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Medallion Resources Ltd. – IPO: ‘F-1’ on 5/12/22

On:  Thursday, 5/12/22, at 6:53pm ET   ·   As of:  5/13/22   ·   Accession #:  1493152-22-13128   ·   File #:  333-264905

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 5/13/22  Medallion Resources Ltd.          F-1         5/12/22   18:67M                                    M2 Compliance LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: F-1         Registration Statement by a Foreign Issuer          HTML   1.01M 
 2: EX-3.1      Articles of Incorporation/Organization or Bylaws    HTML     25K 
 3: EX-3.2      Articles of Incorporation/Organization or Bylaws    HTML     22K 
 4: EX-3.3      Articles of Incorporation/Organization or Bylaws    HTML     22K 
 5: EX-4.3      Instrument Defining the Rights of Security Holders  HTML     81K 
 6: EX-10.1     Material Contract                                   HTML    225K 
 7: EX-10.2     Material Contract                                   HTML     10K 
 8: EX-10.3     Material Contract                                   HTML     10K 
 9: EX-10.4     Material Contract                                   HTML     10K 
10: EX-10.5     Material Contract                                   HTML     10K 
11: EX-10.6     Material Contract                                   HTML      9K 
12: EX-10.7     Material Contract                                   HTML     24K 
13: EX-10.8     Material Contract                                   HTML     86K 
14: EX-21.1     Subsidiaries List                                   HTML      8K 
15: EX-23.1     Consent of Expert or Counsel                        HTML      9K 
16: EX-23.3     Consent of Expert or Counsel                        HTML      9K 
18: EX-FILING FEES  Filing Fees                                     HTML     17K 
17: EX-99.1     Miscellaneous Exhibit                               HTML     12K 

As filed with the Securities and Exchange Commission on May 12, 2022

Registration No. 333-[●]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

MEDALLION RESOURCES LTD.

(Exact Name of Registrant as Specified in its Charter)

325 Howe Street, Suite 410

Vancouver, British Columbia, Canada V6C 1Z7

(604) 681-9558
(Address and telephone number of principal executive offices)

With copies to:

[●]

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: As soon as practicable after effectiveness of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION DATED [ ] , 2022

PRELIMINARY PROSPECTUS

Medallion Resources Ltd.

[2,000,000] Units

Each Unit Consisting of

One Common Share and

One Warrant to Purchase One Common Share

This is the initial public offering in the United States of [2,000,000] units (the “Units”) of Medallion Resources Ltd., a British Columbia corporation. Each Unit consists of one Common Share (the “Common Shares”) and one warrant (the “Warrant”) to purchase one Common Share (with an exercise price no less than 100% of the price of each Unit sold in this offering). The Units have no stand-alone rights and will not be certified or issued as stand-alone securities. The Common Shares and Warrants are immediately separable and will be issued separately in this offering. Each Warrant offered hereby is immediately exercisable on the date of issuance and will expire five years from the date of issuance.

Our Common Shares are currently trading on the TSX Venture Exchange (the “TSXV”) under the symbol “MDL”, the OTCQB under the symbol “MLLOF,” and the Frankfurt Stock Exchange under the symbol “MRDN”. The public offering price and underwriting discount in respect of the Units used in this preliminary prospectus corresponds to an assumed public offering price per share of USD [5.00] per Unit.

We have applied to list our Common Shares and Warrants on the Nasdaq Capital Market under the symbols “MDL” and “MDLW” respectively. There can be no assurance that we will be successful in listing our Common Shares or Warrants on the Nasdaq Capital Market.

Except as otherwise indicated, information in this prospectus, other than as set forth in our financial statements and the notes thereto, reflect an assumed one for [forty-five] (1-for-[45]) reverse stock split of our Common Shares, which we refer to as the “Reverse Split” to be effective immediately prior to the effective date of the registration statement of which this prospectus forms a part.

Investing in our securities involves a high degree of risk, including the risk of losing your entire investment. See “Risk Factors” beginning on page 9 to read about factors you should consider before buying our securities.

We are an “emerging growth company” as defined under the federal securities laws and may elect to comply with reduced public company reporting requirements. Please read “Implications of Our Being an Emerging Growth Company” beginning on page 4 of this prospectus for more information.

Neither the Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

We have granted a 45-day option to the representative of the underwriters, exercisable one or more times in whole or in part, to purchase up to an additional [375,000] Units from us at the public offering price of USD [5.00] per Unit less the underwriting discounts payable by us, solely to cover over-allotments, if any.

The underwriters expect to deliver the securities against payment in New York, New York on or about [●], 2022.

Sole Book-Running Manager

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” and “continue” or the negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees of future performance. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of their dates.

We cannot predict all the risks and uncertainties that may impact our business, financial condition or results of operations. Accordingly, the forward-looking statements in this prospectus should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this prospectus and include information concerning possible or projected future results of our operations, including statements about potential acquisition or merger targets, strategies or plans; business strategies; prospects; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to a variety of factors and risks, including, but not limited to, those set forth under “Risk Factors” starting page of this prospectus.

Many of those risks and factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Considering these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. All subsequent written and oral forward-looking statements concerning other matters addressed in this prospectus and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated under the laws of British Columbia. Some of our directors and officers, and some of the experts named in this prospectus, are residents of Canada or otherwise reside outside of the United States, and all or a substantial portion of their assets, and all or a substantial portion of our assets, are located outside of the United States. We have appointed an agent for service of process in the United States, but it may be difficult for shareholders who reside in the United States to effect service within the United States upon those directors, officers and experts who are not residents of the United States. It may also be difficult for shareholders who reside in the United States to realize in the United States upon judgments of courts of the United States predicated upon our civil liability and the civil liability of our directors, officers and experts under the United States federal securities laws. Furthermore, because substantially all of our assets and substantially all of our directors and officers are located outside the United States, any judgment obtained in the United States against us or any of our directors and officers may not be collectible within the United States. There can be no assurance that U.S. investors will be able to enforce against us, members of our Board of Directors, officers or certain experts named herein who are residents of Canada or other countries outside the United States, any judgments in civil and commercial matters, including judgments under the federal securities laws.

ABOUT THIS PROSPECTUS

Throughout this prospectus, unless otherwise designated or the context suggests otherwise,

INDUSTRY AND DATA FORECASTS

This prospectus contains data related to the REE industry. These industry data include projections that are based on a number of assumptions which have been derived from industry and government sources which we believe to be reasonable. The REE industry may not grow at the rate projected by industry data, or at all. The failure of the industry to grow as anticipated is likely to have a material adverse effect on our business and the market price of our Common Shares. In addition, the rapidly changing nature of the REE industry subjects any projections or estimates relating to the growth prospects or future condition of our industries to significant uncertainties. Furthermore, if any one or more of the assumptions underlying the industry data turns out to be incorrect, actual results may, and are likely to, differ from the projections based on these assumptions.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our securities, discussed under “Risk Factors,” before deciding whether to buy our securities.

Overview

Our objective is to become a technology leader within the industries essential to the generation, storage, and efficient use of clean energy. Our Strategic Plan, announced on April 26, 2022, includes a strengthened executive leadership team, listing of our Common Shares on the Nasdaq Capital Market, and rebranding as Medallion Innovations Corp. to better reflect our future direction.

Our focus has been to identify and develop innovative technologies for the rare earth element (“REE”) industry that are lower cost and reduce the environmental and social impacts of production when compared with incumbent technologies.

Our Strategic Plan is intended to enhance our existing REE processing technology portfolio by identifying, incubating and gaining exclusive rights to the commercialization of additional innovative technology platforms across the entire REE value chain and broadening our focus to include other high-performance materials. We believe that our technology portfolio will facilitate the production of materials, deployment of processes, and generation of essential data for the global clean energy transition.

The clean energy transition, involving the widespread generation of renewable energy and the electrification of transport, is now demonstrating dramatic growth that is at risk because of weaknesses in global supply chains. Our Strategic Plan reflects the global shift from a fossil fuel-based economy to a minerals-based economy centered on “friendly nation” supply chains and is intended to position us for better access to capital and the ability to build a team with essential skills and experience in technology development and commercialization needed to execute on our Strategic Plan.

We believe it is essential that minerals required for the clean energy transition be produced in accordance with environmental, social & governance (“ESG”) best practices. The production of electric vehicles (“EVs”) and clean energy technologies should not cause harm to the communities or the environment where they are produced.

Upon listing of our Common Shares on Nasdaq Capital Market, Alfredo Ramos Plasencia will join us as Chief Executive Officer and director, while Dr. Kurt Forrester, who joined our Board of Directors in March 2022, will transition to our leadership team as Chief Technology Officer. Mark Saxon will continue as a director and assume a business development role focused on mining industry opportunities.

Our initial focus is to continue commercialization of our two REE processing technologies:

We are evaluating a proprietary and privately-owned metallization process, where REE compounds are converted to REE metal, a crucial step in the production of high strength REE permanent magnets. Our evaluation is ongoing, and there can be no assurance as to when we might acquire rights to the technology underlying this process, if at all.

As part of our new Strategic Plan, we are building the team and capital structure to enable replication of the evaluation and commercialization approach that identified and acquired rights to the LAD Chromatography process and identification of the REE metallization and recycling technology. This methodology includes evaluation of commercial needs, assessment of alternative technologies, identification of undervalued disruptive technology, and support for commercial development of additional intellectual property (“IP”) with clear paths to commercialization.

We are in the development stage and currently have no revenue producing activities.

Our registered office is 325 Howe Street, Suite 410, Vancouver, British Columbia, V6C 1Z7.

Our Opportunity

Our objective is to identify, evaluate and, as appropriate, acquire and commercially develop innovative intellectual property related to the production of materials, processes and data critical to the clean energy transformation.

In May 2021, the International Energy Agency (“IEA”) published an extensive flagship report on critical minerals that stated, “Building solar photovoltaic (PV) plants, wind farms and electric vehicles (EVs) generally requires more minerals than their fossil fuel-based counterparts. A typical electric car requires six times the mineral inputs of a conventional car, and an onshore wind plant requires nine times more mineral resources than a gas-fired power plant.” (The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions.)

The IEA report also stated, “The prospect of a rapid increase in demand for critical minerals – well above anything seen previously in most cases – raises huge questions about the availability and reliability of supply. In the past, strains on the supply-demand balance for different minerals have prompted additional investment and measures to moderate or substitute demand. But these responses have come with time lags and have been accompanied by considerable price volatility. Similar episodes in the future could delay clean energy transitions and push up their cost. Given the urgency of reducing emissions, this is a possibility that the world can ill afford.”

This fundamental change in consumption of critical minerals is occurring at a time of heightened supply chain vulnerability, which has been further exacerbated by the COVID-19 pandemic and recent geopolitical instability.

We expect that this challenge will require access to and investment in more efficient and effective processing technologies including the extraction of critical minerals as byproducts of other activities, and increased recycling of critical minerals from end-of-life products – the circular economy.

We believe that our best opportunities lie between proof of concept and the start of pilot work, where nascent technologies have been identified but not optimized and Medallion’s leadership can contribute with its extensive expertise in technology development, innovation management and business development to accelerate commercialization of emerging technologies.

REE permanent magnets are critical components of motors in EVs, generators in wind turbines and are an essential part of the modern economy, performing core functions in components critical to clean energy, transportation, consumer electronics, medical equipment, robotics, and national defense.

We developed the MMP to address health, safety, environmental and economic challenges associated with established processing technology. We identified the need for better technology solutions, undertook internal research and process engineering, and developed MMP to be ready for scale-up to demonstration plant and then commercial scale operations.

MMP extracts mixed REE concentrate from monazite, which is a byproduct of heavy mineral sand mining that is generally stockpiled. The MMP adds value to a material that is already mined, so there is no incremental mining activity.

We also identified the need to separate salable REE compounds from mixed concentrates using less energy and fewer reagents than current standard practice. We completed extensive technical evaluation of alternative technologies and identified the LAD Chromatography process as a potential market-leading opportunity for separating REEs from all raw material feed stocks excluding coal sources and recycled materials from manufacturing wastes and recyclates from battery and magnet sources.

We anticipate the LAD Chromatography process can reduce capital and operating costs for REE separation compared with incumbent technologies, and be readily adaptable to multiple feedstocks, including but not limited to monazite.

On March 28, 2022, following a technology review, we secured exclusive rights to evaluate a proprietary, privately-owned metallization process, where REE compounds are converted to REE metal, a crucial step in the production of high performance REE permanent magnets. There are few entities outside China that have this metallization capacity.

This innovative technology could enable conversion of REE compounds to metal in a continuous process, requiring less energy than incumbent processes and without toxic fluorine chemistry.

If the evaluation is positive, we will seek to secure exclusive rights to the technology at which point we would have a full suite of REE processing technologies from upstream concentrate to downstream alloy feedstock for magnet manufacturing.

Commercially, our methodology is to use an enhanced licensing model whereby we receive performance-related compensation or, alternatively, build, own, and operate a specialized processing plant to convert a range of low value feedstocks to high value materials.

We expect that our technical and commercial methodologies will allow us to create tangible value in addition to and in advance of potential cash flow from operations or enhanced licensing fees. For example, we have entered into a non-binding letter of intent with ACDC Metals Pty Ltd, a privately-held Australian company that is seeking to develop heavy mineral sand projects in eastern Australia. We have already received founders’ stock in ACDC and, under the terms of the Letter of Intent, would receive milestone payments as ACDC advances its projects.

