Financial StatementsQ1 2026

See accompanying notes to condensed interim consolidated financial statements.

(expressed in thousands of Canadian dollars)

See accompanying notes to condensed interim consolidated financial statements.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(expressed in thousands of Canadian dollars)

See accompanying notes to condensed interim consolidated financial statements.

See accompanying notes to condensed interim consolidated financial statements.

Page 5 of 25

(expressed in thousands of Canadian dollars)

1. Nature of Operations

   Electra Battery Materials Corporation (the "Company", "Electra") was incorporated on July 13, 2011 under the Business Corporations Act of British Columbia (the "Act"). On September 4, 2018, the Company filed a Certificate of Continuance into Canada and adopted Articles of Continuance as a Federal Company under the Canada Business Corporations Act (the "CBCA"). On December 6, 2021, the Company changed its corporate name from First Cobalt Corp. to Electra Battery Materials Corporation. The Company is in the business of producing battery materials for the electric vehicle supply chain. The Company is currently in the process of building a refinery focused on the supply of cobalt, nickel and recycled battery materials.

   Electra is a public company which is listed on the Toronto Venture Stock Exchange ("TSXV") (under the symbol ELBM) and on the NASDAQ (under the symbol ELBM). The Company's registered office is 40 Temperance Street, Suite 3200, Bay Adelaide Centre - North Tower, Toronto, Ontario, Canada M5H 0B4 and the corporate head office is located at 133 Richmond Street W, Suite 602, Toronto, Ontario, M5H 2L3.

   The Company is focused on building a North American integrated battery materials facility for the electric vehicle supply chain. The Company is in the process of constructing its expanded hydrometallurgical cobalt refinery (the "Refinery") in Ontario, Canada, assessing the various optimizations and modular growth scenarios for a recycled battery material (known as black mass) program, and exploring and developing its mineral properties.

   Going Concern Basis of Accounting

   The accompanying condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future, and, as such, the condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

   The Company has recurring net operating losses and negative cash flows from operations. As of March 31, 2026 and December 31, 2025, the Company had an accumulated deficit of $380,215 and $408,357, respectively. The Company's recurring losses from operations and negative cash flows raise substantial doubt about the Company's ability to continue as a going concern. The global economy, including the financial and credit markets, have experienced volatility and disruptions, including fluctuating inflation rates and interest rates, foreign currency impacts, declines in consumer confidence, and declines in economic growth. These factors point to uncertainty about economic stability, and the severity and duration of these conditions on our business cannot be accurately predicted, and the Company cannot assure that it will remain in compliance with the financial covenants contained within its credit facilities.

   Management monitors recent developments in relation to global tariffs and does not anticipate material impacts on the financial position of the Company.

   In order to continue its operations, the Company must achieve profitable operations and/or obtain additional equity or debt financing. Until the Company achieves profitability, management plans to fund its operations and capital expenditures with cash on hand, borrowings, and issuance of capital stock. Until the Company generates revenue at a level to support its cost structure, the Company expects to continue to incur operating losses and net cash outflows from operating activities.

   (expressed in thousands of Canadian dollars)

   During the year ended December 31, 2025, the Company completed private placements and raised US$38,000 in gross proceeds from issuance of common shares and warrants, as detailed in Note 12 and completed restructuring transaction with its 2028 and 2027 noteholders. In addition, during the three months ended March 31, 2026, the Company raised proceeds of approximately $6,268, net of transactions costs under its At The Market Offering Agreement ("ATM").

   Although the Company has historically been successful in obtaining financing in the past, there can be no assurances that the Company will be able to obtain adequate financing in the future. These condensed interim consolidated financial statements do not include the adjustments to the amounts and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. These adjustments may be material.

2. Material Accounting Policies and Basis of Preparation

   Basis of Preparation and Statement of Compliance

   The Company prepares its condensed interim consolidated financial statements in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board ("IASB"). These condensed interim consolidated financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting ("IAS 34"). These condensed interim consolidated financial statements should be read in conjunction with our most recent annual financial statements. These condensed interim consolidated financial statements follow the same accounting policies, estimates, and methods of application as our most recent annual financial statements.

   All amounts other than share and per share information on the condensed interim consolidated financial statements are presented in thousands of Canadian dollars unless otherwise stated. The condensed interim consolidated financial statements were authorized for issue by the Board of Directors on May 13, 2026.

3. New Accounting Standards Issued

   A number of new standards, and amendments to standard and interpretations, are not yet effective for the current period, and have not been early adopted in preparing these condensed interim consolidated financial statements.

   In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 Classification and Measurement of Financial Instruments. These amendments clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system; add new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environment, social and governance targets); and update the disclosures for equity instruments designated at fair value through other comprehensive income. These amendments apply to annual reporting periods beginning on or after January 1, 2026. The Company adopted these amendments on January 1, 2026 and they did not have material impact on the Company's consolidated financial statements.

   In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements to improve reporting of financial performance. IFRS 18 replaces IAS 1 Presentation of Financial Statements. It carries forward many requirements from IAS 1. IFRS 18 applies to annual reporting periods beginning on or after January 1, 2027. Earlier

   (expressed in thousands of Canadian dollars)

   application is permitted. The standard must be applied retrospectively with restatement of comparative information. The key new concepts introduced in IFRS 18 relate to: the structure of the statement of profit or loss; required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity's financial statements; and enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes. The Company is currently assessing the impact and efforts related to adopting IFRS 18. The Company expects the standard will primarily affect the presentation and disclosure of information within these consolidated financial.

