Western Uranium & Vanadium Corp. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements The information disclosed in this quarterly report, and the information incorporated by reference herein, include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained or incorporated by reference in this quarterly report are based on our current expectations and beliefs concerning future developments and their potential effects on us and speak only as of the date of each such statement. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in this Item 2 of Part I and Item 1A of Part II of this quarterly report. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. The following discussion should be read in conjunction with our condensed interim consolidated financial statements and footnotes thereto contained in this quarterly report. Overview General Western Uranium & Vanadium Corp. (“Western” or the “Company”, formerly Western Uranium Corporation) was incorporated in December 2006 under the Ontario Business Corporations Act. On November 20, 2014, the Company completed a listing process on the Canadian Securities Exchange (“CSE”). As part of that process, the Company acquired 100% of the members’ interests of Pinon Ridge Mining LLC (“PRM”), a Delaware limited liability company. The transaction constituted a reverse takeover (“RTO”) of Western by PRM. Subsequent to obtaining appropriate shareholder approvals, the Company reconstituted its board of directors and senior management team. Western is a Canadian domestic issuer and Canadian reporting issuer. On August 18, 2014, the Company closed on the purchase of certain mining properties in Colorado and Utah from Energy Fuels Holding Corp. Assets purchased included both owned and leased lands in Utah and Colorado, and all represent properties that have been previously mined for uranium to varying degrees in the past. The acquisition included the purchase of the Sunday Mine Complex. The Sunday Mine Complex is located in western San Miguel County, Colorado. The complex consists of the following five individual mines: the Sunday mine, the Carnation mine, the St. Jude mine, the West Sunday mine and the Topaz Mine. The operation of each of these mines requires a separate permit, and all such permits have been obtained by Western and are currently valid. In addition, each of the mines has good access to a paved highway, electric power to existing declines, office/storage/shop and change buildings, and an extensive underground haulage development with several vent shafts complete with exhaust fans. The Sunday Mine Complex is the Company’s core resource property and in July 2021 was assigned “Active” status when mining operations were restarted. On September 16, 2015, Western completed its acquisition of Black Range, an Australian company that was listed on the Australian Securities Exchange until the acquisition was completed. The acquisition terms were pursuant to a definitive Merger Implementation Agreement entered into between Western and Black Range. Pursuant to the agreement, Western acquired all of the issued shares of Black Range by way of Scheme of Arrangement (“the Scheme”) under the Australian Corporation Act 2001 (Cth) (the “Black Range Transaction”), with Black Range shareholders being issued common shares of Western on a 1 for 750 basis. On August 25, 2015, the Scheme was approved by the shareholders of Black Range, and on September 4, 2015, Black Range received approval by the Federal Court of Australia. In addition, Western issued options to purchase Western common shares to certain employees, directors, and consultants. Such stock options were intended to replace Black Range stock options outstanding prior to the Black Range Transaction on the same 1 for 750 basis. Under United States Securities and Exchange Commission (“Commission”) rules, the Black Range transaction triggered the Company being deemed a United States domestic issuer and losing its foreign private issuer exemption. On April 29, 2016, the Company filed a Form 10 registration statement with the Commission after shifting its basis of accounting from IFRS to U.S. GAAP. On June 28, 2016, the Company’s registration statement became effective and Western became a United States reporting issuer. On June 30, 2023, Western re-qualified as a foreign private issuer as that term is defined in Rule 3b-4(c) promulgated under the Exchange Act. As a result, the Company may now utilize certain accommodations made to foreign private issuers, including (1) an exemption from complying with the Commission’s proxy rules, (2) an exemption from the Company’s insiders having to comply with the reporting and short-swing trading liability provisions of Section 16 under the Exchange Act, (3) the ability to make periodic filings with the Commission on the Form 20-F and Form 6-K foreign issuer forms, and (4) the ability to offer and sell unrestricted securities outside of the United States pursuant to Rule 903 of Regulation S. The Company plans to take advantage of these accommodations. However, the Company currently has decided to voluntarily continue to file periodic reports with the Commission using domestic issuer forms including filing annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. On the subsequent measurement date, June 30, 2024, Western reconfirmed its qualification as a foreign private issuer. 