NexMetals Mining Corp.: Form 10-Q for the period ended Mar 31, 2025

The following management’s discussion and analysis (this “MD&A”) of our financial condition and results of operation should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company and accompanying notes thereto for the quarters ended March 31, 2025 and 2024 (the “Quarterly Financial Statements”) appearing elsewhere in this Report. This discussion and analysis below includes forward-looking statements that are subject to risks, uncertainties and other factors described in the “Risk Factors” section set forth in the 2024 Form 10-K that could cause actual results to differ materially from those anticipated in these forward-looking statements as a result of various factors. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We caution you to read the “Cautionary Note Regarding Forward-Looking Statements” section of this Report.

This MD&A is intended to assist the reader to assess material changes in the financial condition of the Company during the quarter ended March 31, 2025, and the results of operations of the Company for the three-month periods ended March 31, 2025 and March 31, 2024. The Quarterly Financial Statements and the financial information contained in this MD&A were prepared in accordance with US GAAP and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission.

In this MD&A, unless the context otherwise requires, references to the Company or PREM refer to Premium Resources Ltd. and its consolidated subsidiaries. All monetary amounts in the discussion are expressed in Canadian dollars unless otherwise indicated.

This MD&A contains forward-looking information within the meaning of applicable securities laws. All forward-looking information, including information not specifically identified herein, is made subject to cautionary language in this MD&A. Readers are cautioned to refer to the disclosure in this Report under the heading “Cautionary Note Regarding Forward-Looking Statements” when reading any forward-looking information.

Company Overview

PREM is a mineral exploration and evaluation company focused on the discovery and advancement of high-quality nickel-copper-cobalt-platinum group elements (“Ni-Cu-Co-PGE”) resources. The principal assets of the Company are the Selebi Main and Selebi North nickel-copper-cobalt (“Ni-Cu-Co”) mines in Botswana and related infrastructure (together, the “Selebi Mines”), as well as the Ni-Cu-Co-PGE Selkirk mine in Botswana, together with associated infrastructure and four surrounding prospecting licenses (collectively, the “Selkirk Mine” and together with the Selebi Mines, the “Mines”). PREM is committed to governance through transparency, accountability, and open communication within PREM’s team and stakeholders.

The Company’s principal business activity is the exploration and evaluation of the Mines.

The Selebi and Selkirk mines are permitted with 10-year mining licences, granted in 2022, and renewable upon the submission of approved mine plans and other customary conditions, and benefit from significant local infrastructure. The Company’s flagship Selebi Mines include two operational shafts, the Selebi Main and Selebi North shafts, and related infrastructure such as rail, power and roads.

PREM is headquartered in Toronto, Ontario, Canada and is publicly traded on the TSX Venture Exchange (the “TSXV”) under the symbol “PREM”. Prior to November 20, 2024, the Company traded on the TSXV under its previous name and symbol, Premium Nickel Resources Ltd. and PNRL, respectively. In addition, the Company’s common shares (the “Common Shares”) are currently quoted on the OTC Pink Open Market under the symbol “PRMLF”.

Summary of Activities

On January 31, 2025, the Company filed the Selkirk Mineral Resource Estimate (“MRE”) in conformance with the SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary, entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” (the “Selkirk TRS”) and dated January 8, 2025 (with an effective date of November 1, 2024) for its Selkirk Mine. The Selkirk MRE provides a solid foundation for advancing the Selkirk deposit to an economic study.

On March 18, 2025, PREM closed a significant recapitalization (the “March 2025 Financing”) of the Company which included a $46.0 million non-brokered equity private placement (the “Private Placement”) and the equity conversion of its $20.9 million three-year term loan (the “Debt Conversion”) with Cymbria Corporation (“Cymbria”). The March 2025 Financing has resulted in the successful deleveraging of the Company’s balance sheet and has provided the Company with the funds necessary to advance its new strategic direction.

The Company’s strategic direction is aimed at rapidly demonstrating the size potential of the Selebi North and Selebi Main deposits. The Company is aggressively executing a carefully designed exploration drilling program at the Selebi Mines while concurrently finalizing metallurgical work to identify the optimal mineral processing method to consider in a future economic study. In addition, the Company is advancing the Selkirk Mine through low-cost initiatives and evaluating strategic opportunities to enhance its value.

The exploration and development strategy includes the Selebi Main surface drilling program to target a potential third horizon, Hinge drilling between the Selebi North and Selebi Main deposits, Selebi North underground (“SNUG”) resource expansion drilling, underground development in Selebi North to facilitate drilling programs, and a surface drilling program at the Selkirk Mine.

The new strategy also includes advancing project economics through further metallurgical sampling and testing, the evaluation of XRT (“X-ray Transmission”) ore sorting, and the evaluation of IDEON Technologies Inc. for purposes of 3D density mapping. For more information relating to the Company’s new strategic direction, please see “Exploration and Evaluation Activities and Mineral Properties” below.

The Company has also strengthened its management team through the appointment of Morgan Lekstrom as the Company’s new Chief Executive Officer. The Company’s new strategic direction is also further supported by the addition of Frank Giustra and the Fiore Group as strategic advisors to the Company.

During the quarter, the Company announced the remaining results from its infill drill program at SNUG. The Selebi Main surface drilling progressed with the Company having extended historic drillholes by approximately 307 metres in 2 drill holes to-date. The SNUG Resource Expansion Drilling program also commenced, with approximately 2,222 metres in 3 holes drilled to-date. During the quarter, the Company intersected mineralization below the Selebi Mines MRE, confirming the down-plunge continuation of massive sulphides. These assay results will continue to be released as they are received and confirmed by the Company.