   Other accounting standards or amendments to existing accounting standards that have been issued but have future effective dates and are not expected to have a significant impact on the Company's consolidated financial statements.

4. Receivables

   		March 31, 2026	December 31, 2025
   GST receivables	$	725	$	505
   Grant receivables		50		146
   Other		15		15
   	$	790	$	666

5. Property, Plant and Equipment

   Cost	Property, Plant and Equipment		Construction in Progress		Right-of-use Assets		Total
   January 1, 2025	$	7,072	$	43,987	301	$	51,360
   Additions during the period		364		4,128			4,492
   Transfers to capital long-term prepayments		-		139			139
   Asset retirement obligation - Change in estimate		(646)		-			(646)
   Balance December 31, 2025	$	6,790	$	48,254	301	$	55,345
   Additions during the period		-		3,517			3,517
   Asset retirement obligation - Change in estimate		(109)		-			(109)
   Balance March 31, 2026	$	6,681	$	51,771	301	$	58,753
   Accumulated Depreciation
   January 1, 2025	$	10	$	-	161	$	171
   Change for the period		38		-	58		96
   Balance December 31, 2025	$	48	$	-	219	$	267
   Change for the period		18		-	14		32
   Balance March 31, 2026	$	66	$	-	233	$	299
   Net Book Value
   Balance December 31, 2025	$	6,742	$	48,254	82	$	55,078
   Balance March 31, 2026	$	6,615	$	51,771	68	$	58,454

   Majority of the Company's property, plant, and equipment assets relate to the Refinery located near Temiskaming Shores, Ontario, Canada. The DoD retains title to certain construction in progress assets (Note 8) the remaining property, plant and equipment and construction in progress are pledged as security for the term loan (Note 10).

   (expressed in thousands of Canadian dollars)

6. Exploration and Evaluation Assets

   	January 1, 2025	Foreign Exchange	December 31, 2025	Foreign Exchange	March 31, 2026
   Idaho, USA	93,200	(4,424)	88,776	1,509	90,285

   All of the Iron Creek mineral properties are pledged as security for the term loan. Upon successful commissioning of the Refinery, the Iron Creek mineral properties will be released from the term loan security package.

   Certain claims relating to the Iron Creek properties were acquired by the Company against earn-in and option agreements entered with the original owners of such claims. These agreements provide a working interest in the property to the Company, upon making certain milestone payments and/or incurring certain expenditures on the property. The claims are also subject to future net smelter royalty ("NSR") payments.

7. Asset Retirement Obligation

   As at March 31, 2026, the estimated cost of closure is $3,414. The Company maintains a surety bond for $3,450 as financial assurance based on the October 2021 closure plan.

   The full estimated closure cost in the latest closure plan incorporated a number of new disturbances that have yet to take place, such as new roadways, new chemicals on site, and a new tailings area.

   The latest closure plan also included cost updates relating to remediating disturbances that existed at March 31, 2026. The following assumptions were used to calculate the asset retirement obligation:

   • Discounted cash flows of $2,268 (December 31, 2025 - $2,289);

   • Closure activities date in year 2073 (December 31, 2025 - 2073);

   • Risk-free discount rate of 3.90% (December 31, 2025 - 3.84%); and

   • Long-term inflation rate of 3.0% ((December 31, 2025 - 3.0%).

     The continuity of the asset retirement obligation at March 31, 2026 and December 31, 2025 are as follows:

     		March 31, 2026		December 31, 2025
     Balance at January 1,	$	2,289	$	2,842
     Change in estimate from discounting and estimate of costs		(109)		(646)
     Accretion		88		93
     Balance	$	2,268	$	2,289

8. Long-Term Government Loan Payable, Grants and Awards

   On November 24, 2020, the Company entered into a contribution agreement with the Ministry of Economic Development and Official Languages as represented by the Federal Economic Development Agency for Northern Ontario ("FedNor") for up to $5,000 financing related to the recommissioning and expansion of the Refinery in Ontario. The contribution was in the form of debt bearing a 0% interest rate and funded in proportion to certain Refinery construction activities. The Company received approval for an additional $5,000 funding under the agreement on December 27, 2023, which was fully received during the year ended December 31, 2024.

   Once construction is completed, the cumulative balance borrowed will be repaid in 19 equal quarterly instalments. The loan was discounted using a market rate between 7.0% and 17.1% with the resulting difference between the amortized cost and cash proceeds recognized as Government Grant. The FedNor loan required completion of the construction on or before June 30, 2025. On July 14, 2025, the completion of construction required by FedNor was extended to June 30, 2027 and governmental loans repayment commencement date was changed from June 2026 to June 2028.

   The Company accounted for the extension of the repayment commencement date as an extinguishment of the original financial liability and recognized a new financial liability for the new extended loans. The extinguishment of original loans and recognition of amended loans resulted in a gain on extinguishment of

   $3,311, which has been recognized in Other non-operating loss in the statement of loss and other comprehensive loss. The fair value of the amended loan was estimated using fair market interest rate of 16%.