18 The Company has registered offices at 5 Church Street, Toronto, Ontario, Canada, M5E 1M2, and its common shares are listed on the CSE under the symbol “WUC” and are traded on the OTCQX Best Market under the symbol “WSTRF”. Its principal business activity is the acquisition and development of uranium and vanadium resource properties in the states of Utah and Colorado in the United States of America (“United States”). Recent Developments Ore Purchase Agreement On April 8, 2025, PRM entered into an Ore Purchase Agreement (the “Ore Purchase Agreement”) with subsidiaries of Energy Fuels Inc. (“Purchaser”). The Ore Purchase Agreement is for a one year period and provides for the delivery of up to 25,000 short tons of uranium bearing ore to the White Mesa Mill in Blanding, Utah. PRM shall make deliveries at its own cost and the purchase price per ton will be based upon the average grade of uranium within each lot, and other qualifying conditions. Within 30 days after each lot is closed, the Purchaser shall pay to PRM an 85% provisional payment calculated based upon the sampled grade and an agreed upon pricing schedule. Within 30 days after each lot is fed to processing, the Purchaser shall pay to PRM a final settlement payment calculated based upon the assayed grade and the agreed upon pricing schedule, net of a royalty, pursuant to a previously existing royalty agreement with the Purchaser. During April and May of 2025, the Company focused on the operational preparations required to commence ore deliveries. During this period, an additional ore pad was constructed, equipment and vehicles were prepared and new equipment was purchased. As Western is planning to make deliveries with its own trucks and drivers, there were logistical, transportation, permitting, regulatory, insurance and driver qualification matters to finalize. In preparation for transport, significant quantities from the underground stockpiles have been hauled to the Sunday Mine Complex ore pads. Sunday Mine Complex Project Update In response to elevated uranium prices during early 2024, Western spent 2024 ramping up operations to achieve its annualized production target of 1 million pounds of uranium and 6 million pounds of vanadium. Following the expansion of infrastructure deeper into the West Sunday Mine, the mining teams commenced driving a drift to the Leonard & Clark deposit and the drilling teams continued to define additional mining areas utilizing underground horizontal drilling. During the third quarter of 2024, the operations team moved to an area of the Sunday Mine where the last operator ceased production. Existing underground workings were rehabilitated and utilities were installed in a large stope area close to the former production face. With the recent decline in uranium prices, there has been a corresponding reduction in mining operations in 2025. The development of the Sunday Mine Complex will be the secondary focus during 2025 as the mining team will be alternating between mine development and hauling / delivery activities related to the Ore Purchase Agreement. In the first quarter of 2025, the extension of the GMG deposit secondary escape has been the main underground project. Mustang Mineral Processing Plant Our current plans call for the permitting and construction of a mineral processing plant at this newly acquired site in Colorado. Western expects to benefit from the prior site owner’s completion of all phases of licensing and permitting of their Pinon Ridge Mill project. The Company’s plans are to develop its initial mill at the Colorado location, which is much closer to the Sunday Mine Complex. This mill is expected to have a cost of approximately $75 million. This facility will be designed to recover uranium and vanadium both from conventional materials mined from Company mines and materials produced by other mining companies. The processing plant will utilize the latest processing technology, including Western’s patented Kinetic Separation process. These technology advancements will result in lower overall capital and processing costs. After permitting and construction, and subject to available financing, the processing of uranium and vanadium materials is targeted to commence in 2029. Site improvements were made as monitoring equipment and infrastructure were installed and the existing roads were graded. Air and water baseline data was collected for the full first quarter 2025. Western is working to verify that the original data collected by the prior owners is consistent with the data collected by Western beginning in the first quarter of 2025. A minimum of two to three quarters of data collections will be needed to make that comparison. Both datasets will be utilized for a projected 2026 licensing application submission. Mustang Mineral Mill Site Acquisition On October 1, 2024, Western, through its wholly owned subsidiary, Western Utah, executed a binding stock purchase agreement to purchase 100% of the shares of PRC from a private investor group and thereby acquire Mustang, which is a wholly owned subsidiary of PRC. Mustang owns an 880-acre property located in Montrose County, Colorado, where a uranium processing mill was previously licensed but never constructed. The transaction was accounted for as a purchase of an asset. The Company assumed an obligation to an unrelated third party to remit a royalty based on the volume of minerals processed through any mineral processing plant located on the property. The acquisition becomes the second property that Western has acquired, in addition to the Maverick site in Utah. It also becomes part of Western’s plans for developing and licensing one or more uranium and vanadium processing facilities to process production from its resource properties in Colorado and Utah. George Glasier, the President, CEO and a director of Western, and his wife Kathleen owned 50% of the shares of PRC and Andrew Wilder, a director of Western, indirectly owned 3% of the shares of PRC, and so the transaction was considered a related party transaction. The Company’s Board of Directors established an independent committee of the Board comprised of directors who were not considered to have an interest in the transaction, and the independent committee oversaw the negotiation and approved the entering into the agreement on behalf of the Company. The total purchase price of PRC was $1.98 million, which consisted of an aggregate of $829,167 in payments to former PRC shareholders for their equity interests and outstanding loans made to PRC and related accrued interest and a $1,148,125 payment for principal and interest to a third party in satisfaction of an assumed liability of Mustang. For the 53% ownership of PRC, $414,584 was paid to George Glasier and $24,875 was paid to an affiliate of Andrew Wilder. 