In conjunction with implementing this Strategic Plan, we intend to rebrand as Medallion Innovations Corp.

Consent Solicitation

Implementation of the Up-Listing will require the Company to take certain actions in order to comply with the Initial Listing Requirements under Nasdaq Rules 5505(a) and 5505(b)(1) including a reverse split of our Common Shares in order to meet the minimum bid price of USD 4.00 per share.

At our Annual General and Special Meeting of Shareholders to be held on May 27, 2022, our shareholders will be asked to consider and approve resolutions (the “Up-List Resolutions”) to authorize the Board of Directors to proceed with listing our Common Shares on Nasdaq Capital Market, completing a Reverse Split of our Common Shares up to one for ninety (1-for-90), and, if the Board of Directors determines that it is in the best interest of the Company at the time, delisting our Common Shares from the TSXV once trading of our Common Shares has been established on the Nasdaq Capital Market.

Foreign Private Issuer Status

We are a foreign private issuer within the meaning of the rules under the Exchange Act. As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:

Implications of being an Emerging Growth Company

As a company with less than USD 1.07 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

We may choose to take advantage of some or all of the available exemptions. We have taken advantage of some reduced reporting burdens in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein. Accordingly, such information may be different than the information you receive from other public companies in which you hold stock.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies.

Risk Factor Summary

Our business is subject to a number of risks and uncertainties, including those highlighted immediately following this summary. Some of these risks are:

THE OFFERING

The number of shares of our Common Shares to be outstanding after this offering is based on 70,194,437 ([1,559,877] shares following the Reverse Split) of our Common Shares outstanding, as of December 31, 2021, and excludes:

Unless we specifically state otherwise, the information in this prospectus assumes no exercise by the underwriter of the over-allotment option.

Implementation of the Up-Listing will require the Company to take certain actions in order to comply with the Initial Listing Requirements under Nasdaq Rules 5505(a) and 5505(b)(1) including a reverse split of our Common Shares in order to meet the minimum bid price of USD 4.00 per share.

At our Annual General and Special Meeting of Shareholders to be held on May 27, 2022, our shareholders will be asked to consider and approve resolutions (the “Up-List Resolutions”) to authorize the Board of Directors to proceed with listing our Common Shares on Nasdaq Capital Market, completing a Reverse Split of our Common Shares up to one for ninety (1-for-90], and, if the Board of Directors determines that it is in the best interest of the Company at the time, delisting our Common Shares from the TSXV once trading of our Common Shares has been established on the Nasdaq Capital Market.

SUMMARY FINANCIAL DATA

The following summary data from the consolidated statements of comprehensive loss for the nine months ended December 31, 2021 and 2020 and for the fiscal years ended March 31, 2021, and 2020, and the consolidated statements of financial position data as of December 31, 2021 and 2020 and March 31, 2021 and 2020. Per share amounts presented below have not been adjusted for the Reverse Split.

Our management believes that the assumptions underlying our financial statements are reasonable. You should not view our historical results as an indicator of our future performance.

Selected Data from the Unaudited Condensed Consolidated Interim Statements of Comprehensive Loss

(In Canadian dollars, except number of shares)

Selected Data from the Consolidated Statements of Comprehensive Loss

(In Canadian dollars, except number of shares)

Selected Data from the Unaudited Condensed Consolidated Interim Statements of Financial Position

(In Canadian dollars, except number of shares)

Selected Data from the Consolidated Statements of Financial Position

(In Canadian dollars, except number of shares)

RISK FACTORS

An investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and our condensed consolidated financial statements and related notes. If any of these risks actually occur, our business, financial condition, results of operations or cash flow could be materially and adversely affected, which could cause the trading price of our securities to decline, resulting in a loss of all or part of your investment.

Risks Related to Our Business

Our results of operations could be adversely affected by health outbreaks such as the COVID-19 pandemic.

A significant outbreak, epidemic, or pandemic of contagious diseases in any geographic area in which we operate or plan to operate could result in a health crisis adversely affecting the economies, financial markets and overall demand for our services in such areas. In addition, any preventative or protective actions that governments implement or that we take in response to a health crisis, such as travel restrictions, quarantines, or site closures, may interfere with the ability of our employees, suppliers, and customers to perform their responsibilities. Such results could have a material adverse effect on our business development.

The continuing global COVID-19 pandemic has created significant volatility, uncertainty and economic disruption. The extent to which the COVID-19 pandemic continues to impact our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including: the duration and scope of the pandemic; governmental, business and individuals’ actions, including vaccination requirements, that have been and continue to be taken in response to the pandemic; the impact of the pandemic on economic activity and actions taken in response; the effect on future suppliers demand for our processing technologies and our future customers’ demand for our products; any closures of our and our suppliers’ or customers’ offices and facilities; and the need for enhanced health and hygiene requirements or social distancing or other measures in attempts to counteract future outbreaks in our offices and facilities. Potential business partners (feedstock suppliers and REE customers) may also slow down decision-making, delay planned work or seek to terminate existing agreements. Any of these events could adversely affect our business development and financial condition.

To the extent the COVID-19 pandemic or a similar public health threat has an impact on our business, it is likely to also have the effect of heightening many of the other risks described in this “Risk Factors” section.

Our financial statements contain an explanatory paragraph regarding uncertainty as our ability to raise capital and therefore cast substantial doubt about our ability to continue as a going concern.

Our audited consolidated financial statements were prepared assuming that we will continue as a going concern. However, the report of our independent registered public accounting firm included elsewhere in this prospectus contains an explanatory paragraph on our consolidated financial statements stating there is substantial doubt about our ability to continue as a going concern, meaning that we may not be able to continue in operation for the foreseeable future or be able to realize assets and discharge liabilities in the ordinary course of operations. Such an opinion could materially limit our ability to raise additional funds through the issuance of new debt or equity securities or otherwise. There is financing will be available when needed to allow us to continue as a going concern. The perception that we may not be able to continue as a going concern may also make it more difficult to raise additional funds or operate our business due to concerns about our ability to meet our contractual obligations.

Based on current operating plans and together with cash flows from operating activities, available debt financing arrangements and financial support from our shareholders, who may provide us additional equity financing in the case we are not able to meet our financial liabilities, we believe that we have resources to fund our operations until May 2022 but may require further funds to finance our activities thereafter. We may also consider potential financing options with banks or other third parties.

We are a growth-stage company with a history of losses, and we expect to incur significant expenses and continuing losses for the near-term.

We incurred total comprehensive losses for the years ended March 31, 2021, and the year ended March 31, 2020. We believe we will continue to incur operating and net losses for the near-term. Even if we achieve profitability, there can be no assurance that we will be able maintain profitability in the future. Our potential profitability is particularly dependent upon the continued adoption of EVs and PVs by consumers, the widespread adoption of electric trucks and other vehicles, and other electric transportation modalities, and solar photovoltaic plants, which may not occur. Further, EVs and PVs are a developing technology, and our future business performance is dependent upon our ability to supply critical minerals to these consumers that require them to support their businesses. If EVs and PVs commoditize and prices decrease more rapidly than we have forecasted, our market share and results of operations may be adversely impacted.

We may be adversely affected by fluctuations in demand for, and prices of, rare earth products.

We expect to derive revenues, if any, from the sale of REEs and other critical minerals. Changes in demand for, and the market price of, these minerals could significantly affect us. The value and price of our Common Shares and our financial results may be significantly adversely affected by declines in the prices of REE and other critical minerals and products. Rare earth minerals and related product prices may fluctuate and are affected by numerous factors beyond our control, such as interest rates, exchange rates, inflation or 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 rare earth minerals and products, and the political and economic conditions of countries that produce rare earth minerals and products.

A prolonged or significant economic contraction in the United States or worldwide could put downward pressure on market prices of rare earth minerals and products. Protracted periods of low prices for rare earth minerals and products could significantly reduce future revenues and the availability of required development funds in the future. This could cause substantial reductions to, or a suspension of, REE production operations and impair asset values.

Extended periods of high commodity prices may create economic dislocations that may be destabilizing to rare earth minerals supply and demand and ultimately to the broader markets. Periods of high rare earth mineral market prices generally are beneficial to us. However, strong rare earth mineral prices also create economic pressure to identify or create alternate technologies that ultimately could depress future long-term demand for rare earth minerals and products, and at the same time may incentivize development of otherwise marginal mining properties.

The availability of REE- and other critical mineral bearing feedstock and the commercial terms off such material may be affected by changes in the REE market.

Demand for REE products is impacted by demand for downstream products incorporating rare earth minerals, including hybrid and electric vehicles, wind power equipment and other clean technology products, as well as demand in the general automotive, electronics, robotics, and medical device industries. Lack of growth in these markets could adversely affect the demand for REE products, which would have a material adverse effect on 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 development of otherwise marginal mining properties. As a result of the global pandemic and general economic slowdown during 2020, for instance, REE prices declined during the first half of the year. In late 2020 REE prices began to rise as first China’s economy and then the rest of the world economies began recovering from the COVID-19 impact. Protracted periods of low prices for REE products could significantly reduce our ability to develop our projects and, if we attain commercial production, to maintain profitable operations. 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 projects, and our ability to find purchasers for our products at prices acceptable to us or at all.

The success of our business will depend, in part, on the continued growth of existing and emerging uses for REE and other critical minerals products.

The success of our business will depend, in part, on the growth of existing and emerging uses for REE and other critical mineral products. Our strategy is to develop rare earth products, including neodymium praseodymium (“NdPr”), which are used in critical existing and emerging technologies, such as hybrid and electric vehicles, wind turbines, robotics, medical equipment, military equipment and other high-growth, advanced motion technologies. The success of our business depends on the continued growth of these end markets and successfully commercializing REE, including NdPr, in such markets. If the market for these critical existing and emerging technologies does not grow as we expect, grows more slowly than we expect, or if the demand for our products in these markets decreases, then our business, prospects, financial condition and operating results could be harmed. In addition, the market for these technologies tends to be cyclical, which exposes us to increased volatility, and it is uncertain as to how such macroeconomic factors will impact our business. Any unexpected costs or delays in the commercialization of our Medallion Monazite Process or LAD Chromatography process, or less than expected demand for the critical existing and emerging technologies that use rare earth products, could have a material adverse effect on our financial condition or results of operations.

An increase in the global supply of rare earth products, dumping and/or predatory pricing by our competitors may materially adversely affect our ability to raise capital, develop our projects or operate profitably.

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 60% of the global REE mine production in 2021. China also dominates the manufacture of metals, neodymium iron boron (“NdFeB”) magnets and other products from REE. 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 against our future competitors.

The success of our business may depend, in part, on the establishment of new uses and markets for rare earth products.

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 electric vehicles, wind power turbines, oil refining catalysts and compact fluorescent lighting), 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 projects or operate our business profitably.

Our failure to maintain certification could adversely affect our business.

International risks and violations of international regulations may significantly reduce our future revenue and profits, and subject us to criminal or civil enforcement actions, including fines, suspensions, or disqualification from future U.S. federal procurement contracting. Although we have policies and procedures to monitor legal and regulatory compliance, our employees, subcontractors, and agents could take actions that violate these requirements. As a result, our international risk exposure may be more or less than the percentage of revenue attributed to our international operations.

If we fail to complete a project in a timely manner, miss a required performance standard, or otherwise fail to adequately perform on a project, then we may incur a loss on that project, which may reduce or eliminate our overall profitability.

Licensing our MMP process or installing a LAD Chromatography processing facility may require us to provide performance standards such as milestones or guarantees. If we fail to meet those standards, we may either incur significant additional costs or be held responsible for the costs to rectify damages due to late completion or failure to achieve the required performance standards. Failure to meet performance standards or complete performance on a timely basis could also adversely affect our reputation.

If our business partners fail to perform their contractual obligations, we could be exposed to legal liability, loss of reputation and profit reduction or loss on the project.

We routinely enter into subcontracts and joint ventures, teaming arrangements, and other contractual arrangements. Success under these arrangements depends in large part on whether our business partners fulfill their contractual obligations satisfactorily. In addition, when we operate through a joint venture in which we are a minority holder, we have limited control over many project decisions, including decisions related to the joint venture’s internal controls, which may not be subject to the same internal control procedures that we employ. If these unaffiliated third parties do not fulfill their contract obligations, the partnerships or joint ventures may be unable to adequately perform and deliver their contracted services. Under these circumstances, we may be obligated to pay financial penalties, provide additional services to ensure the adequate performance and delivery of the contracted services, and may be jointly and severally liable for the other’s actions or contract performance. These additional obligations could result in reduced profits and revenues or, in some cases, significant losses for us with respect to the joint venture, which could also affect our reputation in the industries we serve.

If our contractors and subcontractors fail to satisfy their obligations to us or other parties, or if we are unable to maintain these relationships, our revenue, profitability, and growth prospects could be adversely affected.

