Consistent with its election to apply the cost accumulation approach under ASU 2025-10 for grants related to long-lived assets, the Company recognized the corresponding grant proceeds as a reduction of the carrying amount of Property, Plant, and Equipment (“PP&E”) associated with the Thompson Falls facility expansion. Grant proceeds are allocated to the underlying depreciable asset categories on a pro rata basis relative to the capitalized costs incurred. The related cash inflow was classified as an investing activity in the Condensed Consolidated Statement of Cash Flows, consistent with the classification of the capital expenditures the grant was intended to offset.

The Thompson Falls facility expansion was substantially completed and $4.1 million of the related assets were placed in service late in the second quarter of 2026. The reduced carrying value of the depreciable assets is expected to result in lower depreciation expense prospectively over the remaining estimated useful lives of those assets.

As of June 30, 2026, the Company had not recognized any amounts related to $14.2 million of funding that remained subject to future milestone achievement and approval. This amount includes the $10.8 million portion of the award that has not yet been authorized by the U.S. government. The Company expects to receive additional funding under the agreement as further milestones are completed, and the related funding is subsequently approved.