19 San Rafael The San Rafael Uranium Project, located in Emery County, Utah, is being developed as the Company's second production facility. During the second quarter 2024, Western submitted a Notice of Intent to the U.S. Bureau of Land Management (“BLM”) that was approved for a mineral and groundwater exploration project. During the third quarter of 2024, Utah’s Division of Oil, Gas & Mining gave its approval of the exploration permit application and the Company posted a $60,300 financial guarantee of reclamation costs with the BLM. Currently all permits have been received that are needed for the drilling of monitor wells, and sinking of a mine shaft. When site work commences, following the completion of repairs to access roads, the phase 1 drilling program can begin. Initially, groundwater monitoring wells will be installed at five drilling locations, reaching depths of approximately 1,000 feet. During the borehole completion process, mineralization will also be assessed and confirmed against historical drill data. This project will provide the baseline data needed for permitting application submission. This project is currently on hold as our mining staff is focused on activities related to the Ore Purchase Agreement and mining operations at the Sunday Mine Complex. Maverick Minerals Processing Plant The development of the Maverick Minerals Processing Plant in Green River, Utah, has advanced since the land package acquisition was completed in 2023. Subsequently, a full team of consulting firms was chosen and engaged for their expertise in engineering / mill design, permit preparation, environmental, hydrology, and air quality. The project design and permitting activities include site evaluation work, compilation of a preliminary plant and property site plan, baseline data collection, plant and animal studies and a cultural survey. Additional consulting commitments were made to advance the licensing and development with Precision Systems Engineering (“PSE”), a leading engineering and design consulting firm headquartered in Sandy, Utah. The next steps were for PSE to complete a preliminary engineering design and cost estimate for a 500 ton per day mill and the installation of monitor wells. However, additional work has been deferred for Western to reassess its design strategy now that it has purchased a previously licensed mill site in Colorado (Mustang Mineral Processing Plant formerly the Pinon Ridge Mill). As processing facility development efforts have been shifted, some of the Maverick site infrastructure has been relocated to the Mustang site and notably the preliminary engineering work is also transferable. The Maverick site is located in close proximity (approximately 4 miles) to the San Rafael Uranium Project, however, it is approximately 170 miles from the Sunday Mine Complex. Stockpiled Mined Materials Inventory From December 2021 through March 2022, 3,140 tons of uranium/vanadium material was mined from the Sunday Mine Complex. The mining contractor calculated uranium grades based upon scintillometer sampling of each 10-ton truckload and vanadium quantities were derived by applying the 6:1 historical ratio. The estimated stockpiled inventory is 50,289 pounds of uranium and 301,736 pounds of vanadium. The value of this stockpile is not reflected as an asset on the balance sheet as the costs to produce the stockpiled inventory was expensed in accordance with Regulation SK-1300. The in-house mining team stockpiled limited quantities of additional mined material in 2024. It is Western’s intent to sell a portion of this stockpiled material to Energy Fuels under the Ore Purchase Agreement. In the recent past, during mine development activities, we have attempted to drift around mineralization, leaving the seam faces for quick access during the next period of full production. Each historical work project has yielded underground stockpiles as higher grade material was intersected, and this uranium/vanadium inventory is not included in the pounds of uranium and vanadium quantified above. 20 Bullen Property (Weld County) In 2017, the Company entered into an oil and gas lease that became effective with respect to minerals and mineral rights owned by the Company of approximately 160 surface acres of the Company’s mining property in Colorado. As consideration for entering into the lease, the lessee has agreed to pay the Company a royalty from the lessee’s revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest. The Company has also received cash payments from the lessee related to the easement that the Company is recognizing incrementally over the eight year term of the easement. On June 23, 2020, the operator elected to extend the oil and gas lease easement for three additional years through July 2023. This was done to provide additional time in order to complete well construction and commence oil and gas production. During 2021, the operator completed a first set of eight (8) wells which commenced oil and gas production by August 2021. During 2022, the operator completed a second set of eight (8) wells which commenced oil and gas production by August 2022. All sixteen (16) wells remain in production and monthly royalty payments will be ongoing in perpetuity as long as oil and/or gas are produced from