NIOCORP DEVELOPMENTS LTD (NB) FY 2024 MD&A

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is
relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries.
This item should be read in conjunction with our consolidated financial statements and the notes thereto included in this Annual
Report on Form 10-K.

See Item
1, “Business—Historical Development of the Business,” for a description of the 2023 Transactions.

Summary
of Consolidated Financial and Operating Performance

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to performing exploration and feasibility study related activities, as well as the activities necessary to support corporate and
shareholder duties.

The
net loss attributable to the Company decreased to $11.4 million for fiscal year 2024 from $40.1 million for fiscal year 2023.
This decreased net loss in fiscal year 2024 as compared to fiscal year 2023 is primarily due to the recognition of general transaction
expenses, Earnout Shares, and warrant liabilities associated with the fiscal year 2023 GXII Transaction as well as a decrease
in exploration expenditures and fiscal year 2024 non-cash gains associated with changes in Earnout Share valuations and warrant
liability valuations.

Results
of Operations

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to costs incurred in connection with the 2023 Transactions, as well as performing exploration and feasibility study related activities,
and the activities necessary to support corporate and shareholder duties, as detailed in the following table.

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Fiscal
Year 2024 as Compared to Fiscal Year 2023

Significant
items affecting operating expenses are noted below:

Other operating
expenses include costs incurred in connection with the 2023 Transactions, including direct transaction expenses, and the fair
value of warrant and Earnout Shares liabilities assumed, as well as costs related to investor relations, general office expenditures,
equity offering and proxy expenditures, Board-related expenditures, and other miscellaneous costs. These costs decreased in fiscal
year 2024 as compared to fiscal year 2023 primarily due to $23.8 million of costs incurred in connection with the 2023 Transactions,
which closed on March 17, 2023, as well as overall lower expenditures during fiscal year 2024 for financial services, Board stipends
and share-based compensation, and investor relation services. This decline was partially offset by the fiscal year 2024 impact
of $1.0 million of additional director and officer insurance premiums associated with our listing on Nasdaq.

Employee-related
costs increased in 2024 as compared to 2023, primarily due to an increase in the number of options issued to employees in
2024 partially offset by a lower fair value per option as well as the impact of board-authorized employee salary increases which
became effective April 1, 2023.

Exploration
expenditures decreased in fiscal year 2024 as compared to fiscal year 2023, reflecting work performed in fiscal year
2023 to complete the development of the Demonstration Plant and the subsequent operation of the Demonstration Plant to verify
process improvement efforts and advance the technical and economic analyses on the potential addition of magnetic rare earth oxides
to NioCorp’s planned product suite. In addition, 2023 costs increased due to costs related to the completion and filing
of the Technical Report Summary based on the Company’s 2022 Feasibility Study for the Elk Creek Project, which was filed
with the SEC on September 6, 2022. Demonstration Plant costs were lower in 2024 as project objectives were completed
and the Demonstration Plant operations ended in February 2024.

Professional
fees increased in fiscal year 2024 as compared to fiscal year 2023, primarily due to additional accounting fees incurred in
2024 associated with our change in auditors as well as legal costs associated with corporate funding initiatives and Form S-1
and S-3 filings.

Other
significant items impacting the change in the Company’s net loss are noted below:

Change
in fair value of Earnout Shares liability represents the change in fair value related to the Earnout Shares based on the results
of Monte Carlo financial modeling. Overall, the decline in the liability corresponds to the overall decline in our share value
during fiscal year 2024.

Change
in fair value of warrant liability represents the change in fair value related to (i) the additional Warrants (the “Contingent
Consent Warrants”) that the Company agreed to issue to Lind Global Asset Management III, LLC (“Lind”) upon certain
conditions in connection with the Waiver and Consent Agreement, dated September 25, 2022, between the Company and Lind (the “Lind
Consent”), as discussed in Note 9 to the consolidated financial statements included in Part II, Item 8 hereof, and (ii)
the change in fair value of the April 2024 Warrants, as discussed in Note 9 to the consolidated financial statements included
in Part II, Item 8 hereof, partially offset by the change in the fair value of the Private Warrants based primarily on the impacts
of a lower closing Common Share price, which increases the probability of these Contingent Consent Warrants being issued under
the Lind Consent terms.