   On June 10, 2024, the Company received $5,000 in contribution funding from Natural Resources Canada ("NRCan") to support the development of its proprietary battery materials recycling technology.

   On August 19, 2024, the Company was awarded US$20,000 by the U.S. Department of Defense ("DoD"). The award was made pursuant to Title III of the Defense Production Act ("DPA") to expand domestic production capability.

   Reimbursement received from DoD as at March 31, 2026 totals $3,124 (December 31, 2025 - $642). Once the conditions of the agreement are met the deferred government grant will be derecognized against the corresponding assets.

   On March 31, 2026, the Company signed a binding investment agreement (the "Investment") with the Government of Canada under the Strategic Resource Fund ("SRF"). The Investment provides for total federal funding of up to $20,000 toward eligible project costs, consisting of a non-repayable contribution of 25% of the total funding and a repayable contribution of up to 75%. The repayable portion is subject to a 15-year repayment term commencing in 2030 and bears interest based on a formula tied to the Company's financial performance and other factors.

   The following table sets out the balances of Government Loan and Government Grant received at March 31, 2026 and December 31, 2025:

   Government Loan			Government Grant			Total
   Balance at January 1, 2025	$	7,824	$	3,124	$	10,948
   FedNor Loan (Nickel Study) - Payment		(27)		-		(27)
   Accretion		368		-		368
   Extinguishment of government loans		(8,017)		-		(8,017)
   Recognition of new government loans due to extension of repayment commencement date		4,706		-		4,706
   Accretion		342		-		342
   Balance at December 31, 2025	$	5,196	$	3,124	$	8,320
   Accretion		191		-		191
   Balance at March 31, 2026	$	5,387	$	3,124	$	8,511

9. Royalty

   On October 22, 2025, the Company entered into amended and restated royalty agreements resulting in an extinguishment of the previous royalty liability. The fair value of the amended Royalty was estimated at October 22, 2025 using a discounted cash flow model. The key inputs included the market interest rate of 11.125% and cash flows estimates of future operating and gross revenues. The loss on extinguishment amounting to $1,023 was included in other non-operating income (expense) in the condensed interim consolidated statement of loss and other comprehensive loss.

   		March 31, 2026	December 31, 2025
   Balance at January 1,	$	2,338	$	1,283
   Foreign exchange		-		(37)
   Accretion		-		58
   Extinguishment of royalty		-		(1,304)
   Foreign exchange		30		(37)
   Recognition of new royalty due to amendment		-		2,327
   Accretion		61		48
   Balance	$	2,429	$	2,338

10. Term Loan

    The Term Loan issued in debt exchange of the convertible notes had an initial principal amount of $38,902 (US$27,795) and matures on October 22, 2028. The Term Loan bears interest on the unpaid principal amount at 8.99% per annum if paid by cash with payment every quarter.

    The Company may elect to have, with respect to interest accrued on and to each interest payment date, all interest on the Term Loan being added to the outstanding principal amount of the Term Loan at a rate equal to 11.125% per annum (such capitalized interest, "PIK Interest"). All such PIK Interest shall thereafter constitute principal and bear interest on the terms of the Term Loan. The Term Loan is secured by a first priority security interest (subject to customary permitted liens) in substantially all of the Company's assets.

    The Term Loan is subject to customary events of default and basic positive and negative covenants. The Company is required to maintain a minimum liquidity balance of US$15,000 until it secures signed, binding commitments from the Government of Canada and from the Government of Ontario, after which the requirement is US$2,000. The Term Loan was measured at fair value on the extinguishment date of October 22, 2025 and was subsequently classified and measured at amortized cost. The fair value of the Term Loan on October 22, 2025 was estimated at $37,258 based on the finite difference valuation model, which included 12.8% market interest rate.

    The Term Loan is accreted through the term of the Term Loan using effective interest rate of 12.8%. During the three months ended March 31, 2026, the Company recorded $1,101 of interest and $116 accretion expenses (For the three months ended March 31, 2025 - $Nil) and gain in foreign exchange of $136.

11. US Warrants

    2026 Warrants

    On April 3 and April 14, 2025, the Company issued 3,125,000 ("2026 Warrants") to subscribers in a non-brokered private placement (Note 12). The warrant exercise price is denominated in US dollars, a currency different than the Company's functional currency.

    Therefore, the warrants were classified as a financial liability in the condensed interim consolidated statements of financial position. During the year ended December 31, 2025, the fair value of the warrants was estimated using the Black Scholes Option Pricing Model, using the following main inputs: volatility of 85% on issuance date, 61.79% - 121.59% on exercise dates, and 125% - 127.6% on December 31, 2025, share price of $1.38

    - $1.50 on issuance date, $1.37 - $6.55 on exercise dates, and $1.11 on December 31, 2025 and risk-free rate of 2.40% - 2.58% on issuance date, 2.38% - 2.48% on exercise date, and 2.55% December 31, 2025, respectively.

    The fair value of the warrants was estimated using the Black Scholes Option Pricing Model using the following main inputs on March 31, 2026: volatility of 49.4% - 52.5%, share price of $0.81 and risk-free rate of 2.79%.