For more information relating to the contemplated activities and milestones on the Mines, please see “Exploration and Evaluation Activities and Mineral Properties” below.

Highlights and Key Developments:

• On January 27, 2025, the Company reported significant assay results for two holes that were drilled outside of the Selebi MRE at Selebi North.
• On January 31, 2025, the Company filed the Selkirk TRS. For details of the Selkirk MRE, see “Selkirk Mine, Botswana”.
• On March 18, 2025, the Company closed a $46.0 million Private Placement and Debt Conversion. On March 20, 2025, Morgan Lekstrom was appointed as the Company’s new Chief Executive Officer. For a summary of the transactions, see “Liquidity & Capital Resources — Financings”.
• On March 25, 2025, the Company announced the appointment of Chris Leavy to the board of directors (the “Board of Directors” or the “Board”). The Company also announced the retirement of William O’Reilly as a director of the Company.
• On April 10, 2025, the Company announced a new strategic direction for the Mines. For more information relating to the planned activities over the next six months, see “Exploration and Evaluation Activities and Mineral Properties” below.
• On April 17, 2025, the Company announced additional high-grade assay results from resource reclassification drilling at SNUG.
• On April 24, 2025, the Company announced the appointment of André van Niekerk to the Board. The Company also announced the retirement of Don Newberry as a director of the Company.
• On May 1, 2025, the Company announced that it had successfully intersected mineralization at SNUG below the Selebi Mines MRE confirming the down-plunge continuation of massive sulphides. For details, see “Exploration and Evaluation Activities and Mineral Properties” below.
• On May 6, 2025, the Company announced that it had applied to list its common shares on the Nasdaq Capital Market.

Corporate Social Responsibility

The Company is committed to conducting its business in a socially responsible and sustainable manner, with a focus on environmental stewardship, health and safety, community engagement and ethical conduct. The Company has established policies and procedures in its Code of Business Conduct and Ethics to ensure compliance with applicable laws and regulations, as well as industry standards for responsible mining. PREM recognizes the importance of stakeholder engagement and works closely with local communities, indigenous groups and other stakeholders to ensure their concerns and perspectives are heard and addressed.

Exploration and Evaluation Activities

The following table outlines the key milestones, estimated timing and costs related to each of the Mines, based on the Company’s reasonable expectations, intended courses of action and current assumptions and judgement, with information based as of March 31, 2025.

Notes:

(1) Includes drilling equipment, mobile equipment, and electrical and communications equipment in support of drill programs and underground development.

(2) Includes advancing project economics through further metallurgical sampling and testing, the evaluation of XRT (“X-ray Transmission”) ore sorting, and the evaluation of IDEON Technologies Inc. for purposes of 3D density mapping.

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Readers are cautioned that the above represents the opinions, assumptions and estimates of management considered reasonable at the date the statements are made and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those described above. See “Cautionary Note Regarding Forward Looking Statements”.

Mineral Properties

The information that follows relating to the Selebi Mines is derived from, and in some instances is an extract from, the Selebi Technical Report Summary entitled “S-K 1300 Technical Report Summary Selebi Mines, Central District, Republic of Botswana” with an effective date of June 30, 2024 and a signature date of December 17, 2024 prepared by SLR Consulting (Canada) Ltd. (the “Selebi TRS”), prepared in compliance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K.

The information that follows relating to the Selkirk Mine is derived from, and in some instances is an extract from, the Selkirk Technical Report Summary entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” with an effective date of November 1, 2024 and a signature date of January 8, 2025 prepared by SLR Consulting (Canada) Ltd. (the “Selkrik TRS”), prepared in compliance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K.

The qualified persons of SLR Consulting (Canada) Ltd. meet the qualifications specified under the definition of “qualified person” under Item 1300 of Regulation S-K. Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the Selebi TRS and Selkirk TRS, which have been included as Exhibit 96.1 and 96.2 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, respectively. In the event that we determine that any modifying factors, estimates and other scientific and technical information in the reports materially change, we may update or file a new technical report in the future. The Selebi Mines and Selkirk Mine are exploration stage properties.

Selebi Mines, Botswana

The Selebi Mines are located in Botswana approximately 150 km southeast of the city of Francistown, and 410 km northeast of the national capital Gaborone. The Selebi Mines are readily accessed via paved and gravel roads from the town of Selebi-Phikwe, located just north of the mining licence. With a population of approximately 52,000, the town is accessed via a well-maintained paved road that branches due east from the major A1 highway at the town of Serule, 57 km from the Selebi Mines.

The Selebi Mines infrastructure includes two previously operating mines, Selebi Main (#2 Shaft) and Selebi North (#4 Shaft), and associated surface infrastructure.

The Selebi Mines consists of a single mining licence covering an area of 11,504 hectares. The mining licence is centred approximately at 22°03’00”S and 27°47’00”E.

Mining licence 2022/1L was granted to PNRPL on January 31, 2022, over the Selebi Mines deposits discovered under mining licence 4/72. The original licence which had been granted to BCL Limited (“BCL”) on March 7, 1972, which covered both Selebi and Phikwe project areas, was amended several times and renewed once, and was set to expire on March 6, 2022. The current mining licence is limited to the Selebi and Selebi North deposits and their surrounding areas, expires May 26, 2032, and excludes the Phikwe mines and associated infrastructure.

Selebi Mines Mineral Resource Estimate, June 30, 2024

The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the Selebi TRS. Readers are cautioned not to assume that all or any part of Indicated Mineral Resources will ever be converted into Mineral Reserves as defined by S-K 1300. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.

