REEMF 10-K & 10-Q changes, risk factors and insider trading

We are subject to the impact of inflation on wages, capital equipment, general supplies and reagents in the operation of our Demonstration Plant. If the additional funds required by these inflationary cost measures were to prevent us from having or being able to secure the funds to operate the Demonstration Plant for a sufficient amount of time to gather the information required for a commercial-scale plant decision, this could adversely have an adverse impact on our future development plans. Additionally, the contracting for some services relating to the Demonstration Plant, including engineering and construction services, was completed by another consortium member and any disputesdisputes, including over cost increasesincreases, are not controlled by us and may result in contractor payment disputes, liens or other delays to the project. Further, the DoE agreement is with General Atomics, and we do not have direct control over the DoE relationship, invoicing and disposition of the equipment post-operations.

Even with the funds already on hand, the funds raised in ourthe March2026 2024Rights rights offering andOffering, the expected 2025 receiptreceipts of the final $400 in grant monies from the WEA,WEA in mid-2026, and the final $3,700 remaining under the DoE cost share award, we will not have sufficient funds to progress our longer-term activities, including the permitting, licensing, development, and construction related toof our Bear Lodge REE Project. Therefore, the achievement of these activities will be dependent upon the receipt of additional funds through one or more of the following: financings, off-take agreements, joint ventures, strategic transactions, or sales of various assets. Ultimately, in the event that we cannot secure additional financial resources, or complete a strategic transaction in the longer term, we may need to suspend our operational plans or liquidate our business interests, and investors may lose all or part of their investment.

As of March 17,6, 2025,2026, Synchron owned approximately 70%71.4% of the issued and outstanding common shares of the Company. Additionally, Synchron has approval rights for certain corporate actions and the right to nominate three of seven directors to the Company’s Board. Pursuant to the investment agreement, dated October 2, 2017, by and between the Company and Synchron (“the Investment Agreement”), Synchron has significant influence on, and control over the outcome of, certain of our major corporate decisions and matters requiring shareholder approval, including the election of directors, mergers, consolidations and acquisitions, the sale of all or substantially all of our assets and other decisions affecting our capital structure, the amendment of our certificate of incorporation and articles, and our winding up and dissolution. These rights, along with the concentration of ownership and voting power with Synchron, (i) may make it more difficult for any other holder or group of holders of our common shares to significantly influence the way we are managed or the direction of our businessbusiness, and (ii) may make it more difficult for another company to acquire us and for shareholders to receive any related takeover premium unless Synchron approves the acquisition. The interests of Synchron with respect to matters potentially or actually involving or affecting us, such as future acquisitions, financings, and other corporate opportunities, and attempts to acquire us, may conflict with the interests of our other shareholders.

We have suspendedrestarted our federal and state licensing, permitting progression for our Bear Lodge REE Project, and there is a risk to the resumptioncompletion of those efforts in a timely and cost-effective manner.

During the first quarter of 2016, we placed the Bear Lodge REE Project on care-and-maintenance, and all licensing and permitting activities were suspended, including the environmental impact statement (“EIS”) process, state permitting, and the NRC licensing process. The Company continued to hold the Bear Lodge REE Project on care-and-maintenance through 2023. In 2024, we resumed certain of these activities, including certain environmental data collection and technical report updates. However,In ourearly ability to obtain further financing to fund2026, the fullCompany permittingformally restarted the licensing and developmentpermitting of the Bear Lodge REE Project beyondfor whatboth isfederal allowedand bystate permitting; however, our ability to complete the fundspermitting raisedand inlicensing on terms that support the March 2024 rights offeringproject is uncertain.

We have no history of mining, recovering, or refining any mineral products, and our Bear Lodge REE Project is not in development or production. There can be no assurance that the Bear Lodge REE Project will be successfully developed and placed into production, produce minerals or products in commercial quantities or otherwise generate operating earnings. Advancing properties from the exploration stage into development and commercial production requires significant capital and time and will be subject to further feasibility studies, permitting and licensing requirements and construction of the mine, processing plants, roads and related works and infrastructure. We will continue to incur losses until such time, if ever, when our mining activities successfully reach commercial production levels and generate sufficient revenue to fund continuing operations. There is no certainty that we will produce revenue from any source, operate profitably, or provide a return on investment in the future. If we are unable to generate revenues or profits, our shareholders mightmay not be able to realize returns on their investment in our common shares.

We will require additional capital through investment, off-take agreements, joint ventures and/or other partnership arrangements with current investors or other parties for the development of our projects. Although such arrangements may lessen our financial burden in exploring and developing the projects, they will likely also dilute our interest therein or affect our ability to control the development and/or operation of any of theour projects. Our ability to attract additional capital may be limited by our majority shareholder Synchron, as it holds certain contractual approval rights pursuant to the Investment Agreement, and its approval may be required. In addition, Synchron has significant influence on, or the ability to control the outcome of, certain of our major corporate decisions and matters requiring shareholder approval. Any failure of aan off-take partner, joint venture partnerpartner, or other partner to meet its obligations to us or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the off-take agreement, joint ventureventure, or other partnership arrangement and, in turn, on our business performance and on our ability to develop theand/or operate our projects.