We depend on contractors and subcontractors in conducting our business. There is a risk that we may have disputes with our subcontractors arising from, among other things, the quality and timeliness of work performed by the subcontractor, client concerns about the subcontractor, or our failure to extend existing task orders or issue new task orders under a subcontract. In addition, if a subcontractor fails to deliver on a timely basis the agreed-upon supplies, fails to perform the agreed-upon services, or goes out of business, then we may be required to purchase the services or supplies from another source at a higher price, and our ability to fulfill our obligations as a prime contractor may be jeopardized. This may reduce the profit to be realized or result in a loss on a project for which the services or supplies are needed.

We also rely on relationships with other contractors when we act as their subcontractor or joint venture partner. The absence of qualified subcontractors with which we have a satisfactory relationship could adversely affect the quality of our service and our ability to perform under some of our contracts. Our future revenue and growth prospects could be adversely affected if other contractors eliminate or reduce their subcontracts or teaming arrangement relationships with us, or if a government agency terminates or reduces these other contractors’ programs, does not award them new contracts, or refuses to pay under a contract.

Our failure to meet contractual schedule or performance requirements that we have guaranteed could adversely affect our operating results.

In certain circumstances, we can incur liquidated or other damages if we do not achieve project completion by a scheduled date. If we or an entity for which we have provided a guarantee subsequently fails to complete the project as scheduled and the matter cannot be satisfactorily resolved with the client, we may be responsible for cost impacts to the client resulting from any delay or the cost to complete the project. Our costs generally increase from schedule delays and/or could exceed our projections for a particular project. In addition, project performance can be affected by a number of factors beyond our control, including unavoidable delays from governmental inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials, changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, labor disruptions and other factors. As a result, material performance problems for existing and future contracts could cause actual results of operations to differ from those anticipated by us and could cause us to suffer damage to our reputation within our industry and client base.

Continuing worldwide political, social, and economic uncertainties may adversely affect our revenue and profitability.

The last several years have been periodically marked by political, social and economic concerns, including decreased consumer confidence, the lingering effects of international conflicts, energy costs and inflation. This instability could affect our future business activities. Further, ongoing economic instability in the global markets could limit our ability to access the capital markets at a time when we would like, or need, to raise capital, which could have an impact on our ability to react to changing business conditions or new opportunities.

Our international operations expose us to legal, political, and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.

Minerals processing is an international business, and we anticipate activity in Canada, Australia, the European Union, and the United Kingdom as well as the United States. International business is subject to a variety of risks, including:

exposure to civil or criminal liability under the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act, the Canadian Corruption of Foreign Public Officials Act, the anti-boycott rules, trade and export control regulations, as well as other international regulations.

We are subject to significant governmental regulations, including permitting, licensing and approval processes that affect our operations and could impact the cost and timing of conducting our business.

Our current and future activities will be governed by laws and regulations, including the following, among others:

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 be no guarantee that we will be able to obtain all necessary licenses and permits that may be required to maintain the current or planned exploration, development and mining activities, including constructing mines and/or beneficiation and processing facilities, and commencing operations at our projects. In addition, if we proceed to production on our projects, we must 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. 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 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 projects.

We could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws.

The FCPA and similar anti-bribery laws generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. The U.K. Bribery Act of 2010 prohibits both domestic and international bribery, as well as bribery across both private and public sectors. In addition, an organization that “fails to prevent bribery” by anyone associated with the organization can be charged under the U.K. Bribery Act unless the organization can establish the defense of having implemented “adequate procedures” to prevent bribery. Improper payments are also prohibited under the Canadian Corruption of Foreign Public Officials Act. Local business practices in many countries outside the United States create a greater risk of government corruption than that found in the United States and other more developed countries. We cannot ensure that our policies and procedures will protect us from potential reckless or criminal acts committed by individual employees or agents. If we are found to be liable for anti-bribery law violations, we could suffer from criminal or civil penalties or other sanctions that could have a material adverse effect on our business.

We could be adversely impacted if we fail to comply with domestic and international export laws.

To the extent we export technical services, data and products outside of the United States, we are subject to U.S. and international laws and regulations governing international trade and exports, including but not limited to the International Traffic in Arms Regulations, the Export Administration Regulations, and trade sanctions against embargoed countries. A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges, and suspension or debarment from participation in U.S. government contracts, which could have a material adverse effect on our business.

Changes in tax laws could increase our tax rate and materially affect our results of operations.

We are subject to tax laws in the United States and numerous foreign jurisdictions. There are calls for changes to fiscal and tax policies, which may include comprehensive tax reform, in the United States and elsewhere. In addition, many international legislative and regulatory bodies have proposed and/or enacted legislation that could significantly impact how U.S. multinational corporations are taxed on foreign earnings. Many of these proposed and enacted changes to the taxation of our activities could increase our future taxes.

New legal requirements could adversely affect our operating results.

Our business and results of operations could be adversely affected by the passage of climate change, defense, environmental, infrastructure and other legislation, policies and regulations. Growing concerns about climate change may result in the imposition of additional environmental regulations. For example, legislation, international protocols, regulation or other restrictions on emissions could increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our services. In addition, relaxation or repeal of laws and regulations, or changes in governmental policies regarding environmental, defense, infrastructure or other industries we serve could result in a decline in demand for our services, which could in turn negatively impact our revenues. We cannot predict when or whether any of these various proposals may be enacted or what their effect will be on us or on our customers.

Changes in resource management, environmental, or infrastructure industry laws, regulations, and programs could directly or indirectly impact our prospective business partners and indirectly impact our business development.

Some of our potential business partnerships may be directly or indirectly impacted by changes in U.S. federal, state, local or foreign laws and regulations pertaining to the resource management, environmental, and infrastructure industries.

We may be subject to liabilities under environmental laws and regulations.

Our operations are subject to numerous U.S. and international environmental protection laws and regulations that are complex and stringent. For example, we must comply with a number of U.S. federal government laws that strictly regulate the handling, removal, treatment, transportation, and disposal of toxic and hazardous substances. Under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (“CERCLA”), and comparable state laws, we may be required to investigate and remediate regulated hazardous materials. CERCLA and comparable state laws typically impose strict, joint and several liabilities without regard to whether a company knew of or caused the release of hazardous substances. The liability for the entire cost of clean-up could be imposed upon any responsible party. Other principal U.S. federal environmental, health, and safety laws affecting us include, but are not limited to, the Resource Conservation and Recovery Act, National Environmental Policy Act, the Clean Air Act, the Occupational Safety and Health Act, the Federal Mine Safety and Health Act of 1977 (the “Mine Act”), the Toxic Substances Control Act, and the Superfund Amendments and Reauthorization Act. Our business operations may also be subject to similar state and international laws relating to environmental protection. Further, past business practices at companies that we have acquired may also expose us to future unknown environmental liabilities. Liabilities related to environmental contamination or human exposure to hazardous substances, or a failure to comply with applicable regulations, could result in substantial costs to us, including clean-up costs, fines, civil or criminal sanctions, and third-party claims for property damage or personal injury or cessation of remediation activities. Our continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial liability.

We could be subject to environmental lawsuits.

Neighboring landowners and other third parties could file claims based on environmental statutes and common law for personal injury and property damage allegedly caused by the release of hazardous substances or other waste material into the environment on or around our projects. There can be no assurance that our defense of such claims will be successful. A successful claim against us could have an adverse effect on our business prospects, financial condition and results of operation.

Legal proceedings, investigations, and disputes could result in substantial monetary penalties and damages, especially if such penalties and damages exceed or are excluded from existing insurance coverage.

We engage in engineering, program management, and technical services that can result in substantial injury or damages that may expose us to legal proceedings, investigations, and disputes. For example, in the ordinary course of our business, we may be involved in legal disputes regarding personal injury claims, employee or labor disputes, professional liability claims, and general commercial disputes involving project cost overruns and liquidated damages, as well as other claims. In addition, in the ordinary course of our business, we frequently make professional judgments and recommendations about environmental and engineering conditions of project sites for our clients, and we may be deemed to be responsible for these judgments and recommendations if they are later determined to be inaccurate. Any unfavorable legal ruling against us could result in substantial monetary damages or even criminal violations. We maintain insurance coverage as part of our overall legal and risk management strategy to minimize our potential liabilities; however, insurance coverage contains exclusions and other limitations that may not cover our potential liabilities. Generally, our insurance program covers workers’ compensation and employer’s liability, general liability, automobile liability, professional errors and omissions liability, property, and contractor’s pollution liability (in addition to other policies for specific projects). Our insurance program includes deductibles or self-insured retentions for each covered claim that may increase over time. In addition, our insurance policies contain exclusions that insurance providers may use to deny or restrict coverage. Excess liability and professional liability insurance policies provide for coverage on a “claims-made” basis, covering only claims actually made and reported during the policy period currently in effect. If we sustain liabilities that exceed or that are excluded from our insurance coverage, or for which we are not insured, it could have a material adverse impact on our financial condition, results of operations and cash flows.

Cyber security breaches of our systems and information technology could adversely impact our ability to operate.

We will develop, install and maintain information technology systems for ourselves, as well as for partners. Contracts for the performance of information technology services, as well as various privacy and securities laws, require us to manage and protect sensitive and confidential information from disclosure. We also need to protect our own internal trade secrets and other business confidential information, as well as personal data of our employees and contractors, from disclosure. For example, the European Union’s General Data Protection Regulation (“GDPR”) extends the scope of the European Union data protection laws to all companies processing data of European Union residents, regardless of the company’s location. In addition, the California Consumer Privacy Act (“CCPA”) increases the penalties for data privacy incidents. The GDPR and CCPA are just examples of privacy regulations that are emerging in locations where we work.

We face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to our and our clients’ proprietary or classified information. We rely on industry-accepted security measures and technology to securely maintain all confidential and proprietary information on our information systems. In addition, we rely on the security of third-party service providers, vendors, and cloud services providers to protect confidential data. In the ordinary course of business, we have been targeted by malicious cyber-attacks. A user who circumvents security measures could misappropriate confidential or proprietary information, including information regarding us, our personnel and/or our clients, or cause interruptions or malfunctions in operations. As a result, we may be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches.

We also rely in part on third-party software and information technology vendors to run our critical accounting, project management and financial information systems. We depend on our software and information technology vendors to provide long-term software and hardware support for our information systems. Our software and information technology vendors may decide to discontinue further development, integration or long-term software and hardware support for our information systems, in which case we may need to abandon one or more of our current information systems and migrate some or all of our accounting, project management and financial information to other systems, thus increasing our operational expense, as well as disrupting the management of our business operations. Any of these events could damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.

Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations.

We maintain insurance coverage from third-party insurers as part of our overall risk management. If any of our third-party insurers fail, suddenly cancel our coverage, or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase, and the management of our business operations would be disrupted. In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

Force majeure events, including natural disasters, pandemics and terrorist actions, could negatively impact the economies in which we operate or disrupt our operations, which may affect our financial condition, results of operations, or cash flows.

Force majeure or extraordinary events beyond the control of the contracting parties, such as natural and man-made disasters, as well as pandemics and terrorist actions, could negatively impact the economies in which we operate by causing the closure of offices, interrupting projects, and forcing the relocation of employees. We typically remain obligated to perform our services after a terrorist action or natural disaster unless the contract contains a force majeure clause that relieves us of our contractual obligations in such an extraordinary event. If we are not able to react quickly to force majeure, our operations may be affected significantly, which would have a negative impact on our financial condition, results of operations, or cash flows.

We have only a limited ability to protect our intellectual property rights, and our failure to protect our intellectual property rights could adversely affect our competitive position.

We rely upon a combination of nondisclosure agreements and other contractual arrangements, as well as copyright, trademark, patent and trade secret laws to protect our proprietary information. We also enter into proprietary information and intellectual property agreements with employees, which require them to disclose any inventions created during employment, to convey such rights to inventions to us, and to restrict any disclosure of proprietary information. Trade secrets are generally difficult to protect. Although our employees are subject to confidentiality obligations, this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the infringement of our patents and copyrights. Further, we may be unable to detect unauthorized use of our intellectual property or otherwise take appropriate steps to enforce our rights. Failure to adequately protect, maintain, or enforce our intellectual property rights may adversely limit our competitive position.

Assertions by third parties of infringement, misappropriation or other violations by us of their intellectual property rights could result in significant costs and substantially harm our business, financial condition and operating results.

In recent years, there has been significant litigation involving intellectual property rights in technology industries. We may face from time to time, allegations that we or a supplier or customer have violated the rights of third parties, including patent, trademark, and other intellectual property rights. If, with respect to any claim against us for violation of third-party intellectual property rights, we are unable to prevail in the litigation or retain or obtain sufficient rights or develop non-infringing intellectual property or otherwise alter our business practices on a timely or cost-efficient basis, our business, financial condition or results of operations may be adversely affected.

Any infringement, misappropriation or related claims, whether or not meritorious, are time consuming, divert technical and management personnel, and are costly to resolve. As a result of any such dispute, we may have to develop non-infringing technology, pay damages, enter into royalty or licensing agreements, cease utilizing products or services, or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us.

Our actual business and financial results could differ from the estimates and assumptions that we use to prepare our consolidated financial statements, which may significantly reduce or eliminate our future profits.

To prepare consolidated financial statements in conformity with International Financial Reporting Standards (“IFRS”), management is required to make estimates and assumptions as of the date of the consolidated financial statements. These estimates and assumptions affect the reported values of assets, liabilities, and expenses, as well as disclosures of contingent assets and liabilities. Our actual business and financial results could differ from those estimates, which may significantly reduce or eliminate future profits.