Selebi North

In 2023, an underground resource and exploration drilling program at Selebi North was initiated. The program was a combination of infill and exploration drilling to follow the extension of the mineralization down-dip and down-plunge. The Company reported the final assays from the 2023/2024 in-fill drill program on April 17, 2025. Supplementary infill drilling has been strategically moved into later work programs.

In March 2025, the Selebi North Underground Resource Expansion Drilling program commenced with one drill rig targeting Borehole Electromagnetic (“BHEM”) plates located down-dip, and down-plunge from the N3, N2, and South Limbs. During 2025 and up to the date of this report, the Company has drilled approximately 2,222 metres in 3 holes. During the quarter, drill hole SNUG-25-184 intersected mineralization 183 metres down-plunge from the Selebi Mines MRE. A BHEM survey in SNUG-25-184 identified strong off-hole responses, indicating both the South Limb and N2 zones remain open down-plunge.

Assays for a total of approximately 34,368 metres across 82 completed holes have not been accounted for in the Initial Selebi MRE. All core is sampled and sent to ALS Chemex in Johannesburg for analysis. All holes are surveyed with a gyro instrument and selected holes are surveyed with BHEM geophysical tools.

Selebi Main

The Company has implemented a surface drilling program at Selebi Main to investigate the potential of a third parallel mineralized horizon beneath the two known zones. The initial drill testing has been through the extension of historic drill holes, to target a large BHEM plate 150 to 200 metres beneath the Selebi Main resource. If successful, this program could lead to the discovery of a new mineralized horizon. These BHEM plates are situated outside the Selebi Mines MRE extents. During 2025 and up to the date of this report, the Company has extended historic drillholes by approximately 307 metres in 2 existing holes.

Selebi Hinge

A large drill capable of drilling to depths of 2,500 metres (NQ core) and kits for converting the two underground U5 drills into surface A5 drills are currently being mobilized from Canada. These are being mobilized for surfacing drilling of the Selebi Hinge, a drilling program targeting BHEM plates in the untested two-kilometre-long area between the Selebi North and Selebi Main deposits. These BHEM targets are situated down-dip and down-plunge of the Selebi Main resource and potentially represent additional mineralization between the two deposits.

Further information on assay results can be found in the Company’s news releases which are available on the Company’s website (https://premiumresources.com) (the Company’s website is not incorporated in this Report). Assay results are publicly released as they are received and confirmed by the Company.

Studies

The historical BCL operations consisted of an integrated mining, concentrating and smelting complex which operated for over 40 years over the Selebi Phikwe project area. The smelter processed Selebi and Phikwe concentrates and toll treated nickel concentrates received from the Nkomati Nickel Mine and the Phoenix Mine. The concentrator plant and smelter were placed on care and maintenance in 2016 and are located adjacent to the Selebi Mines at the historical Phikwe Mine.

PREM intends to use pre-concentration methods to separate the minerals from waste materials to produce a mill feed and flotation to produce a concentrate for commercial sale, or for further refining, and does not plan to restart the existing concentrator or smelter.

Metallurgical sampling and testing from Selebi flotation studies are ongoing. The Company has also begun evaluating XRT ore sorting, which could potentially have a significant impact on waste rock removal. This could in turn positively impact the head feed grade to the concentrate flowsheet, and has the potential to be applied at both the Selebi Mines and Selkirk Mine.

The Company has begun its evaluation of IDEON Technologies Inc., a Company that applies Muon Tomography to create 3D density maps of subsurface mineralization, with the goal of applying this technology at both the Selebi Mines and Selkirk Mine to identify potential areas of additional mineralization.

During the three months ended March 31, 2025, the Company incurred $5,944,153 (three months ended March 31, 2024 - $6,469,929) in exploration and evaluation expenditures on the Selebi Mines. The Company incurred $8,735,401 to acquire the Selebi Mines, and has incurred a further $75,240,729 in exploration and evaluation expenditures project-to-date as at March 31, 2025.

Outlook

The Company has outlined a multi-faceted exploration strategy aimed at expanding the mineral resource potential at the Selebi Mines. One drill is active on surface at Selebi Main with three drills being mobilized to the Selebi Hinge, and one drill is active underground at Selebi North.

The Selebi North Underground Resource Expansion Drilling program is expected to continue throughout the remainder of the year for further testing of the BHEM plates.

The Company is planning to further investigate the potential of a third parallel mineralized horizon at Selebi Main, with approximately 765 metres in 3 hole extensions over a period of 6 weeks.

The Selebi Hinge drilling offers a strategic opportunity for potential substantial resource expansion. Drilling is planned to target large BHEM plates located off the Selebi Main mine horizon and toward the Selebi North deposit. The Company intends to pre-collar the holes to a depth of up to 1,200 metres and bring in a more powerful drill to extend these holes to final target depths. These holes are planned to target a series of previously untested BHEM plates located down-dip and down-plunge of the Selebi Main resource. Drilling is expected to consist of approximately 12,500 metres in 6 holes over an estimated period of 7 months.

In addition to the drilling, the Company is advancing metallurgical studies. Flowsheet designs are nearing completion, taking into consideration the ongoing XRT ore sorting evaluations.

Selkirk Mine, Botswana

The Selkirk Mine is located in the northeast of Botswana approximately 28 km southeast of the city of Francistown, and 450 km northeast of the national capital Gaborone.

The Selkirk Mine is accessed year-round via paved and gravel roads from Gaborone and Francistown. The Selkirk Mine infrastructure includes relict surface infrastructure supporting the historical underground mine, and the original decline. The Selkirk Mine is quite flat, and beyond the mine footprint is covered in grassland with dispersed and clustered trees typical of a tree savanna biome.