In October 2014, we completed a PFS for our Bear Lodge REE Project that updated our mineral resource estimate and refined plans for our process technology. We subsequently updated the mineral resource and more recently completed a TRS (See “Item 2. Properties” of this Annual Report) and Technical Report for the Bear Lodge REE Project; however, the economic assessment of the Bear Lodge REE Project has not been progressed through an updated FS. Subject to further financing and the results of the Demonstration Plant, we may resume work on ana FS. Whether the Company undertakes a FS in the future and, if so, the results of any such study, are uncertain and may indicate project economics that are more or less favorable than those previously reported in 2014 or in the TRS or Technical Report. As our project optimization efforts continue, we cannot ensure that the FSFS, if one is undertaken, will be based upon all of the same inputs used in the PFS and TRS. As a result, we may need to update our processing and/or beneficiation technology, and/or project development plans to enhance economics or further study aspects of the Bear Lodge REE Project. This could result in significant additional delays and expenses or could make financing efforts with respect to such efforts more difficult or not possible. In addition, there is a risk that the Company may not resume work on a FS.

Our only rare earth project at this time is the Bear Lodge REE Project. Our continued viability is based, in large part, on successfully implementing our strategy, including completion of a FS, licensing, permitting and construction of a mine and processing and/or beneficiation facilities in a reasonable timeframe. If we are unable to secure additional capital or enter into a strategic transaction and implement our strategy, or in the event of the imposition of significant additional regulatory burdens or delays or a significant deterioration of the market for rare earth products, our ability to develop a sustainable or profitable business would be materially adversely affected. If the Bear Lodge REE Project does not proceed, then the viability of the Company may depend upon the ability to process REE from sources other than our Bear Lodge REE Project using our proprietary technology assuming the technology is successfully proven through the operation of the Demonstration Plant.

We estimated the initial capital costs required to bring the Bear Lodge REE Project into commercial production in our historical PFS, dated October 9, 2014, at approximately $290,000. We did not evaluate the capital cost estimates in our 2024 TRS or Technical Report for the Bear Lodge REE Project. OurA future FS, if and when completed, is expected to show our estimatedcapital and operating costs will be materially higher than those we previously anticipated, which could make it more difficult to finance the Bear Lodge REE Project or to successfully establish mining operations.

AExternal futureinfluences, like a pandemic or other world health crisis, may have an adverse impact on our business.

We rely on a combination of trade secret protection, nondisclosure agreements, trademarks, and patents to establish and protect our proprietary intellectual property rights in our rare earth technology. As of December 31, 2024,2025, we had on file U.S. provisionala patent applications relating to processing methods, including (i) selective recovery of REEs from mixed chloride leach solutions using oxalic acid, and (ii) separation of thorium from bulk REEs in a solvent extraction (“SX”) process. These provisional applications provided the basis for the current patent portfolio,portfolio which includes two issued U.S. patents and one pending U.S. divisional patent application, and fifteen issued foreign patents across thirteen foreign jurisdictions. The patent claims are generally directed to (1) selective recovery of REEs from mixed chloride leach solutions using oxalic acid, and (2) separation of thorium from bulk REEs in a solvent extraction (“SX”) process. These patents claim priority to provisional applications filed in 2013 and 2014. The issued U.S. patents have a term of 20 years measured from the filing date of the utility patent applications. We licensed our intellectual property, including patents and related technical information, to Synchronour majority shareholder, Synchron, in October 2017, and the license became exclusive to Synchron and its affiliates in October 2019. The Company retains a limited right to use its intellectual property and any enhancements thereto. Several of these technologies may have potential value for application in other industries, and the Company is evaluating this potential.industries. The success of our business depends, in part, on our ability to utilize our proprietary process technologies, and we could encounter unforeseen problems or costs, or both, in scaling up our technologies to commercial applications.

In March 2024, the Company announced the completion ofpublished a new mineral resource estimate based on maximizing the recovery of lanthanum (La) and the key magnet materials of neodymiumNd, (Nd),Pr, praseodymium (Pr), terbium (Tb),Tb, and dysprosium (Dy).Dy. The estimate was focused on the Bull Hill deposit at the Bear Lodge REE Project with long-term upside existing in the Carbon, Whitetail, and Taylor deposits. Unless otherwise indicated, our mineral resources are based upon estimates made by independent geologists. When making determinations about whether to advance the Bear Lodge REE Project to development, we must rely upon such estimated calculations as to the quantity and grades of mineralization contained in the property. Until mineralized material is actually mined and processed, mineral resources and grades of such mineralization must be considered estimates only, which may prove to be unreliable. Because we have not completed a FS on the Bear Lodge REE Project and have not commenced actual production, the mineral resource estimate for the Bear Lodge REE Project may require adjustments or downward revisions. In addition, the grade of material ultimately mined, if any, may differ from that indicated in our mineral resource estimate or in future feasibility studies. Our mineral resource estimate has been determined based on assumed cut-off grades that depend upon estimated REE prices and recovery rates. Any significant increase in cut-off grades could reduce our estimates of mineralization, or the amount of mineralization to be extracted, and could have a material adverse effect on our share price and the value of our Bear Lodge REE Project.

Our success is currently largely dependent on the performance, retention and abilities of our directors, President and Chief Executive Officer (“CEO”), other officers and personnel. The loss of the services of these persons could have a material adverse effect on our business and prospects. There is no assurance that we can maintain the services of our directors, CEO, other officers, or other qualified personnel and consultants required to operate our business. Failure to do so could have a material adverse effect on us and our prospects. We do not maintain life insurance policies on our employees, directors, or consultants.

