NexMetals Mining Corp. Income Taxes Disclosure

17. INCOME TAXES

 

The reported recovery of income taxes differs from amounts computed by applying the Federal statutory income tax rates to the reported loss before income taxes as follows:

 SCHEDULE OF FEDERAL STATUTORY INCOME TAX RATES

		Year ended December 31,
		2025 $				Percent %				2024 $				Percent %
Net loss for the year before tax			(59,086,325	)							(42,420,283	)
Canadian Federal Statutory tax rate			(8,862,949	)			15.00				(6,363,042	)			15.00
Local income taxes, net of federal benefit			(2,692,067	)			4.56				(1,474,885	)			3.48
Foreign tax effects
Barbados
Statutory tax rate difference between Barbados and Canada			159,853				(0.27	)			196,625				(0.46	)
Change in valuation allowance			92,547				(0.16	)			113,835				(0.27	)
Botswana
Statutory tax rate difference between Botswana and Canada			(2,438,733	)			4.13				(1,926,699	)			4.54
Change in valuation allowance			7,664,589				(12.97	)			6,510,888				(15.35	)
Other adjustments			-				-				(455,547	)			1.07
Effect of changes in tax laws or rates in the year			(61,107	)			0.10				-				-
Change in valuation allowance			3,893,937				(6.59	)			2,847,454				(6.71	)
Non-taxable or non-deductible items
Non-deductible (non-taxable) items			(40,068	)			0.07				33,258				(0.08	)
Loss on term loan extinguishment			1,371,088				(2.32	)			-				-
Stock-based compensation			912,910				(1.55	)			518,113				(1.22	)
Deferred tax recovery			-				-				-				-

 

The Company has recorded a valuation allowance as the Company believes it is not more likely than not that the deferred tax assets will be realized in the foreseeable future. The Company’s deferred tax assets and liabilities are comprised of the following:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

		As at December 31,
		2025 $				2024 $
Deferred tax assets
Non-capital losses available for carry-forward			25,676,838				15,499,405
Property, plant and equipment			688,645				717,416
Resource deductions			1,634,132				1,142,853
Non-deductible interest			2,272,514				-
DSU liability			100,181				249,541
Share issuance costs			3,601,065				1,282,390
Other			95,122				-
Deferred tax assets			34,068,497				18,891,605
Deferred tax liabilities
Term Loan			-				(152,537	)
Property, plant and equipment			(1,265,517	)			(715,673	)
Deferred tax liabilities			(1,265,517	)			(868,210	)
Net deferred tax asset			32,802,980				18,023,395
Valuation allowance			(32,802,980	)			(18,023,395	)
Deferred tax asset/(liability)			-				-

 

 

 

Notes to the Consolidated Financial Statements

For the year ended December 31, 2025 and 2024

(Expressed in Canadian dollars)

 

The Company has Canadian non-capital losses of approximately $35,680,514 (2024 - $25,742,976) available for deduction against future taxable income, which if not utilized will expire between the years of 2039 and 2045. The Company also has Barbados losses of approximately $6,918,708 (2024 - $5,531,343) which expire between 2029 and 2032. Losses in Botswana of $71,695,499 (2024 - $38,060,423) do not expire.

 

The potential tax benefit of the non-capital losses has not been recognized in these consolidated financial statements. The non-capital losses that have not been recognized expire as follows:

 SCHEDULE OF NON-CAPITAL LOSSES

		Canada $				Botswana $				Barbados $
2029			-				-				1,365,227
2030			-				-				1,832,617
2031			-				-				2,070,943
2032			-				-				1,649,921
2039			101,573				-				-
2040			351,131				-				-
2041			2,756,891				-				-
2042			3,402,293				-				-
2043			7,624,794				-				-
2044			6,996,987				-				-
2045			14,446,845				-				-
Indefinite			-				71,695,499				-
Operating loss carryforwards			35,680,514				71,695,499				6,918,708