UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2022~~2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~_______________~~ to ~~_______________~~

000-54416

(Commission File Number)

~~ ~~Scandium International Mining Corp.

~~Scandium International Mining Corp.~~ (Exact Name of Registrant as specified in its charter)

British Columbia, Canada

98-1009717

(State or other Jurisdiction of Incorporation or organization)

(I.R.S. Employer

Identification No.)

1390 Ione Pass TrailReno, Nevada		89523
	2011 Phaeton Lane, Reno, Nevada		89521
~~(Address of Principal Executive Offices)~~	(Address of Principal Executive Offices)	~~(Zip Code)~~	(Zip Code)

Registrant’s Telephone Number, including area code: (775) 355-9500

Securities registered pursuant to Section 12(b) of the Act: None

Securities to be registered pursuant to Section 12(g) of the Act: Common Shares without par value ~~(Title of class)~~

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 (Check one):

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-~~accelerated~~Accelerated Filer ☐ Smaller Reporting Company ☒ Emerging Growth Company ☐

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 13(a) of the Exchange Act. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $2612,~~235~~097,~~276~~817 as at June 30, ~~2022~~2023.

Indicate the number of shares outstanding of each of the registrant’s classes of common equity, as of the latest practicable date: 355,860,813 common shares as at March 726, ~~2023~~2024.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’'s Proxy Statement for the Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K, which Proxy Statement is to be filed within 120 days after the end of the registrant’'s fiscal year ended December 31, ~~2022~~2023.

TABLE OF CONTENTS

Note about Forward-Looking Statements		3
Glossary of Terms		4
ITEM 1. BUSINESS		6
ITEM 1A. RISK FACTORS		10
ITEM 2. PROPERTIES, PROJECTS, AND PATENTS		12
ITEM 3. LEGAL PROCEEDINGS		31
ITEM 4. MINE SAFETY DISCLOSURES		31
ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		32
ITEM 6. SELECTED FINANCIAL DATA		34
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS		34
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		39
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		40
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE		40
ITEM 9A. CONTROLS AND PROCEDURES		40
ITEM 9B. OTHER INFORMATION		40
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES		42

TABLE OF CONTENTS

Note about Forward-Looking Statements	4
Glossary of Terms	4
ITEM 1. BUSINESS	7
ITEM 1A. RISK FACTORS	11
ITEM 2. PROPERTIES, PROJECTS, AND PATENTS	13
ITEM 3. LEGAL PROCEEDINGS	26
ITEM 4. MINE SAFETY DISCLOSURES	27
ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	27
ITEM 6. SELECTED FINANCIAL DATA	29
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS	29
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	34
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	35
ITEM 9A. CONTROLS AND PROCEDURES	35
ITEM 9B. OTHER INFORMATION	35
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES	36

PART I

Note about Forward-Looking Statements

Certain statements contained in this annual report on Form 10-K and the documents incorporated by reference herein constitute “"forward-looking statements.” Forward-looking statements may include, but are not limited to, statements with respect to the future price of commodities, the estimation of mineral resources, the realization of mineral resource estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, our ability to fund property acquisition costs, our ability to reach targeted time frames for establishing feasibility, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, our ability to raise funds necessary for ongoing and planned expenditures and operations, and regulatory approvals. In certain cases, forward-looking statements can be identified by the use of words such as “"plans,” “"expects”" or “"does not expect,” “"is expected,” “"scheduled,” “"estimates,” “"intends, “"anticipates”" or “"believes,” or variations of such words and phrases or state that certain actions, events or results “"may,” “"could,” “"would”" or “"will be taken,” “"occur”" or “"be achieved.” Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors may include, among others, risks related to our joint venture operations; actual results of current exploration activities or production technologies that we are currently testing; actual results of reclamation activities; future metal prices; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental or regulatory approvals or financing or in the completion of development activities, as well as those factors discussed in the section entitled “"Risk Factors”" and elsewhere in this Form 10-K. Although we have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Glossary of Terms

“Company,” “SCY,” “we,” “us,” “our” and similar words of similar meaning refer to Scandium International Mining Corp.

$, A$, C$	mean respectively, United States dollars, Australian dollars and Canadian dollars.
Alteration	Usually referring to chemical reactions in a rock mass resulting from the passage of hydrothermal fluids.
Assay	An analysis to determine the presence, absence or quantity of one or more components, elements or minerals.
Core	The long cylindrical piece of a rock, up to several inches in diameter, brought to the surface by Diamond drilling.
Diamond drilling	A drilling method in which the cutting is done by abrasion using diamonds embedded in a matrix rather than by percussion. The drill cuts a core of rock, which is recovered in long cylindrical sections.
Fractures	Breaks in a rock, usually due to intensive folding or faulting.
Grade	The concentration of a valuable mineral within an Ore.
Hydrothermal	Hot fluids, usually water, which may or may not carry metals and other compounds in solution to the site of mineral deposition or wall rock alteration.
Igneous	A rock formed by the cooling of molten silicate material.
Intrusion	A general term for a body of igneous rock formed below the surface of the earth.
Kg	Kilogram which is equivalent to approximately 2.20 pounds.
Km	Kilometer which is equivalent to approximately 0.62 miles.
Mineralization	A term used to describe the presence of minerals of possible economic value. Also used to describe the process by which concentration of economic minerals occurs.
Net Smelter Returns Royalty	A share of the net revenues generated from the sale of metal produced by a mine.
NI 43-101	National Instrument 43-101 – Standards for Disclosure of Mineral Projects, being the regulation adopted by Canadian securities regulators that governs the public disclosure of technical and scientific information concerning a mineral property.
Ore	A naturally occurring solid material from which a metal or valuable mineral can be profitably extracted.
Outcrop	An exposure of rock at the earth’s surface.
ppm	Parts per million.
Pyrite	Iron sulphide mineral. The most common and abundant sulphide mineral and often found in association with copper and gold.
Qualified Person	Means a Qualified Person as defined in National Instrument 43-101, including an engineer or geoscientist in good standing with their professional association, with at least five years of relevant experience.
Quartz	The second most common rock forming mineral in the earth’s crust. SiO2.

$, A$, C$	mean respectively, United States dollars, Australian dollars and Canadian dollars.

Assay	An analysis to determine the presence, absence or quantity of one or more components, elements or minerals.

Exploration stage issuer	An issuer that has no material property with mineral reserves disclosed.

Exploration stage property	A property that has no mineral reserves disclosed.

Grade	The concentration of a valuable mineral within an Ore.

Resource	Means any of a measured, indicated or inferred resource as used in NI 43-101, and having the following meanings:
hematite	A mineral composed of iron oxide minerals.
	“measured resource” is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
Igneous	A rock formed by the cooling of molten silicate material.
	“indicated resource” is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Intrusion	A general term for a body of igneous rock formed below the surface of the earth.
	“inferred resource” is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.
Kg	Kilogram which is equivalent to approximately 2.20 pounds.
	For the purposes of the above a “mineral resource” means a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.
Km	Kilometer which is equivalent to approximately 0.62 miles.
	(Please refer to “Item 2. Properties - Cautionary Note to U.S. Investors Regarding Resource Estimates” in regards to the use of the above terms in this Form 10-K.)
laterite	Soil layer rich in iron dioxide.
Sulphide	A class of minerals characterized by the linkage of sulphur with a metal (such as Pyrite (FeS2)).
Limonite	an iron ore consisting of a hydrous ferric oxide of variable composition.
Tpd/Tpa	Tonnes per day/tonnes per annum.
Mineralization	A term used to describe the presence of minerals of possible economic value. Also used to describe the process by which concentration of economic minerals occurs.
Tonne	A metric ton which is equivalent to approximately 2,204 pounds.
Mineral reserve	An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
Sediments	The debris resulting from the weathering and breakup of rocks that have been deposited by or carried by runoff, streams and rivers, or left over from glacial erosion or sometimes from wind action.
Mineral resource	A concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. Includes measured, indicated and inferred mineral resources, as defined below: “measured mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve. “indicated mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve. “inferred mineral resource” is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve.
Vein	A geological feature comprised of minerals (usually dominated by quartz) that are found filling openings in rocks created by faults or replacing rocks on either side of faults or fractures.

Net smelter returns royalty	A share of the net revenues generated from the sale of metal produced by a mine.

NI 43-101	National Instrument 43-101 – Standards for Disclosure of Mineral Projects, being the regulation adopted by Canadian securities regulators that governs the public disclosure of technical and scientific information concerning a mineral property.

Ore	A naturally occurring solid material from which a metal or valuable mineral can be profitably extracted.

ppm	Parts per million.

Qualified person	Means a qualified person as defined in S-K 1300, including an engineer or geoscientist in good standing with their professional association, with at least five years of relevant experience.

saprolite	Soft, friable, isovolumetrically weathered bedrock that retains the fabric and structure of the parent rock.

S-K 1300	Item 1300 of Regulation S-K of the 1933 Securities Act.

Tpy	Tonnes per year.

Tonne	A metric ton which is equivalent to approximately 2,204 pounds.

ITEM 1. BUSINESS

General

We were incorporated on July 17, 2006, under the laws of British Columbia, Canada under the name Golden Predator Mines Inc. We were incorporated as a wholly owned subsidiary of Energy Metals Corp. for the purpose of holding precious metals and certain specialty metals assets. In order to focus on specialty metals, during February 2009 we transferred most of our precious mineral assets to our then wholly owned subsidiary Golden Predator Corp., and on March 6, 2009, we completed a spin-out of Golden Predator Corp. to our shareholders. Effective March 12, 2009, we changed our name to EMC Metals Corp. In order to reflect a new emphasis on mining for scandium minerals, effective November 19, 2014, we changed our name to Scandium International Mining Corp (“SCY” or the “Company”).

We are a reporting issuer in the Canadian Provinces of British Columbia, Alberta and Ontario and our common shares are listed for trading on the Toronto Stock Exchange under the trading symbol “SCY.”

Our head office is located at ~~1390~~2011 ~~Ione~~Phaeton ~~Pass Trail~~Lane, Reno, Nevada ~~89523~~89521. The address of our registered office is 1200 - 750 West Pender Street, Vancouver, British Columbia, Canada, V6C 2T8.

Our most advanced project is the Nyngan Scandium Project, located in New South Wales, Australia (the “Nyngan Scandium Project”), on which we hold a mine lease grant and a development consent. We also hold an exploration license on a scandium mineral property located near Nyngan known as the “Honeybugle Scandium property.” ~~and~~We adid ~~reservation~~not onrenew an exploration license on a scandium mineral property in Finland, known as the “Kiviniemi Scandium property.”

~~During~~In ~~the~~November ~~first~~2023 ~~quarter~~we ofcommenced ~~2022,~~physical ~~SCY~~development ~~completed an internal review~~ of ~~its portfolio of assets and projects. The purpose of this review was to determine~~ the appropriate allocation of capital between the Company’s scandium activities and the recently announced initiatives on Critical Metals Recovery (CMR) and High Purity Alumina (HPA). The board decided and announced on April 18, 2022, that the best return on invested capital for its shareholders was to prioritize the Company’s portfolio of scandium assets including the Nyngan Scandium Project ~~and~~following tothe ~~idle~~results ~~its CMR and HPA initiatives. As a result~~ of the ~~review,~~2023 ~~leadership~~Nyngan ~~changes~~drilling ~~were~~program ~~also~~which ~~made~~better ~~with~~defined the ~~appointment~~western ofboundary ~~an interim CEO and CFO and a downsizing~~ of the ~~board~~existing toresource. ~~four~~The ~~directors.~~actions included:

As• ~~its~~Survey ~~first~~conducted ~~priority,~~of the ~~new~~site ~~management completed a C$3.4 million non-brokered equity private placement which replenished cash balances and eliminated negative working capital. The second priority was~~ to ~~reduce~~establish ~~costs~~ and peg the ~~Company~~boundaries ~~has~~for ~~been~~proposed ~~successful~~work in ~~reducing~~accordance ~~corporate~~with ~~G&A~~State ~~costs~~Significant ~~including~~Development ~~being~~5157 ~~able~~(“SSD ~~to reverse over $1 million in accruals during 2022~~5157”).

~~Our~~• ~~plan~~Soil ofmanagement ~~operation~~works ~~for~~including ~~2023 is to continue to reduce costs and position~~ the ~~Company~~establishment ~~to benefit from the growing market adoption~~ of ~~Scandium.~~water ~~This~~exclusion ~~includes~~embankments ~~moving forward with our patent portfolio~~ and ~~filing a new mine lease application to re-establish~~ the ~~original~~stripping ~~Mining~~of ~~License~~topsoil, ~~giving~~with ~~access~~subsequent ~~to the full scandium resource at Nyngan and conduct drilling campaigns at both Nyngan and Honeybugle to further delineate the resources~~stockpiling.

6• Construction and placement of temporary office quarters at the site for future site development activities.

In the first quarter of 2023, we completed a drilling program at the Honeybugle Scandium Project which discovered a new Scandium enriched laterite formation approx. 2 meters below the surface area at the Woodlong prospect within the Honeybugle Exploration License 7977 area, where 32 vertical air core holes were drilled in an approximately 300m x 400m area.

During the first quarter of 2022, SCY completed an internal review of its portfolio of assets and projects. The purpose of this review was to determine the appropriate allocation of capital between the Company’s scandium activities and the recently announced initiatives on Critical Metals Recovery (CMR) and High Purity Alumina (HPA). The board decided and announced on April 18, 2022, that the best return on invested capital for its shareholders was to prioritize the Company’s portfolio of scandium assets including the Nyngan Scandium Project, and to idle its CMR and HPA initiatives. As a result of the review, leadership changes were also made with the appointment of a CEO and CFO and a downsizing of the board to four directors.

As its first priority, the new management completed a C$3.4 million non-brokered equity private placement which replenished cash balances and eliminated negative working capital. The second priority was to reduce costs, and the Company has been successful in reducing corporate G&A costs, including being able to reverse over $1 million in accruals during 2022.

Our plan of operation for 2024 is to continue to advance commercial discussions with potential offtake partners. The completion of a sufficient offtake agreements totalling a minimum quantity is the critical factor to enable the Company to be in a position to consider taking a Final Investment Decision to put the Nyngan Scandium Project into production. At the same time, the capital raise in 2022, positive working capital and no debt, and the reduction of operating costs have given the Company time to be in a position to benefit from the growing market adoption of scandium.

Intercorporate Relationships

The chart below illustrates our corporate structure on December 31, ~~2022~~2023, including our subsidiaries, the jurisdictions of incorporation, and the percentage of voting securities held.

Pursuant to a share exchange agreement dated June 30, 2017, the Company acquired the remaining 20% interest in EMC Metals Australia Pty. Ltd. from Scandium Investments LLC (“SIL”). On completion of the share exchange, the Company issued an aggregate of 58,830,645 common shares to SIL and granted to SIL the right to nominate two individuals to the board of the Company for so long as SIL holds at least 15% of SCY’s issued and outstanding shares, and one director for so long as SIL holds at least 5% but less than 15% of SCY’s issued and outstanding shares.

Business Operations

Company, Projects and Markets Summary

We are a mineral exploration and development company that is at an exploration stage. Our most advanced project is the Nyngan Scandium Project, located in New South Wales, Australia (the “Nyngan Scandium Project”), on which we hold a mine lease grant, a development consent, and 100% of the mineral rights. The Company has completed a definitive feasibility study on the Nyngan Scandium Project dated May 4, 2016 (the “Feasibility Study” or “DFS”), which was prepared independently in accordance with NI 43-101. The results of the DFS include a 16.9 million tonne measured and indicated resource (grading 235ppm at a 100ppm cut-off) and a 1.43 million tonne mineral reserve (combined proven and probable), based on economics established in that study. The DFS was filed on May 6, 2016, and is available on SEDAR (www.sedar.com), on the Company’s website (www.scandiummining.com) and on the SEC’s website (www.sec.gov). A summary of the DFS is provided herein under “Item 2. Properties, Projects and Patents – Description of Mineral Projects – Nyngan Scandium Project – Nyngan Feasibility Study.”

7The Company also holds an exploration license on the Honeybugle Scandium property, located 24 kilometers from the Nyngan Scandium Project, granted in 2014.

The Company also holds exploration licenses on two separate scandium-prospective properties:

	·	an exploration license on the Honeybugle Scandium property, located 24 kilometers from the Nyngan Scandium Project, granted in 2014; and
	·	an exploration license on the Kiviniemi Scandium Property a scandium-prospective property in central Finland, granted in 2018.

Corporate Objectives and Strategy

Our corporate focus is the development of projects that enable the production and sale of scandium and scandium-based products. That scandium focus has now been expanded to include other specialty metals, identified by the US Department of Commerce on a list of 35 critical metals, which specifically includes scandium. In this regard, the Company remains open to pursuing various host project opportunities that can produce a basket of metal products, including scandium, along with other technology-driven critical metals.

The Nyngan Scandium Project remains the most advanced project in the Company portfolio at this time, with permitting largely complete and a published DFS on SEDAR. Subject to successful construction financing and customer sales agreements, we intend to develop the Nyngan Scandium Project for production and supply of scandium oxide and scandium-content products. The Company has been successful in developing capability to manufacture an aluminum-scandium master alloy product, specifically for sale to aluminum alloy customers. This additional product capability enhances the Company’s ability to sell scandium-containing products to the aluminum industry, and potentially generate additional margins in certain markets. For further information on the Nyngan Scandium Project, please refer to “Item 2. Properties - Description of Mineral Projects – Nyngan Scandium Project” and “Item 1A. Risk Factors.”

Product Markets for Scandium

Scandium is the 31st most abundant element in the earth’s crust (average 33 ppm), which makes it more common than lead, mercury, and precious metals, but less common than copper. Scandium has characteristics that are similar to rare earth elements, and it is often classified as a member of that group, although it is technically a light transition metal. Scandium occurs in nature as an oxide, rarely occurs in concentrated quantities because it does not selectively combine with the common ore-forming anions and is very difficult to reduce to a pure metal state. Scandium is typically produced and sold as a powder, in oxide form, and known as scandium oxide, scandia or Sc2O3.,

Global annual production estimates of scandium range from 15 tonnes to 20 tonnes, but accurate statistics are not available due to the lack of public information from countries in which scandium is currently being produced, specifically China and Russia. Two sources of scandium production outside of China and Russia have ~~recently~~ commenced production. The Taganito Nickel Mine in the Philippines (Sumitomo Metal Mining Co., Ltd.) reported sales of 16 tonnes of Scandium Oxalate in 2021.

In October 2022, Rio Tinto announced that Rio Tinto Fer et Titane in Quebec plans to quadruple scandium oxide production capacity to 12 tonnes from its current 3 tonne per annum capacity. This C$30-35 million expansion is expected to produce incremental scandium oxide in 2024. The entrance of Rio Tinto into the production of scandium oxide is considered to be confirmation of the growth of the scandium market.

There is no reliable pricing data on global scandium oxide trading. Scandium oxide is typically traded in small quantities, between private parties, and pricing is not transparent to other buyers or sellers as there is no clearing facility as is more common with commercially traded metals and commodities. The U.S. Geological Survey (“USGS”) in its latest available report (dated January 2022) documents the 2021 price of scandium oxide (99.99% grade) at US$2,200/kg, indicating a significant reduction from the 2020 price estimate of US$3,800/kg. They also estimate the global sales of scandium oxide to be between 15-25 tpy, principally from China, Russia and the Philippines.