Because our primary focus is currently the advancement and development of the Demonstration Plant and ultimately the Bear Lodge REE Project, changes in demand for, and the market price of, REE products could significantly affect our ability to develop or finance the Bear Lodge REE Project and eventually attain commercial production or profitability. REE product prices may fluctuate and are affected by numerous factors beyond our control such as interest rates, exchange rates, inflation orinflation, deflation, fluctuation in the relative value of the U.S. dollar against foreign currencies on the world market, global and regional supply, and demand for REE products, and the political and economic conditions of countries that produce and use REEs. Protracted periods of low prices for REE products could significantly reduce our ability to develop the Bear Lodge REE Project and, if we attain commercial production, to maintain profitable operations.

Demand for REE products is impacted by demand for downstream products incorporating rare earths, including hybrid and fully electric vehicles, wind power equipment and other clean technology products, as well as demand in the general automotive and electronics industries. Lack of growth in these markets or the introduction of substitute products could adversely affect the demand for REE products, which would have a material adverse effect on our Bear Lodge REE Project and our business. In contrast, periods of high REE prices are generally beneficial to us; however, strong REE prices, as well as real or perceived disruptions in the supply of REE, also create economic pressure to identify or create non-REE alternate technologies that ultimately could reduce future long-term demand for REE products, and at the same time, may incentivize the development of otherwise marginal mining properties or the development of new, lower cost sources of supply that could reduce or eliminate the market for REEs altogether. For example, automobile manufacturers have announced plans to develop motors for electric and hybrid cars that do not require REE products due to concerns about the available supply of REEs. If the automobile industry or other industries reduce their reliance on rare earthREE products, the resulting change in demand could have a material adverse effect on our business. In particular, if prices or demand for REEs were to decline, our share price would likely decline, and this could also impair our ability to obtain the funding needed for our operations and our ability to find purchasers for our products at prices acceptable to us or at all.

The pricing and demand for REE products is affected by a number of factors beyond our control, including growth of economic development and the global supply and demand for REE products. REE supply markets continue to be dominated by production from China, which produced an estimated 69%70% of the global REE mine production and 93%91% of refined product in 2024.2025. China also dominates the manufacture of metals, NdFeB magnets and other products from REEs. The threat of increased competition may lead our competitors to engage in predatory pricing behavior or manipulation of the available supply of REEs. Advanced technology in recycling REEs may also impact supply and prices. Any increase in the amount of REE products exported from other nations and increased competition may result in price reductions, reduced margins, or loss of potential market share, any of which could materially adversely affect our business. As a result of these factors, we may not be able to compete effectively againstin ourthe future competitors.market.

The success of our business may depend, in part, on the establishment of new markets by us or third parties for certain rare earth products. Although we plan to produce rare earth products for use in end-products such as NdFeB magnets, which are used in critical existing and emerging technologies (hybrid and fully electric vehicles, wind power turbines, robotics, and AI data centers), as well as other REE applications such as oil refining catalysts and compact fluorescent lighting),catalysts, the success of our business may depend on the creation of new markets in addition to the successful commercialization of REE products in existing and emerging markets. Any unexpected costs or delays in the commercialization of any of the foregoing products or applications could have a material adverse effect on our ability to develop our Bear Lodge REE Project or operate our business profitably.

We believe that we hold, or are in the process of obtaining, all licenses and permits necessary to carry on the activities that we currently are conducting or propose to conduct in the near term under applicable laws and regulations. Such licenses and permits are subject to changes in regulations and changes in various operating circumstances. There can beis no guarantee that we will be able to obtain all necessary licenses and permits that may be required for future exploration, development and mining activities, including constructing mines and/or processing and/or beneficiation facilities, and commencing operations at the Bear Lodge REE Project. In addition, if we proceed to production on the Bear Lodge REE Project, we will be required to obtain and comply with permits and licenses that may contain specific operating or other conditions. There can be no assurance that we will be able to obtain such permits and licenses or that we will be able to comply with any such conditions. Our Sundance Gold Project, previously in the exploration stage, but on hold since 2014,2011, does not have any of the permits or licenses that would be necessary to carry on further activities on the project. Costs related to applying for and obtaining permits and licenses may be prohibitive and could delay planned exploration and development activities. Failure to comply with applicable laws, regulations and permitting and licensing requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.

Parties engaged in mining operations may be required to compensate those suffering loss or damage relating to mining activities and may be subject to civil or criminal liability, fines or penalties imposed for violations of applicable laws or regulations. Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on our operations, cause increases in capital expenditures or production costs, or require abandonment or delays in the exploration or the development of either of our projects.

A number of governments or governmental bodies have adopted or are contemplating regulatory changes in response to the potential impact of climate change. In the U.S., on December 15, 2009, the EPA published its findings that emissions of carbon dioxide, methane and other GHGs present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to the warming of the earth’s atmosphere and other climate changes. Based on these findings, the EPA has developed and implemented regulations that restrict GHG emissions under existing provisions of the CAA,CAA. includingThe oneEPA rulerescinded thatits limitsendangerment finding on February 12, 2026, prompting immediate legal challenges. The EPA’s ability and obligation to regulate GHG emissions fromis motortherefore vehiclesin beginninglegal withflux at the 2012moment, modelcreating year.regulatory The EPA has asserted that these final motor vehicle GHG emission standards trigger the CAA construction and operating permit requirements for stationary sources, commencing when the motor vehicle standards took effect on January 2, 2011. On June 3, 2010, the EPA published its final rule to address the permitting of GHG emissions from stationary sources under the Prevention of Significant Deterioration (“PSD”) and Title V permitting programs. This rule “tailored” these permitting programs to apply to certain stationary sources of GHG emissions in a multi-step process, with the largest sources first subject to permitting. However, based on a decision of the U.S. Supreme Court, only facilities already required to obtain PSD permits for other criteria pollutants must also reduce GHG emissions that exceed certain thresholds consistent with guidance for determining “best available control technology” standards for GHG, which guidance was published by the EPA in November 2010.uncertainty.