Foreign currency fluctuations and local laws and practices may reduce our competitiveness and sales in foreign markets.

The relative change in currency values creates fluctuations in product pricing for international customers. These changes in foreign end-customer costs may result in lost orders and reduce the competitiveness of our products in certain foreign markets. These changes may also negatively impact the financial condition of some foreign customers and reduce or eliminate their future orders of our products. We also face adverse changes in, or uncertainty of, local business laws or practices, including the following:

Our failure to manage any of these risks successfully could harm our international operations and adversely impact our business, operating results and financial condition.

Increased costs of commodities could affect our financial condition.

Costs are affected by the price of commodities such as fuel, rubber, and electricity. Such commodities are at times subject to volatile price movements, including increases that could make production at certain operations less profitable. A material increase in costs at any significant location could have a significant effect on our current and future operations.

Increased competition could adversely affect our ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future.

The mineral processing industry is intensely competitive. Significant competition exists for the acquisition of properties producing or capable of producing, REE or other metals. We will require significant capital, technical resources, personnel and operational experience to effectively compete in the minerals processing industry. We may be at a competitive disadvantage in acquiring additional projects because we must compete with other individuals and companies, many of which have greater financial resources, operational experience and technical capabilities than us. We may also encounter increasing competition from other companies in our efforts to hire experienced professionals. Competition for resources at all levels is currently very intense, particularly affecting the availability of manpower, production equipment and spare parts. Increased competition could adversely affect our ability to attract necessary capital funding or acquire suitable technology platforms.

We are a small operator in a highly competitive industry and may not have the adequate resources to compete effectively.

We compete with other mineral processing and mining companies for the acquisition of mineral claims, permits, concessions and other mineral interests as well as for the recruitment and retention of qualified employees. Upon the start of processing, we will compete against large and established companies in the world market to sell our products. Many of our competitors have greater resources than we do. Increased competition could result in increased costs and lower prices for REEs and other critical minerals resulting in reduced profitability. Consequently, our revenues, operations and financial condition could be materially adversely affected.

Industry consolidation may result in increased competition, which could result in a reduction in revenue.

Some of our competitors have made, or may make, acquisitions or enter into partnerships or other strategic relationships to achieve competitive advantages. In addition, new entrants not currently considered competitors may enter our market through acquisitions, partnerships or strategic relationships. We expect these trends to continue as demand for rare earth materials increases. Industry consolidation may result in competitors with more compelling product offerings or greater pricing flexibility than we have, or business practices that make it more difficult for us to compete effectively, including on the basis of price, sales, technology or supply. These competitive pressures could have a material adverse effect on our business.

Our resources may not be sufficient to manage our expected growth, and a failure to properly manage our potential growth would be detrimental to our business.

We may fail to adequately manage our anticipated future growth. Any growth in our operations will place a significant strain on our administrative, financial and operational resources, and increase demands on our management and on our operational and administrative systems, controls and other resources. We cannot assure you that our existing personnel, systems, procedures or controls will be adequate to support our operations in the future or that we will be able to successfully implement appropriate measures consistent with our growth strategy. As part of this growth, we may have to implement new operational and financial systems, procedures and controls to expand, train and manage our employee base, and maintain close coordination among our staff. We cannot guarantee that we will be able to do so, or that if we are able to do so, we will be able to effectively integrate them into our existing staff and systems.

If we are unable to manage growth effectively, our business, operating results and financial condition could be materially adversely affected. As with all expanding businesses, the potential exists that growth will occur rapidly. If we are unable to effectively manage this growth, our business and operating results could suffer. Anticipated growth in future operations may place a significant strain on management systems and resources. In addition, the integration of new personnel will continue to result in some disruption to ongoing operations. The ability to effectively manage growth in a rapidly evolving market requires effective planning and management processes. We will need to continue to improve operational, financial and managerial controls, reporting systems and procedures, and will need to continue to expand, train and manage our work force.

We have made and expect to continue to make acquisitions. Acquisitions could disrupt our operations and adversely impact our business and operating results. Our failure to conduct due diligence effectively, or our inability to successfully integrate acquisitions, could impede us from realizing all of the benefits of the acquisitions, which could weaken our results of operations.

A key part of our growth strategy is to acquire intellectual property and process technologies that broaden our technical capabilities. Acquisitions involve certain known and unknown risks that could cause our actual growth or operating results to differ from our expectations. For example:

If we fail to conduct due diligence on our potential targets effectively, we may, for example, not identify problems at target process technologies, or fail to recognize incompatibilities or other obstacles to successful integration. The integration process may disrupt our business and, if implemented ineffectively, may preclude realization of the full benefits expected by us and could harm our results of operations. In addition, the overall integration of the combining process technologies may result in unanticipated problems, expenses, liabilities, and competitive responses, and may cause our stock price to decline. The difficulties of integrating an acquisition include, among others:

In addition, even if the operations of an acquisition are integrated successfully, we may not realize the full benefits of the acquisition, including the synergies, cost savings or growth opportunities that we expect. These benefits may not be achieved within the anticipated time frame, or at all.

Further, acquisitions may cause us to:

Joint ventures and other partnerships may expose us to risks.

We will require additional capital through investment, 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 our projects, they will likely also dilute our interest therein or affect our ability to control development of either of our projects. Further, any failure of a joint venture partner 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 joint venture or other partnership arrangement and, in turn, on our business performance and on our ability to develop our projects

We may not be able to acquire rights to the proprietary and privately-owned metallization process that we are currently evaluating.

We are evaluating a proprietary and privately-owned metallization process, where REE compounds are converted to REE metal, a crucial step in the production of high strength REE permanent magnets. Our evaluation is ongoing, and there can be no assurance as to when we might acquire rights to the technology underlying this process, if at all.

We may experience difficulty attracting and retaining qualified management to meet the needs of our anticipated growth, and the failure to manage our growth effectively could have a material adverse effect on our business and financial condition.

Competition for additional qualified management is intense, and we may be unable to attract and retain additional key personnel, or to attract and retain personnel on terms acceptable to us. Management personnel are currently limited, and they may be unable to manage our expansion successfully and the failure to do so could have a material adverse effect on our business, results of operations and financial condition. We have not entered into non-competition agreements. As our business is substantially dependent upon the directors, executive officers and consultants, the lack of non-competition agreements poses a significant risk to us in the event such persons were to resign or be terminated from such positions. Under such circumstances, such persons may provide confidential information and key contacts to our competitors, and we may have difficulties in preventing the disclosure of such information. Such disclosure would have a material adverse effect on our business and operations.

Our operations are dependent upon key personnel, the loss of which would be detrimental to our business.

The nature of our business, including our ability to continue our exploration and development activities, depends, in large part, on the efforts of key personnel such as Mark Saxon, our Chief Executive Officer, or Alfredo Ramos Plasencia who will become our Chief Executive Officer upon completion of the up-listing . The loss of Mr. Saxon or Mr. Ramos could have a material adverse effect on our business.

Employee, agent, or partner misconduct, or our failure to comply with anti-bribery and other laws or regulations, could harm our reputation, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.

Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one of our employees, agents, or partners could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with government procurement regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting, environmental laws, and any other applicable laws or regulations. For example, as previously noted, the FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our policies mandate compliance with these regulations and laws, and we take precautions to prevent and detect misconduct. However, since our internal controls are subject to inherent limitations, including human error, it is possible that these controls could be intentionally circumvented or become inadequate because of changed conditions. As a result, we cannot assure that our controls will protect us from reckless or criminal acts committed by our employees or agents. Our failure to comply with applicable laws or regulations or acts of misconduct could subject us to fines and penalties, loss of security clearances, and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits, and subject us to criminal and civil enforcement actions.

Our business activities may require our employees to travel to and work in countries where there are high security risks, which may result in employee death or injury, repatriation costs or other unforeseen costs.

Certain of our contracts may require our employees travel to and work in high-risk countries that are undergoing political, social, and economic upheavals resulting from war, civil unrest, criminal activity, acts of terrorism, or public health crises. For example, we currently have employees working in high security risk countries such as Afghanistan and Iraq. As a result, we risk loss of or injury to our employees and may be subject to costs related to employee death or injury, repatriation, or other unforeseen circumstances. We may choose or be forced to leave a country with little or no warning due to physical security risks.

Our failure to implement and comply with our safety program could adversely affect our operating results or financial condition.

Our project sites may put our employees and others in close proximity with mechanized equipment, moving vehicles, chemical and manufacturing processes, and highly regulated materials. On some project sites, we may be responsible for safety, and, accordingly, we have an obligation to implement effective safety procedures. Our safety program is a fundamental element of our overall approach to risk management, and the implementation of the safety program is a significant issue in our dealings with our business partners. Unsafe job sites and office environments have the potential to increase employee turnover, increase the cost of a project, expose us to types and levels of risk that are fundamentally unacceptable, and raise our operating costs. The implementation of our safety processes and procedures are monitored by various agencies, including the U.S. Mine Safety and Health Administration (“MSHA”), and rating bureaus, and may be evaluated by certain clients in cases in which safety requirements have been established in our contracts. Our failure to meet these requirements or our failure to properly implement and comply with our safety program could result in reduced profitability, the loss of projects, or potential litigation, and could have a material adverse effect on our business, operating results, or financial condition.

We may have customer concentration, so the loss of, or significant reduction in, purchases by our largest customers could adversely affect our business, financial condition, results of operations and cash flows.

There are inherent risks whenever a significant percentage of total revenues are concentrated with a limited number of customers. Revenues from our largest customers in the future may fluctuate from time to time based on numerous factors, including market conditions, which may be outside of our control. If any of our future largest customers experience declining revenues due to market, economic or competitive conditions, we could be pressured to reduce the prices that we charge for our services, which could have an adverse effect on our margins, profitability, cash flows and financial position.

We may have feedstock supplier concentration, so the loss of, or significant reduction in, deliveries by our largest suppliers could adversely affect our business, financial condition, results of operations and cash flows.

There are inherent risks whenever a significant percentage of total revenues are based on feedstock supply from a limited number of suppliers. Revenues derived from our largest suppliers in the future may fluctuate from time to time based on numerous factors, including market conditions, which may be outside of our control. If any of our largest future customers experience declining revenues due to market, economic or competitive conditions, we could be pressured to reduce the prices that we charge for our services, which could have an adverse effect on our margins, profitability, cash flows and financial position.

Changes in capital markets could adversely affect our access to capital and negatively impact our business.

Our results could be adversely affected by an inability to access the revolving credit facility under our credit agreement. Unfavorable financial or economic conditions could impact certain lenders’ willingness or ability to fund our revolving credit facility. In addition, increases in interest rates or credit spreads, volatility in financial markets or the interest rate environment, significant political or economic events, defaults of significant issuers, and other market and economic factors, may negatively impact the general level of debt issuance, the debt issuance plans of certain categories of borrowers, the types of credit-sensitive products being offered, and/or a sustained period of market decline or weakness could have a material adverse effect on us.

Risks Related to this Offering and Our Securities

We do not know whether an active, liquid and orderly trading market will develop for our common shares or what the market price of our common shares will be and as a result it may be difficult for you to sell your common shares.

Prior to this offering there has been no public market for our common shares in the United States. Although we will apply to list our common shares on The Nasdaq Capital Market (“Nasdaq”) an active trading market for our shares may never develop or be sustained following this offering. You may not be able to sell your shares quickly or at the market price if trading in our common shares is not active. The initial public offering price for our common shares will be determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the common shares after the offering. As a result of these and other factors, you may be unable to resell your common shares at or above the initial public offering price. Further, an inactive market may also impair our ability to raise capital by selling our common shares and may impair our ability to enter into strategic partnerships or acquire companies or products by using our Common Shares as consideration.

We expect that our stock price will fluctuate significantly, and you may not be able to resell your shares at or above the initial public offering price.

The trading price of our Common Shares is likely to be volatile and subject to wide price fluctuations in response to various factors, including:

These and other factors may cause the market price and demand for our Common Shares to fluctuate substantially, which may limit or prevent investors from readily selling their common shares and may otherwise negatively affect the liquidity of our common shares. If the market price of our Common Shares after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have often instituted securities class action litigation against the company that issued the stock. If any of our shareholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business.

Warrants are speculative in nature.

The Warrants offered in this offering do not confer any rights of Common Shares ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire Common Shares at a fixed price for a limited period of time. Specifically, commencing on the date of issuance, holders of the Warrants may exercise their right to acquire the Common Shares and pay an exercise price of no less than 100% of the public offering price of a Unit, prior to five years from the date of issuance, after which date any unexercised Warrants will expire and have no further value.

Holders of the Warrants will have no rights as a Common Shareholder until they acquire our Common Shares.

Until holders of the Warrants acquire Common Shares upon exercise of the Warrants, the holders will have no rights with respect to the common shares issuable upon exercise of the Warrants. Upon exercise of the Warrants, the holder will be entitled to exercise the rights of a Common Shareholder as to the security exercised only as to matters for which the record date occurs after the exercise.

There is no established market for the Warrants to purchase our Common Shares being offered in this offering.

There is no established trading market for the Warrants and we do not expect a market to develop. Although we [will apply] to list the Warrants on the Nasdaq Capital Market there can be no assurance that there will be an active trading market for the Warrants. Without an active trading market, the liquidity of the Warrants will be limited..