8Prices vary, based on purity and quantity supplied. The USGS pricing generally reflects small volume sales, with larger quantities selling at lower prices, typically under US$2,000/kg. USGS reporting also acknowledged that ex-works China prices for 99.99% purity oxide were considerably lower than US-observed prices in 2021, based on underutilization of existing Chinese production capacity. Scandium oxide grades of 95-99% are generally considered suitable for manufacturing AlSc 2% master alloy, the form demanded for aluminum alloy applications.

Prices vary, based on purity and quantity supplied. The USGS pricing generally reflects small volume sales, with larger quantities selling at lower prices, typically under US$2,000/kg. USGS reporting also acknowledged that ex-works China prices for 99.99% purity oxide were considerably lower than US-observed prices in 2021, based on underutilization of existing Chinese production capacity. Scandium oxide grades of 95-99% are generally considered suitable for manufacturing AlSc 2% master alloy, the form demanded for aluminum alloy applications

Scandium can also be effectively purchased in the form of aluminum-scandium (Al-Sc) master alloy, typically containing 2% scandium by weight. This product is the preferred form for manufacture of aluminum alloys containing scandium. The current January 2022 USGS report indicates the 2021 price for Al-Sc 2% master alloy at US$350/kg, slightly higher than the 2020 USGS average. Recent USGS estimated prices for Al-Sc 2% master alloy have also been high relative to commonly available prices ex-works China, which have trended under US$100/kg and are available in one tonne lots or greater today.

Principal uses for scandium are in high-strength aluminum alloys, solid oxide fuel cells, high-intensity metal halide lamps, electronics, and laser research. Recently developed applications include welding wire ~~and fuel cells which are expected to be in future demand~~. Approximately 15 different commercial aluminum-scandium alloys have been developed, and some of them are used for aerospace applications. In Europe and the U.S., scandium-containing alloys have been evaluated for use in structural parts in commercial airplanes and high stress parts in automobile engines and brake systems. Military and aerospace applications are known to be of interest, although with less specificity. The combination of high strength, weldability and ductility makes aluminum-scandium alloys potentially attractive replacements for existing aluminum alloys in a number of applications where improved alloy properties can add value to final products.

Competitive Conditions

We compete with numerous other companies and individuals in the search for and the acquisition or control of attractive rare earth and specialty metals mineral properties and opportunities. Our ability to profitably build a portfolio of commercial operations in this market segment will depend on our acquisition success in finding and securing attractive positions for development, our ability to operate the plants and facilities we commit to construct, and our success in marketing the products we manufacture against competing producers in the marketplace.

In regard to our plan to produce scandium, there are a limited number of scandium producers presently. If we are successful at becoming a producer of scandium, our ability to be competitive will require that we establish a reliable supply of scandium to the market, delivered at purity levels demanded by various applications, and that our operating costs generate satisfactory margins, recognizing true prices will be set by customers and competitors in a market that is yet to mature.

Governmental Regulations and Environmental Laws

The development of any of our mining properties will require numerous local and national government approvals and environmental permits. For further information about governmental approvals and permitting requirements, please refer to “Item 1A. Risk Factors” and Nyngan Scandium Project -Environmental Permitting/Development Consent/Mining Lease below for additional information.

~~Environmental Permitting/Development Consent/Mining Lease below for additional information.~~ 10

Employees

As at January 1, 2023, we have 5 full and part time employees. Our operations are managed by our officers with input from our directors. We engage geological, metallurgical, and engineering consultants from time to time as required to assist in evaluating our property interests and recommending and conducting work programs.

ITEM 1A. RISK FACTORS

In addition to the factors discussed elsewhere in this Form 10-K, the following are certain material risks and uncertainties that are specific to our industry and properties that could materially adversely affect our business, financial condition and results of operations.

Risks Associated with the Nyngan Scandium Project

There are technical challenges to scandium production that may render the Nyngan Scandium Project not economic. The economics of scandium recovery are known to be challenging. There are very few facilities producing scandium and the existing scandium producers are secretive in their techniques for recovery. In addition, the recovery of scandium product from laterite resources, such as are found on the Nyngan property, has not been demonstrated at an operating facility. The Nyngan processing facility design, if constructed, will be the first of its kind for scandium production. These factors increase the possibility that we will encounter unknown or unanticipated production and processing risks. Should we encounter any of these risks, they could increase the cost of production thereby reducing margins on the Nyngan Scandium Project or rendering it uneconomic.

There is no guarantee that we will be able to finance the Nyngan Scandium Project for production. Any decision to proceed with production on the Nyngan Scandium Project will require significant production financing. Scandium projects are uncommon, and economic and production uncertainty may limit our ability to attract the required amount of capital to put the project into production. If we are unable to source production financing on commercially viable terms, we may not be able to proceed with the project and may have to write off our investment in the project.

If we are successful at achieving scandium production, we may have difficulty selling scandium-containing products longer term. Scandium is characterized by unreliable supply, resulting in limited development of markets for scandium oxide. Markets may take longer to develop than anticipated, and Nyngan and other potential scandium producers may have to wait for products and applications to create adequate demand. Certain applications may require lengthy certification processes that could delay usage or acceptance. In addition, certain scandium applications require very high purity scandium product, which is much more difficult to produce than lower grade product. If we commence production, our inability to supply scandium in sufficient quantities, in a reliable and timely manner, and in the correct quality, could reduce the demand for any scandium produced from our projects and possibly render the project uneconomic.

General Risks Associated with our Mining Activities and Company

We may not receive permits necessary to proceed with the development of any of our advancing projects. The development of any of our mining properties, including the Nyngan Scandium Project, will require the acquisition and sustained possession of numerous local and national government approvals and permits. Our ability to secure all necessary permits required to develop any of our projects is unknown until such permits are received. If we cannot obtain or retain all necessary permits, the Nyngan Scandium Project cannot be developed, and our investment in the project potentially will be lost. While the critical permits for the Nyngan Scandium Project have been received, other permits remain outstanding at this time and continuing compliance with the terms of the permits is required.

Mineral Resource Estimates on our properties are subject to uncertainty and may not reflect what may be economically extracted. Resource estimates included for scandium on our Nyngan property are estimates only and no assurances can be given that the estimated levels of scandium minerals will actually be produced or that we will receive the metal prices assumed in determining our resources. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling and exploration results and industry practices. Estimates made at any given time may change significantly when new information becomes available or when parameters that were used for such estimates change. By their nature resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. Furthermore, market price fluctuations in scandium, as well as increased capital or production costs or reduced recovery rates, may limit our ability to establish reserves at some future point on Nyngan, or on any of our properties. The extent to which more Nyngan project resources may ultimately be reclassified as proven or probable reserves is dependent upon the demonstration of their profitable recovery. The evaluation of reserves or resources is always influenced by economic and technological factors, which may change over time. Accordingly, further current resource estimates on our material properties may never be converted into reserves, or be economically extracted, and we may have to write off such properties or incur a loss on sale of our interest on such properties, which will likely reduce the value of our shares.

Our operations are subject to losses due to exchange rate fluctuation. We maintain accounts in Canadian, Australian, Euro and U.S. currency. Our equity financings have to date been priced in Canadian dollars. All of our material projects and non-cash assets are located outside of both Canada and the USA, however, and require regular currency conversions to local currencies where such projects and assets are located. Our operations are accordingly subject to foreign currency fluctuations and such fluctuations may materially affect our financial position and results. We do not engage in currency hedging activities.

We do not currently earn any revenue and without additional funding, we will not be able to carry out our business plan, and if we raise additional funding existing security holders may experience dilution. As an exploration stage mining company, none of our principal properties are in operation and we do not currently earn any revenue. In order to continue our exploration activities and to meet our obligations on the Nyngan Scandium Project, we will need to raise additional funds. Recently, we have relied entirely on the sale of our securities to raise funds for operations. Our ability to continue to raise funds from the sale of our securities is subject to significant uncertainty due to volatility in the mineral exploration marketplace. If we are able to raise funds from the sale of our securities, existing security holders may experience significant dilution of their ownership interests and possibly to the value of their existing securities.

11Risks Related to the COVID-19 Pandemic. In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.

Risks Related to the COVID-19 Pandemic. The current outbreak of the novel coronavirus (COVID-19) that was first reported from Wuhan, China in December 2019, and the spread of this virus could continue to have a material adverse effect on global economic conditions which may adversely impact our business. The World Health Organization (WHO) declared a global emergency on January 30, 2020 with respect to the outbreak and characterized it as a pandemic on March 11, 2020. Cases of COVID-19 have been reported in 223 countries, areas or territories as of February 17, 2021, including China, Australia, the United States, Canada and countries in the European Union. The extent to which the outbreak impacts the Company’s business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions to contain the outbreak or treat its impact, among others. Moreover, the actual and threatened spread of the coronavirus globally could also have a material adverse effect on the regional economies in which the Company intends to operate, continue to negatively impact stock markets and adversely impact the Company’s ability to raise capital. Any of these developments, and others, could have a material adverse effect on the Company’s business. In particular, the COVID-19 pandemic has resulted in restrictions including quarantines, closures, cancellations and travel restrictions, which may have a material adverse effect on the Company’s business including delays or disruptions in regulatory submissions, exploration activities on the Nyngan Scandium Project and CMR Project development.12

ITEM 2. PROPERTIES, PROJECTS AND PATENTS

Cautionary Note to U.S. Investors Regarding Resource Estimates

The Company’s technical disclosure in this section uses certain terms which are defined by the Canadian Institute of Mining, Metallurgy and Petroleum, and required to be disclosed in accordance with Canadian National Instrument 43-101 (“NI 43-101”). The disclosure standards in the United States Securities and Exchange Commission’s (the “SEC”) Subpart 1300 of Regulation S-K contain significant differences from the disclosure requirements of NI 43-101 and information presented in this section may not be comparable with United States standards in documents filed with the SEC. Accordingly, information concerning mineral deposits set forth in this section may not be comparable with information presented by companies using only United States standards in their public disclosures.

~~Description~~Summary Disclosure of Mineral Projects

The Company holds two properties, the Nyngan Scandium Project in Australia, and the Honeybugle Scandium Property in Australia, each of which is an exploration stage property. Only the Nyngan Scandium Project is considered a material mineral property by the Company.

Location of Properties

Figure 1: Location of Properties in Australia

The Nyngan Scandium Project site is located approximately 450 kilometres northwest of Sydney, NSW, Australia, and approximately 20 kilometres due west from the town of Nyngan, a rural town of approximately 2,900 people. The deposit is located 5 kilometres south of Miandetta, off the Barrier Highway that connects the towns of Nyngan and Cobar.

The Honeybugle Scandium property covers part of the Honeybugle geologic complex in New South Wales, NSW, Australia, and is located approximately 24 kilometers west-southwest from the Company’s Nyngan Scandium Project.

Type and Amount of Ownership Interests

The Company holds a mine lease grant, a development consent, and 100% of the mineral rights on the Nyngan Scandium Project. The scandium resource is held under one Mining License (ML1792) and three exploration licenses (EL 8448, EL 8316 and EL6096). The exploration licenses allow the license holder to conduct exploration on private land (with landowner consents and signed compensation agreements in place) and public lands not including wildlife reserves, heritage areas or National Parks. The scandium resource is fully enclosed on private agricultural land. The Company’s Australian subsidiary holds legal title to specific surface and mineral exploration rights on the Nyngan Scandium Project. The exploration licenses cover 29.25 square kilometers (2,925 hectares). The project surface rights (freehold) total 810 acres (370 hectares).

The Company has a 100% interest in an exploration license (EL 7977) covering the Honeybugle Scandium property. The Honeybugle Scandium property is 34.7 square kilometers.

Key Permit Conditions

The Company previously undertook permitting efforts required to obtain a mine lease grant and a development consent on the Nyngan Scandium Project. In addition to these two key governmental approvals, other required licenses and permits must be acquired for the Nyngan Scandium Project but are considered routine and require only compliance with fixed standards and objective measurements. These remaining approvals include submittal of numerous plans and reports supporting compliance with the Company’s development consent and mining lease. In addition, certain water, roads, dam and electrical access reviews and arrangements must be finalized. For additional details, see “Individual Property Disclosure - Nyngan Scandium Project – Mining Lease.”

To date, no permitting efforts have been undertaken or are currently planned at the Honeybugle Scandium property.

Mineralization Styles

The Honeybugle Scandium property’s mineralization has a high iron content with medium grade scandium, located on or near surface.

Available Facilities

The Nyngan Scandium Project site is accessed from the Barrier Highway, a paved two lane all-weather road connecting the town of Nyngan with Cobar. Adequate water supply is available for the project via raw water supply lines, which are ultimately sourced from Burrendong Dam, located 230 kms to the southeast. Grid electrical power is available in the form of separate 132kV, 66kV and 33kV lines, all run within 5 km of the site.

The Honeybugle Scandium property is all-weather accessible and close to infrastructure.

Nyngan Scandium Project

Property Description and Location

The Nyngan Scandium Project site is located approximately 450 kilometres northwest of Sydney, NSW, Australia and approximately 20 kilometres due west from the town of Nyngan, a rural town of approximately 2,900 people. The deposit is located 5 kilometres south of Miandetta, off the Barrier Highway that connects the towns of Nyngan and Cobar. Final license area access is reached by clay farm tracks. The general area can be characterized as flat agricultural land, used predominantly for wheat farming and livestock grazing. Infrastructure in the area is good, including available water and electric power. The property is classified as an Australia Property for financial statement segment information purposes.

12The 2019 ML 1792 grant covers 810 acres (370 hectares) of surface area fully owned by the Company, an area adequate to construct and operate a scandium mine of a scale outlined in the DFS. The book value of the Nyngan Scandium Project is $704,053 and is entirely related to the acquisition cost of the land which is unencumbered. There is no associated plant and equipment. The property has only been used for agricultural purposes and there have been no previous natural resource operations or encumbrances.

The general location of the Nyngan Scandium Project is provided in Figure 1 below.

Figure 1: Location of Nyngan Scandium Project

Note: None of the Existing Mines identified in Figure 1 produce scandium.

The scandium resource is hosted within the lateritic zone of the Gilgai Intrusion, one of several Alaskan-type mafic and ultramafic bodies which intrude Cambrian-Ordovician metasediments collectively called the Girilambone Group. The laterite zone, locally up to 40 meters thick, is layered with hematitic clay at the surface followed by limonitic clay, saprolitic clay, weathered bedrock and finally fresh bedrock. The scandium mineralization is concentrated within the hematitic, limonitic, and saprolitic zones with values up to 350 ppm scandium.

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Figure 2: Location of the Exploration Licenses and Mining Lease for the Nyngan Scandium Project

Mineral License Details

The scandium resource is held under Exploration License (EL) 8316 (Block Number 3132, units d, e, j, k and Block no. 3133, unit f) and EL 6096 (Block 3132, unit p, and Block 3133, units l, m, r and s); a total of ten (10) graticular units. The exploration licenses allow the license holder to conduct exploration on private land (with landowner consents and signed compensation agreements in place) and public lands not including wildlife reserves, heritage areas or National Parks. The scandium resource is fully enclosed on private agricultural land.

The Company’s Australian subsidiary holds legal title to specific surface and mineral exploration rights on the Nyngan Scandium Project. During 2017, an additional EL (EL 8448) was granted. Figure 2 provides details of the location of EL 8448 and the locations of Mining Lease 1792 and Mining Lease Application 531, both of which overlay the exploration license area.

The exploration licenses cover 29.25 square kilometers (2,925 hectares). The resource site is located at geographic coordinates MGA zone 55, GDA 94, Lat: - 31.5987, Long: 146.9827, Map Sheets 1:250k – Cobar (SH/55-14) and 1:100k Hermidale (8234).

The project surface rights (freehold) total 810 acres (370 hectares) on the portion of the exploration license area corresponding to the Mine Lease 1792 area. The freehold property boundaries are defined by standard land survey techniques undertaken by the Lands Department and currently presented in the form of Cadastral Deposited Plans (DP) and Lots. The land associated with the project rights is DP 752879, Lots 6 and 7 (Appendix 2, Lots 6 and 7 - Nyngan).

The Company is required to lodge individual A$10,000 environmental bonds with the NSW Mines Department for each license and must meet total minimum work requirements annually of approximately A$65,000, covering both licenses.

Royalties attached to the properties include a 1.5% Net Profits Interest royalty to private parties involved with the early exploration on the property, a 1.7% Net Smelter Returns Royalty payable to Jervois for 12 years after production commences, subject to terms in the settlement agreement, and a 0.7% royalty on gross mineral sales to a private investor. Another revenue royalty is payable to private interests of 0.2%, subject to a US$370k cap. A NSW minerals royalty will also be levied on the project, subject to negotiation, currently 4% on revenue.

Metallurgy Development

The Company has invested in and developed methodology for extracting scandium from the Nyngan property resource since 2010. A portion of the work done over this period has been superseded by work that followed, but subsequent test programs universally benefitted from prior efforts. In summary, the programs have been as follows:

·● 2010 – The Company inherited work done on Nyngan from the previous property owner, and applied that work to a quick flowsheet and capital estimate done for management by Roberts & Schaefer of Salt Lake City, Utah; · 2011 – The Company employed Hazen Research, Inc., of Golden, Colorado, USA (“Hazen”) to test acid baking techniques and solvent extraction (“SX”) processes with Nyngan resource material. The Company also employed SGS-Lakefield (Ontario) to test pressure acid leach techniques on Nyngan resource, as a replacement for or an enhancement to acid bake techniques done earlier in the year by Hazen; · 2012 – The Company engaged SNC-Lavalin to do an economic study for management, utilizing an acid bake flowsheet and SX work from the Hazen test program; · 2014 – The Company published a preliminary economic assessment (“PEA”) entitled NI 43-101F1 Technical Report on the Feasibility of the Nyngan Scandium Project, authored by Larpro Pty Ltd, utilizing both Hazen and SGS-Lakefield test work results; and · 2015 – The Company amended and refiled the 2014 PEA Report as the “Amended Technical Report and Preliminary Economic Analysis on the Nyngan Scandium Project, NSW, Australia.” · 2016 – The Company published an independently prepared definitive feasibility study (“DFS”) on the Nyngan Scandium Project. The technical report on the feasibility study entitled “Feasibility Study – Nyngan Scandium Project, Bogan Shire, NSW, Australia” was independently compiled pursuant to the requirements of NI 43-101 and incorporated the results of current and previous test work.

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2011 – The Company employed Hazen Research, Inc., of Golden, Colorado, USA (“Hazen”) to test acid baking techniques and solvent extraction (“SX”) processes with Nyngan resource material. The Company also employed SGS-Lakefield (Ontario) to test pressure acid leach techniques on Nyngan resource, as a replacement for or an enhancement to acid bake techniques done earlier in the year by Hazen;

●

2012 – The Company engaged SNC-Lavalin to do an economic study for management, utilizing an acid bake flowsheet and SX work from the Hazen test program;

●

2014 – The Company published a preliminary economic assessment (“PEA”) entitled NI 43-101F1 Technical Report on the Feasibility of the Nyngan Scandium Project, authored by Larpro Pty Ltd, utilizing both Hazen and SGS-Lakefield test work results;

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2015 – The Company amended and refiled the 2014 PEA Report as the “Amended Technical Report and Preliminary Economic Analysis on the Nyngan Scandium Project, NSW, Australia.”