In addition, both houses of Congress have considered legislation to reduce GHG emissionsemissions, and many states have already taken legal measures to reduce GHG emissions, primarily through the development of GHG inventories, GHG emission fees, GHG permitting and/or regional GHG “cap and trade” programs. Most of these “cap and trade” programs work by requiring major sources of emissions to acquire and surrender emission allowances, with the number of allowances available for purchase reduced each year until the overall GHG emission-reduction goal is achieved. It is likely that, in the absence of federal regulation over GHG following the EPA’s recission of the endangerment finding, certain states will pass additional legislation regulating GHG emissions at the state level.

The mining industry is intensely competitive, and we must compete with other individuals and companies, many of which have greater financial resources, operational experience, and technical capabilities than we have. This competition from other mining companies could adversely impact our efforts to hire experienced mining professionals. Competition for resources at all levels can be very intense, particularly affecting the availability of manpower, drill rigs, mining equipment and production equipment. Increased competition could adversely affect our ability to attract necessary capital funding or attract or retain key personnel or outside technical resources.

To carry out reclamation obligations imposed on us in connection with the potential future development activities at the Demonstration Plant and the Bear Lodge Property, we must allocate financial resources that might otherwise be spent on further exploration and future development programs. We have set up a provision for reclamation obligations as currently anticipated for exploration completed on the Bear Lodge Property,Property and operations conducted at the Demonstration Plant, as appropriate, but thisthese provisionprovisions may not be adequate. If we are required to carry out unanticipated reclamation work, our financial position could be adversely affected.

Due to the relatively high cost of being a public company in the U.S., our Board of Directors may elect to voluntarily deregister our common shares under the Exchange Act and suspend our reporting obligations in the U.S., possibly in combination with an effort to list our common shares on a securities exchange other than the OTCQB Venture Marketplace. No Board approval of deregistration has taken place, but in the future, the Board may authorize the Company to file with the SEC a Form 15 to voluntarily deregister our common shares under Section 12(g) of the Exchange Act and suspend our reporting obligations under Section 15(d) of the Exchange Act. If the Board approves such deregistration, we would file a Form 15 and our obligations to file periodic reports, such as annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, would be suspended immediately upon the filing of the Form 15 with the SEC, and our proxy statement, Section 16 and other Section 12(g) reporting responsibilities would terminate effective 90 days after the filing of the Form 15. We believe that we are eligible to deregister under the Exchange Act. If we were to file a Form 15, we expect that our common shares, which currently trade on the OTCQB Venture Marketplace, would not continue to be quoted on the OTCQB Venture Marketplace. Following any deregistration, we would not expect to publish periodic financial information or furnish such information to our shareholders except as may be required by applicable laws, including Canadian securities laws, or stock exchange rules. As a result of the foregoing factors, deregistration may result in less disclosure about us and may negatively affect the liquidity and trading prices of our common shares.

We have not declared any dividends since our incorporation and do not anticipate that we will do so in the foreseeable future. Our present policy is to retain all available funds for use in our business development and operations. Payment of future cash dividends, if any, will be at the discretion of the Board of Directors and will depend on our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that the Board of Directors considers relevant. In the absence of dividends, investors will only see a return on their investment if the value of our common shares appreciates.appreciate.

It is possible that we will sell common shares, or securities exercisable or convertible into common shares, in order to finance our planned development activities. Future sales of substantial amounts of our securities in the public or private markets wouldcould potentially dilute our existing shareholders and potentially adversely affect the trading prices of our common shares or could impair our ability to raise capital through future offerings of securities. Alternatively, we may rely on debt financing and assume debt obligations that require us to make substantial interest and principal payments that could adversely affect our business or future growth potential.

We are subject to the so-called “penny stock” rules. The SEC has adopted regulations that define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange. For any transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions. A broker-dealer may find it more difficult to trade, and an investor may find it more difficult to acquire or dispose of,of our common shares on the OTCQB Venture Marketplace. Additionally, our trading volume on the over-the-counter exchange fluctuates and has a limited volume, which can impact on the price and trading, and our majority shareholder holds approximately 71% of the shares, which further limits our public float and access to liquidity on our trading platform. These factors could significantly negatively affect the market price of our common shares and our ability to raise capital.capital and may deter other potential investors from investing in our common shares.

Our primary focus has been and continues to be the engineering, permitting, licensing, construction, and operation of the Demonstration Plant.Plant, Ifand successful,as of late 2025, the Demonstrationresumption Plantof will show that our proprietary extraction technology is able to processlicensing and separatepermitting certainactivities REEs from high grade sample materials extracted fromfor our Bear Lodge REE Projectproject. inThe a more efficientlicensing and economicalpermitting mannerefforts thanare traditional REE processing methods and will serve as a precursorexpected to informcontinue thethrough design and estimated cost for a future full-scale production facility.2027.