Provisions of the Warrants offered by this prospectus could discourage an acquisition of us by a third party.

In addition to the discussion of the provisions of our governing organizational documents, certain provisions of the Warrants offered by this prospectus could make it more difficult or expensive for a third party to acquire us. The Warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the Warrants. These and other provisions of the Warrants offered by this prospectus could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to you.

Our planned Reverse Split may decrease the liquidity of our Common Shares.

The liquidity of our Common Shares may be affected adversely by the Reverse Split given the reduced number of Common Shares that will be outstanding following the Reverse Split. In addition, the Reverse Split may increase the number of shareholders who own odd lots (less than 100 shares) of our Common Shares, creating the potential for such shareholders to experience an increase in the cost of selling their Common Shares and greater difficulty effecting such sales.

Following the Reverse Split, the resulting market price of our Common Shares may not attract new investors, including institutional investors, and may not satisfy the investing requirements of those investors. Consequently, the trading liquidity of our Common Shares may not improve.

Although we believe that a higher market price of our Common Shares may help generate greater or broader investor interest, there can be no assurance that the Reverse Split will result in a Common Shares price that will attract new investors, including institutional investors. In addition, there can be no assurance that the market price of our Common Shares will satisfy the investing requirements of those investors.

We may require additional capital to fund our business and support our growth, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition and prospects.

We intend to continue to make substantial investments to fund our business and support our growth. In addition, we may require additional funds to respond to business challenges, including the need to develop new features or enhance our solutions, improve our operating infrastructure or acquire or develop complementary businesses and technologies. As a result, in addition to the revenues we generate from our business and the proceeds from this offering, we may need to engage in additional equity or debt financings to provide the funds required for these and other business endeavors. If we raise additional funds through future issuances of equity or convertible debt securities, our existing shareholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Common Shares. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain such additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely impacted. In addition, our inability to generate or obtain the financial resources needed may require us to delay, scale back, or eliminate some or all of our operations, which may have a significant adverse impact on our business, operating results and financial condition.

Although as a Foreign Private Issuer we are exempt from certain corporate governance standards applicable to US issuers, if we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of the Nasdaq Capital Market, our securities may not be listed or may be delisted, which could negatively impact the price of our securities and your ability to sell them.

We will seek to have our securities approved for listing on the Nasdaq Capital Market upon consummation of this offering. We cannot assure you that we will be able to meet those initial listing requirements at that time. Even if our securities are listed on Nasdaq, we cannot assure you that our securities will continue to be listed on Nasdaq.

In addition, following this offering, in order to maintain our listing on Nasdaq, we will be required to comply with certain rules of Nasdaq, including those regarding minimum shareholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. Even if we initially meet the listing requirements and other applicable rules of Nasdaq, we may not be able to continue to satisfy these requirements and applicable rules. If we are unable to satisfy Nasdaq criteria for maintaining our listing, our securities could be subject to delisting.

If Nasdaq does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including:

As a foreign private issuer, we are exempt from a number of U.S. securities laws and rules promulgated thereunder and are permitted to publicly disclose less information than U.S. public companies must. This may limit the information available to holders of the Common Shares.

We qualify as a “foreign private issuer,” as defined in the SEC’s rules and regulations, and, consequently, we are not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. For example, some of the Company’s key executives may sell a significant amount of Common Shares and such sales will not be required to be disclosed as promptly as public companies organized within the United States would have to disclose. Accordingly, once such sales are eventually disclosed, the price of Common Shares may decline significantly. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. We are also not subject to Regulation FD under the Exchange Act, which would prohibit us from selectively disclosing material nonpublic information to certain persons without concurrently making a widespread public disclosure of such information. Accordingly, there may be less publicly available information concerning us than there is for U.S. public companies.

We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses. This would subject us to U.S. GAAP reporting requirements which may be difficult for us to comply with.

As a “foreign private issuer,” we are not required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. Under those rules, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on September 30, 2022.

In the future, we could lose our foreign private issuer status if a majority of our Common Shares are held by residents in the United States and it fails to meet any one of the additional “business contacts” requirements. Although we intend to follow certain practices that are consistent with U.S. regulatory provisions applicable to U.S. companies, our loss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to us under U.S. securities laws if we are deemed a U.S. domestic issuer may be significantly higher. If we are not a foreign private issuer, we will be required to file periodic reports and prospectuses on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, we would become subject to the Regulation FD, aimed at preventing issuers from making selective disclosures of material information. We also may be required to modify certain of our policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, we may lose our ability to rely upon exemptions from certain corporate governance requirements of Nasdaq that are available to foreign private issuers. For example, Nasdaq’s corporate governance rules require listed companies to have, among other things, a majority of independent board members and independent director oversight of executive compensation, nomination of directors, and corporate governance matters. Nasdaq rules also require shareholder approval of certain share issuances, including approval of equity compensation plans. As a foreign private issuer, we would be permitted to follow home country practice in lieu of the above requirements. As long as we rely on the foreign private issuer exemption to certain of Nasdaq’s corporate governance standards, a majority of the directors on our Board of Directors are not required to be independent directors, our remuneration committee is not required to be comprised entirely of independent directors and it will not be required to have a nominating and corporate governance committee. Also, we would be required to change our basis of accounting from IFRS as issued by the IASB to U.S. GAAP, which may be difficult and costly for it to comply with. If we lose our foreign private issuer status and fails to comply with U.S. securities laws applicable to U.S. domestic issuers, we may have to de-list from Nasdaq and could be subject to investigation by the SEC, Nasdaq and other regulators, among other materially adverse consequences.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.

After the closing of this offering, we will be subject to the reporting requirements of the Exchange Act the Sarbanes-Oxley Act of 2002 and the rules and regulations of Nasdaq. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal controls over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the U.S. Commencing with our fiscal year ending March 31, 2027, we must perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Form 20-F filing for that year, as required by Section 404 of the Sarbanes-Oxley Act. This will require that we incur substantial additional professional fees and internal costs to expand our accounting and finance functions and that we expend significant management efforts. Prior to this offering, we have never been required to test our internal controls within a specified period, and, as a result, we may experience difficulty in meeting these reporting requirements in a timely manner.

During the evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective. We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common shares could decline, and we could be subject to sanctions or investigations by Nasdaq, the Securities and Exchange Commission, or the SEC, or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

We will incur significant increased costs as a result of operating as a public company in the United States, and our management will be required to devote substantial time to new compliance initiatives.

As a public company in the United States, we will incur significant legal, accounting and other expenses that we did not incur previously. We will be subject to the reporting requirements of the Exchange Act, which will require, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was enacted. There are significant corporate governance and executive-compensation-related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas. Recent legislation permits emerging growth companies to implement many of these requirements over a longer period and up to five years from the pricing of this offering. We intend to take advantage of this new legislation but cannot assure you that we will not be required to implement these requirements sooner than planned and thereby incur unexpected expenses. Shareholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our consolidated net loss and may require us to reduce costs in other areas of our business or increase the prices of our products or services. For example, we expect these rules and regulations to make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to incur substantial costs to maintain the same or similar coverage. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as executive officers.

New investors in our securities will experience immediate and substantial dilution after this offering.

The initial public offering price of our Units will be substantially higher than the pro forma net tangible book value per share of the outstanding Common Shares immediately after this offering. Based on an assumed initial public offering price of $[5.00] per Unit and our net tangible book value as of December 31, 2021, if you purchase our Common Shares in this offering, you will pay more for your shares than the amounts paid by some of our existing shareholders for their shares and you will suffer immediate dilution of approximately $[2.12] per share in pro forma net tangible book value. As a result of this dilution, investors purchasing common shares in this offering may receive significantly less than the full purchase price that they paid for the shares purchased in this offering in the event of a liquidation.

Immediately prior to the consummation of this offering, we expect to have approximately [1,707,585] ([37,947] after a 1-for-[45] Reverse Split) outstanding stock options to purchase our Common Shares with exercise prices that are below the assumed initial public offering price of our Common Shares. To the extent that these options are exercised, there will be further dilution.

If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our Common Shares could decline.

If our existing shareholders sell substantial amounts of our Common Shares in the public market following this offering and the expiration of the lock-up agreements, the market price of our Common Shares could decrease significantly. The perception in the public market that our existing shareholders might sell Common Shares could also depress our market price. Upon completion of this offering, we will have outstanding [4,059,877] Common Shares, upon the effectiveness of the 1-for-[45] Reverse Split, assuming no exercise by the underwriters of their option to purchase additional shares, and options to purchase of our Common Shares, based on our shares and options to be outstanding as of immediately prior to the consummation of this offering. Our directors, executive officers and other holders of our Common Shares will be subject to the lock-up agreements described in “Underwriting” and the Rule 144 holding period requirements described in “Shares Eligible for Future Sale.”

In addition, certain holders of Common Shares will have the right, subject to certain exceptions and conditions, to require us to register their Common Shares under the Securities Act, and they will have the right to participate in future registrations of securities by us. Registration of any of these outstanding shares would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. A decline in the price of shares of our Common Shares might impede our ability to raise capital through the issuance of additional shares of our Common Shares or other equity securities.

Since we do not expect to pay any cash dividends for the foreseeable future, investors in this offering may be forced to sell their stock in order to obtain a return on their investment.

We do not anticipate declaring or paying in the foreseeable future any cash dividends on our capital stock. Instead, we plan to retain any earnings to finance our operations and growth plans discussed elsewhere or incorporated by reference in this prospectus. Accordingly, investors must rely on sales of their Common Shares after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our Common Shares.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering, including for any of the purposes described in the section entitled “Use of Proceeds,” and you will not have the opportunity as part of your investment decision to assess whether the net proceeds will be used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We currently intend to use the net proceeds from this offering to expand marketing and brand enhancement related to our products, to fund our ongoing research and development activities, for personnel development and training and for resource management software development.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the commercial success of our systems and the costs of our research and development activities, as well as the amount of cash used in our operations. As a result, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering.

The failure by our management to apply these funds effectively could harm our business. Pending their use, we may invest the net proceeds from this offering in short-term, investment-grade, interest-bearing securities. These investments may not yield a favorable return to our shareholders. If we do not invest or apply the net proceeds from this offering in ways that enhance shareholder value, we may fail to achieve expected financial results, which could cause our stock price to decline.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our securities will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our securities would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our securities could decrease, which might cause our stock price and trading volume to decline.

USE OF PROCEEDS

Based upon an assumed initial public offering price of USD [5.00] per Unit, we estimate that we will receive net proceeds from this offering, after deducting the underwriting discounts, non-accountable expense allowance and the estimated offering expenses payable by us, of approximately USD [9.0 million] assuming the Underwriter does not exercise its over-allotment option.

We plan to use the net proceeds we receive from this offering and any proceeds from the exercise of Warrants for general corporate purposes including working capital (25%), growth strategies (50%), research and development (20%) and sales and marketing (5%).

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have some flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

DIVIDEND POLICY

We have never declared or paid any dividends on our Common Shares. We do not anticipate paying any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions and other factors that our Board of Directors may deem relevant.

CAPITALIZATION

The following table sets forth our cash and capitalization as of December 31, 2021, on:

The information below is illustrative only and our cash and capitalization following the completion of this offering will be based on the actual public offering price and other terms of this offering determined at pricing. You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus.

The number of Common Shares to be outstanding after this offering is based on 70,194,437 Common Shares ([1,559,887] shares following the Reverse Split) as of April 26, 2022 and excludes:

The pro forma as adjusted information set forth in the table above assumes that the Underwriter does not exercise its over-allotment option.

DILUTION

If you invest in our Shares in this offering, your interest will be diluted to the extent of the difference between the public offering price per share of common stock and the as adjusted net tangible book value per share of common stock immediately after this offering.

Our historical net tangible book value as of December 31, 2021 was USD 1,260,427, or USD [0.81] (giving effect to the 1-for-[45] Reverse Split, that is expected to occur immediately following the effectiveness of the registration statement of which this prospectus forms a part) per share of common stock. Our historical net tangible book value is the amount of our total tangible assets (Total Assets less Technology License) less our liabilities converted into USD at the exchange rate of USD 1 = $ 1.2678 reported by the Bank of Canada on December 31, 2021. The historical net tangible book value per share of common stock is our historical total tangible asset value less our total liabilities divided by the number of outstanding shares of common stock as of December 31, 2021.

After giving effect to this offering, at an assumed public offering price of USD [5.00] per share, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value on a pro forma as adjusted basis as of December 31, 2021 would have been USD [2.88] per share of common stock. This amount represents an immediate increase in pro forma as adjusted net tangible book value of USD [2.07] per share of common stock to our existing shareholders and an immediate dilution of USD [2.12] per share of common stock to new investors purchasing common stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a common stock.

The following table illustrates this dilution:

A USD [0.50] increase (decrease) in the assumed public offering price of USD [5.00] per share of common stock, would increase (decrease) the pro forma as adjusted net tangible book value per share by USD [0.26], and increase (decrease) dilution to new investors by USD [0.24] per share, in each case assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

An increase (decrease) of [100,000] shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted net tangible book value per share by USD [0.05], and increase (decrease) dilution to new investors by USD ([0.05]) per share, assuming a public offering price of USD [5.00] per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The foregoing discussion and table do not take into account further dilution to new investors that could occur upon the exercise of outstanding warrants or other convertible securities having a per share exercise or conversion price less than the per share offering price to the public in this offering.