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2016 – The Company published an independently prepared definitive feasibility study (“DFS”) on the Nyngan Scandium Project; and

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2023 – The Company commenced physical development of the Nyngan Scandium Project following the results of the 2023 Nyngan drilling program which better defined the western boundary of the existing resource.

Nyngan Definitive Feasibility Study

On April 18, 2016, the Company announced the results of an independent definitive feasibility study on the Nyngan Scandium Project. The technical report on the feasibility study entitled “Feasibility Study – Nyngan Scandium Project, Bogan Shire, NSW, Australia” is dated May 4, 2016, and was independently compiled pursuant to the requirements of NI 43-101 (the “Feasibility Study” or “DFS”). The report was filed on May 6, 2016 and is available on SEDAR (www.sedar.com), the Company’s website (www.scandiummining.com) and the SEC’s website (www.sec.gov). A full discussion on the technical report was provided in the Company’s Form 10Q for the quarterly period ending March 31, 2016, as filed with the SEC and on SEDAR on May 13, 2016.

The Feasibility Study concluded that the Nyngan Scandium Project has the potential to produce an average of 37,690 kilograms of scandium oxide (scandia) per year, at grades of 98.0%-99.8%, generating an after-tax cumulative cash flow over a 20 year project life of US$629 million, with an NPV10% of US$177 million. The average process plant feed grade over the 20 year project life is 409ppm of scandium.

The financial results of the Feasibility Study are based on a conventional flow sheet, employing continuous high pressure acid leach (HPAL) and solvent extraction (SX) techniques. The flow sheet was modeled and validated from METSIM modeling and considerable bench scale/pilot scale metallurgical test work utilising Nyngan resource material. A number of the key elements of this flowsheet work have been protected by the Company under US patent applications.

The Feasibility Study has been developed and compiled to an accuracy level of +15%/-5%, by a globally recognized engineering firm that has considerable expertise in laterite deposits and process facilities, as well as in smaller mining and processing projects, and has excellent familiarity with the Nyngan Scandium Project location and environment.

Nyngan Scandium Project Highlights

· Capital cost estimate for the project is US$87.1 million, (2016 Dollars) · Annual scandium oxide product volume averages 37,690 kg, over 20 years, · Annual revenue of US$75.4 million (oxide price assumption of US$2,000/kg), · Operating cost estimate for the project is US$557/kg scandium oxide, · Project Constant Dollar NPV10% is US$177 million, (NPV8% is US$225 million), · Project Constant Dollar IRR is 33.1%, · Oxide product grades of 98-99.8%, as based on customer requirements, · Project resource increases by 40% to 16.9 million tonnes, grading 235ppm Sc, at a 100ppm cut-off in the measured and indicated categories, and · Project Reserve totalling 1.43 million tonnes, grading 409ppm Sc was established on part of the resource.

The Feasibility Study consolidates a significant amount of metallurgical test work and prior study on the Nyngan Scandium Project. The metallurgical assumptions are supported by various bench and pilot scale independent test work programs that are consistent with known outcomes in other laterite resources. A number of the key elements of this flowsheet work have been protected by the Company under US Patent Applications.

The Feasibility Study delivered a positive result on the Nyngan Scandium Project, and recommends the Nyngan Scandium Project owners seek finance and proceed to construction, provided suitable offtake agreements with customers are arranged

Confirmatory Metallurgical Test Results

The final Nyngan Project DFS contained several recommended confirmatory process investigations be undertaken prior to commencing detailed engineering and construction. Specific study areas included pressure leach (“HPAL”), counter-current decant circuits (“CCD”), solvent extraction (“SX”), and oxalate precipitation, with specific work steps suggested in each area. The Company engaged Altrius Engineering Services (AES) of Brisbane, Australia to undertake these studies, which AES devised and supervised at the SGS laboratory in Perth, Australia and at the Nagrom laboratory in Brisbane, Australia.

On June 29, 2016, the Company announced the results of the subsequent AES metallurgical test work, which confirmed recoveries and efficiencies that either meet or exceed the parameters used in the DFS. Highlights of the independent testing were as follows:

· Pressure leach test work achieved 88% recoveries, from larger volume tests, · Settling characteristics of leach discharge slurry show substantial improvement, · Residue neutralization work meets or exceeds all environmental requirements as presented in the DFS and the environmental impact statement, · Solvent extraction circuit optimization tests generated improved performance, exceeding 99% recovery in single pass systems, and · Product finish circuits produced 99.8% scandium oxide, completing the recovery process from Nyngan ore to finished scandia product.

Engineering, Procurement and Construction Management Contract

On May 30, 2017, the Company announced that its subsidiary EMC Metals Australia Pty. Ltd. signed an Engineering, Procurement and Construction Management (“"EPCM”") contract with Lycopodium Minerals Pty Ltd (“"Lycopodium”"), to build the Nyngan Scandium Project in New South Wales, Australia. The EPCM contract also provides for start-up and commissioning services. As it has been more than ~~five~~six years since initial signing, a new contract with similar provisions will be required.

The EPCM contract appoints Lycopodium (Brisbane, QLD, Australia) to manage all aspects of project construction. Lycopodium is the principal engineering firm involved with the DFS. Lycopodium’'s continued involvement in project construction and commissioning ensures valuable technical and management continuity for the project during the construction and start-up of the project.

On October 19, 2017, we announced that Lycopodium has been instructed to initiate critical path engineering for the Nyngan Scandium Project. Lycopodium commenced work on select critical path components for the project, including design and specification engineering on the high-pressure autoclave unit, associated flash and splash vessels and several specialized high-pressure input pumps. The engineering work was completed in 2018 and will enable final supplier selection, firm component pricing and delivery dates for these key process components.

Environmental Permitting/Development Consent/Mining Lease

On May 2, 2016, the Company announced the filing of an Environmental Impact Statement (“EIS”) with the New South Wales, Australia, Department of Planning and Environment, (the “Department”) in support of the planned development of the Nyngan Scandium Project. The EIS was prepared by R.W. Corkery & Co. Pty. Limited, on behalf of the Company’s subsidiary, EMC Metals Australia Pty. Ltd. (“EMC Australia”), to support an application for Development Consent for the Nyngan Scandium Project. The EIS is a complete document, including a Specialist Consultants Study Compendium, and was submitted to the Department on April 29, 2016.

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EIS Highlights:

·● The EIS finds residual environmental impacts represent negligible risk. · The proposed development design achieves sustainable environmental outcomes. · The EIS finds net-positive social and economic outcomes for the community. · Nine independent environmental consulting groups conducted analysis over five years, and contributed report findings to the EIS. · The Nyngan project development is estimated to contribute A$12.4M to the local and regional economies, and A$39M to the State and Federal economies, annually · The EIS is fully aligned with the DFS and with a NSW Mining License Application for the Nyngan project.

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The proposed development design achieves sustainable environmental outcomes.

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The EIS finds net-positive social and economic outcomes for the community.

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Nine independent environmental consulting groups conducted analysis over five years, and contributed report findings to the EIS.

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The Nyngan project development is estimated to contribute A$12.4M to the local and regional economies, and A$39M to the State and Federal economies, annually.

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The EIS is fully aligned with the DFS and with a NSW Mining License Application for the Nyngan project.

Conclusion statement in the EIS: “In light of the conclusions included throughout this Environmental Impact Statement, it is assessed that the Proposal could be constructed and operated in a manner that would satisfy all relevant statutory goals and criteria, environmental objectives and reasonable community expectations.”

EIS Discussion

The EIS is the foundation document submitted by a developer intending to build a mine facility in Australia. The Nyngan Scandium Project is considered a State Significant Project, in that capital cost exceeds A$30million, which means State agencies are designated to manage the investigation and approval process for granting a Development Consent from the Minister of Planning and Environment. This Department will manage the review of the Proposal through a number of State and local governmental agencies.

The EIS is a self-contained set of documents used to seek a Development Consent. It is however, supported in many ways by the recently completed DFS.

On November 10, 2016, the Company announced that the Development Consent had been granted. This Development Consent represents an approval to develop the Nyngan Scandium Project and is based on the EIS. The Development Consent follows an in-depth review of the EIS, the project plan, community impact studies, public EIS exhibition and commentary, and economic viability, and involved more than 12 specialized governmental agencies and groups.

Mining Lease

During July 2019, EMC Australia received notice of approval for its mining lease (ML) application. The ML (ML 1792) overlays select areas previously covered by exploration licenses and represents the final major development approval required from the NSW Government to begin construction on the project. The ML 1792 grant is issued for a period of 21 years and is based on the development plans and intent submitted in the ML application. The ML can be modified by NSW regulatory agencies, as requested by EMC Australia over time, to reflect changing operating conditions.

In addition to these two key governmental approvals, other required licenses and permits must be acquired but are considered routine and require only compliance with fixed standards and objective measurements. These remaining approvals include submittal of numerous plans and reports supporting compliance with Development Consent and Mining Lease. In addition, the following water, roads, dam and electrical access reviews and arrangements must be finalized:

·● Water Supply Works and Use Approval and Water Access License, · State and local approval for construction of the intersection of the Site Access Road and Gilgai Road, · An approval from the NSW Dams Safety Committee for the design and construction of the Residue Storage Facility, and · A high voltage connection agreement with Essential Energy.

18● State and local approval for construction of the intersection of the Site Access Road and Gilgai Road,

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An approval from the NSW Dams Safety Committee for the design and construction of the Residue Storage Facility, and

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A high voltage connection agreement with Essential Energy.

The 2019 ML 1792 grant covers 810 acres (370 hectares) of surface area fully owned by the Company, an area adequate to construct and operate a scandium mine of a scale outlined in the definitive Feasibility Study. The Company had originally filed a mining lease application (MLA 531) covering an area of 874 hectares, which was granted in 2017 as a mining lease (ML 1763), and later ruled invalid. At that time, it was unknown, to both the Department and the Company, that a local landowner had filed a prior, timely and valid objection to the granting of that mining lease. The reduction in area between the initial 2017 ML 1763 and the replacement 2019 ML 1792 represented acreage protested in an “Agricultural Land” objection lodged by a local landowner. The landowner holds freehold surface ownership over a portion of the original grant that was previously covered by the 2017 ML 1763.

On September 10, 2020, the Company announced receipt of a final determination letter from the Deputy Secretary, Department of Regional NSW, Division of Mining, Exploration and Geoscience resolving the outstanding objection filed by the landowner in 2016.

Written advice from the Department to the Company makes clear that all required independent investigative processes, and all affected party comment periods, are now completed, and the Department’s decision is final. There are further state courts of appeal available to the landowner, but the facts supporting this final decision are confirmed by the NSW Department of Primary Industry and follow governing law.

This Final Determination from the NSW Government will again allow all measured and indicated resource included in the Nyngan Scandium Project DFS to be reinstated in a new mining lease grant, for which the Company ~~intends~~has tofiled ~~file~~an application and which remains pending with the NSW Government.

Honeybugle Scandium Property (NSW, Australia)

On April 2, 2014, the Company announced that it had secured a 100% interest in an exploration license (EL 7977) covering 34.7 square kilometers in New South Wales, Australia. The license area we call the ‘Honeybugle Scandium Property’ is located approximately 24 kilometers west-southwest from the Company’s Nyngan Scandium Project and approximately 36 kilometers southwest from the town of Nyngan, NSW. The application to renew the exploration license for a further six years was approved in November 2022.

Exploration rights for the Honeybugle Scandium Property include certain minimum expenditure requirements. The Company intends to fulfill those minimum expenditure requirements.

The location of the Honeybugle Scandium property is provided below.

Figure 3. Location of Honeybugle Scandium property

Honeybugle Drill Results

The Honeybugle drill program was completed in the first quarter of 2023. The drill program found Scandium enriched laterite formation defined at Woodlong prospect within the Honeybugle Exploration Licence 7977 area, where 32 vertical air core holes were drilled during first quarter 2023 in an approximately 300m x 400m area.

The laterite mineralization, consisting of both hematite and limonite, lies less than 2 meters below the surface. The laterite zone appears to thicken to both the west and south. Additional metallurgical testing is required on the saprolite mineralization to determine suitability for potential economic extraction.

Downstream Scandium Products

In February 2011, we announced results of a series of laboratory-scale tests investigating the production of aluminum-scandium master alloys directly from aluminum oxide and scandium oxide feed materials. The overall objective of this research was to demonstrate and commercialize the production of aluminum-scandium master alloy using impure scandium oxide as the scandium source, potentially significantly improving the economics of aluminum-scandium master alloy production. In 2014, the Company announced it applied for a US patent on master alloy production, which is still in the application phase.

During the 2015-2017 timeframe, we continued our own internal laboratory-scale investigations into the production of aluminum-scandium master alloys, furthering our understanding of commercial processes and achievable recoveries. We advanced our abilities to make a standard-grade 2% scandium master alloy product typical of commercially available products offered today.

On March 2, 2017, we announced the signing of a Memorandum of Understanding (“MOU”) with Weston Aluminium Pty Ltd. (“Weston”) of Chatswood, NSW, Australia. The MOU defines a cooperative commercial alliance to jointly develop the capability to manufacture aluminum-scandium master alloy. The intended outcome of this alliance will be to develop the capability to offer Nyngan Scandium Project aluminum alloy customers scandium in form of Al-Sc master alloy, should customers prefer that product form.21

~~The~~On ~~MOU~~March ~~outlines~~2, ~~steps~~2017, towe ~~jointly~~announced ~~establish~~ the ~~manufacturing~~signing ~~parameters,~~of ~~metallurgical~~a ~~processes,~~Memorandum ~~and~~of ~~capital~~Understanding ~~requirements~~("MOU") towith ~~convert~~Weston ~~Nyngan~~Aluminium ~~Scandium~~Pty ~~Project~~Ltd. ~~scandium~~("Weston") ~~product~~of ~~into Master Alloy~~Chatswood, ~~at Weston’s existing production site in~~ NSW, Australia. The MOU ~~does~~defines ~~not include~~ a ~~binding~~cooperative ~~contract with~~ commercial ~~terms~~alliance atto ~~this~~jointly ~~stage,~~develop ~~although~~ the ~~intent~~capability is to ~~pursue~~manufacture ~~the~~aluminum-scandium ~~necessary~~master ~~technical~~alloy. ~~elements~~The tointended ~~arrive~~outcome atof athis ~~commercial~~alliance ~~contract~~will ~~for~~be ~~conversion~~to ofdevelop ~~scandium~~the ~~oxide~~capability to ~~master~~offer Nyngan Scandium Project aluminum alloy, ~~and~~customers toscandium doin soform ~~prior~~of toAl-Sc ~~first~~master ~~mine~~alloy, ~~production~~should ~~from~~customers ~~the~~prefer ~~Nyngan~~that ~~Scandium~~product ~~Project~~form.

19The MOU outlines steps to jointly establish the manufacturing parameters, metallurgical processes, and capital requirements to convert Nyngan Scandium Project scandium product into Master Alloy, at Weston's existing production site in NSW. The MOU does not include a binding contract with commercial terms at this stage, although the intent is to pursue the necessary technical elements to arrive at a commercial contract for conversion of scandium oxide to master alloy, and to do so prior to first mine production from the Nyngan Scandium Project.

On March 5, 2018, the Company announced that it had initiated a small-scale pilot program (4kg scale) at the Alcereco Inc. metallurgical research facilities in Kingston, Ontario, to confirm and refine previous lab-scale work on the manufacture of aluminum-scandium 2% master alloy (MA). The program advanced the process understanding for commercial scale upgrade of Nyngan scandium oxide product to master alloy product.

The 2018 pilot program consisted of five separate trials on two MA product types, production of MA in various forms, and dross analysis to ascertain scandium recoveries to product. The mass of master alloy and product variants produced in the program totaled approximately 20kg and was completed in December of 2018. The results of the program included the successful production of 2% grade MA, with recoveries of scandium to product of 85%.

A second phase of the small-scale pilot program was initiated in the first half of 2019, again at 4kg scale, building on the work done in phase I. The results of this second program included successful production of 2% grade MA, with improvements in form of rapid kinetics, and recoveries of scandium to product of +90%.

On March 5, 2018, the Company also announced that it filed for patent protection on certain process refinements for master alloy manufacture that it believes are novel methods, and also on certain product variants that it believes represent novel forms of introducing scandium more directly into aluminum alloys.

Master Alloy Capability Demonstrated

On February 24, 2020, the Company announced the completion of a three year, three stage program to demonstrate the capability to manufacture aluminum-scandium master alloy (Al-Sc2%), from scandium oxide, using a patent pending melt process involving aluminothermic reactions.

This master alloy capability will allow the Company to offer scandium product from the Nyngan Scandium Project in a form that is used directly by aluminum alloy manufacturers globally, either major integrated manufacturers or smaller wrought or casting alloy consumers.

Research Highlights:

·● Program achieved full 2% target product quality requirement, · Sc recoveries from oxide exceeded target, demonstrated in final tests, · The microstructure and metal quality meet major alloy producers’ specifications, · Rapid kinetics achieved, important for commercial viability, · Individual testing batches done at 4kg scale, and · Successful program testing forms a basis for a larger scale demonstration facility, supporting large scale samples required for industrial aluminum alloy trials.

●

Sc recoveries from oxide exceeded target, demonstrated in final tests,

●

The microstructure and metal quality meet major alloy producers’ specifications,

●

Rapid kinetics achieved, important for commercial viability,

●

Individual testing batches done at 4kg scale, and

●

Successful program testing forms a basis for a larger scale demonstration facility, supporting large scale samples required for industrial aluminum alloy trials.

Focus on Aluminum Alloy Applications for Scandium Products

The Company isplans into ~~the~~obtain ~~process of obtaining~~ sales agreements for scandium products produced from our Nyngan Scandium Project. Our focus is on the use of scandium as an alloying ingredient in aluminum-based products. The specific scandium product forms we intend to sell from the Nyngan project include both scandium oxide (Sc2O3) and aluminum-scandium master alloys (Al-Sc 2%).

Scandium as an alloying agent in aluminum allows for aluminum metal products that are much stronger, more easily weldable and exhibit improved performance at higher temperatures than current aluminum-based materials. This also means lighter structures, lower manufacturing costs and improved performance in areas that aluminum alloys do not currently compete.

Letters of Intent Signed with Aluminum Scandium Alloy Testing Partners

During 2018 and 2019, the Company announced that it entered into letter of intent (“LOI”) agreements with nine unrelated partnering entities who either manufactured parts from aluminum or consumed aluminum in the making of products. In each instance, we agreed to contribute scandium samples, either in form of scandium master alloy product, or aluminum-scandium alloy product, for trial testing by the partners in their downstream manufacturing applications. Each of the parties in receipt of the scandium samples agreed to report the general results of their testing programs, once completed. One of the agreements, specifically with Eck Industries, was extended in 2020 to a wider development program.

While most of these formal LOI agreements have expired, they are representative of end user interest in scandium and were designed to demonstrate how scandium performs in specific products, and in production-specific environments. Potential scandium customers insist on these sample testing opportunities, directly in their research facilities or on their shop floor, to ensure their full understanding of the impacts, benefits, and costing implications of introducing scandium into their traditional aluminum feedstocks.