Change
in fair value of convertible notes represents the impact of the initial allocation of fair value to the April 2024 Notes,
which are carried at fair value, as well as the change in fair value for the period ended June 30, 2024.

Loss
on debt extinguishment represents the loss incurred under Accounting Standards Codification (“ASC”) Topic 470,
Debt, related to the convertible security issued to Lind (the “Lind III Convertible Security”)
with a face value of $11.7 million (representing $10.0 million in funding plus an implied 8.5% interest rate per annum for the
term of the Lind III Convertible Security) pursuant to the Convertible Security Funding Agreement, dated February 16, 2021, as
amended by Amendment #1 to the Convertible Security Funding Agreement, dated

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December 2, 2021, between the Company and Lind (as
amended, the “Lind III Agreement”), as discussed in Note 9 to the consolidated financial statements included in Part
II, Item 8 hereof.

Interest
expense increased in fiscal year 2024 as compared to fiscal year 2023 due to the impacts of Convertible Debenture interest
expense incurred in fiscal year 2024.

Loss
attributable to noncontrolling interest represents the portion of net loss in ECRC attributable to the Vested Shares, which
are not owned by the Company.

Liquidity
and Capital Resources

We
have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed
by the sale of our equity securities by way of private placements, convertible securities issuances, the exercise of incentive
Options and Warrants, and related party loans. With respect to currently outstanding Options and Warrants, we believe that exercise
of these instruments, and cash proceeds from such exercises, will not occur unless and until the market price for our Common Shares
equals or exceeds the related exercise price of each instrument.

In
connection with the Closing of the 2023 Transactions, the Company received net cash proceeds of $8.3 million, as follows:

The
2023 Transactions delivered to NioCorp several important benefits, including a ready pathway to an up-listing to the Nasdaq, which
is expected to allow additional institutional firms to invest in the Company for the first time. Further, we believe it has given
NioCorp and the Elk Creek Project a much higher profile among institutional investors evaluating projects in the critical materials
space.

The sale of the April
2024 Notes has provided, and the Yorkville Equity Facility Financing is expected to provide, near-term and longer-term access to
capital. The ability of the Company to draw down on the Yorkville Equity Facility Financing Agreement, at its discretion, is subject
to certain limitations and the satisfaction of certain conditions. When available, the Yorkville Equity Facility Financing Agreement
provides an opportunity to actively manage the cash needs of the Company more closely. Historically, cash has generally been available
to the Company through private placements of equity for which the timing did not always coincide with the Company’s cash
needs. In the near term, the Company intends to utilize the Yorkville Equity Facility Financing Agreement to offset amounts owed
under the April 2024 Notes. The Company may also utilize the Yorkville Equity Facility Financing Agreement to potentially generate
funds at a time when they are in need. Alternatively, the Company can also utilize the Yorkville Equity Facility Financing Agreement
for opportunistic share sales.

On
July 19, 2024, the Company and Yorkville entered into a make-whole payment agreement under which Yorkville agreed to convert the
remaining principal and accrued interest of $553,767 under the Convertible Debenture into Common Shares in exchange for a $95,000
make-whole payment.

On
September 17, 2024, all the remaining outstanding Financing Warrants expired.

On September 17, 2024, the
Company’s Common Share price was below the threshold price set forth in the Lind Consent, and accordingly, the Company issued
2,816,742 Contingent Consent Warrants to Lind. Each Contingent Consent Warrant is exercisable for one Common Share at an exercise
price of $2.308 and may be exercised at any time prior to

51

their expiration on September 17, 2028. The number
of Contingent Consent Warrants issued was based on $5.0 million divided by the five-day volume weighted average price of the Common
Shares on September 16, 2024.