    The table below presents changes in 2026 Warrants during the year ended December 31, 2025 and for the three months ended March 31, 2026:

    	Number of warrants		Fair value
    Balance at January 1, 2025	-	$	-
    Issued	3,125,000		1,150
    Changes in fair value	-		8,112
    Exercised	(2,481,786)		(9,066)
    Balance at December 31, 2025	643,214	$	196
    Changes in fair value	-		(195)
    Balance at March 31, 2026	643,214	$	1

    The changes in fair value amounting to $(195) (December 31, 2025 - $8,112) was included in changes in fair value of US warrants in the condensed interim consolidated statement of loss and other comprehensive loss.

    Pre-Funded Warrants

    The fair value of the Pre-Funded Warrants is the same as the Company's share price as at the corresponding valuation date. The table below presents changes in Pre-Funded Warrants during the year ended December 31, 2025 and for the three months ended March 31, 2026:

    	Number of warrants		Fair value
    Balance at January 1, 2025	-	$	-
    Issued	31,735,657		73,309
    Changes in fair value	-		(36,698)
    Exercised	(5,330,000)		(7,302)
    Balance at December 31, 2025	26,405,657	$	29,309
    Changes in fair value	-		(7,921)
    Balance at March 31, 2026	26,405,657	$	21,388

    The changes in fair value amounting to $(7,921) (December 31, 2025 - $(36,698)) was included in changes in fair value of US warrants in the condensed interim consolidated statement of loss and other comprehensive loss.

    New Equity Offering Warrants

    The fair value of the warrants was estimated using the Black Scholes Option Pricing Model using the following main inputs on March 31, 2026: volatility of 84.4%, share price of $0.81 and risk-free rate of 2.79%.

    The table below presents changes in New Equity Offering Warrants during the year ended December 31, 2025 and for the three months ended March 31, 2026:

    	Number of warrants		Fair value
    Balance at January 1, 2025	-	$	-
    Issued equity exchange	55,041,712		79,562
    Issued in equity offering	46,000,000		18,597
    Changes in fair value	-		(46,006)
    Balance at December 31, 2025	101,041,712	$	52,153
    Changes in fair value	-		(25,192)
    Balance at March 31, 2026	101,041,712	$	26,961

    The changes in fair value amounting to $(25,192) (December 31, 2025 - $(46,006)) was included in changes in fair value of US warrants in the consolidated statement of loss and other comprehensive loss.

    2028 Warrants

    On October 22, 2025, the Company cancelled the previously issued 2028 Warrants as part of the exchange agreement in which the convertible notes were equitized.

    (expressed in thousands of Canadian dollars)

    The table below presents changes in 2026 Warrants, Pre-Funded Warrants and New Equity Offering Warrants during the year ended December 31, 2025 and for the three months ended March 31, 2026:

    	Number of warrants		Fair value
    Balance at January 1, 2025	-	$	-
    Issued equity exchange	135,902,369		172,618
    Changes in fair value	-		(74,592)
    Exercised	(7,811,786)		(16,368)
    Balance at December 31, 2025	128,090,583	$	81,658
    Changes in fair value	-		(33,308)
    Balance at March 31, 2026	128,090,583	$	48,350

12. Shareholder's Equity

    1. Authorized Share Capital

       The Company is authorized to issue an unlimited number of common shares without par value. As at March 31, 2026, the Company had 103,738,331 (December 31, 2025 - 98,982,239) common shares outstanding.

    2. Issued Share Capital

       During the three months ended March 31, 2026, the Company issued common shares as follows:

       • The Company issued 4,734,605 common shares at a weighted average price of $1.38 for gross proceeds of approximately $6,535 under its At The Market Offering Agreement ("ATM"). The transaction costs associated with these issuances were $267. On February 20, 2026, the Company upsized the ATM program to US$25,000, providing additional financial flexibility to fund working capital and expenditures related to refinery commissioning.

         During the year ended December 31, 2025, the Company issued common shares as follows:

       • 5,330,000 Pre-Funded Warrants were exercised for a nominal exercise price (Note 11). The exercised Pre-Funded Warrants were measured at $7,302 on the exercise date which was recognized in share capital in the consolidated statements of shareholders' equity.

       • 2,481,786 2026 Warrants were exercised for total proceeds of $4,894. The exercised 2026 Warrants were measured at $9,066 on the exercise date which was recognized in share capital in the consolidated statements of shareholders' equity.

       • 65,544 broker warrants were exercised for total proceeds of $103. The exercised 2026 Warrants were measured at $42 on the exercise date which was recognized in share capital in the consolidated statements of shareholders' equity.

       • The Company issued 26,975 and 15,340 common shares for the exercise of restricted shares and stock options for total proceeds of $39.

       • On April 14, 2025, the Company closed the first (occurring on April 3, 2025) and second tranches of its non-brokered private placement, raising aggregate gross proceeds of US$3,500 ($4,908). An aggregate of 3,125,000 units (each, a "Unit") were issued at a price of US$1.12 per Unit under the private placement. Each Unit consists of one common share in the capital of the Company and one transferable common share purchase warrant ("2026 Warrants"), with each warrant entitling the holder to purchase one common share of the Company at a price of US$1.40 at any time for a period of eighteen (18) months following the issue date. In connection with the closing of the Offering, the Company incurred aggregate finders' fees of $338, including $109 representing the value of 183,333 non-transferable finders' warrants. Each finders' warrant is exercisable to acquire one common share of the Company at an exercise price of US$1.12 until October 14, 2026. Finders' warrants were measured at $109 using the Black-Scholes option pricing model with the following main assumptions: share price $1.50, volatility 85.0%, risk free rate 2.58%.