The results of the nine programs varied, with some showing positive results and others either showing little advantage or not enough to offset cost impacts. Some outcomes were limited in significant ways by the parameters of the testing itself. Based on the reported testing results, all nine partners would need to enter into new testing agreements, with more compelling outcomes, in order to contemplate the introduction of scandium into the aluminum alloy contained in their products in the future.

Some further specifics:

Alloy Casting Partners. Four agreements were executed with the following entities: Eck Industries Inc. (Manitowoc, Wisconsin, USA), Grainger & Worrall Ltd., based in Shropshire, UK, Ohm & Häner Metallwerk GmbH & Co. GK, based in Olpe, Germany, and Bronze-Alu Group, based in La Couture-Boussey, northern France. Eck Industries is expected to continue their work with scandium (and cerium) additions in cast alloys, based on success in strength retention in high heat environments. The other groups did not see cost-offsetting benefits in existing alloys with existing customers.

Wrought Aluminum Manufacturing Partners. Two agreements were executed with the following entities:

Austal Ltd. headquartered in Henderson, Western Australia, and Gränges AB, based in Stockholm, Sweden. Results on marine alloys with Austal were encouraging, but further development of both plate and wire samples were deemed required to draw commercially favorable conclusions. Both corrosion and weld strength properties were pursued. Results on heat exchanger alloys with Gränges were ultimately less successful, based on the impacts of downstream manufacturing processes on scandium, and a challenging cost environment in the business sector.

Metal Forming Partners. Two agreements were executed with the following entities: Impression Technologies Ltd., based in Coventry, UK., and PAB Coventry Ltd., based in Coventry, UK. These entities were both interested in determining whether ITLdefine? sheet-forming technology would see advantage in shaping aluminum containing scandium. A brief testing regime indicated that the machines saw no improvement, and in fact had difficulty managing the properties in the AlSc samples provided.

3D Print Partners. Only one agreement was executed, with AML Technologies, based in Adelaide, Australia. SCY found significant challenge in sourcing quality AlSc wire for AML, and also for making suitable wire for this purpose ourselves. However, AML has had success with other wire sourcing partners, and ultimately received sample material in wire form from SCY. AML has not provided test results on SCY-supplied samples to date. Our independent testing results on these wire samples have been favorable.

While working with these nine industry partner groups during the 2018-2021 period, the Company also pursued independent work on aluminum-scandium alloys in two areas: welding/heat tolerance and electrical conductivity. Results of the work in both of these areas is incomplete but shows good promise in specific applications. SCY’s intent is to continue to pursue opportunities to test these specific property-driven applications for aluminum-scandium alloys with appropriate testing partners in the future, whether those partners and programs can be disclosed or not disclosed.

The Company’s objectives regarding all future sample and testing programs with industry participants remains unchanged – to build a market for scandium alloys and to secure long term customers for the purchase of scandium products supplied by SCY.

Use Of Scandium in Lithium-Ion Batteries

On September 24, 2020, the Company announced the filing of a provisional patent application with the US Patent Office seeking patent rights on various applications of scandium in lithium-ion batteries. The patent application covers a number of scandium enhancements, including doping potential for both anodes and cathodes, and for solid electrolytes.

Patent Application Highlights:

·● US Patent Application filed for use of scandium in lithium-ion battery applications. · Scandium doping applications are explained for anodes, cathodes and electrolytes. · Scandium offers conductivity advantages as a dopant, over other options, and · Scandium in other aluminum components offers numerous property improvements, including conductivity, strength and corrosion resistance.

●

Scandium doping applications are explained for anodes, cathodes and electrolytes.

●

Scandium offers conductivity advantages as a dopant, over other options, and

●

Scandium in other aluminum components offers numerous property improvements, including conductivity, strength and corrosion resistance.

Rechargeable lithium-ion batteries (LIBs) are a staple of everyday life. The search for improved performance through design and materials advances is intense today. Considerable effort is being expended in developing next-generation materials for LIBs that will make batteries safer, lighter, more durable, faster to charge, more powerful, and more cost-effective. A sampling of some these efforts are as follows:

·● Minimizing or removing cobalt from cathode materials, based on cost, supply and geographic sourcing issues. · Improving the durability of liquid electrolytes with dopants, or substitution with safer and higher performing liquid or solid electrolyte systems. · Designing for higher voltage potential by utilizing different anode or cathode materials. · Determining combinations of metals that can better withstand harsh internal conditions. · Scandium, along with other specialty metals, has a clear role to play in each of these areas.

●

Improving the durability of liquid electrolytes with dopants, or substitution with safer and higher performing liquid or solid electrolyte systems.

●

Designing for higher voltage potential by utilizing different anode or cathode materials.

●

Determining combinations of metals that can better withstand harsh internal conditions.

●

Scandium, along with other specialty metals, has a clear role to play in each of these areas.

One particularly promising area for scandium contributions is in a lithium nickel manganese oxide (LNMO) battery. The cathode in this design substitutes manganese for cobalt and supports a higher nickel content as well. The substitution then delivers higher working potentials (voltage), higher energy densities, and faster charge/discharge rates, all of which offer the promise of improved battery performance.

Delivering on that promise requires a number of improvements, including employing a dopant for stabilization of the manganese in certain cathode compositions, potential stabilization of lithium titanate (LTO) anode materials as well, and use of dopants to improve the conductivity of both these anode and cathode materials. Conventional liquid electrolytes may see improved function and longevity with the improved cathode and anode conductivity. Scandium represents a suitable and effective dopant in each of these applications.

Solid state electrolytes (SSEs) represent another potential break-through improvement in LIBs. They will handle higher voltages, higher temperatures, greater power densities, are potentially easier to package, and are considered safer in use. Scandium represents a suitable and effective dopant in these applications, analogous to the use of scandium to stabilize solid zirconia electrolytes in solid oxide fuel cells. Recently technical papers (available upon request) covering the use of Lithium Super Ion Conductors (LiSICON) for SSEs have indicated that primary compounds containing scandium, such as Li₃Sc₂(PO₄)₃, LiScP₂O₇ and Li₃Sc(BO₃)₂, LiScO₂ as well as certain doped compounds such as Li_1.33ScSi_0.33P_1.67O₇, Li_3.375Mg_0.375Sc_0.625(BO₃)₂, Li_1.5Al_0.33Sc_0.17Ge_1.5(PO₄)₃, etc. can provide desirable crystal structural frameworks for solid state electrolytes. Non-oxide LiSICON fast conductors have also been identified recently, such as some lithium cryolite types: Li₃ScCl₆, as well as its fluoride counterpart Li₃ScF₆.

Lithium-ion batteries employ aluminum in a number of areas, specifically in cathode structure, current connectors, and in general battery structure. Aluminum-scandium alloys represent an enhanced aluminum alloy option, based on their combination of conductivity and strength.

The intent of this SCY patent filing was to advise the battery industry that scandium is a prospective dopant choice for enhanced performance of LIBs, both under existing design parameters and in particular for certain next-gen lithium-ion batteries. We want to ensure that battery research and design groups consider scandium additions, amongst their various materials choices, as they race to build a better lithium-ion battery.

Honeybugle Scandium Property

On April 2, 2014, the Company announced that it had secured a 100% interest in an exploration license (EL 7977) covering 34.7 square kilometers in New South Wales (NSW), Australia referred to as the Honeybugle Scandium property. The license area is located approximately 24 kilometers west-southwest from SCY’s Nyngan Scandium Project. The license area covers part of the Honeybugle geologic complex and will carry that name in our future references to the property. The ground was released by the prior holder, and SCY intends to explore the property for scandium and other metals.

The Company does not consider the Honeybugle Scandium property to be a material property at this time. No resources or reserves are known to exist on the property. The property is classified as an Australian property for purposes of financial statement segment information.

The location of the Honeybugle Scandium property is provided below.

Figure 3. Location of Honeybugle Scandium property

Honeybugle Drill Results

On May 7, 2014, the Company announced completion of an initial program of 30 air core (AC) drill holes on the property, specifically at the Seaford anomaly, targeting scandium (Sc). Results on 13 of these holes are shown in detail in the table below. These holes suggest the potential for scandium mineralization on the property similar to our Nyngan Scandium Project.

Highlights of initial drilling program results are as follows:

· The highest 3-meter intercept graded 572 ppm scandium (hole EHAC 11); · EHAC 11 also generated two additional high grade scandium intercepts, grading 510 ppm and 415 ppm, each over 3 meters; · The program identified a 13-hole cluster which was of particular interest; · Intercepts on these 13 holes averaged 270 ppm scandium over a total 273 meters at an average continuous thickness of 21 meters per hole, representing a total of 57% (354 meters) of total initial program drilling; · The 13 holes produced 29 individual (3-meter) intercepts over 300 ppm, representing 31% of the mineralized intercepts in the 273 meters of interest; and · This initial 30-hole AC exploratory drill program generated a total of 620 meters of scandium drill/assay results, over approximately 1 square kilometer on the property.

The detail results of 13 holes in the initial drill program are as follows:

Table 1. Results of 13-Hole Initial Drill Program

Seaford is characterized by extensive outcrops of dry, iron-rich laterites, allowing for a particularly shallow drill program. Thirty (30) air core (AC) holes on nominal 100-meter spacing were planned, over an area of approximately 1 square kilometer. Four holes were halted in under 10 meters depth, based on thin laterite beds, low scandium grades, and shallow bedrock.

The 13 holes highlighted in the table are grouped together on either side of Coffills Lane and represent all of the drill locations where meaningful intercept thickness generated scandium grades exceeding 175 ppm. Some of these 13 holes showed significant scandium values on the immediate surface, and alternately, other holes exhibited favorable scandium grades that began at shallow depth. The highest-grade Sc sample was found in a 21-24 meter interval (572 ppm), although several holes produced better than 350 ppm Sc intercepts at depths of under 9 meters. The deepest hole (EHAC 7) was drilled to 57 meters, showing good scandium grades over a 12-meter horizon (245 ppm) near the bottom of the hole, from 39 to 51 meters depth. Higher scandium grades were associated with higher iron levels. Holes were drilled to a depth where they contacted the fresh ultramafic bedrock, which generally signaled the end of any scandium enrichment zones.

The drill plan divided Seaford into four sub-areas, 1-4, as highlighted Figure 2, below. Area 1 was relatively higher ground and therefore the least impacted by ground moisture. Consequently, this dryer area received the greatest attention, although that had been the general intention in the plan. Area 1 received 17 holes, with 13 presented in detail in the table above. Areas 2-4 were each intended as step-out areas that need to be further examined in the next program. The three step-out areas did not generate results of particular note, although hole locations were not optimal due to ground conditions and access.

Area 2 received 3 holes, 60 meters total, and generated Sc grades from 45-75 ppm,

Area 3 received 4 holes, 87 meters total, and generated Sc grades from 47-122 ppm,

Area 4 received 5 holes, 72 meters total, and generated Sc grades from 60-101 ppm, and

The average depth of all of these holes was 18 meters, with the deepest 30 meters.

Figure 2. Initial Drill Program Map

This 13-hole cluster (Area 1) was noted to be in a relatively thick laterite zone which was constrained to the west by contact with meta-sediments, to the east by fresh ultramafic bedrock, and to some extent in the north by a poor intersection result in hole 30. Area 1 remains somewhat open to the south, with the two southern-most holes (EHAC 9 and EHAC 29) generating some of the best scandium grade intercepts in the area.

The surface and near surface mineralization at this property is an advantage, both in locating areas of interest for future exploration work, and also because of extremely low overburden ratios. This particular characteristic for the Honeybugle Scandium property is different from our Nyngan Scandium Project, where mineralization is typically covered by 10-20 meters of barren alluvium.

Further drilling at Seaford is warranted, based on the results of this introductory and modest program, specifically to the north and south of the existing area 1 drill pattern, along with investigation and select drilling at the other three remaining anomalies on the property.

During 2018, we performed site work at the Honeybugle Scandium property to meet the expenditure commitment to maintain the exploration license. That 2018 work did not change the previous conclusions, as described above. Work is planned for 2023 on the property.

Qualified Person and Quality Assurance/Quality Control

John Thompson, B.E. (Mining); Vice President - Development at SCY is a qualified person as defined in NI 43-101 and has reviewed the technical information on this property. The drilling, sampling, packaging and transport of the 2023 drill samples was carried out to industry standards for QA/QC. SCY employed an independent local geology consulting and drill supervisory team, Rangott Mineral Exploration Pty. Ltd., (RME) of Orange, NSW, Australia, to manage the drill work on-site. Bulk samples of drill returns were collected at one metre intervals from a cyclone mounted on the drilling rig, and a separate three-tier riffle splitter was used on site to obtain 2.0-4.5kg composite samples collected over 3 metre intervals, for assay. Individual sample identifiers were cross-checked during the process. The assay samples were placed in sealed polyweave bags which remained in RME’s possession until the completion of the drilling program, at which time they were transported to RME’s office in Orange. There, the sequence of sample numbers was validated, and the assay samples were immediately submitted to Australian Laboratory Services’ (ALS’) laboratory in Orange. The remnant bulk samples, which were collected in sealed polythene bags, were transported by RME to a local storage unit at Orange, for long-term storage. ALS/Orange dried and weighed the samples and pulverized the entire sample to 85% passing 75 microns or better (technique PUL-21). These 50g sample bags of pulps were then sent to the ALS laboratory at Stafford in Brisbane, Queensland for analysis. ALS/Brisbane analyzed the pulps for scandium, nickel, cobalt, chromium, iron and magnesium, using Inductively Coupled Plasma Atomic Emission Spectroscopy (ICP-AES) after a four acid (total) digestion (technique ME-ICP61). The lower detection limit for scandium using this technique is 1ppm. For their internal quality control, ALS/Brisbane added 4 standard samples (for 20 repeat analyses), 10 blank samples and 16 duplicate samples to the batch. Please see news release see news release dated May 7, 2014, and available on www.sedar.com for further information on the Honeybugle drill results.

~~Kiviniemi Scandium Property (Eastern Finland Province, Finland)~~24

On September 25, 2017, the Company announced that its wholly owned subsidiary company, Scandium International Mining Corp., Norway AS, was granted a reservation on an Exploration License for the Kiviniemi Scandium property in central Finland from the Finnish regulatory body governing mineral exploration and mining in Finland. The exploration license was subsequently granted during August 2018, and our exploration rights have been moved to SCY Exploration Finland Oy, a wholly owned Finnish subsidiary.

The Geological Survey of Finland (“GTK”) conducted airborne survey work on the area in 1986, conducted exploration drilling on the property in 2008-2010, and published those program results on their public GTK website in 2016.

The Company does not consider the Kiviniemi Scandium property to be a material property at this time. No NI 43-101 resources or reserves are known to exist on the property. The property is classified as the Finland property for purposes of financial statement segment information.

Highlights

· Kiviniemi property was previously identified for scandium and explored by GTK, · Property is a high iron content, medium grade scandium target, located on surface, with on-site upgrade potential, · Early resource upgrade work done for GTK promising, confirmed by SCY, · Property is all-weather accessible, close to infrastructure, and · Finland location is mining-friendly and ideally suited to EU customer markets.

Property/Location

The Kiviniemi property is located in the municipality of Rautalampi, Eastern Finland Province, approximately 350km northeast of Helsinki, by road. The closest major city/airport is Kuopio (pop. 110,000), approximately 70km to the northeast of the property. The exploration target is located on a small portion of a family farm, partially cleared for farming. Most of the property is wooded, including the area where the mineralization has been located.

Exploration License

During August 2018, an exploration license for the Kiviniemi Scandium property was granted from the Finnish regulatory body governing mineral exploration and mining in Finland. The exploration area is approximately 24.6 hectares (0.25 square kilometer), identical to the historic GTK exploration license on the property, which expired in 2015. The mineralized area, as defined on GTK resource modeling maps, is approximately 25% of the total reservation. The exploration license requires us to report our exploration activities annually to Finland government agencies and to demonstrate in the annual reports that any exploration work has been effective and systematic.

Prior Exploration Work

GTK performed magnetic surveys on the general area in 1986, focused on copper/nickel/cobalt targets, and based on current mining activity in the area. That initial field work located a significant magnetic anomaly on the Kiviniemi property. In 2008, GTK initiated an exploration drilling program on the property, completing 4 diamond core holes in that first program phase, followed by a further 5 diamond holes in 2010, totaling 1,250 meters, at an average (angled) length of 139 meters, and a maximum vertical extension of 167 meters. The drill spacing varied from 50-200 meters, using a diamond drill size of 46mm (T56).

Four of the nine total holes drilled (approx. 850 meters) are in the mineralized area, with the remainder defining portions of the mag zone that did not contain scandium. The mag zone is generally very high in iron, ranging from about 20% to 35% Fe. The GTK published the results of the drill program assays, and other information on the geology and mineralization, on their website in 2016.

Geology of Resource Target. The host rock is very iron-rich, garnet-bearing fayalite ferro(monzo) diorite. The main minerals in the deposit include plagioclase, potassium feldspar, ferrohedenbergite (clinopyroxene), ferrohastingsite (amphibole), almandine garnet and fayalite. The principal scandium carrier minerals are ferrohastingsite (59 %) and ferrohedenbergite (40 %).

Resource Modeling

GTK completed and published a paper outlining property work including a 3D modeling and resource estimation on the project, in March 2016. The authors employed data from 6 holes and used an industry standard GEOVIA Surpac software to produce a geological 3D domain model, and inverse distance was run to estimate resource grades into the block model. The authors declined to specifically characterize the resource on the basis of limited holes and uneven spacing, describing their estimate as an “exploration potential measurement.” The authors estimated that another 500-700 meters of drilling (5-7 holes) would establish 50-meter centers on the target and allow a resource classification. The mineralized target remains open at depth. The authors did provide a table of results on tonnage estimates from their modeling work, at various cut off values, excerpts of which are presented below.

The Company believes the standards and controls employed by GTK are reliable and consistent with proper industry practice. However, the potential quantity and grade is conceptual in nature and there has been insufficient exploration to define a mineral resource and it is uncertain whether further exploration will result in a mineral resource. The Company considers the above estimates as historical in nature, and such estimates do not use the categories prescribed by NI 43-101. A qualified person (as defined in NI 43-101) has not done sufficient work to classify the historical estimate as a current mineral resource. The Company is not treating the historical estimate as a current mineral resource.

Metallurgical Upgrade Work

In 2010, GTK engaged their metallurgical research laboratory (at Outokumpu) to conduct standard upgrade testing on the drill core sample material, specifically magnetic gravity separations. The mag separation work suggested a scandium upgrade to approximately 346ppm, based on a resource material head grade of 160-200ppm, and a 72% scandium recovery.

In June 2017, SCY engaged FLSmidth (Salt Lake City, Utah) seeking to duplicate the earlier 2010 upgrade work and confirm the earlier results. The earlier results were generally confirmed, in that the 2017 work achieved magnetic separation upgrade assays of 286ppm on a resource material head grade of 186ppm. We supplied FLSmidth with approximately 16kg of resource material sourced from GTK, all samples from a single hole (P433-R3). FLSmidth also carried out scandium check assays on the individual drill hole samples provided by GTK, with good grade correlation to GTK data.