The Selkirk Mine consists of a single mining licence covering an area of 1,458 hectares (14.58 km2) and four prospecting licences covering a total of 12,670 hectares (126.7 km2). The mining licence, 2022/7L, is centred approximately at 21°19’13” S and 27°44’17” E and is held by PNGPL, a subsidiary of PREM. The mining licence was renewed for ten years commencing on May 27, 2022, ending on May 26, 2032. The four prospecting licences (PL050/2010, PL051/2010, PL210/2010, and PL071/2011) were renewed during the first quarter of 2025 and will expire March 31, 2027.

Exploration

On January 31, 2025, the Company filed the Selkirk MRE in conformance with the SEC’s Modernized Property Disclosure Requirements for Mining Registrants as described in Subpart 229.1300 of Regulation S-K, Disclosure by Registrants Engaged in Mining Operations (S-K 1300) and Item 601(b)(96) Technical Report Summary, entitled “S-K 1300 Technical Report Summary, Selkirk Nickel Project, North East District, Republic of Botswana” and dated January 8, 2025 (with an effective date of November 1, 2024) for its Selkirk Mine.

Selkirk Mine Mineral Resource Estimate, November 1, 2024:

The key assumptions, parameters, and methods used to estimate the mineral resources are contained in the Selkirk TRS. Readers are cautioned not to assume that all or any part of an Inferred Mineral Resource exists or is economically or legally mineable, or that an Inferred Mineral Resource will ever be upgraded to a higher category.

The Selkirk MRE provides a solid foundation for advancing the Selkirk deposit to an economic study. It was prepared using results from 232 surface and 10 underground historical drillholes drilled between 2003 and 2016, five 2016 drillholes sampled by PREM in 2021, and 17 historical drillholes resampled in 2024. Analytical results from PREM re-sampling showed higher platinum group element values compared to historic results. Further, the Selkirk MRE was prepared under the conceptual processing scenario of producing two separate concentrates. Additional work on alternate processing options may result in higher recoveries. Cobalt, a potentially valuable by-product, has not been included in the Selkirk MRE as cobalt analyses are not consistently available throughout the deposit. Planned metallurgical studies will determine payability of cobalt at the Selkirk Mine.

During the first quarter of 2025, the Company continued its re-sampling program of historic drill core, targeting both resource expansion and reclassification in an updated MRE.

A surface drilling program is planned to commence in the second quarter of 2025 which will support the collection of samples for metallurgical test work and an updated MRE through twinning of historic holes and in-filling of identified gaps.

Studies

The Company has been exploring alternate processing options, including producing a lower grade nickel concentrate suitable for hydrometallurgical processing. Phase 1 hydrometallurgical test-work using the Platsol process began in late 2023 and was completed in 2024. Recoveries of all the payable metals (Ni, Cu, Co, Au, Pt and Pd) to the solution phase were very high (generally >99%) in the initial batch autoclave testing. The downstream processes have been tested at bench scale and, although it is not possible to precisely quantify final metal recoveries to saleable products until continuous, integrated piloting is completed, overall recoveries of all payable metals is expected to be >95% based on commercial experience of base metal hydrometallurgical plants. This study demonstrated that alternate processing options are potentially viable at Selkirk.

The surface drilling program that is expected to commence in the second quarter of 2025 will utilize HQ sized holes. These will facilitate the collection of metallurgical samples for flowsheet development and XRT ore sorting.

During the three months ended March 31, 2025, the Company incurred $101,968 (three months ended March 31, 2024 - $196,497) in exploration and evaluation expenditures on the Selkirk Mine. The Company incurred $327,109 to acquire the Selkirk Mine, and has incurred a further $3,160,470 in exploration and evaluation expenditures project-to-date as at March 31, 2025.

Outlook – Selkirk

The ongoing re-sampling program is expected to support an updated MRE through systematic analyses of PGE to augment the patchwork of PGE analyses in the historic database.

The surface drilling program that is expected to commence in the second quarter of 2025 will also support an updated MRE through twinning of historic holes and in-filling of identified gaps.

Canadian Nickel Projects - Sudbury, Ontario

Post Creek Property

The Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 64 unpatented mining claim cells, covering a total area of 847 hectares held by the Company. The Company acquired the property through an option agreement in April 2010, which was subsequently amended in March 2013. As at the date of this Report, the Company holds a 100% interest in the Post Creek property and is obligated to pay advances on a net smelter return of $10,000 per annum, which will be deducted from any payments to be made under the net smelter return.

The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall deposits and accounts for a significant portion of all ore mined in the Sudbury nickel district and, as such, represents favourable exploration targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks of the Sudbury Igneous Complex which both represent potential controls on mineralization.

No exploration work was completed in the first quarter of 2025 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing until 2030. No material expenditures or activities are contemplated on the Post Creek property at this time.

Halcyon Property

The Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships and consists of 62 unpatented mining cells for a total of 1,024 hectares. Halcyon is adjacent to the Post Creek property and is approximately two kilometres north of the producing Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this Report, the Company holds a 100% interest in the Halcyon property and is obligated to pay advances on a net smelter return of $8,000 per annum, which will be deducted from any payments to be made under the net smelter return.

No exploration work was completed in the first quarter of 2025 on the Post Creek Property. The claims are in good standing through 2030. No material expenditures or activities are contemplated on the Halcyon property at this time.