         The gross proceeds were allocated between common shares and 2026 Warrants, based on relative fair values and 2026 Warrants were allocated $1,150 on initial recognition. The residual balance of $3,759 was then allocated to the equity component (common shares issued). The transaction costs of $447 were allocated proportionately between the 2026 Warrants and the common shares. Transaction costs allocated to the common shares were accounted for as a deduction from equity of $338.

       • Concurrently with the completion of the Equity Exchange, the Company completed New Equity Offering of 46,000,000 New Equity Offering Units, each consisting of one common share and one New Equity Offering Warrants to purchase one common share at a price of US$0.75 per New Equity Offering Unit. Each New Equity Offering Warrants or the 2028 Warrants entitling the holder thereof to purchase one common share at a price of US$1.25 for a period commencing on the date that is 60 days following the completion of the offering until October 22, 2028, Note 11.

    The Company incurred an aggregate cash commission of US$1,851 to the agents of the New Equity Offering. The Company also issued an aggregate of 2,416,884 non-transferable warrants to purchase common shares to the agents (the "Broker Warrants"). Each Broker Warrant entitles the holder to acquire one Common Share at US$0.75 per share, at any time on or before the date that is 36 months following the closing date of the New Equity Offering. Broker warrants were measured at $4,604 using the Black-Scholes option pricing model with the following main assumptions: share price $2.31, volatility 124.31%, risk free rate 2.39%.

    The gross proceeds were allocated between common shares and New Equity Offering Warrants, based on relative fair values and New Equity Offering Warrants were allocated $18,597 on initial recognition. The residual balance of $29,720 was then allocated to the equity component (common shares issued). The transaction costs of $8,240 were allocated proportionately between the New Equity Offering Warrants and common shares. Transaction costs allocated to the equity component were accounted for as a deduction from equity of $5,078.

13. Share Based Payments

    The Company adopted a long-term incentive plan ("LTIP") on December 20, 2024, whereby it can grant stock options, restricted share units ("RSUs"), Deferred Share Units ("DSUs"), and Performance Share Units ("PSUs") to directors, officers, employees, and consultants of the Company. The maximum number of shares that may be reserved for issuance under the LTIP is 3,150,000.

    In 2024, the Company was approved to implement an employee share purchase plan ("ESPP") to provide its employees an incentive to promote performance and growth potential over the long-term. The Company has reserved 250,000 common shares that can be issued under the ESPP.

    The grant date fair value is determined using the Black-Scholes Option Pricing Model and this value is recognized as an expense over the vesting period. DSUs generally vest in one year but cannot be exercised until the holder ceases to be a director or officer of the Company. DSUs are valued based on the market price of the Company's common shares on the grant date. PSUs generally vest over 18 - 24 months if certain performance metrics have been achieved. They are valued based on the market price of the Company's shares on the grant date and this value is expensed over the vesting period. RSUs generally vest over 12 - 36 months. They are valued based on the market price of the Company's shares on the grant date and this value is expensed over the vesting period.

    1. Stock Options

       During the three months ended March 31, 2026:

       • On March 31, 2026, the Company issued 110,000 incentive stock options to an employee and consultant. The stock options are exercisable for three years at $0.81 and will vest in two equal tranches, on the first and second anniversary of the grant date. The fair value of the options at the date of the grant was $65 using the Black-Scholes Option Pricing Model, assuming a risk-free rate of 2.87% per year, an expected life of 3 years, expected volatility based on historical prices of 125%, no expected dividends and a share price of $0.81. The grant of these stock options are conditional upon approval by the shareholders and TSX Venture Exchange of amendments to increase the participation limits under the LTIP.

       • During the three months ended March 31, 2026, 21,487 DSUs were exercised.

         During the year ended December 31, 2025:

       • On October 29, 2025, upon approval by shareholders at the annual general meeting on June 24, 2025, Electra issued 2,669,000 incentive stock options, 179,000 RSUs, and 271,000 DSUs to certain directors, officers, employees, and contractors. The stock options are exercisable for three years at

         $1.97 and will vest in two equal tranches, on the first and second anniversary of the grant date. The fair value of the options at the date of the grant was $3,835 using the Black-Scholes Option Pricing Model, assuming a risk-free rate of 2.36% per year, an expected life of 3 years, expected volatility based on historical volatility of 125%, no expected dividends and a share price of $1.97.

         • The RSUs will vest in two equal tranches on the first and second anniversaries of the grant date and may be settled in cash or shares at the discretion of the Company. The DSUs will be settled in shares when the holder ceases to serve as a director.

         • During the year ended December 31, 2025, 15,340 stock options were exercised for total proceeds of $39.

         • On January 1, 2025, the Company granted 125,000 stock options at an exercise price of $2.60 that will vest in two equal tranches on the first and second anniversaries of the grant date. The fair value of the options at the date of grant was $190 using the Black-Scholes Option Pricing Model, assuming a risk-free rate of 2.87% per year, expected life of 3 years, expected volatility based on historical volatility of 90.0%, no expected dividends and a share price of $2.60.