Kiviniemi Project Summary

The Kiviniemi property represents a medium grade scandium resource target that has remained unrecognized and overlooked by earlier exploration work, largely due to the absence of the more commonly sought-after minerals in the region, specifically copper, nickel and cobalt. We believe that Kiviniemi is Europe’s largest underdeveloped primary scandium mining resource.

The target has benefited significantly from valuable early exploration work by the GTK, which has advanced the property to a stage where successful metallurgical investigations may prove value that offsets grade concerns. SCY estimates roughly US$2M of work value has been directed at this property to date, including field work, drilling programs, assay work, overheads, and metallurgical upgrade studies, but firm numbers are not available.

We plan a limited drill program to augment the existing GTK data and provide more sample material for metallurgical test work programs to define economic site upgrade possibilities on the scandium mineralization observed to date.

Patent Program Summary- Applications and Grants

Patent Filings - Summary

The Company is in the process of establishing a significant portfolio of intellectual property through the filing of scandium related patents both in the US and abroad.

On 10/12/2021 the company was granted a patent for the recovery of scandium from nickel laterite ores.

To date, the following nine US patents have been granted to the Company:

11,142,809	Systems and Processes for Recovering Scandium Values from Laterite Ores
10,988,830	Scandium Master Alloy Production
10,988,828	Extraction of Scandium Values from Copper Leach Solutions
10,450,634	Scandium-Containing Master Alloys and Method for Making The Same
10,378,085	Recovery Of Scandium Values Through Selective Precipitation of Hematite and Basic Iron Sulfates from Acid Leachates
10,260,127	Method For Recovering Scandium Values from Leach Solutions
9,982,326	Solvent Extraction of Scandium from Leach Solutions
9,982,325	Systems And Methodologies for Direct Acid Leaching of Scandium-Bearing Ores
8,372,367	System and Method for Recovering Boron Values from Plant Tailings

Below is a list of thirteen US patents that have been filed, but have not been granted yet:

US20210371294-A1	Process for the Preparation of High Purity Alumina*
US202163038873	Recovery of Critical Metals from SX-EW Copper Raffinate and Other Solutions Derived from Leaching Ores with Sulfuric Acid
US20210347651	Counter Current Process for Recovering High Purity Copper Sulfate Values from Low Grade Ores
US20200001407	Control Of Recrystallization In Cold-Rolled AlMn(Mg)ScZr Sheets For Brazing Applications
US20210172041	Byproduct Scandium Recovery from Low Grade Primary Metal Oxide Ores
US20190218645	Direct Scandium Alloying
US20120305452	Dry, Stackable Tailings and Methods for Producing the Same
US20110298270	In Situ Ore Leaching Using Freeze Barriers
US2012005585l	Low Carbon Dioxide Footprint for Coal Liquefaction
US20120204680	System and Method for Recovery of Nickel Values from Nickel-Containing Ores
US20120207656	System and Method for Recovery of Scandium Values from Scandium-Containing Ores
Provisional (2)	Titles not yet publicly disclosed

*NOTE: This Final Patent Application was published by the US Patent office on December 2, 2021 (A1)

3025

Patent Applications Discussion

·● These patents and patent applications cover novel, unique flowsheet designs, applicable to both scandium extraction and other metals extraction. · The patented designs on scandium are largely supported by test work done with Nyngan Scandium Project resource material and known design parameters. · The scandium patents cover HPAL system material flows, solvent extraction (SX), ion exchange systems (“IX”), atmospheric tank and heap leaching systems and techniques, and processes for directly making select master alloys containing scandium; and · A number of the scandium-focussed designs are incorporated as part of the DFS. · Recovery of by-product scandium from certain other mineral resources is also covered. · Recovery of base metals, such as copper, cobalt, nickel, manganese and aluminum from process solutions or waste products is also covered. · Use of scandium in lithium-ion batteries is addressed.

●

The patented designs on scandium are largely supported by test work done with Nyngan Scandium Project resource material and known design parameters.

●

The scandium patents cover HPAL system material flows, solvent extraction (SX), ion exchange systems (“IX”), atmospheric tank and heap leaching systems and techniques, and processes for directly making select master alloys containing scandium; and

●

A number of the scandium-focussed designs are incorporated as part of the DFS.

●

Recovery of by-product scandium from certain other mineral resources is also covered.

●

Recovery of base metals, such as copper, cobalt, nickel, manganese and aluminum from process solutions or waste products is also covered.

●

Use of scandium in lithium-ion batteries is addressed.

These patent applications, filed with the US Patent Office, protect the Company’s position and rights to the intellectual property (IP) contained and identified in the applications as of the date filed, within the worldwide jurisdiction limits of the US patent system. Review of patent applications by the US Patent Office takes time, but the initial dates of filing these patents define the basis of IP ownership claims, as is generally afforded U.S. patentholders.

The Company intends to utilize the IP contained in these process patents in the development of process flowsheets for recovery of scandium from its Nyngan Scandium Project, as well as its Honeybugle project and future by-product opportunities from leach solutions and/or waste products. The Company believes that patent protection of these specific, novel process designs will be granted.

Many of the basic design elements contemplated in the Nyngan Scandium Project flowsheet are commonly applied to other specialty metals, particularly nickel. However, the application of these basic design elements has not been commonly applied to scandium extraction from laterite resources, and there are enough intended and required operational differences in the application to permit the Company to patent-protect IP on those differences.

Our history of work on solution separation technologies using ion exchange and/or solvent extraction has widened our opportunity to pursue recovery of select elements of a growing list of critical metals, as defined by governments, concerned customers and industry groups, specifically prioritising lithium-ion battery metals.

These patent claims are the result of ten years of metallurgical test work with independent resource laboratories and specific design work by Willem Duyvesteyn, the Company’s former Chief Technology Officer. This work is ongoing. Patent protection on flowsheet intellectual property will serve to limit or prevent the unauthorized use of that IP by others without the Company’s consent. We believe these filings are an important action to protect the ownership of a Company asset, on behalf of all SCY shareholders.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any pending legal proceedings and, to the best of our knowledge, none of our properties or assets are the subject of any pending legal proceedings.

ITEM 4. MINE SAFETY DISCLOSURES

The Company has no active mining operations or dormant mining assets currently and has no outstanding mine safety violations or other regulatory safety matters to report.

PART II

ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Shares

The principal market on which our common shares are traded is the Toronto Stock Exchange. Our common shares commenced trading on the Toronto Stock Exchange on April 24, 2008, under the symbol “GP.” Effective March 11, 2009, the common shares were listed and posted for trading on the Toronto Stock Exchange under the symbol “EMC.” Effective November 28, 2014, the common shares were listed and posted for trading on the Toronto Stock Exchange under the symbol “SCY.” The following table shows the high and low trading prices of our common shares on the Toronto Stock Exchange for the periods indicated.

Year	High (C$)		Low (C$)
Fiscal Year ended December 31, 2023
First quarter		0.080		0.040
Second quarter		0.060		0.040
Third quarter		0.055		0.030
Fourth quarter		0.035		0.020
Fiscal Year ended December 31, 2022
First quarter		0.160		0.130
Second quarter		0.140		0.085
Third quarter		0.120		0.060
Fourth quarter		0.095		0.060
Fiscal Year ended December 31, 2021
First quarter		0.325		0.205
Second quarter		0.250		0.165
Third quarter		0.225		0.155
Fourth quarter		0.200		0.135

Exchange Rates

We maintain our books of account in United States dollars and references to dollar amounts herein are to the lawful currency of the United States except that we are traded on the Toronto Stock Exchange and, accordingly, stock price quotes and sales of stock are conducted in Canadian dollars (C$). The following table sets forth, for the periods indicated, certain exchange rates based on the noon rate provided by the Bank of Canada. Such rates are the number of Canadian dollars per one (1) U.S. dollar (US$). The high and low exchange rates for each month during the previous six months were as follows:

	High		Low
February 2023		1.3622		1.3312
February 2024		1.3574		1.3404
January 2023		1.3658		1.3376
January 2024		1.3512		1.3446
December 2022		1.3687		1.3433
December 2023		1.3582		1.3200
November 2022		1.3749		1.3288
November 2023		1.3873		1.3573
October 2022		1.3856		1.3547
October 2023		1.3873		1.3577
September 2022		1.3726		1.2988
September 2023		1.3661		1.3422

3227

The following table sets out the exchange rate (price of one U.S. dollar in Canadian dollars) information as at each of the years ended December 31, ~~2021~~2023, and 2022.

	Year Ended December 31(Canadian $ per U.S. $)
	Year Ended December 31 (Canadian $ per U.S. $)
	2022		2021
	2023		2022
Rate at end of Period		1.~~3544~~3247		1.~~2732~~3544
Low		1.~~2470~~3128		1.~~2718~~2470
High		1.~~3856~~3875		1.~~4496~~3856

As of March 126, ~~2023~~2024, there were 104 registered holders of record of the Company’s common shares and an undetermined number of beneficial holders.

Dividends

We have not paid any cash dividends on our common shares since our inception and do not anticipate paying any cash dividends in the foreseeable future. We plan to retain our earnings, if any, to provide funds for the expansion of our business.

Securities Authorized for Issuance under Compensation Plans

The following table sets forth information as of December 31, ~~2022~~2023, respecting the compensation plans under which shares of the Company’s common stock are authorized to be issued.

Plan Category	Number of securities to be issued ~~uponexercise~~upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)	~~Weighted-average exercise price of outstanding options, warrants and rights(b)~~	Number of securities remaining available for future issuance under ~~equitycompensation~~equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		3440,~~665~~015,000	C$0.010	~~C$0.140~~	19,714,122	~~18,714,122~~
Equity compensation plans not approved by security holders		37,803,218	C$0.1075	~~C$0.1075~~	Nil	~~Nil~~
Total		7277,~~468~~818,218	C$0.0980	~~C$0.1231~~	19,714,122	~~18,714,122~~

Purchases of Equity Securities by the Company and Affiliated Purchasers

Neither the Company nor an affiliated purchaser of the Company purchased common shares of the Company in the year ended December 31, ~~2022~~2023.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

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

Overview

Scandium International is a specialty metals company focused on the evaluation and potential development of projects into producing assets. The Company pursues project opportunities from both known geologic resources and existing mine process solutions when it identifies further recovery potential.

The Company is an exploration stage company and anticipates incurring significant additional expenditures prior to production at all its properties. The Company was incorporated under the laws of the Province of British Columbia, Canada in 2006. The Company currently trades on the Toronto Stock Exchange under the symbol “SCY.”

These consolidated financial statements have been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying values in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

The Company currently earns no operating revenues and will require additional capital to advance the Nyngan property. The Company’s ability to continue as a going concern is uncertain and is dependent upon the generation of profits from mineral properties, obtaining additional financing and maintaining continued support from its shareholders and creditors. These are material uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern. If additional financial support is not received, or operating profits are not generated, the carrying values of the Company’s assets may be adversely affected.

InThe ~~March~~outbreak ~~2020,~~of ~~the World Health Organization declared coronavirus~~ COVID-19 ~~a global pandemic. This contagious disease outbreak, which has continued to spread,~~ and ~~related~~political ~~adverse~~upheavals ~~public~~in ~~health~~various ~~developments,~~countries ~~has~~have ~~adversely~~caused ~~affected~~significant ~~workforces,~~volatility ~~economies,~~in ~~and~~commodity ~~financial markets globally, leading to an economic downturn~~prices. ItWhile isthese ~~not~~effects ~~possible~~are ~~for~~expected ~~the Company~~ to ~~predict~~be temporary, the duration ~~or magnitude~~ of the ~~adverse~~business ~~results~~disruptions ofinternationally ~~the outbreak~~ and ~~its~~related ~~effects~~financial onimpact ~~the~~cannot ~~Company’s~~be ~~business~~reasonably orestimated ~~ability~~at tothis ~~raise funds~~time.

~~Results~~RESULTS ~~for~~FOR ~~the~~THE ~~Year~~YEAR ~~ended~~ENDED ~~December~~DECEMBER 31, ~~2022~~2023

Liquidity and Capital Resources

On December 31, ~~2022~~2023, we had working capital of $~~378~~712,~~527~~908 including cash of $1,~~852~~021,~~710~~956 and current liabilities of $1349,~~507,724~~259 as compared to working capital of $(1378,~~598,778)~~527 including cash of $931,~~894~~852,710 at December 31, ~~2021~~2022.

On December 31, ~~2022~~2023, we had a total of 3440,~~665~~015,000 (~~2021~~2022 – 34,~~615~~665,000) stock options exercisable between C$0.~~065~~035 and C$0.~~225~~180 (~~2021~~2022 – between C$0.065 and C$0.37225) which have the potential upon exercise to generate a total of C$43,~~753~~833,~~500~~750 (~~2021~~2022 – C$54,~~962~~753,~~625~~500) in cash over the next four and a half years. On December 31, ~~2022~~2023, we had a total of 37,803,218 (~~2021~~2022 – ~~Nil~~37,803,218) warrants exercisable at C$0.1075 which have the potential upon exercise to generate a total of C$4,063,~~218~~846. There is no assurance that these securities will be exercised.

3429

Our continued development is contingent upon our ability to raise sufficient financing both in the short and long term. There are no guarantees that additional sources of funding will be available to us; however, management is committed to pursuing all possible sources of financing to execute our business plan.

Results of Operations

Quarter ended December 31, ~~2022~~2023

The net ~~profit~~loss for the quarter ~~increased~~decreased by $~~443~~362,~~482~~143 to $~~228~~133,~~371~~772 from a ~~loss~~profit of $~~215~~228,~~111~~371 in the ~~prior~~quarter ~~year~~ended December 31, 2022. Details of the individual items contributing to the decreased loss are as follows:

Q4 2022 vs. Q4 2021 - Variance Analysis (US$)
Q4 2023 vs. Q4 2022 - Variance Analysis (US$)
Item	Variance Favourable / (Unfavourable)	Explanation
Gain on derivative liability	$364,206	Warrants issued in Q2 2022 are in Canadian funds. As the exchange rate with the Canadian dollar fluctuates, a gain or loss on this is recorded in the financial statements. Also, the value of the warrants is recalculated based on Black-Scholes calculation at the end of the year. Since the warrants were issued, a gain has been calculated. This is a non-cash item.
Salaries and benefits including stock based compensation	($178,023)	This unfavorable variance when comparing Q4 2023 to Q4 2022 is a result of options being issued in Q4 2023 whereas there were no options issued in Q4 2022.
Salaries and benefits	$73,430	This favorable variance is due to the resignation in Q1 2022 of 3 senior staff that have not been replaced.
General and administrative	($26,863)	In Q4 of 2022 there were very little expenditures. The current quarter costs of $16,997 are much more indicative or normal activity levels.
General and administrative	$40,921	With the closing of the Sparks, Nevada office and reduced staffing, a favorable variance was realized when compared to 2021 when there was much more activity and staffing.
Exploration	($24,858)	In the current quarter the Company was still incurring costs for the winding up of the exploration programs carried out in Q2 and Q3 of 2023. There was no major exploration carried out in Q4 of 2022.
Consulting	$25,500	The resignation of a consultant in Q1 2022 has led to this favorable variance.
Professional fees	($10,386)	The slightly higher fees in the quarter relate to activities pertaining to share encumbrances being dealt with.
Exploration	$7,081	In Q2 2022, the Company received a refund for the cost of a new mine lease after the original mine lease was objected to. The cost of the second mine lease was refunded as it was determined that the original mine lease was valid.
Gain on derivative liability	($157,049)	Warrants issued in Q2 2022 are in Canadian funds. As the exchange rate with the Canadian dollar fluctuates, a gain or loss on this is recorded in the financial statements. Also, the value of the warrants is recalculated based on Black-Scholes calculation at the end of the year. Quarter over quarter the gain on the derivative liability is almost the same. This is a non-cash item.
Professional fees	$729	Year over year costs are relatively the same.
Insurance	$417	New insurance policies were entered into in Q4 2023. Premiums have increased resulting in this minor favorable variance.
Amortization	$419	In Q1 2022, all depreciable assets were disposed of. No further amortization expense was incurred in the year resulting in this favorable variance when compared to 2021.
Travel	$747	There were no travel expenditures incurred in Q4 of 2023 versus Q4 of 2022 when very light travel took place.
Insurance	($255)	New insurance policies were entered into in Q4 2022. Premiums have increased resulting in this minor unfavorable variance.
Interest income	$9,771	The company has invested funds received from the financing received in 2022 resulting in this favorable variance.
Travel	($367)	Costs have not increased very much. Limited travel has been incurred in both years as the Company conserves its cash.
Foreign exchange loss	$24,101	In Q4 funds held in foreign currencies increased against the US dollar resulting in this positive variance when compared to the comparable period in 2022.
Foreign exchange loss	($19,572)	In Q4 funds held in foreign currencies decreased against the US dollar resulting in this negative variance when compared to the comparable period in 2021. Also in 2021 there was less exposure to currency fluctuations as much smaller amounts of foreign currency funds were held.
Stock based compensation	($48,610)	In Q4 of 2022 the Company was expensing options granted in Q2 2022 that vested over 18 months. No such vestings were incurred in Q4 2021.

3530

Results of Operations for the Year ended December 31, ~~2022~~2023

The net profit for the year ~~increased~~decreased by $2803,~~417,628~~392 to $~~850~~47,~~596~~204 from a ~~loss~~profit of $1850,~~567,032~~596 in the prior year, Details of the individual items contributing to the decreased net loss are as follows:

2022 vs. 2021 - Variance Analysis (US$)
2023 vs. 2022 - Variance Analysis (US$)
Item	Variance Favourable / (Unfavourable)	Explanation
Accrual reversal	($1,032,044)	In the ~~current~~prior year, the Company reversed accrued liabilities for certain staff who are no longer with the Company. No such item was incurred in ~~2021~~2023.
Gain on derivative liability	$525,259	Warrants issued in Q2 2022 are in Canadian funds. As the exchange rate with the Canadian dollar fluctuates, a gain or loss on this is recorded in the financial statements. Also, the value of the warrants is recalculated based on Black-Scholes calculation at the end of the quarter. Since the warrants were issued, a gain has been calculated. This is a non-cash item.
Exploration	($245,092)	In Q2 2023, the Company carried out drilling activities on its Australian properties while in 2022, no exploration activities were conducted. To further increase this unfavorable variance, the Company received a refund in 2022 from the Australian government related to over payment of mining license costs.
Stock-based compensation	$412,106	Stock options granted in Q2 2022 will vest and be expensed over an 18-month period while stock options granted in Q2 2021 vested and were expensed immediately. Also, the options granted in Q2 2021 were at a higher price resulting in higher amounts expensed. These are non-cash costs.
Salaries benefits and stock-based compensation	($31,836)	The stock-based compensation value for 2023 is higher due to the large number of options issued in 2023 when compared to 2022 resulting in this unfavorable variance.
Salaries and benefits	$243,461	This favorable variance is due to the resignation in Q1 2022 of 3 senior staff that have not been replaced.
Foreign exchange gain	($17,086)	The US dollar strengthened in 2023 against both the Australian and Canadian dollar.
Consulting	$112,259	The resignation of a consultant in Q1 2022 has led to this favorable variance.
Travel and entertainment	($2,990)	With the start of the drilling program at Honeybugle, management visited the property and legal counsel in Australia. No such expenditures were incurred in 2022.
Exploration	$71,409	In Q2 2022, the Company received a refund for the cost of a new mine lease after the original mine lease was objected to. The cost of the second mine lease was refunded as it was determined that the original mine lease was valid.
Insurance	($134)	Slightly higher premiums for D&O insurance and general liability insurance resulted in this minor variance when comparing the two years.
General and administrative	$61,728	With the closing of the Sparks, Nevada office and reduced staffing, a favorable variance was realized when compared to 2021 when there was much more activity and staffing.
Amortization	$2,932	All fixed assets were fully depreciated in Q2 2022, resulting in no expense associated with this item in 2023.
Insurance	$4,471	Lower fees were negotiated in Q4 2021 resulting in lower costs in the current year when compared to 2021.
Professional fees	$8,636	In Q2 2022 advice from our legal firm were required as the Company underwent management changes. No such activities took place in 2023.
Travel and entertainment	($367)	Year over year costs have not increased very much. Limited travel has been incurred in both years as the Company conserves its cash.
Consulting	$18,363	The resignation of a consultant in 2022 led to this favorable variance in the current year.
Amortization	($1,204)	In 2022, all depreciable assets were disposed of resulting in this negative variance.
Interest income	$39,851	In 2023, the Company purchased short term secure investments. No similar opportunity existed in 2022.
Foreign exchange gain	($10,200)	The US dollar strengthened in the year ending December 30, 2022, and because of the large derivative liability being in Canadian dollars, there was a favorable foreign exchange gain. However, excluding the impact of the derivative liability there was a loss on assets carried in foreign currencies.
General and administrative	$59,901	With the closing of the Sparks, Nevada office and reduced staffing, a favorable variance was realized when compared to 2022 when there was much more activity and staffing.
Professional fees	($33,338)	Audit fees have increased resulting in this unfavorable variance when compared to 2021.
Gain on derivative liability	$396,107	Warrants issued in Q2 2022 are in Canadian funds. As the exchange rate with the Canadian dollar fluctuates, a gain or loss on this is recorded in the financial statements. Also, the value of the warrants is recalculated based on Black-Scholes calculation at the end of the quarter. Since the warrants were issued, a gain has been calculated. This is a non-cash item.