Maniitsoq Nickel-Copper-PGM Project, Southwest Greenland

In December 2024, the Company notified the Government of Greenland that it was relinquishing its licences effective immediately. The Company is expecting final approval from authorities pending the removal of remaining structures.

Selected Financial Information and Financial Position

The following amounts are derived from the Company’s unaudited condensed interim consolidated financial statements prepared under US GAAP.

Net Loss

The net loss of $15,228,330 for the three months ended March 31, 2025 was higher by $5,881,150 compared to the prior year comparable period of $9,347,180, largely due to the loss on the Term Loan extinguishment of $5,982,434 and an increase in general and administrative expenses of $462,682 largely associated with stock options issued during the current period, partially offset by reduced general exploration expenses of $578,682 resulting from the pause of certain activities in the current period as part of cash conservation measures.

Total Assets

Total assets as at March 31, 2025 increased by $38,827,996 from the December 31, 2024 balance largely as a result of higher cash balances in the current period. During the quarter, the Company closed a Private Placement for aggregate gross proceeds of $46,000,000 (see “Liquidity & Capital Resources — Financings”).

Current Liabilities

Current liabilities as at March 31, 2025 increased by $3,054,102 from December 31, 2024 due to: (i) an increase in trade payables as the Company deferred certain payments as part of cash conservation measures; and (ii) an increase in share issuance costs payable related to the March 2025 Financing.

Overall Performance and Results of Operations

As at the date of this Report, the Company has not earned revenue nor proved the economic viability of its projects. The Company’s expenses are not subject to seasonal fluctuations or general trends other than factors affecting costs such as inflation and input prices. The Company’s expenses and cash requirements will fluctuate from period to period depending on the level of activity at the projects, which may be influenced by the Company’s ability to raise capital to fund these activities. Comparisons of activity made between periods should be viewed with this in mind. The Company’s quarterly results may be affected by many factors such as timing of exploration activity, share-based compensation costs, capital raised, marketing activities and other factors that affect the Company’s exploration and evaluation activities.

The following table summarizes the Company’s operations for the three-month periods ended March 31, 2025 and March 31, 2024:

• General exploration expenses decreased by $578,682 for the three months ended March 31, 2025 as the Company put drilling activities on hold mid-February 2025 through to the end of the quarter to conserve cash.
• Depreciation increased $271,600 for the three months ended March 31, 2025 due to the acceleration of depreciation on certain software assets.
• General and administrative expenses increased by $462,682 for the three months ended March 31, 2025. The Company granted 5,750,000 stock options during the current quarter which vested as to one-half on the date of grant and the balance vesting on the first anniversary of the date of grant. There were no stock options granted during the prior year comparable period.
• DSUs granted, net of fair value movement, or deferred share units, represents the Company’s long-term incentive program compensation granted to directors of the Company, net of period-end mark to market adjustments. The decrease of $65,471 for the three months ended March 31, 2025 is a result of DSUs not being granted during the current period as the Company evaluates its board of directors’ compensation plan.
• Interest income and expense represents interest income earned on cash and cash equivalent deposits and interest expense on the Company’s vehicle financing and previous lease liabilities. Net interest income increased by $179,779 for the three months ended March 31, 2025. The final instalments on the drilling equipment and Syringa Lodge leases were paid subsequent to the first quarter of 2024, resulting in lower interest expense for the current period.
• Interest expense and accretion on Term Loan comprises the accrued interest on the Company’s now extinguished Term Loan (see “Liquidity & Capital Resources – Financings” below), as well as the accretion of related transaction costs and fees. The decrease of $331,739 for the three months ended March 31, 2025 relates to the Term Loan being converted to equity during the first quarter of 2025.
• Loss on Term Loan extinguishment represents the difference between the fair value of the Settlement Units (defined in “Liquidity & Capital Resources – Financings”) issued and the carrying amount of the Term Loan on the date it was converted to equity.

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Cash Flows

The following table summarizes the Company’s cash flows:

Operating Activities

Net cash used in operating activities for the three months ended March 31, 2025, decreased by $2,190,985 compared to the prior year comparable period resulting from: (i) a reduction in general exploration expenses as the Company put drilling activities on hold mid-February 2025 through to the end of the quarter to conserve cash; (ii) positive changes in non-cash working capital resulting from an increase in trade payables as the Company deferred certain payments as part of cash conservation measures; and (iii) lower interest payments on the Term Loan.

Investing Activities

Key investing activities relate to the acquisition of property, plant and equipment. Net cash used in investing activities for the three months ended March 31, 2025 decreased by $1,001,869 compared to the prior comparable period. The higher spending in the 2024 comparable period primarily relates to the acquisition of capital spares and critical spares for existing equipment on-site.

Financing Activities

Net cash provided by financing activities for the three months ended March 31, 2025 increased by $45,922,707 compared to the prior year comparable period. During the current period, the Company closed a Private Placement for gross proceeds of $46,000,000 (see “Liquidity & Capital Resources - Financings”). The Company did not execute any financing transactions during the prior year comparable period.

Liquidity & Capital Resources

The Company, being in the exploration and evaluation stage, is subject to risks and challenges similar to companies in a comparable stage of exploration and evaluation. These risks include the challenges of securing adequate capital for exploration and advancement of the Company’s material projects, operational risks inherent in the mining industry, and global economic and metal price volatility. There is no assurance management will be successful in its endeavors.

The properties in which the Company currently has an interest are in the pre-revenue stage. Operating cash outflows are highly dependent upon the exploration and evaluation programs taking place at that time. As such, the Company is dependent on external financing to fund its activities and the advancement of its projects. In order to carry out the planned project advancement and cover administrative costs, the Company will need to use its existing working capital and raise additional amounts as needed.