As
of June 30, 2024, the Company had cash of $2.0 million and a working capital deficit of $9.0 million, compared to cash of $2.3
million and working capital of $0.2 million on June 30, 2023. Subsequent to June 30, 2024, the Company issued 339,250 Common
Shares under the Yorkville Equity Facility Financing Agreement in exchange for $0.6 million in gross cash proceeds. On
September 11, 2024, the Company and Mark Smith, Chief Executive Officer, President and Executive Chairman of NioCorp, entered into
a loan agreement (the “Smith Loan Agreement”), which provides for a $2.0 million non-revolving credit facility. An
initial drawdown under the Smith Loan Agreement of $33,000 was completed on September 11, 2024. NioCorp intends to use the
net proceeds from these transactions to satisfy amounts due under the April 2024 Notes and for general corporate purposes.

We
expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned cash needs are
approximately $26.0 million until June 30, 2025.

In addition to outstanding
accounts payable and short-term liabilities, our average monthly planned expenditures through June 30, 2025 are expected to be
approximately $1.6 million per month, of which approximately $375,000 is for corporate overhead and estimated costs related to
securing financing necessary for advancement of the Elk Creek Project. This includes general overhead costs, satisfying outstanding
accounts payable, and repayment of the April 2024 Notes and the Smith Loan Agreement. This also includes anticipated financing
costs associated with the Elk Creek Project, including an updated mine plan in connection with the EXIM application process. The
scope of these financing costs remains under discussion with EXIM. Approximately $1.2 million per month is planned for expenditures
relating to the advancement of the Elk Creek Project by NioCorp’s majority owned subsidiary, ECRC. The Company’s ability
to continue operations and fund our current work plan is dependent on management’s ability to secure additional financing.

The
Company anticipates that it does not have sufficient cash on hand to continue to fund basic operations for the next twelve months,
and additional funds totaling $25.0 million to $26.0 million, net of funds raised from advances under the Yorkville Equity Facility
Financing Agreement and borrowings under the Smith Loan Agreement, are likely to be necessary to continue advancing the project
in the areas of financing, permitting, and detailed engineering. While the Yorkville Equity Facility Financing Agreement may provide
the Company with access to additional capital, the Company will likely require additional capital to meet its cash needs. Management
is actively pursuing such additional sources of debt and equity financing, and while it has been successful in doing so in the
past, there can be no assurance it will be able to do so in the future.

Elk
Creek Property and lease commitments are $15,000 through June 30, 2025. To maintain our currently held properties and fund our
currently anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project
for the fiscal year ending June 30, 2025, the Company will likely require additional financing during the current fiscal year.
Should such financing not be available in that timeframe, we will be required to reduce our activities and will not be able to
carry out all our presently planned activities at the Elk Creek Project.

On
June 6, 2023, the Company announced that it had submitted an application to EXIM to obtain EXIM Financing to fund the project
costs for the Elk Creek Project, under EXIM’s “Make More in America” initiative. The Company was informed that
its application received approval by the first of three reviews by the EXIM Transaction Review Committee on October 2, 2023. EXIM
deployed additional resources to the processing of the Company’s application during the quarter ended December 31, 2023
and has retained financial and legal consultants to support EXIM’s due diligence on the Elk Creek Project. On April 15,
2024, the Company received the PPL from EXIM. The PPL is a summary of EXIM’s initial due diligence findings and also includes
a preliminary Indicative Term Sheet. The PPL identified additional project activities to be undertaken by the Company in conjunction
with the EXIM evaluation process. These include an updated mine plan and updated Elk Creek Project capital costs on a final or
close-to-final basis reflecting updated process flows. Management is working with EXIM to continue to advance the project through
the next stages of EXIM’s due diligence and loan application process. We are currently unable to estimate how long the application
process may take, and there can be no assurances that we will be able to successfully negotiate a final commitment of debt financing
from EXIM.