    The changes in incentive stock options outstanding are summarized as follows:

    Exercise price			Number of shares issued or issuable on exercise
    Balance at January 1, 2025	$	4.61	1,170,363
    Granted		2.00	2,794,000
    Expired		12.94	(21,297)
    Exercised (Share price at $2.31)		2.57	(15,340)
    Forfeited / Cancelled		1.97	(16,000)
    Balance at December 31, 2025	$	2.72	3,911,726
    Granted		0.81	110,000
    Forfeited / Cancelled		2.04	(526,500)
    Balance at March 31, 2026	$	2.78	3,495,226

    Incentive stock options outstanding and exercisable (vested) at March 31, 2026 are summarized as follows:

    Options Outstanding						Options Exercisable
    Exercise price		Number of shares issuable on exercise	Weighted average remaining life (Years)	Weighted average exercise price		Number of shares issuable on exercise	Weighted average exercise price
    $	0.81	110,000	3.00	$	0.81	-	$	0.81
    	1.97	2,189,000	2.58		1.97	-		1.97
    	2.00	16,667	1.79		2.00	11,111		2.00
    	2.60	62,500	0.16		2.60	62,500		2.60
    	3.24	746,916	1.47		3.24	746,917		3.24
    	3.28	250,000	1.41		3.28	250,000		3.28
    	9.60	56,423	0.74		9.60	56,423		9.60
    	18.52	15,000	1.08		18.52	15,000		18.52
    	21.60	41,428	0.74		21.60	41,428		21.60
    	24.84	7,292	0.04		24.84	7,292		24.84
    Total		3,495,226	2.19	$	2.78	1,190,671	$	4.47

    During the three months ended March 31, 2026, the Company expensed $761 (the three months ended March 31, 2025 - $327) for options valued at share prices $0.81 to $9.60 as share-based payment expense.

    (expressed in thousands of Canadian dollars)

    Incentive stock options outstanding and exercisable (vested) at December 31, 2025 are summarized as follows:

    Options Outstanding						Options Exercisable
    Exercise price		Number of shares issuable on exercise	Weighted average remaining life (Years)	Weighted average exercise price		Number of shares issuable on exercise	Weighted average exercise price
    $	1.97	2,653,000	2.83	$	1.97	-	$	1.97
    	2.00	16,667	2.04		2.00	-		2.00
    	2.60	125,000	2.00		2.60	-		2.60
    	3.24	746,916	2.12		3.24	369,955		3.24
    	3.28	250,000	1.66		3.28	250,000		3.28
    	9.60	56,423	1.19		9.60	37,616		9.60
    	12.84	15,000	1.86		12.84	15,000		12.84
    	21.60	41,428	1.05		21.60	41,428		21.60
    	24.84	7,292	0.29		24.84	7,292		24.84
    Total		3,911,726	2.52	$	2.72	721,291	$	5.06

    During the year ended December 31, 2025, the Company expensed $1,412 (the year ended December 31, 2024 - $1,212) for options valued at share prices $1.94 to $24.84 as share-based payment expense.

    (b) DSUs, RSUs and PSUs

    During the three months ended March 31, 2026, the Company has expensed $234 (the year ended December 31, 2025 - $254) for DSUs and $44 (the year ended December 31, 2025 - $41) for RSUs as share-based payment expense.

    Deferred Shares Units

    The Company's DSUs outstanding at March 31, 2026 and December 31, 2025 were as follows:

    Number of Units	March 31, 2026	December 31, 2025
    Balance at January 1,	428,085	157,085
    Granted	159,959	271,000
    Exercised	(21,487)	-
    Balance	566,557	428,085

    The grant of DSUs are conditional upon approval by the shareholders and TSX Venture Exchange of amendments to increase the participation limits under the LTIP.

    Restricted Share Units

    The Company's RSUs outstanding at March 31, 2026 and December 31, 2025 were as follows:

    Number of Units	March 31, 2026	December 31, 2025
    Balance at January 1,	179,000	26,975
    Granted	-	179,000
    Exercised	-	(26,975)
    Balance	179,000	179,000

    Performance Share Units

    There were no PSUs outstanding at March 31, 2026 and December 31, 2025.

14. Other Non-Operating Income (Expense)

    The Company's Other Non-Operating Income (Expense) comprises the following for the three months ended March 31, 2026 and 2025:

    For the three months ended March 31
    		2026		2025
    Foreign exchange gain	$	248	$	91
    Interest expense		(1,380)		(3,859)
    Realized gain on marketable securities		-		1
    Other non-operating expense		(191)		(94)
    	$	(1,323)	$	(3,861)

15. Income (Loss) Per Share

    The following table sets forth the computation of basic and diluted loss per share for the three months ended March 31, 2026 and 2025:

    For the three months ended March 31
    		2026		2025
    Numerator
    Net income (loss) for the period - basic	$	28,142	$	(12,680)
    Deduct - Change in fair value of pre-funded warrants		(7,920)		-
    Net income (loss) for the period - adjusted for the effect of dilution		20,222		(12,680)
    Denominator
    Basic - weighted average number of shares outstanding	102,156,057		14,819,621
    Income (loss) Per Share - Basic	$	0.28	$	(0.86)
    Pre-funded warrants		26,405,657		-
    DSUs		353,156		-
    Stock options		31,565		-
    Diluted - weighted average number of shares outstanding	128,946,435		14,819,621
    Income (loss) Per Share - Diluted	$	0.16	$	(0.86)

    Conversion option, share purchase warrants (other than prefunded warrants), certain stock options, RSUs and certain DSUs were excluded from the calculation of diluted weighted average number of common shares outstanding for the three months ended March 31, 2025 as they were anti-dilutive.