As at March 31, 2025, the Company had $45,466,839 in available cash (December 31, 2024 – $6,105,933), with no source of operating cash flows, and no significant credit lines in place. As at March 31, 2025, the Company had working capital (calculated as total current assets less total current liabilities) of $39,434,623 (December 31, 2024 – $3,410,490). The increase in working capital is a result of the cash proceeds received from the Private Placement.

Financings

2025

On March 18, 2025, the Company closed a financing transaction which included a non-brokered private placement and the conversion into equity of its $20,882,353 three-year Term Loan with Cymbria, the lender and an affiliate of the Company’s largest shareholder, EdgePoint Investment Group Inc. (“EdgePoint”), which bore interest at a rate of 10% per annum.

The Company issued to Cymbria an aggregate of 69,607,843 units (each, a “Settlement Unit”) at a deemed issue price of $0.30 per Settlement Unit in full satisfaction of the $20,882,353 principal amount outstanding under the Term Loan. Accrued interest under the Term Loan, up to the date of the Debt Conversion, in the amount of $268,896 was settled in cash. Each Settlement Unit consisted of one Common Share of the Company and one Common Share purchase warrant (each, a “Settlement Warrant”) of the Company.

Each Settlement Warrant entitles the holder to acquire one additional Common Share of the Company at a price of $0.40 per Common Share until March 18, 2028. If, at any time prior to the expiry date, the volume-weighted average trading price of the Common Shares is at least $2.00 per Common Share for a period of 20 trading days, the Company may, at its option, accelerate the expiry date with 30 days’ notice to the Settlement Warrant holders.

The Private Placement consisted of issuing 153,333,334 units (each, a “Private Placement Unit”) of the Company at a price of $0.30 per unit for aggregate gross proceeds of $46,000,000. Each Private Placement Unit consisted of one Common Share of the Company and one-half of one Common Share purchase warrant (each whole warrant, a “Private Placement Warrant”) of the Company. Each Private Placement Warrant entitles the holder to acquire one additional Common Share at a price of $0.55 per share until March 18, 2028.

In connection with the March 2025 Financing, the Company issued: (i) 4,000,000 Common Shares to TriView Capital Ltd. (“TriView”) for its services as finder; (ii) 9,000,000 Common Shares to Fiore Management and Advisory Corp. (“Fiore”) and 3,750,000 Common Shares to Bowering Projects Ltd. (“Bowering”) for certain advisory services; and (iii) 3,586,709 Common Shares to a financial advisor for financial advisory services. In addition to the Common Shares, the Company incurred various legal, listing and financing fees payable in cash totalling $2,371,203. As of March 31, 2025, the Company has made cash payments relating to these fees of $397,250.

As at March 31, 2025, the Company has expended $553,704 of the Private Placement net proceeds. While the Company has arranged this additional financing, the proceeds are intended for the advancement of exploration and evaluation activities at the Mines and for general corporate and working capital purposes. Subject to any changes in the Company’s operational plan, this transaction will provide the Company with the funds required to advance its planned activities and cover administrative costs into the first quarter of 2026. Therefore, the Company will need to arrange additional financing to meet its commitments under the asset purchase agreements (see “Contractual Obligations and Contingencies”).

2024

In June of 2024, the Company closed two tranches of a non-brokered private placement offering of units of the Company, pursuant to which the Company issued a total of 35,256,409 units at a price of $0.78 per unit for gross proceeds of approximately $27.5 million (the “June 2024 Financing”). Each unit was comprised of one Common Share and one Common Share purchase warrant. As at March 31, 2025, the Company has expended all the June 2024 Financing.

Although the Company has been successful in its past fundraising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future. Factors that could affect the availability of financing include the progress and results of ongoing exploration and evaluation activities at the Mines, the state of international debt and equity markets, and investor perceptions and expectations with respect to global commodity markets. If necessary, depending on the amount of funding raised, the Company may explore opportunities to defer the timing of certain discretionary expenditures and the Company’s planned initiatives and other work programs may be postponed, or otherwise revised.

Going Concern

The ability of the Company to continue operations as a going concern is ultimately dependent upon achieving profitable operations and its ability to obtain adequate financing. The Company incurred a net loss of $15,228,330 for the three months ended March 31, 2025 (three months ended March 31, 2024 - $9,347,180). To date, the Company has not generated profitable operations from its resource activities. It is not possible to predict whether future financing efforts will be successful or if the Company will attain a profitable level of operations. These material uncertainties cast substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities, and the reported expenses and comprehensive loss that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material. In assessing whether a going concern assumption is appropriate, management considers all available information about the future, which is at least, but not limited to, twelve months from the date of this report.

Contractual Obligations and Contingencies

As of March 31, 2025, the Company had commitments for capital expenditures over the next 12 months of $1,062,094 and the following other contractual obligations and commitments:

Selebi Mines

As per the Selebi APA, the aggregate purchase price payable to the seller for the Selebi Mines is the sum of US$56,750,000 which amount shall be paid in three instalments:

• US$1,750,000 payable on the closing date, and payment of care and maintenance funding contributions in respect of the Selebi Mines from March 22, 2021, to the closing date of US$5,178,747. These payments have been made.
• US$25,000,000 upon the earlier of: (i) approval by the Botswana Ministry of Mineral Resources, Green Technology and Energy Security (“MMRGTES”) of the Company’s Section 42 and Section 43 applications (for the further extension of the mining licence and conversion of the mining licence into an operating licence, respectively); and (ii) January 31, 2026, the expiry date of the study phase.
• The third instalment of US$30,000,000 is payable on the completion of mine construction and production start-up by the Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications.