If the underwriters exercise in full their option to purchase additional common stock in this offering, the pro forma as adjusted net tangible book value after the offering would be USD [3.01] per share, the increase in net tangible book value to existing shareholders would be USD [2.21] per share, and the dilution to new investors would be USD [1.99] per share, in each case assuming a public offering price of USD [5.00] per share.

The number of shares of common stock used in the table above is based on [1,559,887] shares of common stock outstanding as of April 26, 2022 (subject to adjustment based on issuances of additional shares as applicable due to the rounding up of fractional shares resulting from the 1-for-[45] Reverse Split that is expected to occur immediately following the effectiveness of the registration statement of which this prospectus forms a part) and excludes the following as of that date:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The audited consolidated financial statements of the Company for the fiscal years ended March 31, 2021 and 2020 and the unaudited condensed consolidated interim financial statements of the Company for the nine months ended December 31, 2021 and 2020 have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

We are incorporated in British Columbia, Canada.

On April 26, 2022 we announced a new Strategic Plan to position the Company in the near term as a technology leader within the industries essential to the generation, storage, and efficient use of clean energy. Key parts of the plan include a strengthened executive leadership team, up-listing to Nasdaq Capital Markets, and rebranding as Medallion Innovations Corp. to better reflect our future direction.

Under the new Strategic Plan, our initial focus will be to continue commercialization of our two REE processing technologies: the Medallion Monazite Process (MMP) developed by us, and the Ligand Assisted Displacement (LAD) Chromatography REE separation process initially developed by Purdue University and licensed by us from Purdue Research Foundation (“Purdue”) to separate REEs from all raw material feed stocks excluding coal sources and recycled materials from manufacturing wastes and recyclates from battery and magnet sources..

On March 28, 2022, following a technology review, we announced we had secured exclusive rights to evaluate a proprietary and privately-owned metallization process, where REE compounds are converted to REE metal, a crucial step in the production of high strength REE permanent magnets. There are few entities outside China that have this metallization capacity. The novel and innovative technology would enable conversion of REE compounds to metal in a continuous process, requiring less energy than incumbent processes and without toxic fluorine chemistry.

We are building the team and capital structure to enable replication of the evaluation and commercialization approach that identified and delivered access to the LAD Chromatography process and identification of the REE metallization and recycling technologies and includes evaluation of commercial needs, assessment of alternative technologies, identification of undervalued disruptive technology, and support commercial development of additional intellectual property (IP) with clear paths to commercialization.

We believe that up-listing to the Nasdaq Capital Markets will significantly strengthen our profile and increase the capacity for US and international shareholders to invest in the REE and clean energy technology sectors.

Upon completion of the Nasdaq up-listing, Alfredo Ramos Plasencia will join the Company as Chief Executive Officer and Director, while Dr. Kurt Forrester will join the management team as Chief Technology Officer and continue to serve as a Director. Mark Saxon will continue as a Director and assume a business development role focused on mining industry opportunities.

Additional information relating to the Company is available on the SEDAR website: www.sedar.com under “Medallion Resources Ltd.”. Information about us on SEDAR is not incorporated by reference into, and is not part of, this prospectus.

All currency amounts in the following discussion and analysis are in Canadian dollars unless otherwise indicated.

Operations

Our new Strategic Plan is intended to enhance our existing REE processing technology portfolio by identifying, incubating and gaining exclusive rights to the commercialization of additional innovative technology platforms across the entire REE value chain and broadening its focus to include other high-performance materials. We believe that our technology portfolio will continue to facilitate the production of materials, deployment of processes, and/or generation of essential data for the clean energy transition.

The clean energy transition, involving the widespread generation of renewable energy and the electrification of transport is now demonstrating dramatic growth that is at risk because of weaknesses in global supply chains. Our new Strategic Plan reflects the global shift from fossil fuel-based to a minerals-based economy centered on ‘friendly nations” and is intended to position us for better access to capital and importantly the facilitate building a team with the essential skills and experience in technology development and commercialization.

REE permanent magnets are critical components of motors in electric vehicles, generators in wind turbines and are an essential part of the modern economy, performing core functions in components of trillions of dollars in global GDP including clean energy, transportation, consumer electronics, medical equipment, robotics, and national defense.

We developed the MMP to address health, safety, environmental and economic challenges associated with established processing technology. We identified the need for better technology solutions, undertook internal research and process engineering, and developed MMP to be ready for scale-up to demonstration plant and then commercial scale operations.

MMP extracts mixed REE concentrate from mineral sand monazite, which is accumulated as a byproduct from heavy mineral sand mining. The MMP adds value to a material that is already mined, such that there is no incremental mining activity.

We also identified the need to separate salable REE compounds from mixed concentrates using less energy and fewer reagents than current standard practice. We completed extensive technical evaluation of alternative technologies and identified the LAD Chromatography process as a potential market-leading opportunity. We entered into an agreement with Purdue whereby the Company and Purdue are jointly advancing the LAD process to separate REEs from all raw material feed stocks excluding coal sources, manufacturing waste and recycled materials from battery and magnets sources.

We anticipate the LAD Chromatography process will reduce capital and operating costs for REE separation compared with incumbent technologies, and be readily adaptable to multiple feedstocks, including but not limited to monazite.

We are undertaking process testwork and seeking monazite supply agreements for the future production of REE materials. A variety of samples from heavy-mineral-sands producers are regularly tested, which could lead to monazite purchase agreements for a planned rare-earth processing plant or lead to another commercial partnership.

We signed a non-binding letter of intent with an Australian private company, ACDC Metals Pty Ltd (“ACDC”), to permit ACDC to utilize MMD, including the exclusive right to construct a mineral sand monazite refinery in southeastern Australia and the right to sub-license the LAD Chromatography process for REE separation.

Medallion invested $31,746 of cash to purchase shares of ACDC at an early stage and recorded the investment at a fair value of $441,840. For further details regarding ACDC, please refer to Note 9 of the accompanying unaudited condensed consolidated interim financial statements for the nine months ended December 31, 2021.

Since no monazite purchase contracts or processing plant financing and development agreements are in place at this time, all expenditures, other than assets acquired separately, associated with this strategy are being expensed in the Company’s consolidated statements of loss and comprehensive loss.

The Company has no commercial production at this time and accordingly the Company has no revenue from operations.

Research Costs and Expenditures

To support the Company’s strategy of securing monazite supply agreements for the future production of REE materials, certain consulting, travel, legal and other expenses have been incurred by the Company. The Company expects to continue to incur such expenses during the current year. Since no monazite purchase contracts or process-plant financing and development agreements are in place at this time, all expenses associated with this strategy are being expensed in the Company’s consolidated statements of loss and comprehensive loss.

During the period ended December 31, 2021, the Company paid $191,233 to support LAD Chromatography research, issued shares with a fair value of $300,000 and paid cash of $9,833 to acquire a technology license, and purchased specialized equipment in the amount of $152,146. For further details relating to project investigation expenses, please refer to Note 4 of the accompanying unaudited condensed consolidated interim financial statements for the nine months ended December 31, 2021.

Results of Operations

Nine Months Ended December 31, 2021 Compared to the Nine Months Ended December 31, 2020

The Company’s loss for the nine months ended December 31, 2021 was $717,678 (loss per share – $0.01) compared to a loss of $1,412,728 (loss per share – $0.03) for the nine months ended December 31, 2020.

Excluding the non-cash share-based compensation of $84,090 (2020 - $566,098), the expenses amounted to $1,043,866 (2020 - $837,276). The factors that contributed to the increase in the loss during the three months ended December 31, 2021 compared with the corresponding period in 2020 were:

These increased expenses were offset by the following:

Year Ended March 31, 2021 Compared to Year Ended March 31, 2020

The Company’s loss for the year ended March 31, 2021 was $1,901,250 (loss per share – $0.03) compared to a loss of $1,193,927 (loss per share – $0.03) for the year ended March 31, 2020.

Excluding the non-cash share-based compensation of $715,522 (2020 - $166,413), the expenses amounted to $1,176,092 (2020 - $1,110,618). The factors that contributed to the increase in the loss during the year ended March 31, 2021 compared with the corresponding period in 2020 were:

These increased expenses were offset by the following:

Liquidity and Capital Resources

Nine Months Ended December 31, 2021

As at December 31, 2021, the Company had working capital of $1,003,978 (March 31, 2021 - $2,056,390), a decrease in the working capital of $1,052,407 from March 31, 2021. The working capital decrease is due to operating expenses incurred and the 50% down payment for the purchase of research equipment ($76,073) and the investment of $31,746 in ACDC Metals Pty Ltd (“ACDC”) during the nine months ended December 31, 2021, offset by proceeds from exercise of warrants during the nine months ended December 31, 2021.

Cash consisted of $1,073,827 (March 31, 2021 - $2,081,232) available in the bank accounts of the Company at December 31, 2021.

During the nine months ended December 31, 2021, the Company issued an aggregate of 1,252,500 Common Shares for gross proceeds of $185,000 pursuant to the exercise of warrants and stock options.

During the nine months ended December 31, 2021, the Company issued 1,000,000 Common Shares at an ascribed price of $0.30 per share to a nominee of Hasler Ventures LLC in connection with the acquisition of a license for exclusive rights to Purdue University-developed REE separation and purification technologies.

During the nine months ended December 31, 2021, 1,891,542 warrants expired unexercised and, during the nine months ended December 31, 2021, 366,250 stock options expired unexercised.

Contributed surplus totaled $4,476,033 as at December 31, 2021 (March 31, 2021 - $4,192,305). The increase of $283,728 is due to the reversal of fair value of exercised options, share-based compensation with respect to options granted, and the transfer of fair value of expired warrants.

The Company has in the past relied primarily upon the sale of equity securities for cash required for business purposes, for acquisitions, and to fund the administration of the Company. Since the Company does not expect to generate any revenues in the near future, it will continue to rely primarily upon sales of its equity to raise capital. There can be no assurance that additional equity financing will be available to the Company in the required amount when needed or at all. Mineral processing is a capital-intensive business with lengthy periods elapsing from initial investigation to any prospect of revenues. The nature of the mineral processing business increases risks of insufficient capital resources above that of many other businesses. The Company believes it has sufficient cash to fund operations through June 2022.

Fiscal Year ended March 31, 2021

As at March 31, 2021, the Company had working capital of $2,056,390 (March 31, 2020 - deficiency of $170,541), an increase in the working capital of $2,226,931 from March 31, 2020. The working capital increase is due to proceeds from private placements and exercise of warrants, during the year ended March 31, 2021 offset by operating expenses incurred during the year ended March 31, 2021. During the year ended March 31, 2021, a total of $226,060 was repaid to a corporation controlled by a director of the Company that decreased amounts owed to that related party.

Cash consists of $2,081,232 (March 31, 2020 - $138,104) available in the bank accounts of the Company at March 31, 2021.

On August 25, 2020 the Company completed a non-brokered private placement consisting of 10,666,667 units at $0.15 per unit for gross proceeds of $1,600,000. Each unit consisted of one Common Share and one-half transferable Common Share purchase warrant, with each full transferable warrant exercisable to acquire one Common Share for 3 years at an exercise price of $0.20. The Company paid finders’ fees of $65,620 and granted 437,467 finders’ warrants (valued at $68,200), each finders’ warrant exercisable to acquire one Common Share at an exercise price of $0.25 until August 25, 2022. The warrants were ascribed a value of $437,233 under the Black-Scholes valuation model with the residual being allocated to share capital. In accordance with the Company’s accounting policy in regard to unit bifurcation, the Company calculated the relative fair value of the unit warrants with the use of the Black-Scholes option pricing model with the following assumptions: term of three years, dividend yield of 0%, expected volatility of 123.49% and a risk free interest rate of 1.53%. In addition, the Company calculated the fair value of the finders’ warrants with use of the Black-Scholes option pricing model with the following assumptions: term of two years, dividend yield of 0%, expected volatility of 123.72% and a risk-free interest rate of 1.38%.

During the year ended March 31, 2021, the Company issued an aggregate of 8,421,402 Common Shares for gross proceeds of $1,679,371 pursuant to the exercise of warrants and options.

Contributed surplus totaled $4,192,305 as at March 31, 2021 (March 31, 2020 - $3,130,902). The increase of $1,061,403 is due to the grant of stock options to officers, directors and consultants of the Company, the reversal of fair value of exercised options and the transfer of fair value of expired warrants.

Subsequent Events

Events subsequent to December 31, 2021 comprise:

Off Balance Sheet Arrangements

The Company has not entered into any off-balance sheet transactions.

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Significant estimates and assumptions include those related to the valuation allowance on deferred income taxes and share-based compensation valuations. Actual results could differ from these estimates. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant.

Financial Instruments

Nine Months Ended December 31, 2021

The following table sets forth the levels in the fair value hierarchy in which the Company’s financial assets and liabilities are measured and recognized in the statement of financial position. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The fair value of the Company’s accounts payables and accrued liabilities and amounts due to related parties approximates their carrying values due to the short-term nature of these instruments. The Company’s financial instruments are exposed to certain financial risks including credit risk, liquidity risk, and commodity-price risk.