Throughout 2024, the Company, along with the other consortium members, continued their work on the Demonstration Plant project, and this work is expected to continue until the completion of the project’s operations. In September 2024, the DoE issued its final Project Continuation Notice, confirming the Demonstration Plant’s readiness for operations. This notice, along with the NRC’s approval of operations received in October 2024, cleared the path for operations of the Demonstration Plant to formally commence, with operations to process and separate the REEREEs from the previously stockpiled mineralhigh-grade sample materials from the Bear Lodge REE Project to follow the completion of construction and pre-operation activities. During the productionyear phase,ended whichDecember 31, 2025, the Company continued work on the Demonstration Plant project as described below, and this work is expected to commencecontinue inuntil mid-2025,the completion of the Demonstration PlantPlant’s is expected to produce up to 10 tons (9.1 tonnes) of NdPr oxide.operations.

In June 2023, the Company entered into the WEA Funding Agreement for its previously announced award of a $4,400 grant from the WEA to be used toward the advancement of the Demonstration Plant. This award, along with funds contributed by the Company and the DoE, is being used to fund the Demonstration Plant’s construction and operating costs. As of December 31, 2023, the Company had met the conditions allowing for the invoicing of $2,000 of the $4,400 WEA grant total. This $2,000 was subsequently received on January 31, 2024. By September 30, 2024, the Company had met the conditions allowing for the invoicing of an additional $2,000, which was subsequently received in November 2024. The remaining $400 of the $4,400 grant total, which is conditioned on Demonstration Plant operations and a report to the achievement of other, future milestones,WEA, will be invoiced to the WEA once thosethat final milestonesmilestone havehas been achievedachieved, (which is currently expected in mid-2025).mid-2026.

Since inception, the General Atomics-led consortium has seen increases in the Demonstration PlantPlant’s project costs, including expected final equipment costs, due to, among other factors, inflation. As a result of these cost pressures, General Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant construction and operations budget of approximately $53,600, which iswas approximately 21%22% higher than the original budget of approximately $43,800. In response, the DoE pledged an additional commitment of $2,400 to help fund a portion of this budget increase, with the balance to be funded by the Company, including any amounts in excess of the $53,600 revised DoE approved budget.budget Eventotal. withThe thisCompany increase,currently estimates the Companytotal nowcost expects thatof the full Demonstration Plant projectfrom costs,inception, once operations are complete, will exceed the higher, revised DoE budget totalinclusive of $53,600 and has advised the DoE that it will use Company funds, to the extent it is unable to secure other external funding sources, to cover thoseoperating costs aboveestimates thethrough DoEDecember approved31, cost-share budget, now estimated2026, to be approximately $66,000.$77,500.

Our consolidated net loss for the year ended December 31, 20242025 was $18,451,$4,899, or $0.04$0.01 per share, compared with our consolidated net loss of $8,996,$18,451, or $0.04 per share, for the same period in 2023. The loss per share amounts in each year of $0.04 were approximately the same due to the greater number of shares outstanding atended December 31, 2024 as compared to December 31, 2023 as a result of the shares issued in the 2024 Rights Offering.2024. See our discussion below for the primary drivers of this change. As an exploration stage company, we had no properties in production and generated no revenues during either year.

Our exploration and evaluation costs totaled $2,887 for the year ended December 31, 2025, compared with $18,479 for the year ended December 31, 2024, compared with $8,242 for the same period in 2023.2024. This increasedecrease of $10,237$15,592 was largely attributable to (i) the activities associated with our Bear Lodge REE Project and the Demonstration Plant as workwe progressedshifted from the more expensive equipment acquisition and installation activities during 2024 to the less expensive plant rework and equipment upgrades in 2025, and (ii) the decision to include certain past Demonstration Plant expenses (formerly excluded from our billings under the Cost Share Agreement) (in our billings to the DoE under the Cost Share Agreement. This change to include certain previously excluded costs from the Cost Share Agreement reduced the Company’s share of these costs as definedpartial below).reimbursement is now expected to be received from the DoE. See Note 4 to the Consolidated Financial Statements for a more complete discussion of the Cost Share Agreement.

Our corporate administration costs decreasedincreased by $162$147 on a comparative year-over-year basis, fallingincreasing from $2,828$2,666 in the year ended December 31, 20232024 to $2,666$2,813 for the year ended December 31, 2024.2025. ThisThe decreasemajority wasof largelythese attributableexpenses relate to reductionscosts inassociated with our stockpublic optioncompany expense of $505, partially offset by increases in our employee wagescompliance and benefitsreporting expenses of $304.obligations.

For the years ended December 31, 20242025 and 2023,2024, the Company generated interest income of $1,182$1,009 and $476,$1,182, respectively, on investments of its excess cash holdings.balances. TheThis increase in 2024 interest incomechange was primarilylargely theattributable resultto ofour thelarger substantially higher averageexcess cash balances available for investment during the2024 yearas endedcompared Decemberto 31, 20242025 due to the fundsrights raisedoffering in the 2024 Rights Offering, whichthat closed in March 2024.2024 (the “2024 Rights Offering”).

During each of the years ended December 31, 2023 and 2024, the Company recognized grant income of $2,000,$2,000 with the achievement of the first and second milestones, respectively,milestone under the WEA Funding Agreement. There was no similar transaction during the year ended December 31, 2025. See Note 5 to the Consolidated Financial Statements for a more complete discussion of the WEA Funding Agreement.