16. Management of Capital

    The Company's objectives when managing capital are to ensure it has sufficient cash available to support its future Refinery expansion and exploration activities; and ensure compliance with debt covenants under the convertible notes arrangement.

    The Company manages its capital structure, consisting of cash and cash equivalents, share capital and debt (convertible notes and loans), and will make adjustments depending on the funds available to the Company for its future Refinery expansion and exploration activities. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business.

    Management reviews its capital management approach on an ongoing basis and believes that this approach, given the size of the Company, is reasonable. Other than the minimum liquidity balance covenant under the term loan arrangement, the Company is not subject to externally imposed capital requirements. The term loan arrangement does not impose any quantitative ratio covenants on the Company in the course of the normal construction and operation of its current assets.

17. Fair Value Measurements

    Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is measured or disclosed in the condensed interim consolidated financial statements are categorized

    within the fair value hierarchy, described, as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:

    Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

    Level 2 - Quoted prices in markets that are not active or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

    Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

    Assets and Liabilities Measured at Fair Value

    The Company's fair values of financial assets and liabilities were as follows:

    Classification
    March 31, 2026	Fair value through profit or loss		Amortized cost		Level 1			Level 3		Total Fair Value
    Assets:
    Cash and cash equivalents	$	-	$	40,160	$	-	$	-	$	40,160
    Restricted cash		-		1,208		-		-		1,208
    Receivables		-		790		-		-		790
    	$	-	$	42,158	$	-	$	-	$	42,158
    Liabilities:
    Accounts payable and accrued liabilities	$	-	$	5,618	$	-	$	-	$	5,618
    Short-term deferred government grant		-		3,124		-		-		3,124
    Long-term government loan payable		-		5,387		-		-		5,387
    Term loan		-		39,249		-		-		39,249
    US Warrants		48,350		-		-		48,350		48,350
    Royalty		-		2,429		-		-		2,429
    	$	48,350	$	55,807	-		$	48,350	$	104,157

    Classification
    December 31, 2025	Fair value through profit or loss		Amortized cost		Level 1			Level 3		Total Fair Value
    Assets:
    Cash and cash equivalents	$	-	$	39,024	$	-	$	-	$	39,024
    Restricted cash		-		1,208		-		-		1,208
    Receivables		-		666		-		-		666
    	$	-	$	40,898	$	-	$	-	$	40,898
    Liabilities:
    Accounts payable and accrued liabilities	$	-	$	5,817	$	-	$	-	$	5,817
    Short-term deferred government grant		-		642		-		-		642
    Long-term government loan payable		-		5,196		-		-		5,196
    Term loan		-		38,168		-		-		38,168
    US Warrants		81,658		-		-		81,658		81,658
    Royalty		-		2,338		-		-		2,338
    	$	81,658	$	52,161	-		$	81,658	$	133,819

    Valuation techniques

    1. Royalty

       The fair value of the Royalty has been estimated at inception using a discounted cash flow model. The key inputs in the valuation include the effective interest rate of 11.125% and cash flows estimates of future operating and gross revenues. As there are significant unobservable inputs used in the valuation, the Royalty is included in Level 3. A 3% increase or decrease in the effective interest rate would be a decrease of $338 (December 31, 2025 - $1,862) or an increase of $412 (December 31, 2025 - $928) to the fair value of the royalty.

    2. Other Financial Derivative Liability (2026, Warrants, 2028 Warrants and New Offering Warrants)

    The Company uses the Black-Scholes Option Pricing Model. The key inputs in the valuation include risk-free rates and equity volatility. As there are significant unobservable inputs used in the valuation, the financial derivative liability is included in Level 3.

    The Company used an equity volatility of 51% for the 2026 Warrants. If the Company used an equity volatility that was higher or lower by 10%, the potential effect would be an increase of $2 (December 31, 2025 - $25) or a decrease of $1 (December 31, 2025 - $25) to the fair value of the embedded derivative.

    The Company used an equity volatility of 84% for the 2028 Warrants (New Equity Offering Warrants). If the Company used an equity volatility that was higher or lower by 10%, the potential effect would be an increase of $2,317 (December 31, 2025 - $2,910) or a decrease of $2,369 (December 31, 2025 - $3,079) to the fair value of the embedded derivative.

    The Company used an equity volatility of 84% for the Restructuring Warrants. If the Company used an equity volatility that was higher or lower by 10%, the potential effect would be an increase of $2,772 (December 31,

    2025 - $3,481) or a decrease of $2,835 (December 31, 2025 - $3,584) to the fair value of the embedded derivative.

18. Commitments and Contingencies

    From time to time, the Company and/or its subsidiaries may become defendants in legal actions and the Company intends to defend itself vigorously against all legal claims. Electra is not aware of any unrecorded claims against the Company that could reasonably be expected to have a materially adverse impact on the Company's consolidated financial position, results of operations or the ability to carry on any of its business activities.