The Company’s cash is held in a major Canadian financial institution. The Company does not have any significant exposure to credit risk.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.

The ability of the Company to develop its business and the future profitability of the Company are directly related to the market price of several commodities. The Company has not hedged any potential future commodity sales. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.

The Company has, for accounting purposes, designated its cash and short-term investments as held-for-trading, which are measured at fair value. Accounts payable and accrued liabilities are classified as other financial liabilities which are measured at amortized cost. As of December 31, 2021, the carrying and fair value amounts of the Company’s financial instruments are the same.

Based on management’s knowledge and experience of the financial markets, management does not believe that the Company’s current financial instruments will be affected significantly by interest rate risk, foreign currency risk and price risk. The Company does not hold significant balances in foreign currencies to give rise to exposure to foreign exchange risk. Commodity price risk could, however, affect the Company. In particular, the Company’s future profitability and viability of development depends upon world markets for natural resources. As of December 31, 2021, the Company was not a producing entity. As a result, commodity price risk could affect the completion of future equity transactions such as equity offerings and the exercise of stock options and warrants. The Company closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken.

Fiscal Year ended March 31, 2021

The following table sets forth the levels in the fair value hierarchy in which the Company’s financial assets and liabilities are measured and recognized in the statement of financial position. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The fair value of the Company’s accounts payables and accrued liabilities and amounts due to related parties approximates their carrying values due to the short-term nature of these instruments. The Company’s financial instruments are exposed to certain financial risks including credit risk, liquidity risk, and commodity-price risk.

The Company’s cash is held in a major Canadian financial institution. The Company does not have any significant exposure to credit risk.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure. Accounts payable and accrued liabilities are due within the current operating period.

The ability of the Company to develop its business and the future profitability of the Company are directly related to the market price of several commodities. The Company has not hedged any potential future commodity sales. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company.

The Company has, for accounting purposes, designated its cash and short-term investments as held-for-trading, which are measured at fair value. Accounts payable and accrued liabilities are classified as other financial liabilities which are measured at amortized cost. As of March 31, 2021, the carrying and fair value amounts of the Company’s financial instruments are the same.

Based on management’s knowledge and experience of the financial markets, management does not believe that the Company’s current financial instruments will be affected significantly by interest rate risk, foreign currency risk and price risk. The Company does not hold significant balances in foreign currencies to give rise to exposure to foreign exchange risk. Commodity price risk could, however, affect the Company. In particular, the Company’s future profitability and viability of development depends upon world markets for natural resources. As of March 31, 2021, the Company was not a producing entity. As a result, commodity price risk could affect the completion of future equity transactions such as equity offerings and the exercise of stock options and warrants. The Company closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken.

Management of Capital

The Company manages its cash, common shares, stock options, and warrants as capital. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its mineral properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust its capital structure, the Company may look to issue new shares, issue new debt, acquire or dispose of assets or adjust the amount of cash. In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. In order to maximize ongoing exploration efforts, the Company does not currently pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments issued by a major Canadian chartered bank.

There has been no change in the Company’s management of capital risk during the nine months ended December 31, 2021 or the twelve months ended March 31, 2021.

Disclosure controls and procedures

The Company’s management is responsible for designing disclosure controls and procedures to provide reasonable assurance that: (a) material information relating to the Company is made known to management so as to allow for timely decisions to be made regarding disclosure, and (b) information required to be disclosed by the Company is recorded, processed, summarized and reported within the time periods specified in applicable securities legislation.

The Chief Executive Officer and Chief Financial Officer of the Company have evaluated, or caused to be evaluated under their supervision, the effectiveness of the Company’s disclosure controls and procedures as at December 31, 2021. Based on this evaluation, the CEO and CFO of the Company have concluded that the Company’s disclosure controls and procedures in place during the fiscal years ended March 31, 2021 and 2020 and as at December 31, 2021 are effective to provide reasonable assurance that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by the Company under securities legislation is recorded, processed, summarized and reported within the time periods specified in the securities legislation and that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow for timely decisions regarding required disclosure.

Internal control over financial reporting

Management is responsible for designing, establishing and maintaining an adequate system of internal control over financial reporting. The CEO and CFO of the Company have evaluated, or caused to be evaluated under their supervision, the effectiveness of the Company’s internal control over financial reporting during the fiscal years ended March 31, 2021 and 2020 and as at December 31, 2021. Based on this evaluation, the CEO and CFO have concluded that as at December 31, 2021, the Company’s internal control over financial reporting continues to be effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

The CEO and CFO of the Company have identified that due to the size of the Company there is limited segregation of duties. Companies of a similar size often have this limitation. Although it is possible, management of the Company does not believe that this lack of segregation of duties will lead to a material misstatement in the financial statements. Steps have been taken to minimize this risk such as ensuring that two senior officers or directors sign all cheques and outgoing wire transfer requests. In addition, senior management and the directors of the Company review quarterly and year-end financial statements on a regular basis.

There was no change in the Company’s internal control over financial reporting during the fiscal years ended March 31, 2021 and 2020 or for the period ended December 31, 2021, that materially affected, or was reasonably likely to materially affect, the Company’s internal control over financial reporting.

BUSINESS

Overview

Our objective is to become a technology leader within the industries essential to the generation, storage, and efficient use of clean energy. Our Strategic Plan includes a strengthened executive leadership team, up-listing to Nasdaq Capital Markets, and rebranding as Medallion Innovations Corp. to better reflect our future direction.

In the past, our focus has been to identify and develop innovative technologies for the rare earth element (“REE”) industry that are lower cost and reduce the environmental and social impacts of production when compared with incumbent technologies.

Our Strategic Plan is intended to enhance our existing REE processing technology portfolio by identifying, incubating and gaining exclusive rights to the commercialization of additional innovative technology platforms across the entire REE value chain and broadening our focus to include other high-performance materials. We believe that our technology portfolio will facilitate the production of materials, deployment of processes, and generation of essential data for the clean energy transition.

The clean energy transition, involving the widespread generation of renewable energy and the electrification of transport, is now demonstrating dramatic growth that is at risk because of weaknesses in global supply chains. Our Strategic Plan reflects the global shift from a fossil fuel-based economy to a minerals-based economy centered on ‘friendly nation” supply chains and is intended to position us for better access to capital and importantly the ability to build a team with essential skills and experience in technology development and commercialization needed to execute on our Strategic Plan.

We believe it is essential that minerals required for the clean energy transition be produced in accordance with environmental, social & governance (“ESG”) best practices. The production of EVs and clean energy technologies should not cause harm to the communities or the environment where they are produced.

Upon completion of the Nasdaq up-listing, Alfredo Ramos Plasencia will join us as Chief Executive Officer and Director, while Dr. Kurt Forrester will join the management team as Chief Technology Officer and continue to serve as a Director. Mark Saxon will continue as a Director and assume a business development role focused on mining industry opportunities.

Our initial focus is to continue commercialization of our two REE processing technologies:

We are evaluating a proprietary and privately-owned metallization process, where REE compounds are converted to REE metal, a crucial step in the production of high strength REE permanent magnets. Our evaluation is ongoing, and there can be no assurance as to when we might acquire rights to the technology underlying this process, if at all

As part of our new Strategic Plan, we are building the team and capital structure to enable replication of the evaluation and commercialization approach that identified and acquired rights to the LAD Chromatography process and identification of the REE metallization and recycling technology. This methodology includes evaluation of commercial needs, assessment of alternative technologies, identification of undervalued disruptive technology, and support for commercial development of additional IP with clear paths to commercialization.

Critical Minerals in the Clean Energy Transition

In May 2021, the International Energy Agency (IEA) published an extensive flagship report on critical minerals that stated, “Building solar photovoltaic (PV) plants, wind farms and electric vehicles (EVs) generally requires more minerals than their fossil fuel-based counterparts. A typical electric car requires six times the mineral inputs of a conventional car, and an onshore wind plant requires nine times more mineral resources than a gas-fired power plant.” (The Role of Critical Minerals in Clean Energy Transitions, IEA, Paris https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions.)

This fundamental change in consumption of critical minerals is occurring at a time of heightened supply chain vulnerability, which has been further exacerbated by the COVID-19 pandemic.

The IEA report also stated, “The prospect of a rapid increase in demand for critical minerals – well above anything seen previously in most cases – raises huge questions about the availability and reliability of supply. In the past, strains on the supply-demand balance for different minerals have prompted additional investment and measures to moderate or substitute demand. But these responses have come with time lags and have been accompanied by considerable price volatility. Similar episodes in the future could delay clean energy transitions and push up their cost. Given the urgency of reducing emissions, this is a possibility that the world can ill afford.”

We believe that this challenge will require access to and investment in more efficient and effective processing technologies including the extraction of critical minerals as byproducts of other activities, and increased recycling of critical minerals from end-of-life products – the circular economy.

Over the past decade, the U.S., Europe, Japan, and Korea have been increasingly focused on the supply chain for critical minerals. In the U.S., rare earth supply chain resilience is a bipartisan issue as demonstrated by a series of responses to Executive Orders (EO) by Presidents Obama, Trump and Biden that have increasingly noted the strategic importance of rare earth elements.

REEs are a critical part of high-performance permanent magnets used in motors for EVs, robotics, wind turbines, and other clean energy applications as well as broader industries such as transportation, consumer electronics, medical devices, and national defense.

In response to EO 13953, in December 2020 the U.S. Geological Survey (“USGS”) issued an investigation of U.S. foreign reliance on critical minerals, which included an evaluation of the risk of supply disruption and the potential economic impact based on consumption patterns in 2016, before the clean energy transition gained momentum.

Figure 1: Assessment of mineral commodity supply risk, USGS 2020

The report concluded that key REEs, notably neodymium, praseodymium and dysprosium used in rare earth permanent magnets, are exposed to significant risk of supply disruption and, even in 2016, the U.S. economy was vulnerable to supply disruptions. We believe that the disruption potential may have increased for geopolitical reasons and the economic vulnerability has increased and will continue to increase as the clean energy transition continues.

For these reasons our initial focus is on REEs. We are currently developing two REE technology platforms, the Medallion Monazite Process (“MMP”) and the Ligand Assisted Displacement (“LAD”), for commercialization within the next two years. The platforms are complimentary and are designed to be operated separately or as an integrated process.

The MMP is a proprietary process, developed through internal research and engineering, for recovering REE mixed concentrates as byproducts from heavy mineral sands mining. It is a value-added process for material that has already been mined with no incremental mining activity.

The patented LAD Chromatography REE separation process, initially developed by Purdue University, was selected as Medallions’ second platform following extensive technical evaluation of alternative technologies. The LAD Chromatography process improves upon current industry standards by extracting and separating REEs into salable compounds from mixed concentrates using less energy and fewer reagents. We expect it to reduce capital and operating costs for operators and be readily adaptable to multiple feedstocks, including but not limited to monazite.

The MMP and LAD business models can be adapted to a variety of commercial opportunities. In general, because MMP is best located at heavy mineral sand processing facilities, we expect MMP to utilize an enhanced licensing model in which we will receive a technology licensing fee and other consideration. In contrast, we expect LAD Chromatography facilities to be central processing hubs or dedicated REE separation facilities treating monazite or other feedstock and therefore expect to construct, own and operate LAD facilities. We have had confidential discussions with heavy mineral sand processors in Australia and elsewhere and have entered into a non-binding letter of intent with ACDC, an Australian company formed to develop heavy mineral sand operations in eastern Australia.

We intend to replicate the approach we undertook with the LAD Chromatography process, namely, to evaluate a need, assess alternative technologies, and support commercial development, to secure additional innovative, disruptive intellectual property (IP) with clear paths to commercialization using an enhanced licensing model whereby we receive a performance-related fee, or alternatively build, own and operate specialized processing plants.

We believe it is essential that minerals required for the clean energy transition be produced in accordance with ESG best practices. The production of EVs and clean energy technologies should not cause harm to the communities or the environment where they are produced.

Rare Earth Industry Overview and Market Opportunity

REEs are extracted from three major geological sources: monazite, bastnasite, and ionic clays. Prior to the mid-1960s, most of the world’s production of REEs was from monazite sourced from mineral sand. The REE industry was transformed by the discovery in 1949 of the Mountain Pass bastnasite deposit in southern California. China started to produce significant amounts of REEs in the 1980s and rapidly came to dominate mining and processing, including downstream manufacturing of rare earth magnets.

Rare earth permanent magnets are an essential part of the modern economy, performing core functions in components of trillions of dollars in global GDP including clean energy, transportation, consumer electronics, medical equipment, robotics, and national defense.

There are 17 REEs comprising the 15 lanthanide elements, yttrium, and scandium. While often characterized as a single group, each element has different properties and vastly different scarcity such that rare earth oxide (“REO”) market prices quoted by Asian Metals (www.asianmetals.com) range from approximately $2,000 per kilogram for terbium to less than $1.50 per kilogram for cerium.

Figure 2: Periodic Table of Elements highlighting Rare Earth Elements; source: Bloomberg

REEs are often subdivided into three categories based on their atomic number, comprising Lights (LREE) which include lanthanum, cerium, praseodymium and neodymium; Mids (MREE) which include samarium, europium, and gadolinium, and Heavies (HREE) which include terbium through lutetium plus scandium and yttrium. However, those categories do not reflect the commercial market.

