LEASES

3 Months Ended

Mar. 31, 2025

LEASES

LEASE

NOTE 7 – LEASES

Philipsburg Operating Lease

In September 2024, the Company executed a contract to lease a metals concentration facility located in Philipsburg, Montana. The Company amended this lease in March 2025 extending the term of the lease to September 2, 2026 and changing the fixed monthly lease payments to $10,000 per month through the month of June 2025, $20,000 per month during the months of July 2025 to October 2025, and $95,000 per month thereafter to the end of the lease term. The $95,000 per month payment includes a fixed monthly fee of $45,000 and a minimum milling fee of $50,000 per month. An additional payment of $50 per ton is due each month in the last twelve months of the lease for all milling in excess of 1,000 tons per month. The Company has not included any milling fee payments above the minimum in its lease liability as it is not deemed probable at this time. The Company recorded the present value of the original fixed lease cost in September 2024 over the lease term as a lease liability and Right of Use (“ROU”) asset. As a result of the amendment in March 2025, the Company reduced the ROU asset and corresponding lease liability by $37,448. The Company used its incremental borrowing rate of 3.49% when determining the present value of future payments of this operating lease as the rate implicit in the lease was not readily determinable. The lease includes provisions for the Company to use the existing mill building and all contents related to its use and to process owned and non-owned ore containing antimony and other critical minerals. The lease does not include any transfer of ownership of the facility at the end of the lease, nor any option to extend the lease or purchase the facility, nor any residual value guarantees. The Company can terminate the lease without cause with thirty days’ notice and must provide the facility to the lessor at the end of the lease in the same condition as it was received.

The lease liability related to this operating lease, which represents the present value of the lease payments, was $701,557 at inception of the lease amendment and $691,894 and $755,569 at March 31, 2025 and December 31, 2024, respectively. The ROU asset, which includes the unamortized portion of initial direct costs (“IDC”) and is adjusted for any accrued or prepaid lease, was $565,289 and $354,652 at March 31, 2025 and December 31, 2024, respectively. During the three months ended March 31, 2025 and 2024, the Company recorded $176,962 and $nil, respectively, of lease expense related to this lease and IDC in “Cost of Revenues” in the Condensed Consolidated Statements of Operations. Lease payments were $30,000 and $nil during the three months ended March 31, 2025 and 2024, respectively, which were included in operating cash flows.

Dallas Operating Lease

In the first quarter of 2025, the Company executed a contract to lease office space for its corporate headquarters located in Dallas, Texas with a lease term of 24 months and total fixed payments during the term of $3,945 per month, or $94,680 in total. The Company is amortizing the lease on a straight-line basis over the term of the lease. The Company recorded the present value of the lease payments over the term as a lease liability and ROU asset. The Company’s incremental borrowing rate of 3.49% was used as the discount rate as the rate implicit in the lease was not readily determinable. The lease does not include any transfer of ownership of the office space at the end of the lease, nor any option to extend the lease or purchase the facility, nor any residual value guarantees. The Company cannot terminate the lease without cause, and must provide the office space to the lessor at the end of the lease in the same condition as it was received.

The lease liability related to this operating lease, which represents the present value of the lease payments, and ROU asset were $63,416 at inception of the lease and were $55,921 and $nil at March 31, 2025 and December 31, 2024, respectively. During the three months ended March 31, 2025 and 2024, the Company recorded $7,890 and $nil, respectively, of lease expense related to this lease in “General and administrative” in the Condensed Consolidated Statements of Operations. Lease payments were $7,890 and $nil during the three months ended March 31, 2025 and 2024, respectively, which were included in operating cash flows. The Company made a security deposit payment of $3,945 at the inception of the lease.

The following table summarizes expense and cash payments for both operating leases during the periods noted:

	For the three months ended
	March 31, 2025		March 31, 2024
Operating lease expense	$	184,852	$	-
Cash paid for operating lease liability		37,890		-
Cash paid for security deposit		3,945		-

At March 31, 2025, the weighted average remaining lease term of operating leases was 17 months and the weighted average discount rate for operating leases was 3.49%.

The following table is a maturity analysis of the future minimum lease payments for operating leases as of March 31, 2025:

Twelve months ending March 31,
2026	$	632,340
2027		514,450
Total operating lease payments		1,146,790
Less: discount on lease liability		(398,975	)
Total operating lease liability		747,815
Less: current portion of operating lease liability		(452,826	)
Noncurrent operating lease liability	$	294,989