    As at March 31, 2026, the Company's commitments relate to purchase and services commitments for work programs relating to Refinery expansion and payments under financing arrangements. The Company entered into a binding agreement for sale of cobalt sulfate. This is dependent on certain conditions that the Company has to fulfill by December 2026. If not met, the buyer has the option to amend or extend the agreement.

    The Company had the following commitments as at March 31, 2026.

    		2026		2027		2028		2029	Thereafter			Total
    Purchase commitments	$	11,730	$	-	$	-	$	-	$	-	$	11,730
    Term loan		-		-		53,774		-		-		53,774
    Government loan payments		9		36		1,615		2,141		6,378		10,179
    Lease payments		129		11		-		-		-		140
    Royalty payments 1		-		-		233		538		3,744		4,515
    	$	11,868	$	47	$	55,622	$	2,679	$	10,122	$	80,338

    1 Royalty payments are estimated amounts associated with the royalty agreements entered with the debt holders as part of the term loan. The estimated amounts and timing are subject to changes in cobalt sulfate prices, timing of completion of the refinery, reaching commercial operations and timing and amounts of sales.

    On March 19, 2026, the Company announced that it received notice from The Nasdaq Stock Market LLC stating that the Company is not in compliance with the minimum bid price requirement of US$1.00 per share based upon the closing bid price of the Company's common shares for the 30 consecutive business days prior to the date of the Notice. The Corporation has 180 calendar days from the date of the Notice, or until September 14, 2026, to regain compliance with the minimum bid requirement, during which time the Company's common shares will continue to trade on Nasdaq.

19. Segmented Information

    The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer. The CODM reviews the results of Company's refinery business and exploration and evaluation activities as discrete business units, separate from the rest of the Company's activities which are reviewed on an aggregate basis.

    The Company's exploration and evaluation activities are located in Idaho, USA, with its head office function in Canada. All of the Company's capital assets, including property and equipment, and exploration and evaluation assets are located in Canada and USA, respectively.

    (expressed in thousands of Canadian dollars)

    1. Segmented operating results for the three months ended March 31, 2026 and 2025:

       For the three months ended March 31, 2026		Refinery	Exploration and Evaluation		Corporate and Other			Total
       Operating expenses
       Consulting and professional fees	$	177	$	98	$	909	$	1,184
       Exploration and evaluation expenditures		-		55		-		55
       General and administrative		259		-		553		812
       Investor relations and marketing		-		-		143		143
       Salaries and benefits		295		-		549		844
       Share-based payments		-		-		805		805
       Operating loss	$	731	$	153	$	2,959	$	3,843
       Changes in US Warrants		-		-		33,308		33,308
       Other non-operating loss		-		-		(1,323)		(1,323)
       Income (loss) before taxes	$	(731)	$	(153)	$	29,026	$	28,142

       For the three months ended March 31, 2025		Refinery	Exploration and Evaluation			Corporate and Other		Total
       Operating expenses
       Consulting and professional fees	$	153	$	-	$	848	$	1,001
       Exploration and evaluation expenditures		-		41		-		41
       General and administrative		508		-		535		1,043
       Investor relations and marketing		-		-		92		92
       Salaries and benefits		499		-		753		1,252
       Share-based payments		-		-		327		327
       Operating loss	$	1,160	$	41	$	2,555	$	3,756
       Unrealized gain on marketable securities		-		-		4		4
       Loss on financial derivative liability - Convertible Notes		-		-		(5,067)		(5,067)
       Other non-operating loss		-		-		(3,861)		(3,861)
       (Loss) before taxes	$	(1,160)	$	(41)	$	(11,479)	$	(12,680)

    2. Segmented assets and liabilities as at March 31, 2026 and December 31, 2025:

    Total Assets						Total Liabilities
    		March 31, 2026	December 31, 2025			March 31, 2026	December 31, 2025
    Refinery	$	62,363	$	56,443	$	8,192	$	12,493
    Exploration and Evaluation 1		90,392		88,884		25		53
    Corporate and Other		40,063		40,237		101,400		126,768
    	$	192,818	$	185,564	$	109,617	$	139,314

    1 Total non-current assets comprising of exploration and evaluation assets in the amount of $90,285 (December 31, 2025 -

    $88,776) are located in Idaho, USA. All other assets are located in Canada.

    (expressed in thousands of Canadian dollars)

20. Related Party Transactions

    The Company's related parties include key management personnel and companies related by way of directors or shareholders in common. The Company paid and/or accrued during the three months ended March 31, 2026 and 2025, the following fees to management personnel and directors.

    For the three months ended March 31,
    		2026		2025
    Management	$	284	$	665
    Directors' fees		65		47
    	$	349	$	712

    During the three months ended March 31, 2026, the Company had share-based payments made to management and directors of $934 (for the three months ended March 31, 2025 - $235).

    As at March 31, 2026, the accrued liabilities balance for related parties was $1,407 (December 31, 2025 -

    $1,582, which relates mainly to compensation accruals.

21. Subsequent Events

    • Subsequent to March 31, 2026, the Company issued 1,674,750 common shares at a weighted average price of $0.91 for gross proceeds of approximately $1,522 under its At The Market Offering Agreement ("ATM"). The transaction costs associated with these issuances were $52.