As per the terms and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and return the Selebi Mines to the BCL Liquidator if the Company determines that the Selebi Mines are not economical. The Company also has an option to pay in advance the second and third payments if the Company determines that the Selebi Mines are economical. The Company’s accounting policy is to measure and record contingent consideration when the conditions associated with the contingency are met. As of March 31, 2025, none of the conditions of the second and third instalments have been met, hence these amounts are not accrued in the Financial Statements.

In addition to the Selebi APA, the purchase of the Selebi Mines is also subject to a royalty agreement as well as a contingent consideration agreement with the liquidator. The royalty agreement consists of a net smelter royalty (“NSR”) of 2% on the net value of sales of concentrate or other materials with respect to production from the Selebi mining licence, of which the Company has the right to buy-back 50%. The contingent consideration agreement consists of two components: (i) a sliding scale payment of US$0.50/tonne of ore up to US$1.40/tonne of ore with respect to the discovery of new mineable deposits greater than 25 million tonnes of ore from a base case of 15.9 million tonnes, with a minimum grade of 2.5% nickel equivalent, accrued at the time of a decision to mine; (ii) price participation of 15% on post-tax net earnings directly attributable to an increase of 25% or more in commodity prices, on a quarterly basis, for a period of seven years from the date of first shipment of concentrate or other materials.

Both the Selebi Mines and Selkirk Mine are subject to a royalty payable to the Botswana Government of 5% of all precious metals sales and 3% of all base metals sales.

Phikwe South and the Southeast Extension

In August 2023, the Company announced that it had entered into a binding commitment letter with the liquidator of BCL to acquire a 100% interest in two additional deposits, Phikwe South and the Southeast Extension, located adjacent to and immediately north of the Selebi North historical workings. The acquisition of the Phikwe South and the Southeast Extension deposits is subject to customary closing conditions and has not yet closed as of May 13, 2025.

The upfront cost to the Company to acquire these additional mineral properties is US$1,000,000. In addition, the Company has agreed to additional work commitments of US$5,000,000 in the aggregate over four years. As a result of the extension of the Selebi mining licence, the remaining asset purchase obligations of the Company outlined in the Selebi APA will each increase by 10%, US$5,500,000 in total, while the trigger events remain unchanged. The existing 2% NSR and contingent consideration agreement held by the liquidator with respect to production from the Selebi mining licence will also apply to production from these additional deposits, subject to the Company’s existing buy-back right for 50% of the NSR.

Selkirk Mine

In regard to the Selkirk Mine, the purchase agreement does not provide for a purchase price or initial payment for the purchase of the assets. The Selkirk purchase agreement provides that if the Company elects to develop Selkirk first, the payment of the second Selebi instalment of US$25 million would be due upon the approval by the Minister of MMRGTES of the Company’s Section 42 and Section 43 applications (for the further extension of the Selkirk mining licence and conversion of the Selkirk mining licence into an operating licence, respectively). For the third Selebi instalment of US$30 million, if Selkirk were commissioned earlier than Selebi, the payment would trigger on Selkirk’s commission date.

In addition to the Selkirk purchase agreement, the purchase of the Selkirk Mine is also subject to a royalty agreement as well as a contingent consideration agreement with the liquidator. The royalty agreement consists of an NSR of 1% on the net value of sales of concentrate or other materials with respect to production from the Selkirk mining licence, which the Company has the right to buy-back in full. The contingent consideration agreement is on similar terms as the Selebi Mines contingent consideration.

NSR Option

The Company received $2,750,000 (the “Option Payment”) from Cymbria for their right to participate in the Company’s right to repurchase one-half of the Selebi NSR and the entirety of the Selkirk NSR. Cymbria also has the right: (i) at any time following the date of any buyback exercise notice from PNRP and/or PNGP and prior to the first anniversary of sale of product, to terminate the option and receive from PNRP and/or PNGP a refund of the related option price paid by Cymbria; (ii) upon receipt from PNRP and/or PNGP of any termination, settlement or waiver of the buyback right or royalty agreement and prior to the first anniversary of sale of product, to exercise the option or terminate the option, and if terminated PNRP and/or PNGP shall refund the related option price paid by Cymbria; (iii) to exercise the option and compel PNRP and/or PNGP to exercise the buyback right at any time within the first nine months immediately following the first anniversary of sale of product and not less than 60 days prior to the date of exercise of the buyback right; and (iv) to require PNRP and/or PNGP to repurchase the option from Cymbria for an amount equal to the option price at any time commencing on the first anniversary of sale of product, provided PNRP and/or PNGP have not provided a buyback exercise notice or notice of any termination, settlement or waiver of the buyback right or royalty agreement to Cymbria.

Contingencies

There are no environmental liabilities associated with the Mines as at the acquisition dates as all liabilities incurred prior to the acquisitions are the responsibility of the sellers, BCL and Tati Nickel Mining Company (“TNMC”). The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of March 31, 2025, there were no material rehabilitation costs for which the Company expects to incur, and management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.

The Company’s exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions in which the Company operates. It is not possible to estimate any future contingent liabilities and the impact on the Company’s operating results due to future changes in the Company’s development of its projects or future changes in such laws and environmental regulations.