the pooled unit containing these sixteen (16) wells. During the three months ended March 31, 2025 and 2024, we recognized aggregate revenue of $41,221 and $54,273, respectively, under these oil and gas lease arrangements. For the three months ended March 31, 2025, oil and gas royalties declined due to lower volumes attributable to production decline curves. Kinetic Separation Licensing On December 1, 2016 a determination was made by the CDPHE considering the NRC Advisory Opinion, the Colorado public meeting process, and the CDPHE regulatory and evaluation framework. This determination stated that the proposed Kinetic Separation operations at the Sunday Mine by Black Range Minerals must be regulated by the CDPHE through a milling license. Previously, the Company was unable to deploy Kinetic Separation as it was without a regulatory framework, but as a result of this determination the Company is now able to deploy Kinetic Separation under a milling license. The Colorado milling license that Western is currently seeking will likely incorporate Kinetic Separation via an amendment to the initial license – as Western’s current plan is to submit a licensing application that is substantially identical to the application that was used previously for the Pinon Ridge Mill (which did not include the Company’s Kinetic Separation technology). Biden-Harris, Trump 1.0 and Trump 2.0 Administration Initiatives During the first Trump Administration, the U.S. government focused on market distortions caused by foreign state-owned enterprises and the economic and geopolitical influence lost by allowing Russia and China to take the global lead in nuclear power. In support of the world’s largest civilian nuclear reactor fleet, the U.S. has implemented some of the recommendations of the Nuclear Fuel Working Group which followed the uranium Section 232 investigation. This led to the implementation of the Uranium Reserve Program and the American Assured Fuel Supply program. Subsequently, the Russia/Ukraine war has highlighted the nuclear fuel supply chain risks and the geopolitical risks of dependence on the direct and indirect sourcing of nuclear fuel from state owned enterprises in Russia and former Soviet Union republics. Upon taking office, the Biden-Harris Administration team immediately rejoined the Paris Climate Accord, reversed a number of pro-fossil fuel energy policies, and gave all agencies climate change initiatives. The Administration worked to advance a national clean energy standard. In August 2022, the Inflation Reduction Act was signed into law authorizing governmental investments of approximately $369 billion in climate and energy, a portion of which would benefit the U.S. domestic nuclear industry and battery technologies. 21 In November 2024, the United States held a highly contested Presidential election between Republicans (Trump-Vance) and Democrats (Harris-Walz). The Trump-Vance Republican ticket won, returning former President Donald Trump to the Presidency. Republicans also achieved Congressional majorities in both the Senate and House of Representatives. Nuclear energy now enjoys bipartisan support. However, with the change in Presidential Administrations, the Biden emphasis on climate change and clean energy initiatives was replaced by Trump pro-energy initiatives. In his first day in office, President Trump signed Executive Orders declaring a National Energy Emergency and a U.S. withdrawal from the Paris Climate Agreement for a second time. The new administration is seeking a reduction in the federal government’s size and regulatory power; we believe this is likely to expedite the permitting and development of energy resource projects. The Trump Administration has put forth multiple measures that are very positive for U.S. domestic energy, mining and Western. On February 14, 2025, President Trump signed an Executive Order creating the National Energy Dominance Council. On March 20, 2025 to boost domestic production of critical minerals and reduce reliance on foreign imports, President Trump signed an Executive Order titled “Immediate Measures to Increase American Mineral Production.” On April 9, 2025, President Trump signed an Executive Order entitled “Zero-based Regulatory Budgeting to Unleash American Energy” to reduce costs on energy production by requiring conditional sunset dates for regulations. Then on April 15, 2025, an Executive Order was released entitled “Ensuring National Security and Economic Resilience through Section 232 Actions on Processed Critical Minerals and Derivative Products”. The Department of the Interior followed on April 23, 2025, by implementing emergency permitting procedures to strengthen domestic energy supply. In April / May 2025, in response to President Trump’s earlier March 20, 2025 Executive Order, the Federal Permitting Improvement Steering Council announced the first two waves of critical mineral production projects selected to benefit from expedited permitting, the second included two uranium projects. The capital markets have yet to reflect the very positive impact of these pro-energy policies for the uranium mining sector as this has initially been overshadowed by the announcements of U.S. tariffs and reciprocal tariffs on the U.S.’s largest trading partners. United States Ban of Russian Uranium due to Russian Invasion of Ukraine In response to Russia’s war in Ukraine, the U.S. legislature passed the Prohibiting Russian Uranium Imports Act (H.R. 1042) to ban Russian uranium imports into the United States. Unanimous passage in April 2024 by the U.S. Senate followed the U.S. House of Representatives’ passage of the bill in December 2023. Subsequently, on May 13, 2024, President Biden signed this legislation into law. The ban became effective 90 days after its enactment on August 11, 2024 and is being