For the yearsyear ended December 31, 2024 and 2023,2025, we recorded accretion expense of nil compared to $236 andfor $283,the respectively,year ended December 31, 2024, with the accretion expense recorded during 2024 being related to the Company’s option to repurchase approximately 640 acres (257 hectares) of non-core real property in Wyoming for not less than $1,200 or greater than $1,850 in the form of cash, common shares of the Company, or a combination of cash and common shares of the Company. Accretion expense was recorded each reporting period to increase the Repurchase Option liability to the maximum exercise price of $1,850, less any annual option payments of $25.Wyoming. With the Company’s repurchase of this land duringin October 2024, the Company discontinued its recording of accretion expense and will not incur further accretion expense in future periods.periods See Note 8related to thethis Consolidatedrepurchase Financial Statements for a more complete discussion of the Repurchase Option.option.

ForNet thecash yearsused in investing activities of $289 for year ended December 31, 20242025 was for the purchase of buildings and 2023,equipment. For the year ended December 31, 2024, our investing activities consumed cash of $1,559 and $4, respectively,$1,559, with the majority of the 2024 spending related to the Landrepurchase Repurchaseof property from Whitelaw Creek LLC in the amount of $1,507.

At December 31, 2024,2025, we had a working capital balance of $24,821$19,666, which represented ana increasedecrease of $17,012$5,155 from our December 31, 20232024 working capital balance of $7,809.$24,821. This increasedecrease was largely the result of the $35,286reduction in netour proceedscash receivedand cash equivalents balance, which decreased by $7,417 from the$26,732 2024at RightsDecember Offering,31, 2024, to $19,315 at December 31, 2025, partially offset by increasedan amountsincrease paidof by$2,509 thein Companyour duringrelated theparty yearbalance, endedwhich changed from a $895 liability at December 31, 20242024, underto thean Cost Share Agreement (as defined below) and for the paymentasset of other$1,614 ongoingat expenses.December 31, 2025.

Due to inflationary cost pressures on labor, equipment, and consumables, as well as cost increases associated with certain optimized plant engineering and design parameters, General Atomics, on behalf of the consortium, submitted to the DoE an updated Demonstration Plant project budget of approximately $53,600, which iswas approximately 21%22% higher than the original budget of approximately $43,800. In response, the DoE pledged an additional commitment of $2,400 (increasing its total commitment to approximately $24,300$24,200) in September 2024 to help fund a portion of this budget increase, with the balance to be funded by the Company, including any amounts in excess of the $53,600 revised budget total, now estimated to be approximately $66,000.$77,500 The funds raised by the Company in the 2024 Rights Offering are expected to support the operationsinclusive of theoperating Demonstrationcost Plantestimates forthrough aDecember sufficient31, period of time to gather the information necessary for a commercialization decision.2026.

With the funds raised from the 2024 Rights Offering, the Company expects to have sufficient funds to complete commissioning and operation of the Demonstration Plant; however, even with these funds and the expected receipt of the remaining WEA grant monies, the Company will still require substantial additional funds to complete the permitting and licensing, and ultimate construction and operation of a commercial mine and plant for the Bear Lodge REE Project. Ultimately, in the event the Company cannot secure additional financial resources,resources or complete a strategic transaction in the longer term,transaction, the Company may need to curtail orits plans for the Demonstration Plant, suspend itspermitting operationaland/or plansdevelopment regardingof the Bear Lodge REE Project or other initiatives, or potentially liquidate its business interests, and investors may lose all or part of their investment.

CostFinancial ShareAssistance Agreement – Related Party

Our mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The reclamation obligation is based on when spending for an existing disturbance will occur. We reclaim the disturbance from our exploration programs on an ongoing basis and, therefore, the portion of our reclamation obligation corresponding to our exploration programs willthat are expected to be settled in the near term and isare classified as a current liability. The remaining reclamation associated with environmental monitoring programs is classified as a long-term liability; however, because we have not declared proven and probable reserves as defined by Item 1300 of Regulation S-K or NI 43-101, the timing of these reclamation activities is uncertain as the reclamation areas will be utilized once the project is operating. For exploration stage properties that do not qualify for asset capitalization, the costs associated with the obligation are charged to operations. For development and production stage properties, the costs are added to the capitalized costs of the property and amortized using the units-of-production method. We review, on a quarterly basis, unless otherwise deemed necessary, the reclamation obligation associated with our properties.

Our Bear Lodge REE Project reclamation obligation is secured by a surety bond held for the benefit of the state of Wyoming in an amount determined by the applicable federal or state regulatory agency. We also maintain a surety bond for the decommissioning and reclamation of the Demonstration Plant property.

During the three months ended MarchJune 31,30, 2026, there were no material changes to the risk factors disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2025.

The following management’s discussion and analysis of the consolidated financial results and condition of Rare Element Resources Ltd. (collectively, “we,” “us,” “our,” “RER” or the “Company”) for the three and six months ended MarchJune 31,30, 2026, has been prepared based on information available to us as of MayAugust 13,4, 2026. This discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto included herewith and the audited Consolidated Financial Statements of RER for the year ended December 31, 2025, and the related notes thereto filed with our Annual Report on Form 10-K for the year ended December 31, 2025, which have been prepared in accordance with U.S. GAAP. This discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results, performance, or achievements may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth elsewhere in this Quarterly Report. See “Cautionary Note Regarding Forward-Looking Statements.”