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Except for potential
funding from advanced under the Yorkville Equity Facility Financing and potential funding under the Smith Loan Agreement, each
as discussed above, and the potential exercise of Options and Warrants, we currently have no further funding commitments or arrangements
for additional financing at this time, and there is no assurance that we will be able to obtain any such additional financing on
acceptable terms, if at all. Pursuant to the Exchange Agreement, NioCorp is restricted from issuing equity or equity-linked securities
(other than Common Shares) or any preferred equity or non-voting equity if such issuance would adversely impact the rights of the
holders of the shares of Class B common stock of ECRC, without the consent of the holders of a majority of the shares of Class
B common stock of ECRC. The April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s
ability to use the proceeds from the April 2024 Purchase Agreement to pay related party debt or to enter into any variable rate
transaction, including issuances of equity or debt securities that are convertible into Common Shares at variable rates and any
equity line of credit, ATM agreement or other continuous offering of Common Shares, other than with Yorkville, subject to certain
exceptions. Notwithstanding the restrictions set forth in the Exchange Agreement and the April 2024 Purchase Agreement, there is
significant uncertainty that we would be able to secure any additional financing in the current equity or debt markets. The quantity
of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken will be negotiated by management
as opportunities to raise funds arise. Management may pursue funding sources of both debt and equity financing, including but not
limited to the issuance of equity securities in the form of Common Shares, Warrants, subscription receipts, or any combination
thereof in units of the Company pursuant to private placements to accredited investors or pursuant to public offerings in the form
of underwritten/brokered offerings, registered direct offerings, or other forms of equity financing and public or private issuances
of debt securities, including secured and unsecured convertible debt instruments or secured debt project financing. Management
does not currently know the terms pursuant to which such financings may be completed in the future, but any such financings will
be negotiated at arm’s-length. Future financings involving the issuance of equity securities or derivatives thereof will
likely be completed at a discount to the then-current market price of the Company’s securities and will likely be dilutive
to current shareholders. In addition, we could raise funds through the sale of interests in our mineral properties, although current
market conditions and other recent worldwide events have substantially reduced the number of potential buyers/acquirers of any
such interests. However, we cannot provide any assurances that we will be able to be successful in raising such funds.

Based on the conditions
described within, management has concluded and the audit opinion and notes that accompany our consolidated financial statements
for the year ended June 30, 2024, disclose that substantial doubt exists as to our ability to continue as a going concern. The
consolidated financial statements included in this Annual Report on Form 10-K have been prepared under the assumption that we will
continue as a going concern. As defined under S-K 1300, we are a development stage issuer, and we have incurred losses since our
inception. We may not have sufficient cash, including option and warrant exercises subsequent to June 30, 2024, to fund normal
operations and meet debt obligations for the next twelve months without deferring payment on certain current liabilities and raising
additional funds. Uncertainty in capital markets, supply chain disruptions, increased interest rates and inflation, and the potential
for geographic recessions have contributed to general global economic uncertainty. During fiscal year 2024, these events continued
to create uncertainty with respect to overall project funding and timelines. We believe that the going concern uncertainty cannot
be alleviated with confidence until the Company has entered into a business climate where funding of its planned ongoing operating
activities is secured. Therefore, these factors raise substantial doubt as to our ability to continue as a going concern.

We
have no exposure to any asset-backed commercial paper. Other than cash held by our subsidiaries for their immediate operating
needs in Colorado and Nebraska, all of our cash reserves are on deposit with major U.S. and Canadian chartered banks. We do not
believe that the credit, liquidity, or market risks with respect thereto have increased as a result of the current market conditions.
However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required to accept
lower rates of interest, which has also lowered our potential interest income.

Operating
Activities

During the year ended
June 30, 2024, the Company’s operating activities consumed $11.7 million of cash (2023: $17.3 million). Overall, operational
outflows during fiscal year 2024 decreased from the corresponding period of 2023 due to fiscal year 2023 cash expenses related
to the 2023 Transactions and a decrease in fiscal year 2024 exploration-

53

related spending at the Elk Creek Project. Going forward,
the Company’s working capital requirements are expected to increase substantially in connection with the development of the
Elk Creek Project.

Investing
Activities

The
Company had minimal investing activities during the years ended June 30, 2024 and 2023, respectively.

Financing
Activities

Net
cash provided by financing activities was $11.4 million in fiscal year 2024 (2023: $14.6 million). This decrease in financing
inflows primarily reflects the timing of cash inflows from the financing transactions disclosed below.

2024
inflows reflect the gross receipts of $1.0 million from the September 2023 Private Placement (as defined below), $1.3 million
from the December 2023 Private Placement (as defined below), $0.6 million from the June 2024 Private Placement (as defined below)
and $3.3 million from Common Share issuances under the Yorkville Equity Facility Financing Agreement, as well as $6.5 million
of net proceeds from the issuance of the April 2024 Notes.

The
following is a discussion of significant financing transactions since the beginning of fiscal year 2024:

The
Company also issued to the April 2024 Purchasers, in proportion to the aggregate principal amount of April 2024 Notes issued to
each April 2024 Purchaser, Warrants (the “April 2024 Warrants”) to purchase up to 615,385 Common Shares (the “April
2024 Warrants Shares”), which are equal to 25% of the aggregate principal amount of April 2024 Notes issued to the April
2024 Purchasers divided by the exercise price of $3.25, subject to any adjustment to give effect to any stock dividend, stock
split or recapitalization.

54

Pursuant
to the April 2024 Purchase Agreement, the April 2024 Purchasers advanced an aggregate of $6.935 million to the Company in consideration
of the issuance by the Company to the April 2024 Purchasers of $8.0 million aggregate principal amount of the April 2024 Notes
and April 2024 Warrants.

Proceeds
from the April 2024 Purchase Agreement were used for general working capital purposes, including for accounts payable, other payables
and operating expenses, and to satisfy the fees and expenses incurred in connection with the April 2024 Purchase Agreement.

Subject
to certain limitations contained within the April 2024 Notes, holders of the April 2024 Notes will be entitled to convert the
principal amount of, accrued and unpaid interest, if any, and any Payment Premium that has become due and payable on each April
2024 Note, from time to time over their term, into a number of Common Shares equal to the quotient of the amount being converted
divided by a fixed conversion price of $2.75 per Common Share up to a maximum of 3,141,817 Common Shares (together with the April
2024 Warrant Shares, the “April 2024 Underlying Shares”).

The
April 2024 Notes are the unsecured obligations of the Company and will mature on December 31, 2024. The April 2024 Notes incur
a simple interest rate obligation of 0.0% per annum (which will increase to 18.0% per annum upon the occurrence of an event of
default). The outstanding principal amount of, accrued and unpaid interest, if any, on, and the Payment Premium, if any, on the
April 2024 Notes must be paid by NioCorp in cash when the same becomes due and payable under the terms of the April 2024 Notes
at their stated maturity, upon their redemption or otherwise.

The
April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s ability to use the
proceeds from the sale of the April 2024 Notes and the exercise of the April 2024 Warrants to repay related party debt or to enter
into any variable rate transaction other than with Yorkville, subject to certain exceptions, and to distribute proceeds from the
sale of the April 2024 Notes and the exercise of the April 2024 Warrants to subsidiaries other than ECRC and 0896800 B.C. Ltd.
(together with ECRC, the “Guarantors”), upon the entry by the Guarantors into a global guaranty agreement, dated as
of April 11, 2024, among the Guarantors in favor of the Purchasers (the “Guaranty Agreement”). Pursuant to the Guaranty
Agreement, the Guarantors guaranteed the full, prompt and unconditional payment when due (whether at maturity, by acceleration
or otherwise), and the performance of all liabilities, agreements and other obligations of NioCorp to the April 2024 Purchasers
contained in the April 2024 Purchase Agreement, the April 2024 Notes, and the April 2024 Warrants, to the extent such liabilities,
agreements and obligations are payable in cash.