phased in under Department of Energy conditional waivers before becoming a complete ban on January 1, 2028. Importantly, the enactment of a Russian ban releases funding to support the American nuclear supply chain. This funding was deployed by the DOE under a new program called the Low-Enriched Uranium (LEU) – Enrichment Acquisition. The United States has the world’s largest civilian nuclear reactor fleet, and it has now taken steps to reduce its reliance on state-sponsored Russian nuclear fuel. 22 In November 2024, in response to the U.S. ban on Russian uranium imports, Russia imposed a counter restriction on the export of enriched uranium to the United States. This was designed to create maximum uncertainty through its implementation on a shipment-by-shipment basis. Also in December 2024, Russia’s national nuclear company sold a 49% minority stake in a joint venture in a Kazakhstan uranium mine to a Chinese state-owned company. It was reported that this was done due to difficulties selling uranium to European or North American buyers due to sanctions recently imposed upon Russia. The war in Ukraine is ongoing and it is unclear at this time when and how it will end but the parties have commenced negotiations under the guidance of the Trump Administration. In the early days of the new administration, President Trump appeared to be more open toward Russia’s interests, which caused concern from traditional European allies. Recently, the Trump’s Administration position regarding the war in Ukraine has become more balanced. The earlier embrace of Russia negatively impacted the prices of uranium equities and physical uranium commodities during the first quarter of 2025. Nuclear Fuel and Uranium Market Conditions During the three months ended March 31, 2025, the spot uranium price decreased $9 from $73 to ~$64, and then rebounded to the $70 level by mid-May 2025. Notably, over this same three month period, the long-term price was steady at ~$80. However, this follows an extremely strong period in the market where spot uranium prices have reacted to supply/demand constraints and geopolitical risks. Since January 2024 and through April 2025, spot uranium had a slow decline from a high of $100/lb level to the aforementioned levels. There are positive catalysts across multiple levels of the nuclear fuel and uranium markets that. have set in motion uranium market and nuclear fuel opportunities for the next decade and beyond. Underlying fundamentals are the strongest in decades. This is attributable to multiple factors, including climate change, energy security, supply chain and energy scarcity initiatives. The supply/demand imbalance has flipped from a market with excess supply into a market with excess future demand. With the reduced availability of secondary supplies, utilities have begun adding multi-year contracts with mining companies for primary supply. The drivers expanding the demand for nuclear fuel include non-nuclear nations adding nuclear power generation, nuclear nations expanding fleets and/or extending lives of existing reactors, idled nuclear reactors being redeployed, the reversal of phase-outs and shutdowns, and the deployment of advanced reactors / SMRs. However, the challenge is in meeting increasing demand simultaneously with supply constraints from the world’s largest suppliers. We believe uranium equity prices will continue to strengthen and reflect the underlying positive fundamentals in the nuclear/uranium sector. Multiple market analysts have flagged low availability of mobile secondary inventories. We believe the continued draw down of inventories to be a market catalyst for uranium prices. Positive nuclear energy news has continued to highlight the global growth of future nuclear electricity generation which will drive increased nuclear fuel demand. However, due to the lead time needed for future uranium production, we are entering a phase where the supply-demand fundamentals are in a deep multi-year structural supply deficit. The future is not clear as we believe some miners with available near-term production are waiting for higher price levels and/or project funding before making full start-up commitments. Utilities have also deferred contracting to understand how regulations and geopolitics will modify their future access to Russian uranium, conversion and enrichment services. In the second quarter of 2024, investors began purchasing nuclear and uranium equities as a means to create long exposure for their positive view on Artificial Intelligence (AI), due to the vast energy requirements of data centers. Recent transactions have been announced as tech giants Microsoft, Amazon, and Google have sought deals to source nuclear power for their data centers from full scale reactors and SMRs. Microsoft most prominently signed an agreement with Constellation Energy to restart a Three Mile Island reactor in Pennsylvania and purchase 100% of the power generated for two decades. Many investors reversed their positions and began to sell these nuclear and uranium equities in the fourth quarter of 2024 and in the first quarter of 2025, and the nuclear and uranium equities that initially benefited saw a price reversal. Nuclear Fuel Supply Chain Concentration Risks Russia’s invasion of Ukraine and the ensuing global energy crisis has focused attention on security of supply and supply chain risks. This has caused most of the world to re-evaluate their dependence upon nuclear fuel exported by Russia. In spite of the dominant market position of Rosatom, future deliveries potentially could be at risk due to sanctions, legislation, or a Russian embargo. Customer dependence upon the Russian supply of uranium, conversion and enrichment are being addressed slowly by governments as alternative suppliers are not currently available. Both Urenco