Commercially, the most important use of REEs is in permanent magnets. Neodymium-iron-boron (“NdFeB” or “neo”) permanent magnets use a combination of neodymium (“Nd”) and praseodymium (“Pr”) with additional dysprosium (“Dy”) and terbium (“Tb”) in high-temperature applications. These four elements, collectively the neo magnet rare earth elements, represent more than 90% of the value of REEs in mineral sand monazite feedstock evaluated by Medallion for processing by MMP to produce cerium depleted mixed oxides. The basket price of these neo magnet REOs, based on REO prices reported by Asian Metals, has doubled since 2020 to approximately $200/kg but remains at less than half the mid-2011 peak of $443/kg.

Figure 3: Basket Price of Neo Magnet REOs contained in monazite feedstock

Supply Chain Vulnerability

The U.S. Geological Survey’s (“USGS”) report “Mineral Commodity Summaries 2022” estimates that China mined approximately 60% of the world’s REEs in 2021, followed by the U.S. (15%), Myanmar (9%), Australia (8%) with the rest of the world contributing approximately 8%.

However, in 2021 all the production from the U.S. and Myanmar, and some of the Australian REE production was processed in China, such that downstream value was created within China. The USGS reported the U.S. as being 100% dependent on imported REEs for downstream manufacturing.

Under the Made in China 2025 initiative, China is moving downstream in the production cycle, aiming to produce more manufactured and semi-manufactured goods for domestic consumption or export in contrast to its previous focus on exporting low value raw materials.

Figure 4: Share of top three producing countries in global production of selected minerals and fossil fuels

Despite the importance of REEs to modern industry, the REE supply chain demonstrates a high degree of vulnerability. Currently, mineral concentrates from Mountain Pass are shipped from the California to China for processing and concentrates from Mount Weld are shipped from Australia to Malaysia, and some of the mixed oxides produced in Malaysia are then shipped to China for further processing.

Disrupting the REE supply chain has been a tool in past international conflicts. Following a territorial dispute in 2010 between China and Japan regarding the Senkaku Islands, China restricted supplies of REEs to Japan which caused market prices to surge ten-fold or more between early 2010 and late 2011.

Figure 5: Rare Earth Element Supply by Import Source; source – U.S. Dept of Commerce, Bureau of Industry and Security Materials Assessment, Rare Earth Elements (2016)

U.S. Government policies support both domestic production and production within the National Technology and Industrial Base (“NTIB”) countries – namely the U.S., Australia, Canada, and the United Kingdom – and other so-called “friendly” nations such as Japan, South Korea, and members of the European Union.

President Biden has indicated a preference for upstream mining and initial processing in Australia and Canada with downstream manufacturing in the U.S.

Key markets driving medium- and long-term demand for REEs

We expect the major drivers of demand for REEs to be permanent magnets used in electric vehicles, wind turbines and other high growth markets.

Electric Vehicles

The accelerating transition from internal combustion engines (ICE) to electric vehicles (“EVs”) is well documented. The International Energy Agency’s (IEA) Global EV Data Explorer (https://www.iea.org/articles/global-ev-data-explorer) assesses global EV sales under its sustainable development scenario (SDS) needed to meet the targets set by the 2015 Paris Climate Accords and a more conservative forecast based on stated policies (STEPS) that have already been announced.

The IEA projects that global EV sales in 2030 will be between 26 million and 49 million units, or between 8 and 15 times the sales of 3.2 million units in 2020, with growth of sales of trucks and buses expected to outpace the growth in the sales of cars and light trucks. The IEA projections equate to between 23% and 31% compound annual growth rate (CAGR) for cars and light trucks and between 26% and 39% for trucks and buses from 2020 to 2030.

Figure 6: International Energy Agency’s (IEA) Projections of Global EV sales

There are two types of electric motors in EVs: induction and permanent magnet motors. Permanent magnet motors are generally recognized as offering greater range and performance – Tesla adopted permanent magnets for the Model 3 and subsequently for the smaller front motors in its older models.

We estimate that EV’s represent approximately 10% of global demand for neo magnets in 2019/2020. If the EV market grows ten-fold by 2030 it would consume all the current production of neodymium and praseodymium (“NdPr”).

Due to high temperature operating conditions, neo magnets in EVs require dysprosium and terbium (“DyTb”) in the alloy to prevent demagnetization. We estimate that neo magnets in EVs represent a larger share of the DyTb market than of the NdPr market and therefore anticipates that the effect of EVs will be greater.

Wind Turbines

Wind turbine technology has evolved rapidly to include variable speed turbines which can either power an induction generator via a gearbox or a permanent magnet generator using a direct drive system. By eliminating the gearbox, direct-drive wind turbines are more reliable and easier to maintain as well as lighter and capable of generating electricity at lower wind speeds. Weight and reliability are most important for the largest, offshore wind turbines that are being manufactured today.

Figure 6: Mineral Intensity for wind power by turbine type, International Energy Agency

Medallion’s Technologies

We currently have two REE process technologies, namely the Medallion Monazite Process (MMP) and the Ligand Assisted Displacement (LAD) Chromatography process, and we are in the advance stages of evaluating a third REE process technology for metallization and recycling. Additionally, we continue to seek to identify and acquire process technologies or methods to complement and/or extend our current portfolio and enable the clean energy transition.

Figure 7: Industry Position of Medallion Technology Platforms

Medallion Monazite Process

The proprietary MMP focusses on recovering mixed REE concentrates from monazite, a byproduct of many heavy mineral sand operations that produce the bulk of the world’s supply of titanium and zirconium. We designed the MMP to be highly automated, safe and cost efficient. The MMP is not limited to processing byproduct monazite and could be deployed on hard-rock derived monazite from primary mining operations.

There are several important criteria for successful extraction of REEs from monazite. Cerium, the most abundant REE (typically making up 40% of the total REE content of monazite), is mainly used in relatively mature markets such as catalysts, pigments and phosphors. As demand for NdPr for neo magnets has driven increased production of all REEs, cerium has move to oversupply. The value of the cerium in a typical monazite concentrate is less than the additional separation and transportation cost. MMP incorporates a low-cost method to remove cerium. Monazite typically contains actinides (uranium and thorium), which must be removed from the REE circuits. In the past, these actinides have not always been handled with appropriate concern for health, safety and the environment. The MMP allows the removal of these elements in a safe and stable form.

In 2012, we commissioned a report by SENES Consultants Limited to review the health and safety aspects of our proposed monazite processing. SENES supported our view that a highly automated commercial scale monazite processing plant could be operated safely in compliance with international mineral processing health, safety, and environmental standards.

With this confirmation of concept, we sought to develop a better process that builds on the commercially standard practice – a two-step process of caustic monazite digestion and acid leaching of the caustic residue – with the following design objectives:

Initial process development began with laboratory-scale success using the caustic metallurgical process. During subsequent development work we produced a mixed REE carbonate concentrate provided to a third-party for initial product qualification that confirmed the suitability of the material for that party’s process.

In 2018, we completed bench-scale production of cerium-depleted REE concentrate. This early version of the MMP process incorporated the removal of cerium, significantly increasing the value per kilogram of the REE concentrate. This phase of test work produced a mixed REE carbonate concentrate which would satisfy the quality specifications of established REE refineries.

We completed development of the proprietary flowsheet for the MMP process in 2019. Key features of the process enable:

In November 2019, we engaged Australian-based Simulus Engineers, an independent engineering consultancy, to develop a chemical process model for the MMP process. The integrated process model incorporated the findings from the test work programs and confirmed the technical viability of the complete process.

MMP Process Flowsheet

The MMP process is designed to produce high-purity mixed REE as a chemical concentrate as well as byproduct trisodium phosphate (“TSP”), and radioactive materials in a form where they can be handled effectively for market or storage. In November 2020, we extended Simulus Engineers’ engagement to include a confidential techno-economic assessment (“TEA”) of the MMP process.

The TEA evaluated a commercial-scale facility processing 7,000 metric tons per year of monazite feedstock. Simulus estimated the capital cost at $34 million including 15% contingency and annual operating costs of approximately $21 million, excluding the cost of the monazite feedstock.

Figure 8: Simplified schematic representation of the Medallion Monazite Process flowsheet

The TEA estimated the facility would produce approximately 870,000 kilograms of NdPr contained in a cerium-depleted mixed carbonate per year, which would represent less than 2% of the global primary market of approximately 60 million kilograms, according the ADAMAS Intelligence. At 2021 average prices, Medallion estimate the value of the contained NdPr produced each year by the proposed facility would be approximately $85 million – note that a mixed concentrate is worth less than the value of the contained REOs.

In April 2021, we announced completion of a suite of diagnostic test work at the Australian Nuclear Science and Technology Organization (“ANSTO”) in Sydney, to extract REE from monazite. The monazite was sourced from an Australian mineral sand mine. Test work was focused on correlating low cost “diagnostic” mineralogical and chemical data from “run of mine” monazite with more comprehensive extraction results from the MMP.

We commissioned Minviro Ltd. to complete a Life Cycle Assessment (“LCA”) to evaluate the environmental impact of processing byproduct monazite employing the MMP.

Monazite Feedstock

We have conducted a suite of diagnostic analysis at ANSTO evaluating the potential to process monazite from operating and prospective heavy mineral sand operations in Australia using the MMP process. As source material becomes available, we will continue to grow this data bank in order to help us optimize process conditions for a potential processing hub in Australia.

We entered into a non-binding letter of intent (“LOI”) with Australian private company ACDC Metals Pty Ltd (“ACDC”) to utilize our proprietary MMP process. ACDC is securing mineral sand properties and other exploration assets in Victoria, Australia. The LOI outlines various terms and conditions that will form the basis of a binding contract, subject to mutual due diligence, provides ACDC with the right to construct a mineral sand monazite refinery in southeastern Australia utilizing the MMP, and the right to sub-license the LAD Chromatography process for REE separation from us.

Medallion is in discussion with a range of partners regarding business opportunities in this area.

Ligand Assisted Displacement Process

In 2020, we initiated a comparative technical review of existing and emerging REE separation technologies and, on February 18, 2021 we announced the acquisition of an exclusive license to use Purdue’s Ligand Assisted Displacement (“LAD”) Chromatography REE separation process to separate REEs from all raw material feed stocks excluding coal sources and recycled materials from manufacturing wastes and recyclates from battery and magnet sources..

We are supporting development of the LAD Chromatography process through a three-year sponsored research program with Purdue, targeting the design, development, and operation of a demonstration plant. In June 2021 the Company announced successful separation and purification of Nd and Pr from an REE chemical concentrate derived from monazite processed via the MMP.

The LAD Chromatography process is capable of processing complex multiple metal mixtures into individual metals (or groups) and, as such it may find uses in other separation processes which currently employ solvent extraction.

We expect that the LAD Chromatography process will be a low-cost, environmentally friendly process that will be readily adaptable to different feedstocks, unlike current standard-practice in China and elsewhere.

Vertical Integration

The MMP and LAD Chromatography processes can operate independently or can be integrated into a combined facility processing monazite feedstock and producing separated rare earth oxides, as shown in Figure 7.

Figure 9: Conceptual REE monazite to magnet supply chain utilizing the Medallion Monazite Process and Purdue’s LAD Chromatography. Red box outlines the system boundary for the current Techno Economic Assessment

Classification of Technology Development

Technology development is often classified by the technology readiness level (TRL) framework developed by the National Aeronautics and Space Administration (NASA). We utilize the TRL system as an evaluation framework for our existing portfolio and prospective technologies.

Figure 10: Technology Readiness Levels of novel technology as defined by NASA to assess state of development

The TRL classification starts with initial research (TRL 1) and progresses through proof of concept, prototype design and laboratory testing, pilot plant and ultimately full-scale design, development and deployment.

We believe that our best opportunities lie between proof of concept (TRL 3) and the start of pilot work (TRL 7), where emerging technologies have been identified but not optimized and the company leadership can contribute with their extensive expertise in technology development, innovation management and business development to an accelerated commercialization of the technology.

We believe the Medallion Monazite Process is ready to move from TRL 4 to TRL 7, a commercially ready system. The MMP is a proprietary process, developed through internal research and engineering, for recovering REE mixed concentrates as byproducts from heavy mineral sands mining. It is a value-added process for material that has already been mined with no incremental mining activity.

In addition, we identified Ligand Assisted Displacement as an improvement to standard practice process technology in separating mixed REE concentrate into saleable rare earth oxides and other compounds, given the higher market value attributed to REOs. We conducted extensive evaluation of incumbent and emerging alternative technologies and ultimately selected and acquired the patented LAD Chromatography process developed at Purdue University. We are currently supporting LAD Chromatography’s advancement through prototype and pilot plant development – namely from TRL 4 to TRL 7. The LAD Chromatography process is applicable to a wide range of REE feedstocks and, hence, broadens market access. Commercially, the LAD Chromatography process can be deployed downstream to the MMP or as a standalone system.

Commercially, our approach is to use an enhanced licensing model whereby we receive performance-related fees or equity or alternatively, build, own, and operate a specialized processing plant to convert a range of low value feedstocks to high value materials.

Competitive Strengths

We believe our competitive strengths include: