Critical Metals Corp.

Critical Metals Corp. operates in the mining exploration and evaluation industry, focusing on the development of rare earth elements (REEs) and lithium projects. The company's primary assets are the Tanbreez Project in Greenland, which is an advanced exploration-stage rare earths deposit, and the Wolfsberg Project in Austria, which is prospective for lithium. The industry is characterized by high capital intensity, significant regulatory hurdles, and dependence on commodity prices for heavy rare earth elements (HREEs) and lithium. The company aims to become a reliable western world (non-PRC linked) supplier of rare earths and other critical metals to support the transition toward next-generation technology in environmental, commercial, and government applications, including defense-related applications.

The mining industry is highly competitive, with competition primarily from larger, established mining companies that possess greater liquidity, access to credit, and financial resources. These competitors may have newer or more efficient equipment, lower cost structures, and more effective risk management policies. The company has no influence or control over the activities of its competitors, which could negatively affect the operating and financial performance of its projects. Critical Metals Corp. aims to be one of a few producers of a range of HREEs, critical metals, and critical minerals that are critical inputs into current and next-generation consumer and defense-related applications.

The company generates revenue through the sale of minerals extracted from its projects, including a range of HREEs, lithium hydroxide, and their respective byproducts. However, the company has not yet realized any revenues from the sale of HREEs, lithium, or any other critical minerals mined from its properties. Its operating cash flow needs have been financed primarily through the issuance of debt and equity raises, not from operations. The company's long-term success depends on its ability to negotiate and enter into binding offtake or sales agreements with third-party customers on commercially viable terms.

The Tanbreez Project is an advanced exploration-stage rare earths deposit located in Greenland. The company has declared mineral resources for the project but has not yet begun to extract minerals. The processing flowsheet for the project, comprising crushing, grinding, magnetic separation, and hydrometallurgical treatment to separate eudialyte from arfvedsonite and feldspar, remains conceptual and has not been validated at a commercial scale. A Preliminary Economic Assessment (PEA) for the project set out an estimated net present value of approximately US$3 billion ¹ and an estimated internal rate of return of approximately 180% ². However, in March 2026, following further metallurgical testwork, the company announced that the flowsheet contemplated by the previous PEA was obsolete and that it intended to prepare a replacement PEA reflecting the updated processing flowsheet and metallurgical results. The company expects to complete a definitive feasibility study for the Tanbreez Project by mid-2027 ³.

The Wolfsberg Project is a lithium project located in Austria. The company has declared mineral resources for the project but has not yet begun to extract minerals. The project received a decree from the Carinthian state government in Austria on December 2, 2024, stating that an environmental impact assessment determination procedure at full industrial and procedural scale was not required. However, in 2025, the decree was appealed by third parties not related to the project in the Austrian administrative court. The administrative court has delegated the decision back to the issuing authority at the state of Carinthia for reassessment. The company has filed an appeal to this decision at the administrative court, and the matter is now assigned to the federal court and remains ongoing as of the date of the annual report.

During the fiscal year ended June 30, 2026, the company completed several significant operational and capital events. The company completed the Stage 2 acquisition of Tanbreez Mining Greenland AS by issuing 14,500,000 shares ⁴ to Rimbal Pty Ltd on April 29, 2026, thereby consolidating its interest in Tanbreez. The company also acquired a 70% interest in 60 North Greenland ApS, issuing 150,262 shares ⁵. The company issued 2,000,000 ordinary shares ⁶ for the acquisition of ultra-high-grade copper powder inventory, valued at $15,800,000 ⁷. The company raised funds of $110,004,980 ⁸ (before expenses) from a PIPE transaction, issuing 14,030,301 shares ⁹. The company also settled a dispute with GEM Global Yield LLC, issuing 4,153,686 shares ¹⁰ in connection with the settlement. Additionally, the company issued 500,000 shares ¹¹ to Mathew August for marketing-related services, and 2,535,000 shares ¹² upon the vesting of RSUs.

The company has incurred significant losses, with losses after income tax of $228.2 million ¹³, $51.9 million ¹⁴, and $139.4 million ¹⁵ for the years ended June 30, 2026, 2025, and 2024, respectively. As of June 30, 2026, the company had net cash outflows from operating activities of $29.7 million ¹⁶, a working capital surplus (excluding liabilities that will be settled in CRML shares) of $79.6 million ¹⁷, and cash on hand of $102.5 million ¹⁸. This compares to net cash outflows from operating activities of $14.5 million ¹⁹, a working capital deficit (excluding liabilities that will be settled in CRML shares) of $15.6 million ²⁰, and cash on hand of $7.3 million ²¹ as of June 30, 2025. The company's current liquidity resources raise substantial doubt about its ability to continue as a going concern unless it raises additional capital to meet its obligations in the near term.

A major growth vector is the development of the Tanbreez Project. The company commenced a 2000-meter resource diamond drilling program at the Tanbreez Project site in July 2025 ²² and a similar program during the summer of 2026, intended to increase the size of the current mineral resource estimate to expedite the finalization of the bankable feasibility study. The company expects to complete a definitive feasibility study for the Tanbreez Project by mid-2027 ²³. The company also entered into a letter of intent for an offtake agreement with Ucore Rare Metals Inc. on August 26, 2025 ²⁴ for rare earth concentrate from the Tanbreez Project, though a binding agreement has not yet been entered into. Additionally, the company executed an agreement with REalloy in April 2026 ²⁵ for offtake.

Another significant growth vector is the proposed acquisition of European Lithium Limited (EUR). The company has entered into a Scheme Implementation Deed to acquire all of the issued shares and listed options of EUR by way of two interdependent schemes of arrangement under Australian law. The number of ordinary shares to be issued in the Transaction is subject to a floating exchange ratio with a collar. If the Scheme VWAP is equal to or less than the floor price of US$8.00 ²⁶, the Exchange Ratio will be fixed at the maximum of 0.045 ²⁷ of the company's ordinary shares for each EUR share. If the Scheme VWAP is equal to or greater than the ceiling price of US$16.00 ²⁸, the Exchange Ratio will be fixed at the minimum of 0.025 ²⁹ of the company's ordinary shares for each EUR share. Between those two prices, the Exchange Ratio will adjust on a straight-line basis between 0.045 ³⁰ and 0.025 ³¹. The Transaction may be terminated by either party if it has not completed by December 31, 2026 ³².

The company's margin and cost outlook is heavily influenced by its exploration and evaluation stage. The company expects to materially increase its capital expenditures to support the growth in its business and operations. The company's business plan is based on expectations as to capital expenditures, and if it is unable to fund those capital expenditures, it will not achieve the targets set forth in its business plan. The company's future profitability will depend on the cost and success of its exploration and evaluation programs, which may be affected by a number of factors, including significantly higher than expected capital costs to construct its mine, significantly higher than expected extraction costs, and significantly lower than expected volumes of HREE or lithium extraction.

The company's operational outlook involves significant exploration and development activities. The company has not yet completed a definitive feasibility study for the Tanbreez Project, and its processing flowsheet remains conceptual. The company is required to obtain and renew governmental permits and approvals for its exploration and evaluation activities, a process that is often costly and time-consuming. The company's management team has limited experience operating a U.S. public company, and the company expects to be required to expand its employee base and hire additional employees over time to support its operations, which will increase its operating costs.

The company's capital allocation strategy is focused on funding exploration and development activities. During the year ended June 30, 2026, the company received funds of $144.9 million ³³ from PIPE capital raising transactions and $23.4 million ³⁴ from the exercise of private warrants. During the year ended June 30, 2025, the company received funds of $24.55 million ³⁵ from PIPE capital raising transactions and $2,000,000 ³⁶ from the exercise of private warrants. The company used proceeds from the PIPE transactions and exercise of the private warrants to fund exploration expenditures at its exploration projects and for general working capital purposes. The company may also pursue grants or facilities under the Defense Production Act, as well as financing opportunities from the U.S Export-Import Bank and the European Investment Bank.

A significant headwind is the company's liquidity position. The company has incurred substantial losses and has concluded that substantial doubt exists about its ability to continue as a going concern within one year after the date that the financial statements are available to be issued. The company will require additional funds through the issuance of additional equity or debt securities to finance its ongoing operations and future capital needs. Any inability to raise additional capital may limit the company's ability to fund its ongoing operations, execute its business plan, or pursue investments that it may rely on for future growth.

Another headwind is the uncertainty surrounding the proposed acquisition of EUR. The completion of the Transaction is subject to a number of conditions precedent, including approval by EUR shareholders and option holders, approval of the Australian court, and satisfaction of a minimum cash condition with respect to EUR's net cash position. Many of these conditions are outside of the company's control. If the Transaction is not completed, the company will have incurred substantial costs without realizing the anticipated benefits. The company may also be required to pay a reverse reimbursement fee of $12 million ³⁷ to EUR if the Transaction is not completed in certain circumstances.

The company's most material risk is its liquidity position, as it has incurred losses after income tax of $228.2 million ³⁸ for the year ended June 30, 2026, and substantial doubt exists about its ability to continue as a going concern within one year after the date that the financial statements are available to be issued. The company had net cash outflows from operating activities of $29.7 million ³⁹ and cash on hand of $102.5 million ⁴⁰ as of June 30, 2026. The company's ability to continue operations depends on its ability to raise additional capital, and any inability to do so may limit its ability to fund ongoing operations and execute its business plan. Another material risk is the company's dependence on the successful development of its Tanbreez and Wolfsberg projects, which are at the exploration and evaluation stage, and there are no guarantees that further development into mines will occur or result in commercial extraction. The processing flowsheet for the Tanbreez Project remains conceptual and has not been validated at a commercial scale, and the company has not yet completed a definitive feasibility study. The company also faces significant risks related to the proposed acquisition of EUR, including the possibility that the Transaction may not be completed on the anticipated timeline or at all, and the company may be required to pay a reverse reimbursement fee of $12 million ⁴¹ to EUR if the Transaction is not completed in certain circumstances. Additionally, the company's future revenues will depend on long-term market prices for HREEs and lithium remaining higher than its realized costs, and the company faces intense competition from larger, established mining companies with greater resources.

Management's message to shareholders emphasizes the company's strategic focus on developing its Tanbreez and Wolfsberg projects to become a reliable western world supplier of rare earths and lithium. The company is pursuing the acquisition of EUR to consolidate its interests in the Wolfsberg Project. Management acknowledges the company's limited operating history and the substantial doubt about its ability to continue as a going concern, and intends to seek to raise funds through equity or debt financing transactions, as well as pursue joint ventures, production sharing arrangements, or other transactions. The company may also pursue grants or facilities under the Defense Production Act, as well as financing opportunities from the U.S Export-Import Bank and the European Investment Bank. Management's strategic priorities include completing the definitive feasibility study for the Tanbreez Project by mid-2027 ⁴², finalizing binding offtake agreements, and completing the acquisition of EUR.