~~Cash flow discussion for the year ended December~~ 31~~, 2022, compared to December 31, 2021~~

~~The~~Cash ~~cash~~flow ~~outflow~~discussion ~~from~~for ~~operating~~the ~~activities~~year ~~increased~~ended byDecember ~~$573~~31,~~510~~ ~~to $947~~2023,~~715~~ ~~(2021~~compared ~~– $374,205) due mainly~~ to ~~due~~December ~~mainly~~31, ~~to payment of accrued salaries in~~ 2022.

~~Cash~~The ~~inflows~~cash outflow from ~~financing~~operating activities ofdecreased by $2116,~~706,531~~961 ~~reflect~~to ~~the~~$830,754 ~~private~~(2022 ~~placement~~– ~~and~~$947,715) ~~options~~due ~~being~~mainly ~~exercised in the current nine-month period when compared~~ to ~~the~~payment ~~year~~of ~~ended~~accrued ~~December~~salaries ~~30, 2021,~~ in ~~which options exercised brought in $297,815~~2022.

36Cash inflows from financing activities of $Nil when compared to the year ended December 30, 2022, in which private placement and options being exercised brought in $2,706,531.

Summary of quarterly results (US$)

	2022												2021
	2023												2022
	Q4			Q3			Q2			Q1			Q4			Q3			Q2			Q1
Net Sales		-			-			-			-			-			-			-			-
Net Income (Loss)		~~228~~(133,~~371~~732	)		7074,~~701~~732			28(129,~~577~~756	)		~~522~~236,~~946~~000			~~(215~~228,~~111)~~371			~~(278~~70,~~704)~~701			~~(761~~28,~~080)~~577			~~(312~~522,~~137)~~946
Basic and dilutedNet Income (Loss) per share		(0.00)			(0.00)			(0.00)			(0.00)			(0.00)			(0.00)			(0.00)			(0.00)
Basic and diluted Net Income (Loss) per share		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)		(0.00	)

Financial Position

Cash

~~Yearend~~Year-end ~~Cash~~cash ~~increased~~decreased by $1830,~~758,816~~754 to $1,~~852~~021,~~710~~956 (~~2021~~2022 - $931,~~894~~852,710) due mainly to a ~~private~~reduction ~~placement~~in accounts payable and exploration activities carried out in Q2 2022.

Prepaid expenses and receivables

Prepaid expenses and receivables have ~~decreased~~increased by $16,~~501~~670 to $3340,~~541~~211 (~~2021~~2022 - $3533,~~042~~541) due to ~~lower~~increased activity levels in 2022.

Reclamation bond

A reclamation bond of €10,000 ($1011,~~699~~037) was purchased for the Kiviniemi property in 2018.

Property, plant and equipment

Property plant and equipment consists of office furniture and computer equipment at the Sparks, Nevada office. The decrease of $2,932 to $Nil at December 31, 2022 (2021 - $2,932) is due to the disposal of that office furniture and computer equipment in the nine-month period.

Mineral interests

Mineral interests remained at $704,053 at December 31, ~~2022~~2023 (~~2021~~2022 - $704,053).

Accounts Payable, Accounts payable with related parties, Accrued Liabilities and Derivative liability -warrants.

Accounts payable, accounts payable with related parties, accrued liabilities and Derivative liability – warrants have decreased by $~~219~~1,~~990~~158,465 to $1349,~~507,724~~259 at December 31, ~~2022~~2023 (~~2021~~2022 – $1,~~727~~507,~~714~~724) due to revaluation of warrant derivative liability ~~being~~and ~~classed~~payment ~~as a current liability which was partially offset by the write off~~ of ~~certain~~accrued ~~salary deferrals~~salaries.

Capital Stock

Capital stock ~~increased~~did bynot ~~$995,426~~change toin 2023 - $111,144,603 (~~2021~~2022 - $~~110~~111,~~149~~144,~~177~~603) ~~due to a private placement in Q2 of 2022 and stock option exercises~~.

37Additional paid-in capital increased by $287,515 to $7,306,631 (2022 - $7,019,116) as a result of stock option expensing.

~~Additional~~Treasury ~~paid-in~~shares ~~capital~~remained ~~increased~~at by $~~127~~1,~~606 to $7~~264,~~019,116~~194 ~~(2021~~through -the ~~$6,891,510)~~2023 asand a2022 ~~result~~fiscal ~~of stock option expensing which was partially offset by stock option exercises~~periods.

~~Treasury shares remained at $1,264,194 through the 2022 fiscal period.~~32

Off-balance sheet arrangements

At December 31, ~~2022~~2023, we had no material off-balance sheet arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to us.

Transactions with related parties

During the year ended December 31, ~~2022~~2023, the Company expensed $~~177~~262,~~445~~294 for stock-based compensation for stock options issued to Company directors. During the year ended December 31, ~~2021~~2022, the Company expensed $~~441~~177,~~277~~745 for stock options issued to Company directors.

During the year ended December 31, ~~2022~~2023, the Company expensed a consulting fee of $~~17,000~~Nil to(2022 ~~one~~- ~~of its directors. During the year ended December 31, 2021, the Company expensed a consulting fee of~~ $~~102~~17,000) to one of its directors.

As at December 31, ~~2022~~2023, the Company owed $~~185~~5,~~576~~104 (~~2021~~2022 - $1185,~~159,713~~576) to an officer of the Company.

During the year ended December 31, ~~2022~~2023, the Company reversed $~~669,723~~Nil (~~2021~~2022 - $~~Nil~~669,733) of accruals to related parties, pursuant to settlement agreements.

Additional Information and Accounting Pronouncements

Outstanding share data

At March ~~XX 2~~26, ~~2023~~2024 we had 355,860,~~144~~813 issued and outstanding common shares and 2840,~~965~~015,000 outstanding stock options at a weighted average exercise price of C$0.~~121~~10. Also, there were 37,803,218 warrants outstanding at C$10.75 at March 726, ~~2023~~2024.

Critical Accounting Estimates

The preparation of financial statements in conformity with generally accepted accounting policies requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on past experience, industry trends and known commitments and events. By their nature, these estimates are subject to measurement uncertainty and the effects on the financial statements of changes in such estimates in future periods could be significant. Actual results will likely differ from those estimates.

Stock-based compensation

We use the Black-Scholes option pricing model to calculate the fair value of stock options and compensatory warrants granted. This model is subject to various assumptions. The assumptions we make will likely change from time to time. At the time the fair value is determined, the methodology that we use is based on historical information, as well as anticipated future events. The assumptions with the greatest impact on fair value are those for estimated stock volatility and for the expected life of the instrument.

Deferred income taxes

We account for tax consequences of the differences in the carrying amounts of assets and liabilities and our tax bases using tax rates expected to apply when these temporary differences are expected to be settled. When the deferred realization of income tax assets does not meet the test of being more likely than not to occur, a valuation allowance in the amount of the potential future benefit is taken and no future income tax asset is recognized. We have taken a valuation allowance against all such potential tax assets.

Mineral properties and exploration and development costs

We capitalise the costs of acquiring mineral rights at the date of acquisition. After acquisition, various factors can affect the recoverability of the capitalized costs. Our recoverability evaluation of our mineral properties and equipment is based on market conditions for minerals, underlying mineral resources associated with the assets and future costs that may be required for ultimate realization through mining operations or by sale. We are in an industry that is exposed to a number of risks and uncertainties, including exploration risk, development risk, commodity price risk, operating risk, ownership and political risk, funding and currency risk, as well as environmental risk. Bearing these risks in mind, we have assumed recent world commodity prices will be achievable. We have considered the mineral resource reports by independent engineers on the Nyngan project in considering the recoverability of the carrying costs of the mineral properties. All of these assumptions are potentially subject to change, out of our control, however such changes are not determinable. Accordingly, there is always the potential for a material adjustment to the value assigned to mineral properties and equipment.

Recent Accounting Pronouncements

Accounting Standards Update ~~2021~~2023-0407 -– ~~Earnings~~Segment ~~Per~~Reporting ~~Share~~ (Topic ~~260~~280),. ~~Debt~~This ~~Modifications~~update ~~and~~is ~~Extinguishments~~to ~~(Subtopic~~improve ~~470-50),~~the ~~Compensation—Stock~~disclosures ~~Compensation~~about ~~(Topic~~a ~~718),~~public ~~and Derivatives and Hedging Contracts in Entity~~entity’s ~~Own~~reportable ~~Equity~~segments ~~(Subtopic~~through ~~815-40).~~enhanced ~~This~~disclosures ~~update~~about issignificant tosegment ~~provide~~expenses ~~clarity around earnings per share calculations~~ and is effective for fiscal years beginning after December 15, ~~2021~~2023, ~~including~~and interim periods within ~~those~~ fiscal years beginning after December 15, 2024. The Company ~~has~~is ~~reviewed~~reviewing this standard ~~and~~but ~~determined~~anticipates ~~there~~little ~~is no~~ impact on its financial statements.

Accounting Standards Update 2023-09 – Income Taxes (Topic 740). This update is to enhance the transparency and decision usefulness of income tax disclosures for fiscal years beginning after December 15, 2024. The Company is reviewing this standard to determine the impact on its financial statements.

Financial instruments and other risks

Our financial instruments consist of cash, receivables, accounts payable and accrued liabilities, accounts payable with related parties, and promissory notes payable. It is management’'s opinion that we are not exposed to significant interest, currency or credit risks arising from our financial instruments. The fair values of these financial instruments approximate their carrying values unless otherwise noted. The Company has its cash primarily in five commercial banks, one in Vancouver, British Columbia, Canada, one in Hamilton, Ontario, Canada, one in Melbourne, Australia, one in Chicago, Illinois and one in Los Angeles, California.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements of the Company and the notes thereto are attached to this report following the signature page and Certifications.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

For the fiscal years ended December 31, ~~2022~~2023, and ~~2021~~2022, we did not have any disagreement with our accountants on any matter of accounting principles, practices, or financial statement disclosure.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure controls and procedures

The Company’s management, including our principal executive officer and our principal financial officer, evaluated the effectiveness of disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. Based on that evaluation, the principal executive officer and principal financial officer concluded that as of the end of the period covered by this report, the Company has maintained effective disclosure controls and procedures in all material respects, including those necessary to ensure that information required to be disclosed in reports filed or submitted with the SEC (i) is recorded, processed, and reported within the time periods specified by the sec, and (ii) is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow for timely decision regarding required disclosure.

Management’s report on internal control over financial reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) of the Exchange Act). Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019, using criteria established in Internal Control-Integrated Framework issued in 1992 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Even an effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error and circumvention or overriding of controls and therefore can provide only reasonable assurance with respect to reliable financial reporting. Furthermore, the effectiveness of an internal control system in future periods can change with conditions.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The Company’s management has determined that the internal controls over financial reporting are effective as of December 31, ~~2022~~2023.

Changes in Internal Control

There have been no changes in internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

4035

PART III

Information with respect to Items 10 through 14 is set forth in the definitive Proxy Statement to be filed with the Securities and Exchange Commission on or before April 30, ~~2023~~2024, and is incorporated herein by reference. If the definitive Proxy Statement cannot be filed on or before April 30, ~~2023~~2024, the Company will instead file an amendment to this Form 10-K disclosing the information with respect to Items 10 through 14.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES

Financial Statements

The following Consolidated Financial Statements are filed as part of this report.

Description	Page	~~Page~~
Financial statements for the years ended December 31, 2022, and 2021 and audit reports thereon. PCAOB #731		F-1
Financial statements for the years ended December 31, 2023, and 2022 and audit reports thereon. (DAVIDSON & COMPANY LLP - PCAOB 731)	F-1

Exhibits

The following table sets out the exhibits filed herewith or incorporated herein by reference.

Exhibit	Description	~~Description~~
3.1	Certificate of Incorporation, Certificate of Name Change dated March 2009, Notice of Articles dated March 2009(1) Certificate of Name Change dated November 19, 2014 and Notice of Articles dated November 19, 2014(2)	Certificate of Incorporation, Certificate of Name Change dated March 2009, Notice of Articles dated March 2009(1) Certificate of Name Change dated November 19, 2014 and Notice of Articles dated November 19, 2014(2)
3.2	Corporate Articles(1) Amendment to Corporate Articles dated November 10, 2014(2)	~~Corporate Articles(1) Amendment to Corporate Articles dated November 10, 2014(2)~~
10.1(3)	2015 Stock Option Plan	~~2015 Stock Option Plan~~
10.4(5)	Share Exchange Agreement dated June 30, 2017	~~Share Exchange Agreement dated June 30, 2017~~
21.1(6)	List of Subsidiaries	~~List of Subsidiaries~~
23.1(6)	Consent of Davidson & Company LLP	~~Consent of Davidson & Company LLP~~
23.2(6)		Consent of Stuart Hutchin
31.1(6)	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934 of the Principal Executive Officer
23.3(6)		Consent of Dean Basile
31.2(6)	Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934 of the Principal Financial Officer
23.4(6)		Consent of Geoffrey Duckworth
32.1(6)	Section 1350 Certification of the Principal Executive Officer and Principal Financial Officer of the Principal Executive Officer
31.1(6)		Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934 of the Principal Executive Officer
32.2(6)	Section 1350 Certification of the Principal Executive Officer and Principal Financial Officer of the Principal Financial Officer
31.2(6)		Certification Pursuant to Rule 13a-14(a) or 15d-14(a) of the U.S. Securities Exchange Act of 1934 of the Principal Financial Officer
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
32.1(6)		Section 1350 Certification of the Principal Executive Officer and Principal Financial Officer of the Principal Executive Officer
101.SCH	Inline XBRL Taxonomy Extension Schema Document
32.2(6)		Section 1350 Certification of the Principal Executive Officer and Principal Financial Officer of the Principal Financial Officer
101.CAL	Inline XBRL Extension Calculation Linkbase Document
101.DEF	Inline XBRL Extension Definition Linkbase Document
101.LAB	Inline XBRL Extension Label Linkbase Document
101.PRE	Inline XBRL Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

⁽¹⁾ Previously filed as exhibits to the Form 10 filed May 24, 2011 and incorporated herein by reference.

⁽²⁾ Previously filed as exhibits to the Form 10-K filed February 27, 2015 and incorporated herein by reference.

⁽³⁾ Previously filed as Schedule “A” to the Form DEF 14A filed October 5, 2015 and incorporated herein by reference.

⁽⁴⁾ Previously filed as an exhibit to the Form 10-K/A filed May 1, 2014 and incorporated herein by reference.

⁽⁵⁾ Previously filed as an exhibit to the Form 8-K filed July 26, 2017 and incorporated herein by reference.

⁽⁶⁾Filed herewith.

4336

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SCANDIUM INTERNATIONAL MINING CORP.
By:	/s/ Peter Evensen
	Peter Evensen
	President and Principal Executive Officer
Date:	March 7, 2023

SCANDIUM INTERNATIONAL MINING CORP.

By:	/s/ Peter Evensen
	Peter Evensen
	President and Principal Executive Officer

Date: March 26, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	~~Title~~Date	~~Date~~
/s/ Peter Evensen	President, Principal Executive Officer, and Director	~~President,~~March ~~Principal Executive Officer~~26, ~~and Director~~2024	~~March 7, 2023~~
Peter Evensen
/s/ William Harris	Chairman and Director	~~Chairman~~March ~~and~~26, ~~Director~~2024	~~March 7, 2023~~
William Harris
/s/ James Rothwell	Director	~~Director~~March 26, 2024	~~March 7, 2023~~
James Rothwell
/s/ R. Christian Evensen	Director & Principal Financial Officer	~~Director~~March &26, ~~Principal Financial Officer~~2024	~~March 7, 2023~~
R. Christian Evensen

4437

CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, ~~2022~~2023

4538

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Directors of

Scandium International Mining Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Scandium International Mining Corp. (the “Company”), as of December 31, ~~2022~~2023 and ~~2021~~2022, and the related consolidated statements of income ~~(loss)~~ and comprehensive income ~~(loss)~~, ~~cash flows, and~~ changes in shareholders’’ equity (deficiency), and cash flows for the years ended December 31, ~~2022~~2023 and ~~2021~~2022, and the related notes and schedules (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of ~~Scandium~~the ~~International~~Company ~~Mining Corp.~~ as of December 31, ~~2022~~2023 and ~~2021~~2022, and the results of its operations and its cash flows for each of the years ended December 31, ~~2022~~2023 and ~~2021~~2022, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying ~~consolidated~~ financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company ~~has~~currently ~~suffered~~earns ~~recurring~~no ~~losses~~operating ~~from~~revenues ~~operations~~ and ~~has~~will arequire ~~net~~additional capital ~~deficiency~~in order to advance the Nyngan property. These are material uncertainties that raise substantial doubt about ~~its~~the Company’s ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“"PCAOB”") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the ~~Company~~entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material ~~misstatements~~misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~Critical Audit Matters~~39

~~The~~Critical ~~critical~~Audit audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Matter

~~Mineral~~The ~~property~~critical ~~interests~~audit ~~impairment~~matter ~~consideration~~communicated below is matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

AtAssessment December 31, 2022, the Company’s mineral property interests balance totalled $704,053. As more fully described in Note 2 to the financial statements, the Company evaluates its mining and mineral rights for impairment whenever events or changes in circumstances indicate that the carrying amounts of ~~the~~Impairment ~~asset~~Indicators ~~or group~~ of ~~assets~~Mineral ~~may~~Property not be recoverable. Management evaluates various qualitative factors in determining whether or not events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be recoverable.Interests

~~Auditing~~As described in Note 3 to the financial statements, the carrying amount of the Company’s ~~impairment~~mineral ~~assessment~~property ~~involved~~interest ~~our~~was ~~subjective~~$704,053 ~~judgment~~as ~~because~~of December 31, 2023. As more fully described in ~~determining~~Note ~~whether~~2 ~~any~~to the financial statements, management assesses its mineral property interests for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of the mineral property interests may not be recoverable.