and Orano have announced that they will invest to expand their uranium enrichment capacity respectively in the United States and France, which represents a shift away from Russia. Utilities are demonstrating their desire for increased security of their nuclear fuel supply chains. Kazakhstan is also a concern because the world’s largest uranium producing country has an unguarded and the second longest continuous land border in the world shared with Russia. The potential exists for Russia to exert influence over Kazakhstan. Additionally, Kazatomprom has put large long-term contracts in place with China. This supply is needed for China to fulfill its 15 year plan to deploy 150 new nuclear reactors. China National Nuclear Corp. (CNNC) has recently opened a uranium trading hub /warehouse facility, on the China / Kazakhstan border, with the capacity to store 60 million pounds of uranium. It has become evident that the nuclear fuel supply chain has become increasingly concentrated and interconnected in this very small area of the world. Expanding Kazakhstan uranium exports to Russia and China significantly reduces future supply for Western nuclear fuel buyers. 23 In July 2023, the government of Niger was overthrown by its military. This is significant because the new regime is opposed to Western interests and this landlocked West African country holds the 7th largest uranium resource in the world and was producing about 5% of global production. The conflict has an anti-French sentiment, and the Junta has initiated multiple actions that are counter to French interests. Most importantly, Niger’s Junta has threatened the export of uranium to France which has serious implications because France acquires 20% of its natural uranium from Niger. In addition to the French evacuating/ being expelled from Niger, the U.S. military also departed the country. The Junta is utilizing Russian military support as a replacement. In addition, the Niger government has revoked operating permits from foreign uranium companies, including Orano in June 2024 and Goviex in July 2024. In November 2024, Orano further reported that it had lost operational control, to authorities in Niger, of another of its uranium mines. This mine was in production, but had been impacted by export restrictions imposed by the Junta. During October 2023, geopolitical instabilities spread further to the Middle East after a Hamas attack on Israel triggered a counterattack by Israel on the Gaza Strip. The Israel-Hamas hostilities have escalated over the Summer of 2024 and then spread to other countries in the Middle East. At the beginning of 2025, Israel and Hamas agreed to a ceasefire which ended in March 2025; the hostilities resumed in March and it’s not clear when and if the combatants will be able to negotiate a new ceasefire or an end to military actions. This additional hot spot further increases volatility in the world and destabilizes the Middle East region that is highly influential on global energy prices. Recently, India and Pakistan have exchanged small, but escalating strikes against each other’s interests. This is a concern as both countries have nuclear weapons capabilities. Results of Operations The following table presents the Company’s financial results for the three months ended March 31, 2025 and 2024. For the Three Months Ended March 31, 2025 2024 Revenues $ 41,221 $ 54,273 Expenses Mining expenditures 1,691,149 1,308,879 Professional fees 171,620 112,690 General and administrative 732,078 966,245 Consulting fees 115,148 193,426 Total operating expenses 2,709,995 2,581,240 Operating loss (2,668,774 ) (2,526,967 ) Accretion and interest income, net 31,159 50,079 Net loss (2,637,615 ) (2,476,888 ) Other comprehensive (loss) income Foreign currency translation adjustment (15,335 ) (142,359 ) Comprehensive loss $ (2,652,950 ) $ (2,619,247 ) Three Months Ended March 31, 2025 as Compared to the Three Months Ended March 31, 2024 Summary: Our condensed consolidated net loss for the three months ended March 31, 2025 and 2024 was $2,637,615 and $2,476,888, respectively. The principal components of these quarter over quarter changes are discussed below. Our comprehensive loss for the three months ended March 31, 2025 and 2024 was $2,652,950 and $2,619,247, respectively. 24 Revenues Our revenue for the three months ended March 31, 2025 and 2024 was $41,221 and $54,273, respectively. The decrease in revenues of $13,052, or 24% was primarily related to lower oil and gas well volumes attributable to production decline curves during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 and lower oil prices in the most recent quarter. Mining Expenditures Mining expenditures for the three months ended March 31, 2025 were $1,691,149 as compared to $1,308,879 for the three months ended March 31, 2024. The increase in mining expenditures of $382,270, or 29% was principally attributable to scaling up mining activities at the Company’s Sunday Mine Complex which involved the hiring of additional mining personnel, increased mining services and supplies costs, and increased maintenance and depreciation costs for mining equipment placed into service. Professional Fees Professional fees for the three months ended March 31, 2025 were $171,620 as compared to $112,690 for the three months ended March 31, 2024. The increase in professional fees of $58,930, or 52% was due to increased accounting and legal costs in connection with growth in our business and mining operations, as well as seasonal increases in our public company compliance costs. General and Administrative General and administrative expenses for the three months ended March 31, 2025 were $732,078 as compared to $966,245 for the three months ended March 31, 2024. The decrease in general and administrative expense of $234,167, or 24%, is primarily