Our primary focus is on the operation of the Demonstration Plant, and as of late 2025, the resumption of licensing and permitting activities for our Bear Lodge REE Project. The licensing and permitting efforts are expected to continue into early 2028.

In September 2024, the DoE issued its final Project Continuation Notice, confirming the Demonstration Plant’s readiness for operations. This notice, along with the NRC’s approval of operations received in October 2024, cleared the path for operations of the Demonstration Plant to formally commence, with operations to process and separate REEs from the previously stockpiled high-grade sample materials from the Bear Lodge REE Project. During the threefirst monthshalf ended March 31,of 2026, the Company continued work on the Demonstration Plant project as described below, and this work is expected to continue until the completion of the Demonstration Plant’s operations.

In early 2025, several design and equipment issues were identified during the Demonstration Plant’s equipment testing phase. As a result of these issues, wethe Company initiated an as-built design review in April 2025. Following the review and related project rework, Demonstration Plant operations formally commenced in March 2026. Progress toward full-scale operations has since been delayed as the Company works through operational and equipment changes to efficiently produce the rare earth concentrates required as feed to the separation circuits within the plant. With this delay, the Company now expects full, end-to-end processing operations at the Demonstration Plant to commence in the third quarter of 2026 and are expected to continue for up to 12 months. During the operations phase, the Demonstration Plant is expected to produce up to 10 tons of NdPr oxide.

In June 2023, the Company entered into the WEA Funding Agreement for a $4,400 grant from the WEA to be used toward the advancement of the Demonstration Plant. As of MarchJune 31,30, 2026, the Company had received $4,000the full amount of the $4,400 WEA grant total. The remaining $400 of the $4,400 grant total, which is conditioned on Demonstration Plant operations and a report to the WEA, is currently expected to be invoiced in mid-2026.grant. See Note 5 to the Condensed Consolidated Financial Statements for additional details regarding the WEA Funding Agreement.

As discussed in NoteNotes 1 and 4 to the Condensed Consolidated Financial Statements, the Demonstration Plant’s project costs, have increased since inception, due to corrective actions, upgrades and inflation andamong other factors. The Company currently estimates the total cost of the Demonstration Plant from inception, inclusive of operating cost estimates through completion of the Demonstration Plant’s operations phase, to be approximately $77,500.$82,000.

Through MarchJune 31,30, 2026, the DoE had made payments totaling approximately $20,500 towards its commitment of approximately $24,200, leaving a balance of approximately $3,700 to be collected from the DoE under the current cost share award.

To fund the Company’s share of these cost increases, in March 2026, the Company completed the 2026 Rights Offering for gross proceeds of $30,968. See Note 7 to the Condensed Consolidated Financial Statements for additional details regarding the terms of the 2026 Rights Offering. The 2026 Rights Offering closed on March 4, 2026, generating net proceeds of $30,478. These funds, in conjunction with the funds already on hand and those funds still expected to be received from the DoE and WEA,DoE, will be used to progress the Company’s business strategy, which includes (i) the continued operation of the Demonstration Plant for a sufficient time to provide the information to support a commercialization decision, (ii) the advancement of projects for the as-constructed Demonstration Plant beyond the current NdPr separation objectives, including applying the technology to the separation of HREEs and possibly to third party feed sources, (iii) the completion of federal and state permitting and licensing for the Bear Lodge REE Project, and (iv) other general corporate purposes.

Even with the funds already on hand, the funds raised in the 2026 Rights Offering,hand and the expected receipt of the remaining WEA grant monies and DoE funds, the Company will still require additional funding to design, construct, and operate the Bear Lodge REE Project.

During the first three monthshalf of 2026, we continued to monitor the U.S. political climate and federal actions aimed at securing a domestic REE supply chain. The Trump Administration has sustained and expanded initiatives from prior years to reduce reliance on China-dominated REE supply chains and strengthen the U.S. defense industrial base.

Key developments in 2025 and earlythrough the first half of 2026 include:

In October 2025, China announced enhanced export controls covering 12 of 17 REEs, including extraterritorial requirements for foreign-produced items containing even 0.1% Chinese-origin REEs or manufactured using Chinese refining equipment, as well as a prohibition on REE exports for military applications. Following a meeting between President Trump and Chinese President Xi Jinping on October 30, 2025, China agreed to suspend these enhanced controls, along with certain other related curtailments, for one year as part of a broader trade truce. As of MarchJune 30, 2026, no new Chinese restrictions have been announced, and REE export volumes from China have increased following streamlined licensing. The Company continues to monitor these developments, as ongoing geopolitical tensions and U.S. tariffs/trade measures could affect REE supply chains and our projectBear Lodge REE Project economics.

The U.S. government has also accelerated direct financial support for domestic REE and critical minerals projects throughout 2025 and earlythe first half of 2026, including equity or warrant participation and infrastructure funding. The Company continues to evaluate opportunities to participate in these programs.

OurFor the three and six months ended June 30, 2026, our consolidated net losslosses fortotaled the three months ended March 31, 2026 was $2,133,$2,758, or $0.00 per share, and $4,891, or $0.01 per share, respectively, compared with our consolidated netlosses lossfor ofthe $2,395,three and six months ended June 30, 2025, which totaled $1,180, or $0.00 per share, forand the$3,575, threeor months$0.01 endedper Marchshare, 31, 2025.respectively. See our discussion below for the primary drivers of thisthese change.changes. As an exploration stage company, we had no properties in production and generated no revenues during either period.

Our exploration and evaluation costs totaled $1,719$2,978 for the three months ended MarchJune 31,30, 2026, compared with $1,877$818 for the three months ended MarchJune 31,30, 2025 and $4,697 for the six months ended June 30, 2026, compared with $2,695 for the six months ended June 30, 2025. ThisThese decreaseperiod-to-period ofincreases $158 waswere largely attributable to the activities associated with (i) our Demonstration Plant as we shiftedmoved from finalthe constructionas-built anddesign testingreview stage in early 2025 to the commencement of plant operations activities during theearly quarter ended March 31, 2025, to plant rework2026 and operations(ii) start-upour activitiesBear duringLodge REE Project licensing and permitting efforts as these efforts ramped up over the quarterfirst endedhalf March 31,of 2026.

Our corporate administration costs decreasedremained byrelatively $170 on a comparative year-over-years basis, decreasing from $750constant for the three months ended MarchJune 31,30, 2026 and 2025 at $539 and $568, respectively, while decreasing by $199 over the comparative six-month periods, decreasing from $1,318 for the six months ended June 30, 2025 to $580$1,119 for the threesix months ended MarchJune 31,30, 2026. This decrease was largely attributable to the additional costs incurredrelated in the filing ofto our 2025 Form S-3 registration statement filing which were not incurred during the threesix months ended MarchJune 31,30, 2025.2026.

For the three months ended MarchJune 31,30, 2026 and 2025, the Company generated interest income of $213$413 and $284,$261, respectively, and $626 and $545 for the six months ended June 30, 2026 and 2025, respectively, on investments of its cash holdings. ThisThese decreaseincreases were primarily the result of $71the washigher primarilyaverage cash balances available for investment during the 2026 periods due to the lowerfunds ratesraised ofin interestthe earned2026 Rights Offering, which closed on our invested cash balances during the quarter ended March 31,4, 2026.

Net cash used in operating activities was $2,725$6,191 for the threesix months ended MarchJune 31,30, 2026, compared with $2,269$3,537 for the same period in 2025. This increase of $456$2,654 was largely attributabledue to changes(i) the $1,799 increase in our operating expenses over the comparable June 30, 2025 period and (ii) the additional cash consumed by our working capital that consumed $646 of cash$1,331 duringin the threesix months ended MarchJune 31,30, 2026, while generating cash of $77 during the three months ended March 31, 2025.2026.

Net cash provided by financing activities of $30,553 for the threesix months ended MarchJune 31,30, 2026 stemmed from the receipt of $30,478 in net proceeds from the 2026 Rights Offering and $75 from the exercise of stock options. There were no similar transactions during the threesix months ended MarchJune 31,30, 2025.

At MarchJune 31,30, 2026, we had a working capital balance of $48,102,$30,250, which was an increase of $28,436$10,584 from our December 31, 2025 working capital balance of $19,666. This increase was largely thestemmed result offrom the net proceeds of $30,478 received from theour 2026 Rights Offering, partially offset by operatingthe cash flows.consumed in our operations and by the $14,975 used to purchase a long-term investment instrument.

As discussed in Note 4 to the Condensed Consolidated Financial Statements and in “Overview and Outlook” above, the Demonstration Plant’s project costs have increased since inception. The DoE pledged an additional commitment of $2,400 (increasing its total commitment to approximately $24,200) in September 2024 to help fund a portion of this budget increase, with the balance to be funded by the Company, including any amounts in excess of the $53,600 revised budget total. The Company currently estimates the total Demonstration Plan project cost to be approximately $77,500,$82,000, inclusive of cost estimates through completion of the DemonstrationsDemonstration Plant’s operations phase.

Through MarchJune 31,30, 2026, the DoE has paid a total of approximately $20,500 towards its commitment of approximately $24,200, leaving a balance of approximately $3,700 to be invoiced and collected from the DoE under the current cost share award.

As discussed in Note 1 to the Condensed Consolidated Financial Statements and in “Overview and Outlook” above, design and equipment issues identified in early 2025 led to a complete design review and the implementation of corrective actions and upgrades that continued into 2026, with Demonstration Plant operations formally commencing in March 2026. Progress toward full-scale operations has since been delayed as the Company works through certain operational and equipment changes to efficiently produce the rare earth concentrates required as feed to the separation circuits within the plant. With this delay, the Company now expects full, end-to-end processing operations at the Demonstration Plant to commence in the third quarter of 2026.

The funds raised by the Company in the 2026 Rights Offering (see Note 7 to the Condensed Consolidated Financial Statements), in conjunction with the funds already on handhand, the funds received from the WEA, and those funds expected to be received from the DoE and WEA,DoE, will be used to progress the Company’s business strategy as described in “Overview and Outlook” above. However, even with these funds, the Company will still require substantial additional funds to complete the design, construction, and operation of a commercial mine and plant for the Bear Lodge REE Project.

As discussed in Note 4 to the Condensed Consolidated Financial Statements, in September 2025, at the Company’s request, General Atomics and the Company formally requested a novation of the financial assistance agreement between General Atomics and the DoE. If completed, the Company wouldis expected to be named the recipient of the award under the novated agreement and certain conditions are expected to be confirmed, including the potential for additional DoE funding support for further advancements of the Demonstration Plant.