~~indicators~~The principal considerations for our determination that the assessment of impairment ~~occurred,~~indicators ~~management~~of ~~uses~~the ~~judgments~~Company’s mineral property interests is a critical audit matter are that ~~include,~~there ~~among~~was ~~others,~~judgment ~~assumptions~~made ~~about~~by management’s ~~intentions~~when ~~and~~assessing ~~future~~whether ~~exploration~~there ~~plans~~were indicators of impairment for the mineral property interests, specifically relating to the assets’ carrying amount which is impacted by the Company’s intent and ability to ~~fund~~continue ~~continued~~to ~~exploration~~explore ~~activities,~~and ~~forecasts~~evaluate onits ~~future~~asset. ~~scandium~~This ~~metal~~in ~~prices~~turn led to a high degree of auditor judgment, subjectivity, and ~~market~~effort ~~capitalization.~~in ~~Significant~~performing ~~uncertainty~~procedures ~~exists~~to ~~with~~evaluate ~~these~~audit ~~assumptions.~~evidence ~~Further,~~relating to the judgments made by management’s ~~evaluation~~in oftheir ~~any~~assessment ~~new~~of ~~information~~indicators ~~indicating~~of impairment that ~~continued~~could ~~exploration~~give ~~will~~rise ~~not~~to ~~likely~~the ~~occur~~requirement ~~requires~~to ~~significant~~prepare ~~judgment~~an estimate of the recoverable amount of the mineral property.

ToAddressing ~~test~~ the ~~Company’s~~matter ~~impairment~~involved ~~assessment,~~performing ~~our audit~~ procedures ~~included, among others, assessing the Company’s right to explore in the relevant exploration area which included obtaining~~ and ~~assessing supporting documentation such as mining lease applications and final decisions from governmental bodies;~~ evaluating ~~the~~audit ~~Company’s~~evidence ability and intent to carry out significant exploration and evaluation activity; considering whether there was any other data or information that indicated the carrying amount of the capitalized mineral property interests would not be recovered in ~~full~~connection ~~from~~with ~~successful~~forming ~~development~~our oroverall byopinion ~~sale;~~on ~~and assessing~~ the ~~adequacy~~financial ofstatements. ~~the~~Our ~~associated~~audit ~~disclosures~~procedures inincluded, ~~the~~among ~~financial statements.~~others:

●

Obtaining and assessing management’s impairment analysis.

●

Evaluating the intent for the mineral property interests through discussion and communication with management.

●

Reviewing the Company’s recent expenditure activity and expenditure budgets for future periods.

●

Assessing compliance with agreements

●

Obtaining, on a test basis through government websites, confirmation of title to ensure mineral rights underlying the mineral property interests are in good standing.

We have served as the Company’s auditor since 2008.

/s/ DAVIDSON & COMPANY LLP

		/s/ DAVIDSON & COMPANY LLP


Vancouver, Canada		Chartered Professional Accountants

March 26, 2024

~~Vancouver, Canada Chartered Professional Accountants~~40

~~March~~Scandium 7,International ~~2023~~Mining Corp.

Scandium International Mining Corp.
CONSOLIDATED BALANCE SHEETS
(Expressed in US Dollars)
As at:	December 31,2022			December 31,2021
ASSETS
Current
Cash	$	1,852,710		$	93,894
Prepaid expenses and receivables		33,541			35,042
		1,886,251			128,936
Reclamation bond (Note 4)		10,699			11,444
Equipment (Note 3)		-			2,932
Mineral property interests (Note 4)		704,053			704,053
Total Assets	$	2,601,003		$	847,365
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
Current
Accounts payable and accrued liabilities	$	127,263		$	568,001
Accounts payable with related parties (Note 5)		185,576			1,159,713
Derivative liability - warrants (Note 6)		1,194,885			-
Total Liabilities		1,507,724			1,727,714
Shareholders’ Equity (Deficiency)
Capital stock (Note 6) (Authorized: Unlimited number of common shares; Issued and outstanding: 355,860,813 (2021 – 317,157,595))		111,144,603			110,149,177
Treasury stock (Note 7) (1,033,333 common shares) (2021 – 1,033,333)		(1,264,194	)		(1,264,194	)
Additional paid in capital (Note 6)		7,019,116			6,891,510
Accumulated other comprehensive loss		(853,400	)		(853,400	)
Deficit		(114,952,846	)		(115,803,442	)
Total Shareholders’ Equity (Deficiency)		1,093,279			(880,349	)
Total Liabilities and Shareholders’ Equity (Deficiency)	$	2,601,003		$	847,365

CONSOLIDATED BALANCE SHEETS

(Expressed in US Dollars)

As at:	December 31, 2023			December 31, 2022

ASSETS

Current
Cash	$	1,021,956		$	1,852,710
Prepaid expenses and receivables		40,211			33,541

		1,062,167			1,886,251

Reclamation bond (Note 3)		11,037			10,699
Mineral property interests (Note 3)		704,053			704,053

Total Assets	$	1,777,257		$	2,601,003


LIABILITIES AND SHAREHOLDERS’ EQUITY

Current
Accounts payable and accrued liabilities	$	60,782		$	127,263
Accounts payable with related parties (Note 4)		5,104			185,576
Derivative liability - warrants (Note 5)		283,373			1,194,885


Total Liabilities		349,259			1,507,724


Shareholders’ Equity
Capital stock (Note 5) (Authorized: Unlimited number of common shares; Issued and outstanding: 355,860,813 (2022 – 355,860,813)		111,144,603			111,144,603
Treasury stock (Note 6) (1,033,333 common shares) (2022 – 1,033,333)		(1,264,194	)		(1,264,194	)
Additional paid in capital (Note 5)		7,306,631			7,019,116
Accumulated other comprehensive loss		(853,400	)		(853,400	)
Deficit		(114,905,642	)		(114,952,846	)

Total Shareholders’ Equity		1,427,998			1,093,279

Total Liabilities and Shareholders’ Equity	$	1,777,257		$	2,601,003

Nature and continuance of operations (Note 1)

The accompanying notes are an integral part of these consolidated financial statements.

4641

Scandium International Mining Corp. ~~CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Expressed in US Dollars)~~

Years ended:	December 31,2022			December 31,2021
EXPENSES
Amortization (Note 3)	$	2,932		$	1,728
Consulting (Note 5)		18,363			130,622
Exploration costs (recovery)		(959	)		70,450
General and administrative		151,067			212,795
Insurance		31,064			35,535
Professional fees		96,797			63,459
Salaries and benefits		222,138			465,599
Stock-based compensation (Notes 5 & 6)		198,280			610,385
Travel and entertainment		747			380
		(720,428	)		(1,590,953	)
Foreign exchange gain		13,721			23,921
Accruals reversal (Note 8)		1,032,044			-
Unrealized gain on derivative liability – warrants (Note 6)		525,259			-
Income (loss) and comprehensive income (loss) for the year	$	850,596		$	(1,567,032	)
Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)
Basic and diluted weighted average number of common shares outstanding		340,368,144			316,169,361

CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(Expressed in US Dollars)

Years ended:	December 31, 2023			December 31, 2022

EXPENSES
Amortization	$	-		$	2,932
Consulting (Note 4)		-			18,363
Exploration costs (recovery)		244,133			(959	)
General and administrative		91,166			151,067
Insurance		31,198			31,064
Professional fees		88,161			96,797
Salaries and benefits (Notes 4 & 5)		452,253			420,417
Travel and entertainment		3,737			747

		(910,648	)		(720,428	)

Foreign exchange gain(loss)		(3,365	)		13,721
Accruals reversal (Note 7)		-			1,032,044
Interest income		39,851			-
Unrealized gain on derivative liability – warrants (Note 5)		921,366			525,259

Income and comprehensive income for the year	$	47,204		$	850,596
Basic and diluted earnings per common share	$	0.00		$	0.00
Basic and diluted weighted average number of common shares outstanding		355,860,813			340,368,144

The accompanying notes are an integral part of these consolidated financial statements.

4742

Scandium International Mining Corp. ~~CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in US Dollars)~~

Years ended:	December 31,2022			December 31,2021
CASH FLOWS USED IN OPERATING ACTIVITIES
Income (loss) for the year	$	850,596		$	(1,567,032	)
Items not affecting cash:
Amortization		2,932			1,728
Stock-based compensation		198,280			610,385
Accrual reversal		(1,032,044	)		-
Unrealized gain on derivative liability - warrants		(525,259	)		-
Unrealized gain on foreign exchange		(60,890	)		-
Changes in non-cash working capital items:
Decrease in prepaids and receivables		1,501			7,388
Increase (decrease) in accounts payable, accrued liabilities and accounts payable with related parties		(382,831	)		573,326
		(947,715	)		(374,205	)
CASH FLOWS FROM FINANCING ACTIVITIES
Common shares issued		2,647,852			-
Share issue costs		(48,310	)		-
Options exercised for common shares		106,989			297,815
		2,706,531			297,815
Change in cash during the year		1,758,816			(76,390	)
Cash, beginning of year		93,894			170,284
Cash, end of year	$	1,852,710		$	93,894

CONSOLIDATED STATEMENTS OF CASH FLOWS

~~Supplemental~~(Expressed ~~disclosure~~in ~~with~~US ~~respect to cash flows (Note 11~~Dollars)

Years ended:	December 31, 2023			December 31, 2022

CASH FLOWS USED IN OPERATING ACTIVITIES
Income for the year	$	47,204		$	850,596
Items not affecting cash:
Amortization		-			2,932
Stock-based compensation		287,515			198,280
Accrual reversal		-			(1,032,044	)
Unrealized gain on derivative liability - warrants		(921,366	)		(525,259	)
Unrealized loss (gain) on foreign exchange		9,516			(60,890	)

Changes in non-cash working capital items:
(Increase) decrease in prepaids and receivables		(6,670	)		1,501
Increase (decrease) in accounts payable, accrued liabilities and accounts payable with related parties		(246,953	)		(382,831	)
		(830,754	)		(947,715	)

CASH FLOWS FROM FINANCING ACTIVITIES
Common shares issued		-			2,647,852
Share issue costs		-			(48,310	)
Options exercised for common shares		-			106,989

		-			2,706,531

Change in cash during the year		(830,754	)		1,758,816
Cash, beginning of year		1,852,710			93,894

Cash, end of year	$	1,021,956		$	1,852,710

Supplemental disclosure with respect to cash flows (Note 10)

The accompanying notes are an integral part of these consolidated financial statements.

4843

Scandium International Mining Corp.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)
(Expressed in US Dollars)
	Number of Shares		Capital Stock			Additional Paid in Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Deficit			Total Shareholders’ Equity (Deficiency)
Balance, December 31, 2020		314,032,595	$	109,627,071		$	6,505,416		$	(1,264,194	)	$	(853,400	)	$	(114,236,410	)	$	(221,517	)
Options exercised		3,125,000		522,106			(224,291	)		-			-			-			297,815
Stock-based compensation		-		-			610,385			-			-			-			610,385
Loss for the year		-		-			-			-			-			(1,567,032	)		(1,567,032	)
Balance, December 31, 2021		317,157,595		110,149,177			6,891,510			(1,264,194	)		(853,400	)		(115,803,442	)		(880,349	)
Options exercised		900,000		177,663			(70,674	)		-			-			-			106,989
Private placement net of share issuance costs		37,803,218		2,599,542			-			-			-			-			2,599,542
Derivative liability		-		(1,781,779	)		-			-			-			-			(1,781,779	)
Stock-based compensation		-		-			198,280			-			-			-			198,280
Income for the year		-		-			-			-			-			850,596			850,596
Balance, December 31, 2022		355,860,813	$	111,144,603		$	7,019,116		$	(1,264,194	)	$	(853,400	)	$	(114,952,846	)	$	1,093,279

Scandium International Mining Corp.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)

(Expressed in US Dollars)

	Number of Shares		Capital Stock			Additional Paid in Capital			Treasury Stock			Accumulated Other Comprehensive Loss			Deficit			Total Shareholders’ Equity (Deficiency)

Balance, December 31, 2021		317,157,595	$	110,149,177		$	6,891,510		$	(1,264,194	)	$	(853,400	)	$	(115,803,442	)	$	(880,349	)
Options exercised		900,000		177,663			(70,674	)		-			-			-			106,989
Private placement net of share issuance costs		37,803,218		2,599,542			-			-			-			-			2,599,542
Derivative liability		-		(1,781,779	)		-			-			-			-			(1,781,779	)
Stock-based compensation		-		-			198,280			-			-			-			198,280
Income for the year		-		-			-			-			-			850,596			850,596
Balance, December 31, 2022		355,860,813		111,144,603			7,019,116			(1,264,194	)		(853,400	)		(114,952,846	)		1,093,279
Stock-based compensation		-		-			287,515			-			-			-			287,515
Income for the year		-		-			-			-			-			47,204			47,204
Balance, December 31, 2023		355,860,813	$	111,144,603		$	7,306,631		$	(1,264,194	)	$	(853,400	)	$	(114,905,642	)	$	1,427,998

The accompanying notes are an integral part of these consolidated financial statements.

4944

Scandium International Mining Corp. ~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 (Expressed in US Dollars)~~

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

1.	NATURE AND CONTINUANCE OF OPERATIONS

Scandium International Mining Corp. (“The Company”) is a specialty metals and alloys company focusing on scandium and other specialty metals.

The Company was incorporated under the laws of the Province of British Columbia, Canada in 2006. The Company currently trades on the Toronto Stock Exchange under the symbol “SCY”.

The Company’s focus is on the exploration and evaluation of its specialty metals assets, specifically the Nyngan scandium deposit located in New South Wales, Australia. The Company is an exploration stage company and anticipates incurring significant additional expenditures prior to production at any and all of its properties.

The Company currently earns no operating revenues and will require additional capital in order to advance the Nyngan property. The Company’s ability to continue as a going concern is uncertain and is dependent upon the generation of profits from mineral properties, obtaining additional financing and maintaining continued support from its shareholders and creditors. These are material uncertainties that raise substantial doubt about the Company’s ability to continue as a going concern. In the event that additional financial support is not received, or operating profits are not generated, the carrying values of the Company’s assets may be adversely affected.

InThe ~~March~~outbreak ~~2020,~~of ~~the World Health Organization declared coronavirus~~ COVID-19 ~~a global pandemic. This contagious disease outbreak, which has continued to spread,~~ and ~~related~~political ~~adverse~~upheavals ~~public~~in ~~health~~various ~~developments,~~countries have ~~adversely~~caused ~~affected~~significant ~~workforces,~~volatility ~~economies,~~in ~~and~~commodity ~~financial markets globally, leading to an economic downturn~~prices. ItWhile isthese ~~not~~effects ~~possible~~are ~~for~~expected ~~the Company~~ to ~~predict~~be temporary, the duration ~~or magnitude~~ of the ~~adverse~~business ~~results~~disruptions ofinternationally ~~the outbreak~~ and ~~its~~related ~~effects~~financial onimpact ~~the~~cannot ~~Company’s~~be ~~business~~reasonably orestimated ~~ability~~at tothis ~~raise funds~~time.

2.	SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America (“US GAAP”).

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, EMC Metals USA Inc., Scandium International Mining Corp. Norway AS, SCY Exploration Finland Oy and EMC Metals Australia Pty Ltd.(“EMC-A”). All significant intercompany accounts and transactions have been eliminated on consolidation.

Use of estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuations, asset impairment, stock-based compensation derivative liabilities, and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between estimates and the actual results, future results of operations will be affected.

The Company considers Itself to be an exploration stage company and will consider the transition to development stage after it receives funding to begin mine construction, and board approval.

c) ~~Equipment~~Mineral interests and exploration and development costs

Equipment is recorded at cost less accumulated amortization, calculated as follows:

Computer equipment 30% straight line

d) Mineral interests and exploration and development costs

The costs of acquiring mineral interests are capitalized at the date of acquisition. After acquisition, various factors can affect the recoverability of the capitalized costs. If, after review, management concludes that the carrying amount of a mineral interest is impaired, it will be written down to estimated fair value. Exploration costs incurred on mineral interests are expensed as incurred. Development costs incurred on proven and probable reserves will be capitalized. Upon commencement of production, capitalized costs will be amortized using the unit-of-production method over the estimated life of the ore body based on proven and probable reserves.

50d) Asset retirement obligations

~~Scandium~~The ~~International~~Company ~~Mining~~records ~~Corp~~the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. ~~NOTES~~The TOCompany ~~THE~~also ~~CONSOLIDATED~~records ~~FINANCIAL~~a ~~STATEMENTS~~corresponding ~~December~~asset 31which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, ~~2022~~the obligation is adjusted at the end of each period to reflect the passage of time (~~Expressed~~accretion expense) and changes in USthe ~~Dollars~~estimated future cash flows underlying the obligation (asset retirement cost).

Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

e) ~~Asset~~Long-lived ~~retirement obligations~~ assets

The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal

use of the long-lived assets. The Company also records a corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost).

f) Long-lived assets

Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows or fair value in use related to the long-lived assets. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

gf) Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some part or all of the deferred tax asset will not be recognized.

hg) ~~Income~~Earnings (~~Loss~~loss) per share

Basic ~~income~~earnings ~~(loss)~~ per common share is computed using the weighted average number of common shares outstanding during the year. To calculate diluted ~~income~~earnings (loss) per share, the Company uses the treasury stock method and the if converted method. As at December 31, ~~2022~~2023 there were 37,803,218 warrants outstanding (~~2021~~2022 – ~~Nil~~37,803,218) and 3440,~~665~~015,000 options (~~2021~~2022 – 34,~~615~~665,000) outstanding which have not been included in the weighted average number of common shares outstanding as these were anti-dilutive.

ih) Foreign exchange

The Company's and subsidiaries’ functional currency is the US Dollar (“USD”). Any monetary assets and liabilities that are in a currency other than the USD are translated at the rate prevailing at year end. Revenue and expenses in a foreign currency are translated at rates that approximate those in effect at the time of translation. Gains and losses from translation of foreign currency transactions into USD are included in current results of operations. Fixed assets and mineral properties have been translated at historical rates, the rate on the date of the transaction.

ji) Stock-based compensation

The Company accounts for stock-based compensation under the provisions of Accounting Standard Codification (“ASC”) 718, “Compensation-Stock Compensation.” Under the fair value recognition provisions, stock-based compensation expense is measured at the grant date for all stock-based awards to employees, directors and non-employees and is recognized as an expense over the requisite service period, which is generally the vesting period. The Black-Scholes option valuation model is used to calculate fair value.

kj) Financial instruments

The Company’s financial instruments consist of cash, receivables, accounts payable and accrued liabilities, ~~and~~ accounts payable with related parties and derivative liability- warrants. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments. ~~The~~Except for derivative liabilities, the fair values of these financial instruments approximate their carrying values unless otherwise noted. The Company has its cash primarily in three commercial banks, one in ~~Chicago~~Los Angeles, ~~Illinois~~California, United States of America, one in ~~Vancouver~~Hamilton, ~~British Columbia~~Ontario, Canada and one in Melbourne, Victoria, Australia.

lk) Concentration of credit risk

The financial instrument which potentially subjects the Company to concentration of credit risk is cash. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. As at December 31, ~~2022~~2023, the Company has exceeded the federally insured limit. The Company has not experienced any losses in such amounts and believes it is not exposed to any significant risks on its cash in bank accounts.