On September
4, 2024, NioCorp entered into (i) a consent and waiver (the “Yorkville Consent”) to the April 2024 Note issued and
sold to Yorkville pursuant to the April 2024 Purchase Agreement and (ii) a consent and waiver (together with the Yorkville Consent,
the “Consents”) to the April 2024 Note issued and sold to Lind Global Fund II LP pursuant to the April 2024 Purchase
Agreement. The Consents, among other things, reduced the amounts due to the April 2024 Purchasers on September 1, 2024 by an aggregate
of $1.2 million to an aggregate of $0.3 million, increased the amounts due to the April 2024 Purchasers on December 1, 2024 by
an aggregate of $1.2 million, and prospectively waived any term of the April 2024 Notes that would otherwise be triggered upon
a failure of the Company to pay to the April 2024 Purchasers the remainder of the amount due on September 1, 2024. Except as modified
by the Consents, the terms of the April 2024 Notes as previously disclosed are unchanged.

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Cash
Flow Considerations

The
Company has historically relied upon debt and equity financings to finance its activities. Subject to the restrictions set forth
in the Exchange Agreement and the April 2024 Purchase Agreement, the Company may pursue additional debt and/or equity financing
in the medium term; however, there can be no assurance the Company will be able to obtain any required financing in the future
on acceptable terms.

The
Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance
that additional funding will be available to it for current or future projects, although the Company has been successful in the
past in financing its activities through the sale of equity securities.

The
ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions,
and its success in developing the Elk Creek Project. Any quoted market for the Common Shares may be subject to market trends generally,
notwithstanding any potential success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading
price of the Common Shares could impact its ability to obtain equity financing on acceptable terms.

Historically,
the Company has used net proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration
and development plans and other contractual obligations when due. However, development and construction of the Elk Creek Project
will require substantial additional capital resources. This includes near-term funding and, ultimately, funding for Elk Creek
Project construction and other costs. See “Liquidity and Capital Resources” above, for the Company’s
discussion of arrangements related to possible future financings.

Debt
Covenants

The
April 2024 Notes contain events of default customary for instruments of their type (with customary grace periods, as applicable)
and provide that, upon the occurrence of an event of default arising from certain events of bankruptcy or insolvency with respect
to NioCorp, all outstanding April 2024 Notes will become due and payable immediately without further action or notice. If any
other type of event of default occurs and is continuing, then any holder may declare all of its April 2024 Notes to be due and
payable immediately. The April 2024 Purchase Agreement also contains certain covenants that, among other things, limit NioCorp’s
ability to use the proceeds from the April 2024 Purchase Agreement to repay related party debt or to enter into any variable rate
transaction other than with Yorkville, subject to certain exceptions. The Company was in compliance with these covenants as of
June 30, 2024.

Environmental

Our
mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the
environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot
predict the full amount of such future expenditures. As of June 30, 2024 and 2023, we had accrued $48,000 and $48,000, respectively,
related to estimated environmental obligations.

Forward-Looking
Statements

The
foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report on Form 10-K, contain
“forward-looking statements” within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act, and are intended to be covered by the safe harbor created thereby. See the discussion
in “Forward-Looking Statements” in Item 1., “Business.”

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Accounting
Developments

For
a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see Note 3 to the
consolidated financial statements included in this Annual Report on Form 10-K.

Critical
Accounting Estimates and Recent Accounting Pronouncements

Our
significant accounting policies are described in Note 3 to the Consolidated Financial Statements included in this Annual
Report on Form 10-K. As described in Note 3, we are required to make estimates and assumptions that affect the reported amounts
and related disclosures of assets, liabilities, revenue, and expenses. Our estimates are based on our experience and our interpretation
of economic, political, regulatory, and other factors that affect our business prospects. Many of the inputs into our estimation
process are subjective and are subject to uncertainty over time and therefore, actual results may differ significantly from our
estimates. Note 3 also discloses recent accounting pronouncements applicable to the Company.

We believe that our
most critical accounting estimates are related to the carrying value of our long term assets; accounting for income taxes and the
valuation of deferred tax assets; and the valuation of liabilities associated with warrants, convertible debt carried at fair value,
and Earnout Shares, as they require us to make assumptions that are highly uncertain at the time the accounting estimates are made
and changes in them are reasonably likely to occur from period to period. Management has discussed the development and selection
of these critical accounting estimates with the Audit Committee of our Board (the “Audit Committee”), and the Audit
Committee has reviewed the disclosures presented below. In addition, there are other items within our financial statements that
require estimation, but are not deemed to be critical. However, changes in estimates used in these and other items could have a
material impact on our consolidated financial statements.

Carrying
Value of Long-Lived Assets

The
recoverability of the carrying values of mineral properties is dependent upon economic reserves being discovered or developed
on the properties, permitting, financing, start-up, and commercial production from, or the sale/lease of, or other strategic transactions
related to these properties. Development and/or start-up of a project will depend on, among other things, management’s ability
to raise sufficient capital for these purposes. We assess the carrying cost of our mineral properties for impairment whenever
information or circumstances indicate the potential for impairment. Key inputs include events and circumstances such as our inability
to obtain all the necessary permits, changes in the legal status of our mineral properties, government actions, the results of
exploration activities and technical evaluations and changes in economic conditions, including the price of commodities or input
prices. Many of these inputs are subjective and are subject to uncertainty over time. Such evaluations compare estimated future
net cash flows with our carrying costs and future obligations on an undiscounted basis. If it is determined that the estimated
future undiscounted cash flows are less than the carrying value of the property, an impairment loss will be recorded, measured
by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Where estimates of future net cash
flows are not determinable and where other conditions indicate the potential for impairment, management uses available market
information and/or third-party valuation experts to assess if the carrying value can be recovered and to estimate fair value.

We
review and evaluate our long-lived assets, other than mineral properties, for impairment when events or changes in circumstances
indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated
fair value of the long-lived assets being tested for impairment and their carrying amounts.

Income
Taxes

We
have assets, hold interests, and conduct activities in the U.S. and Canada and are subject to their tax regimes. Tax laws are
complex and continue to evolve. While we have a history of losses, our assumptions made in tax returns are subject to review and
interpretation by taxing authorities and could be modified. Management judgment
is required in determining our provision for income taxes, our deferred tax assets and liabilities, and any valuation allowance
recorded against our deferred tax assets. We consider factors such as the cumulative income or loss in recent years; reversal
of deferred tax liabilities; projected future taxable income exclusive of temporary differences;

57

the character of the income tax
asset, including income tax positions; tax planning strategies and the period over which we expect the deferred tax assets to
be recovered in the determination of the valuation allowance. In the event that actual results differ from these estimates or
we adjust our estimates in the future, we may need to adjust our valuation allowance, which could materially impact our financial
position and results of operations.

Financial
Instruments Carried at Fair Value

The
fair values of our Earnout Shares, Private Warrants, Contingent Consent Warrants, and convertible debt carried at fair value were
determined using various significant unobservable inputs, including a discount rate and our best estimate of expected volatility
and expected holding periods. Changes in the estimated fair values of these liabilities may have material impacts on our results
of operations in any given period, as any increases in these liabilities have a corresponding negative impact on our U.S. GAAP
results of operations. See Notes 9, 10, and 11c to our consolidated financial statements included in this Annual Report on Form
10-K for additional details.

Other

The
Company has one class of shares, being Common Shares. A summary of outstanding shares, share options, warrants, and convertible
debt option as of September 20, 2024, is set out below, on a fully diluted basis.