due to a decrease in non-cash stock-based compensation expense and a reduction in the administrative payroll expense. Consulting fees Consulting fees for the three months ended March 31, 2025 were $115,148 as compared to $193,426 for the three months ended March 31, 2024. The decrease in consulting fees of $78,278, or 40%, was due to a spending shift in the mineral processing plant licensing costs from engineering to baseline data collection studies. Accretion and interest income, net Accretion and interest income, net for the three months ended March 31, 2025 was $31,159 as compared to $50,079 for the three months ended March 31, 2024. The decrease in interest income, net of $18,920 or 38% was principally attributable to a decrease in interest earned, on account of a lower level of interest yielding cash balances during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Foreign currency translation adjustment Foreign currency translation adjustment for the three months ended March 31, 2025 was a loss of $15,335 as compared to a loss of $142,359 for the three months ended March 31, 2024. The lower foreign currency translation adjustment for the three months ended March 31, 2025 was principally attributable to narrower exchange rate changes during the quarter, as compared to exchange rate changes during the March 31, 2024 quarter. Liquidity and Capital Resources Our cash and cash equivalents and restricted cash balances as of March 31, 2025 was $3,936,395. Our cash position is highly dependent on our ability to raise capital through the issuance of debt and equity and our management of expenditures for mining and for the development of our mineral processing plant and for the fulfillment of our public company reporting responsibilities. Our management believes that in order to finance the development and mining operations of our mining resource properties, to construct our Kinetic Separation equipment and operations and to secure regulatory licenses for and to construct our uranium and vanadium mineral processing facilities, we will be required to raise additional capital by way of debt and/or equity. We will also require additional working capital to continue to scale-up our mining operations at the Sunday Mine Complex and develop secondary production facilities. This outlook is based on our current financial position and is subject to change if opportunities become available based on current exploration program results and/or external opportunities. Net cash used in operating activities Net cash used in operating activities for the three months ended March 31, 2025 and 2024 was $2,186,106 and $1,757,471, respectively. The increase of $428,635 in cash used in operating activities was principally driven by an increase in net loss of $160,727 and a decrease of $245,377 in stock-based compensation. Net cash used in investing activities Net cash used in investing activities for the three months ended March 31, 2025 and 2024 was $166,507 and $403,369, respectively. The decrease in cash used in investing activities of $236,862 was principally due to reduced acquisitions of mining equipment and vehicles in the current quarter, as compared to the prior period, during which there was a greater emphasis on acquiring additional equipment and scaling up mining capacity due to elevated uranium price levels. 25 Net cash provided by financing activities Net cash provided by financing activities for the three months ended March 31, 2025 and 2024 was $0 and $4,605,458, respectively. The cash provided by financing activities of $4,605,458 during the three months ended March 31, 2024 was due in its entirety from warrant exercise proceeds. Asset Retirement Obligations Our mines are subject to certain AROs, which we have recorded as liabilities. The AROs of the United States mines are subject to legal and regulatory requirements and estimates of the costs of asset retirement obligations are reviewed periodically by the applicable regulatory authorities. The ARO represents our best estimate of the present value of future reclamation costs in connection with the mineral properties. We determined the gross ARO of the mineral properties to be $1,163,157 and $1,163,978, as of March 31, 2025 and December 31, 2024, respectively. The portion of the asset retirement obligation related to the Van 4 Mine, which is in reclamation as of March 31, 2025, and its related restricted cash are included in current liabilities and current assets, respectively, at a value of $75,075. During the three months ended March 31, 2025, our internal mining operations team has been performing the Van 4 Mine reclamation work, and the State of Colorado has not yet reduced the associated asset retirement obligation amount. The asset retirement obligations represent the Company’s estimate of the present value of future reclamation costs, discounted using a credit adjusted risk-free interest rates of 5.4%. The net discounted aggregated values as of March 31, 2025 and December 31, 2024 were $415,482 and $410,098, respectively. The gross AROs as of March 31, 2025 and December 31, 2024 are secured by financial warranties in the amount of $1,163,157 and $812,993, respectively. Oil and Gas Lease and Easement We entered into an oil and gas lease that became effective with respect to minerals and mineral rights owned by us on approximately 160 surface acres of our property in Colorado. As consideration for entering into the lease, the lessee has agreed to pay us a royalty from the lessee’s revenue attributed to oil and gas produced, saved, and sold attributable to the net mineral interest. We have also received cash payments from the lessee related to the easement that we are recognizing incrementally over the eight year term of the easement. On June 23, 2020, the same entity as discussed above elected to extend the oil and gas lease easement for three additional years, commencing on the date the lease would have previously expired. During 2021, the operator completed a first set of eight (8) wells which commenced oil and gas production by August 2021. During 2022, the operator completed a second set of eight (8) wells which commenced oil and gas production by August 2022. All sixteen (16) wells remain in production and monthly royalty payments will be ongoing in perpetuity as long as oil and/or gas are produced from the pooled unit containing these sixteen (16) wells. Under the oil and gas lease and easement arrangements, during the three months ended March 31, 2025 and 2024, we recognized aggregate revenue of $41,221 and $54,273, respectively, under these oil and gas lease arrangements Related Party Transactions We have transacted with related parties pursuant to service arrangements in the ordinary course of business, as follows: Prior to the acquisition of Black Range, Mr. George Glasier, the Company’s CEO, who is also a director of the Company (“Seller”), transferred his interest in a former joint venture with Ablation Technologies, LLC to Black Range. In connection with the transfer, Black Range issued 25 million shares of Black Range common stock to Seller and committed to pay $312,343 (AUD $500,000) to Seller within 60 days of the first commercial application of the Kinetic Separation technology. We assumed this contingent payment obligation in connection with the acquisition of Black Range. At the date of the acquisition of Black Range, this contingent obligation was determined to be probable. Since the deferred contingent consideration obligation is probable and the amount is estimable, we recorded the deferred contingent consideration as an assumed liability in the amount of $312,343 and $309,138 as of March 31, 2025 and December 31, 2024, respectively. We have multiple lease arrangements with Silver Hawk Ltd., an entity which is owned by George Glasier and his wife Kathleen Glasier. These leases, which are all on a month-to-month basis, are for the rental of office, workshop, warehouse and employee housing facilities. We incurred rent expense of $26,325 and $23,525 in connection with these arrangements for the three months ended March 31, 2025 and 2024, respectively. We are obligated to pay Mr. Glasier for reimbursable expenses in the amount of $18,067 and $83,554, included within accounts payable and accrued liabilities, as of March 31, 2025 and December 31, 2024, respectively. 26 Going Concern With the exception of the quarter ended June 30, 2022, we had incurred losses from our operations and as of March 31, 2025, had an accumulated deficit of $31,567,509 and working capital of $2,554,752. Since inception, we have met our liquidity requirements principally through the issuance of notes, the sale of our common shares and from limited revenue sources. During November 2024, we closed a private placement of 4,142,906 units at a price of $0.94 (CAD $1.32) per unit. The aggregate gross proceeds raised in the private placement amounted to $3,897,166 (CAD $5,468,636) and proceeds net of issuance costs were $3,546,870 (CAD $4,975,966). During year ended December 31, 2024, we received $4,605,458 (CAD $6,238,248) in proceeds from the exercise of common share warrants to purchase 5,198,540 common shares. Our ability to continue our operations and to pay our obligations when they become due is contingent upon us obtaining additional financing. Management’s plans include seeking to procure additional funds through debt and equity financings, to secure regulatory approval licenses to fully utilize our Kinetic Separation and to permit and construct the Mustang Minerals Processing Plant for the processing of uranium and vanadium to generate operating cash flows. We will also require capital to fund the ongoing in-house mining operations at the Sunday Mine Complex. There are no assurances that we will be able to raise capital on terms acceptable to us or at all, or that cash flows generated from our operations will be sufficient to meet our current operating costs and required debt service. If we are unable to obtain sufficient amounts of additional capital, we may be required to reduce the scope of our planned product development, which could harm our financial condition and operating results, or we may not be able to continue to fund our ongoing operations. These conditions raise substantial doubt about our ability to continue as a going concern to sustain operations for at least one year from the issuance of the accompanying financial statements. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Off Balance Sheet Arrangements As of March 31, 2025, there were no off-balance sheet transactions. We have not entered into any specialized financial agreements to minimize our investment risk, currency risk or commodity risk. Critical Accounting Estimates and Policies The preparation of these condensed interim consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed interim consolidated financial statements and reported amounts of expenses during the reporting period. Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, include, but are not limited to, the following: fair value of transactions involving common shares, assessment of the useful life and evaluation for impairment of intangible assets, valuation and impairment assessments on mineral properties, deferred contingent consideration, the reclamation liability, valuation of stock-based compensation and valuation of long-term debt, HST and asset retirement obligations. Other areas requiring estimates include allocations of expenditures, depletion and amortization of mineral rights and properties. Item 3. Quantitative and Qualitative Disclosures About Market Risk Not applicable.