51l) Fair value of financial assets and liabilities

Scandium International Mining Corp. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 (Expressed in US Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

m) Fair value of financial assets and liabilities

The Company measures the fair value of financial assets and liabilities based on US GAAP guidance which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

The Company classifies financial assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables or other financial liabilities depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition, except for those arising from certain related party transactions which are accounted for at the transferor’s carrying amount or exchange amount.

Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

2.	SIGNIFICANT ACCOUNTING POLICIES (cont’d…)

Financial assets and liabilities classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified as held-to-maturity, loans and receivables, and financial liabilities other than those classified as held-for-trading are measured at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured at fair value, with unrealized gains and losses being recognized as other comprehensive income until realized, or if an unrealized loss is considered other than temporary, the unrealized loss is recorded in income.

Financial instruments, including receivables, accounts payable and accrued liabilities, and accounts payable with related parties are carried at amortized cost, which management believes approximates fair value due to the short-term nature of these instruments.

The following table presents information about the assets and liabilities that are measured at fair value on a recurring basis as at December 31, ~~2022~~2023 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset:

	December 31,2022			Quoted Pricesin Active Markets(Level 1)		Significant OtherObservable Inputs(Level 2)			SignificantUnobservable Inputs(Level 3)
	December 31, 2023			Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Cash	$	1,~~852~~021,~~710~~956		$	1,~~852~~021,~~710~~956	$	—		$	—
Derivative liability - warrants		(1283,~~194,885~~373	)		—		—(283,373	)		~~(1,194,885~~—	)

The fair values of cash are determined through market, observable and corroborated sources.

nm) Recently Adopted and Recently Issued Accounting Standards

Accounting Standards Update ~~2021~~2023-0407 -– ~~Earnings~~Segment ~~Per~~Reporting ~~Share~~ (Topic ~~260~~280),. ~~Debt~~This ~~Modifications~~update ~~and~~is ~~Extinguishments~~to ~~(Subtopic~~improve ~~470-50),~~the ~~Compensation—Stock~~disclosures ~~Compensation~~about ~~(Topic~~a ~~718),~~public ~~and Derivatives and Hedging Contracts in Entity~~entity’s ~~Own~~reportable ~~Equity~~segments ~~(Subtopic~~through ~~815-40).~~enhanced ~~This~~disclosures ~~update~~about issignificant tosegment ~~provide~~expenses ~~clarity around earnings per share calculations~~ and is effective for fiscal years beginning after December 15, ~~2021~~2023, ~~including~~and interim periods within ~~those~~ fiscal years beginning after December 15, 2024. The Company ~~has~~is ~~reviewed~~reviewing this standard ~~and~~but ~~determined~~anticipates ~~that~~little ~~there is no~~ impact on its financial statements.

3Accounting Standards Update 2023-09 – Income Taxes (Topic 740). ~~EQUIPMENT~~ This update is to enhance the transparency and decision usefulness of income tax disclosures for fiscal years beginning after December 15, 2024. The Company is reviewing this standard to determine the impact on its financial statements.

~~2022~~3. MINERAL PROPERTY INTERESTS

	December 31, 2021Net Book Value		Additions(disposals)		Amortization			December 31, 2022Net Book Value
	Scandium and other
Computer equipment	$	2,932	$	-	$	(2,932	)	$	-
Acquisition costs
Balance, December 31, 2023, 2022, and 2021	$	704,053

2021

		December 31, 2020 Net Book Value				Additions(disposals)				Amortization				December 31, 2021 Net Book Value
Computer equipment		$	4,660			$	-			$	(1,728	)		$	2,932

During the year period ended December 31, 2022, the remaining fixed assets were disposed for $Nil proceeds.

Scandium International Mining Corp. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 (Expressed in US Dollars)

4. MINERAL PROPERTY INTERESTS

	Scandium andother
Acquisition costs
Balance, December 31, 2022, 2021, and 2020	$	704,053

Title to mineral property interests involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral property interests. The Company has investigated title to all of its mineral property interests and, to the best of its knowledge, title to all of its properties is in good standing.

SCANDIUM PROPERTIES ~~AND CRITICAL METALS RECOVERY PROJECT~~

Nyngan, New South Wales Property

The Company holds a 100% interest in the Nyngan property in New South Wales, Australia (NSW).

Royalties attached to the Nyngan property include a 0.7% royalty on gross mineral sales on the property, a 1.5% Net Profits Interest royalty to private parties involved with the early exploration on the property, and a 1.7% Net Smelter Returns royalty payable for 12 years after production commences. Another revenue royalty is payable to private interests of 0.2%, subject to a $370,000 cap. A NSW minerals royalty will also be levied on the project, subject to negotiation, currently 4% on revenue.

Honeybugle property, Australia

The Company holds a 100% interest in the Honeybugle property.

Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

3.	MINERAL PROPERTY INTERESTS

Kiviniemi Scandium Property Finland

In August 2018, the Company was granted an Exploration License for the Kiviniemi Scandium Property in central Finland from the Finnish regulatory body governing mineral exploration and mining in Finland. As at December 31, ~~2022~~2023, the Company has a reclamation bond of $1011,~~699~~037 (€10,000), (December 31, ~~2021~~2022 - $1110,~~444~~699 (€10,000)). An application to extend the license for 3 years ~~has~~will ~~been~~not be submitted.

54. RELATED PARTY TRANSACTIONS

During the year ended December 31, ~~2022~~2023, the Company expensed $~~177~~262,~~745~~294 for stock-based compensation for stock options issued to Company directors. During the year ended December 31, ~~2021~~2022, the Company expensed $~~441~~177,~~277~~745 for stock options issued to Company directors.

As at December 31, ~~2022~~2023, the Company owed $~~185~~5,~~576~~104 (~~2021~~2022 - $1185,~~159,713~~576) to an officer of the Company.

During the year ended December 31, ~~2022~~2023, the Company reversed $~~669,733~~NIL (~~2021~~2022 - $~~Nil~~669,733) of accruals to related parties, pursuant to settlement agreements.

65. CAPITAL STOCK AND ADDITIONAL PAID IN CAPITAL

The holders of common stock are entitled to one vote for each share held. There are no restrictions that limit the Company’s ability to pay dividends on its common stock. The Company has not declared any dividends since incorporation. The Company’s common stock has no par value per common share.

During the year ended December 31, ~~2022~~2023, ~~the~~there ~~Company~~were ~~issued~~no ~~37,803,218 units as part of a private placement valued at CAD$0.09 per unit. Each units consists of one common~~ share ~~and~~issuances ~~one~~pursuant ~~share purchase warrant. Each warrant will entitle the holder thereof~~ to ~~purchase~~private ~~one~~placements ~~common~~or ~~share in the capital of the Company at an~~ exercise ~~price~~ of ~~CAD$0.1075~~stock ~~at any time up to 5 years following the date of issuance~~options. The warrants attached to the private placement are classified as a derivative liability at an initial value of $1,781,779. During the year ended December 31, 2021, there were no share issuances pursuant to private placements.

During the year ended December 31, 2022, the Company issued 37,803,218 units as part of a private placement valued at CAD$0.09 per unit. Each unit consists of one common share and one share purchase warrant. Each warrant will entitle the holder thereof to purchase one common share in the capital of the Company at an exercise price of CAD$0.1075 at any time up to 5 years following the date of issuance. The warrants attached to the private placement are classified as a derivative liability at an initial value of $1,781,779.

During the year ended December 31, 2022, the holders of 900,000 stock options exercised their options for 900,000 shares for $106,989 (CAD$135,000) at an exercise price of CAD$0.15 per share. During the year ended December 31, 2021, the holders of 3,125,000 stock options exercised their options for 3,125,000 shares for $297,815 (CAD$378,575) at an average exercised price of CAD$0.12.

Scandium International Mining Corp. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 (Expressed in US Dollars)

6. CAPITAL STOCK AND ADDITIONAL PAID IN CAPITAL (cont’d…)

Warrants

A summary of warrant activity for the year ended December 31, ~~2022~~2023, are as follows:

Number of warrants

Exercise price

Expiry date

Outstanding December 31, 2021, and 2020

Outstanding December 31, 2023

37,803,218

CAD$

0.1075

Granted

37,803,218

CAD$0.1075

May 20 - June 14, 2027

Outstanding December 31, 2022

37,803,218

CAD$0.1075

A fair value of the derivative liability of $1,781,779 was estimated on the date of the subscription using the Black-Scholes pricing model. For the year ended December 31, ~~2022~~2023, there was a non-cash gain on derivative liability – warrants of $~~525~~921,~~259~~366 and an unrealized foreign exchange ~~gain~~loss of $6114,~~635~~936 resulting in a fair value as at December 31, ~~2022~~2023 of $1283,~~194,885~~373 with the following weighted average assumptions:

	December 31,2022			Issuancedate
	December 31, 2023			December 31, 2022
Exercise price	CAD$~~0.1075~~	0.1075		CAD$~~0.1075~~	0.1075
Stock price	CAD$~~0.07~~	0.025		CAD$~~0.09~~	0.07
Expected term	4.5 years			5 years
Expected term (years)	3.5			4.5
Expected dividend yield		-			-
Expected stock price volatility		91100.7102	%		8591.6971	%
Risk-free interest rate		23.7559	%		2.7375	%

Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

5.	CAPITAL STOCK AND ADDITIONAL PAID IN CAPITAL (cont’d…)

Stock Options

The Company established a stock option plan (the “Plan”) under which it is authorized to grant options to executive officers and directors, employees and consultants and the number of options granted under the Plan shall not exceed 10% of the shares outstanding. Under the Plan, the exercise period of the options may not exceed ten years from the date of grant and vesting is determined by the Board of Directors. The exercise price is determined by the Board of Directors.

Stock option transactions are summarized as follows:

	Stock Options
	Number			Weighted ~~averageexercise~~average exercise price in Canadian $
Outstanding, December 31, 2020		35,100,000		$	0.17
Outstanding, December 31, 2021		34,615,000		$	0.18
Granted		6,175,000			0.18
Exercised		(3,125,000	)		0.12
Expired		(3,535,000	)		0.16
Outstanding, December 31, 2021		34,615,000			0.18
Granted		5,700,000			0.09
Exercised		(900,000	)		0.15
Expired		(4,750,000	)		0.37
Outstanding, December 31, 2022		34,665,000		$	0.14
Number currently exercisable		31,815,000		$	0.14
Granted		11,400,000			0.035
Expired		(6,050,000	)		0.22
Outstanding, December 31, 2023		40,015,000		$	0.10
Number currently exercisable		40,015,000		$	0.10

54As at December 31, 2023, incentive stock options were outstanding as follows:

Scandium International Mining Corp. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 (Expressed in US Dollars)

	Number of Options (outstanding)		Number of Options (exercisable)		Exercise Price in Canadian $		Expiry Date

Options
		3,240,000		3,240,000		0.150	May 9, 2024
		50,000		50,000		0.130	June 24, 2024
		7,450,000		7,450,000		0.065	March 19, 2025
		100,000		100,000		0.075	May 22, 2025
		5,900,000		5,900,000		0.140	November 13, 2025
		6,175,000		6,175,000		0.180	May 23, 2026
		5,700,000		5,700,000		0.090	June 14, 2027
		11,400,000		11,400,000		0.035	November 14, 2028

		40,015,000		40,015,000

~~6. CAPITAL~~As ~~STOCK~~at ~~AND~~December ~~ADDITIONAL~~31, ~~PAID~~2023 INthe ~~CAPITAL~~Company’s outstanding and exercisable stock options have an aggregate intrinsic value of $Nil (~~cont’d…~~2022 - $Nil) .

As at December 31, 2022, incentive stock options were outstanding as follows:

	Number ofOptions (outstanding)		Number ofOptions (exercisable)		ExercisePrice in Canadian $		Expiry Date
Options
		5,700,000		5,700,000		0.225	January 19, 2023*
		350,000		350,000		0.185	August 30, 2023
		3,240,000		3,240,000		0.150	May 9, 2024
		50,000		50,000		0.130	June 24, 2024
		7,450,000		7,450,000		0.065	March 19, 2025
		100,000		100,000		0.075	May 22, 2025
		5,900,000		5,900,000		0.140	November 13, 2025
		6,175,000		6,175,000		0.180	May 23, 2026
		5,700,000		2,850,000		0.090	June 14, 2027
		34,665,000		31,815,000

*Options expired subsequent to December 31, 2022, unexercised.

As at December 31, 2022 the Company’s outstanding and exercisable stock options have an aggregate intrinsic value of $Nil (2021 - $445,466).

Stock-based compensation

During the year ended December 31, ~~2022~~2023, the Company recognized stock-based compensation of $~~198~~287,~~280~~515 (December 31, ~~2021~~2022 - $~~610~~198,~~385~~279) (included in salaries and benefits) in the statement of profit or loss pursuant to stock options granted and vested. There were 511,~~700~~400,000 stock options granted during the year ended December 31, ~~2022~~2023 (December 31, ~~2021~~2022 – 65,~~175~~700,000).

The weighted average fair value of the options granted in the year was CAD$0.06035 (~~2021~~2022 - CAD$0.1806).

The fair value of all compensatory options granted is estimated on grant date using the Black-Scholes option pricing model. The weighted average assumptions used in calculating the fair values of stock options granted in the years ended December 31,~~2022~~2023 and December 31, ~~2021~~2022, are as follows:

	2022			2021
Risk-free interest rate		2.79	%		0.32	%
Expected life	5 years			5 years
Volatility		85.52	%		87.19	%
Forfeiture rate		0.00	%		0.00	%
Dividend rate		0.00	%		0.00	%

~~7. TREASURY~~Scandium ~~STOCK~~ International Mining Corp.

		Number				Amount
Treasury shares, December 31, 2022, 2021, and 2020			1,033,333			$	1,264,194

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

5.	CAPITAL STOCK AND ADDITIONAL PAID IN CAPITAL (cont’d…)

	2023			2022

Risk-free interest rate		3.87	%		2.79	%
Expected life (years)	5			5
Volatility		99.04	%		85.52	%
Forfeiture rate		0.00	%		0.00	%
Dividend rate		0.00	%		0.00	%

6.	TREASURY STOCK

Number

Amount

Treasury shares, December 31, 2023, 2022, and 2021

1,033,333

1,264,194

Treasury shares comprise shares of the Company which cannot be sold without the prior approval of the TSX.

87. ACCRUALS REVERSAL

During the year ended December 31, 2022, the Company recognized a recovery on historical accruals it had recorded totaling $669,733 to related parties (Note 54) and $362,311 to former contractors and consultants pursuant to settlement agreements.

558. SEGMENTED INFORMATION

Scandium International Mining Corp. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 (Expressed in US Dollars)

9. SEGMENTED INFORMATION

The Company’s mineral properties are located in Australia. The Company’s capital assets’ geographic information is as follows:

December 31, 2022	Australia		United States		Total
December 31, 2023	Australia		Total
Mineral property interests		704,053		-704,053		~~704,053~~
	$	704,053	$	-704,053	$	~~704,053~~

December 31, 2021	Australia		United States		Total
December 31, 2022	Australia		Total
Equipment	$	-	$	2,932	$	2,932
Mineral property interests		704,053		704,053
Mineral property interests		704,053		-		704,053
	$	704,053	$	704,053
	$	704,053	$	2,932	$	706,958

~~10. INCOME TAX~~50

Scandium International Mining Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023

(Expressed in US Dollars)

9.	INCOME TAX

A reconciliation of income taxes at statutory rates with the reported taxes is as follows:

	2022			2021
	2023			2022
Loss before income taxes	$	850,596		$	(1,567,032	)
Income before income taxes	$	47,204		$	850,596
Expected income tax (recovery)		~~221~~13,000			~~(407~~221,000	)
Change in statutory, foreign exchange rates, and other		~~(330~~631,000	)		17(330,000	)
Permanent difference		(~~350~~171,000	)		~~154~~(350,000	)
Impact of foreign exchange		~~171,000~~-			~~(38~~171,000	)
Share issuance costs		(13,000	)		-(13,000	)
Adjustment to prior years provision versus statutory tax returns		~~115~~(258,000	)		~~119~~115,000
Change in unrecognized deductible temporary differences		~~186~~(202,000	)		~~155~~186,000
Total Income tax expense (recovery)	$	-		$	-

The significant components of the Company’s deferred tax assets that have not been included on the consolidated statement of financial position are as follows:

	2022			2021
	2023			2022
Deferred Tax Assets (Liabilities)
Exploration and evaluation assets	$	1,~~761~~871,000		$	1,~~829~~761,000
Property and equipment		~~118~~136,000			~~105~~118,000
Share issuance costs		108,000			-10,000
Derivative liability		~~311~~77,000			-311,000
Allowable capital losses		1,~~773~~882,000			1,~~891~~773,000
Non-capital losses available for future periods		6,~~629~~312,000			6,~~591~~629,000
		10,602,000			10,416,000
		10,286,000			10,602,000
Unrecognized deferred tax assets		(10,~~602~~286,000	)		(10,~~416~~602,000	)
Net deferred tax assets	$	-		$	-

The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included on the consolidated statement of financial position are as follows:

2022

Expiry DateRange

2021

Expiry DateRange

2023

Expiry Date Range

2022

Expiry Date Range

Temporary Differences

Exploration and evaluation assets

67,~~640~~012,000

No expiry date

~~7,036,000~~$

6,640,000

~~No expiry date~~

No expiry date

Property and equipment

~~455~~514,000

No expiry date

~~403,000~~

455,000

~~No expiry date~~

No expiry date

Derivative liability

1283,~~195,~~000

2027

1,195,000

-2027

Share issuance costs

3929,000

2042 to 2046

39,000

-2042 to 2046

Allowable capital losses

6,~~818~~969,000

No expiry date

~~7,274,000~~

6,818,000

~~No expiry date~~

No expiry date

Non-capital losses available for future periods

2423,~~327~~947,000

~~2021~~2028 to ~~2042~~2043

~~25,349,000~~

24,327,000

~~2019 to 2040~~

2028 to 2042

1110. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

During the year ended December 31, 2022, the Company recognized $1,781,779 as a derivative liability associated with warrants attached to a private placement financing as a non-cash transaction. There were no significant non-cash transactions during the year ended December 31, ~~2022, and 2021~~2023.

There were no amounts paid for taxes and interest in the years ended December 31, ~~2022~~2023, and December 31, ~~2021~~2022.

5651

Filing Compare · SCANDIUM INTERNATIONAL MINING CORP.