Related Party Transactions

Key management personnel

Key management (defined as members of the Board of Directors and senior officers) compensation was related to the following:

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Other related parties

On March 18, 2025, the Company closed the March 2025 Financing which included the conversion of its Term Loan held by EdgePoint and its affiliates, related parties of the Company, to equity. The Company issued to EdgePoint and its affiliates an aggregate of 69,607,843 Settlement Units. As of March 31, 2025, EdgePoint and its affiliates beneficially owned an aggregate of 93,441,067 Common Shares and 83,324,150 warrants, representing approximately 21.8% of the outstanding Common Shares (approximately 34.5% on a partially-diluted basis assuming the exercise of all warrants held by EdgePoint).

In connection with the Private Placement, certain insiders of the Company subscribed for an aggregate of 3,936,667 Private Placement Units for gross proceeds of $1,181,000.

During 2024, EdgePoint and its affiliates subscribed for 7,692,307 units as part of the June 2024 Financing. As of December 31, 2024, EdgePoint and its affiliates beneficially owned 23,833,224 Common Shares and 13,716,307 warrants, representing approximately 12.8% of the issued and outstanding Common Shares (approximately 18.8% on a partially-diluted basis assuming the exercise of all warrants held by EdgePoint).

In connection with the June 2024 Financing, certain insiders of the Company subscribed for an aggregate of 1,389,140 Units for gross proceeds of $1,083,529.

For the three months ended March 31, 2025, the Company paid interest of $268,896 (three months ended March 31, 2024 - $519,206) to Cymbria Corporation and recognized a loss on the Debt Conversion of $5,982,434 (three months ended March 31, 2024 – $nil).

Segmented Disclosure

The Company operates in one reportable operating segment, being that of the acquisition, exploration and evaluation of mineral properties, in three geographic segments, being Canada, Barbados, and Botswana. The Company’s geographic segments are as follows:

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The Company’s exploration and evaluation activities are assessed at the individual project level. The Selebi and Selkirk projects below make up the Botswana geographic segment.

Financial Instruments

ASC 820 - Fair Value Measurement establishes a three-tier fair value hierarchy. The fair value hierarchy’s three tiers are based on the extent to which inputs used in measuring fair value are observable in the market, and are as follows:

Determination of fair value and the resulting hierarchy requires the use of observable market data whenever available. The classification of an asset or liability in the hierarchy is based upon the lowest level of input that is significant to the measurement of fair value.

The carrying value of cash and cash equivalents, trade payables and accrued liabilities approximate their fair value due to their short-term nature and therefore have been excluded from the table below. A summary of the carrying value and fair value of other financial instruments were as follows:

DSU liability - the fair value of the DSUs is measured using the closing price of the Company’s Common Shares at the end of each reporting period.

Vehicle financing - The fair values approximate carrying values as the interest rates are comparable to current market rates.

Term Loan – the Term Loan is carried at amortized cost. The fair value measurement of the Term Loan was based on an income approach.

NSR option liability – The fair value of the NSR options is determined using a valuation model that incorporates such factors as discounted cash flow projections, metal price volatility, and risk-free interest rate. As the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair value of the call and put on the options as at March 31, 2025 and December 31, 2024 is $nil.

Interest Rate Risk

The Company’s exposure to interest rate risk arises from the interest rate impact on its cash and cash equivalents and debt facilities. Interest payable on the vehicle financing is based upon a variable base rate, being the lending institution’s prime lending rate, plus a fixed rate margin.

Foreign Currency Exchange Risk

The Company primarily operates in Canada, Barbados and Botswana and undertakes transactions denominated in foreign currencies such as the US dollar and Botswana pula, and consequently is exposed to exchange rate risks. The value of cash and other financial assets and liabilities denominated in foreign currencies can fluctuate with changes in currency exchange rates. Exchange risks are managed by matching levels of foreign currency balances with the related obligations and by maintaining operating cash accounts in non-Canadian dollar currencies.

The following table illustrates the estimated impact a 5% USD and BWP change against the CAD would have on net loss before tax as a result of translating the Company’s foreign denominated financial instruments:

Credit Risk

The Company’s credit risk is primarily associated with its cash and cash equivalents. The Company’s exposure to credit risk arises from the potential default of the counterparty to its cash and cash equivalents, and the maximum exposure is limited to the carrying value of these instruments. The Company limits exposure to credit risk on its cash and cash equivalents by holding these instruments at highly-rated financial institutions.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company manages the liquidity risk inherent in these financial obligations by regularly monitoring actual cash flows against its annual budget, which forecasts expected cash availability to meet future obligations. The Company will defer discretionary expenditures, as required, in order to manage and conserve cash required for current liabilities.

The following table shows the Company’s undiscounted contractual obligations as at March 31, 2025:

The DSU liability of $930,840 is not presented in the above liquidity analysis as management considers it not practical to allocate the amounts into maturity groupings

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at March 31, 2025.

Share Capital Information

As of the date of this Report, the fully diluted share capital of the Company, including Common Shares issuable upon exercise of securities of the Company, is as follows:

Note:

(1) The 118,186 outstanding preferred shares are convertible into Common Shares at a 9:1 ratio.

The information set forth under Item 1.01 is incorporated herein by reference to the extent responsive to Item 3.02. The securities issued were not registered under the Securities Act, and were issued in reliance on the exemption from registration pursuant to Section 4(a)(2), Regulation S or Rule 506 thereunder.

The information set forth under Part II, Item 2 of this Report is also incorporated by reference herein.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2025. Based on the evaluation of these disclosure controls and procedures, management concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Risks and other factors include those listed under “Risk Factors” in the 2024 Form 10-K and elsewhere in this Report, as well as the risk identified below.

We caution readers that our business activities involve risks and uncertainties that could cause actual results to differ materially from those currently expected by management. We described the most significant risks that could impact our results in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024.