Company: PRMLF
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0001641172-25-000043
Chunk: 359

Company: NexMetals Mining Corp.
Filing Date: 2025-03-20
Form: 10-K
Item: Item 1C
Chunk 359
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 Warrants based on the relative fair value method under ASC 470 - Debt.

10. NSR
OPTION

Concurrently
with the closings of the Equity Financing and the Term Loan on June 28, 2023, Cymbria paid an aggregate of $2,750,000 (“Option
Payment”) to two subsidiaries of PREM to acquire a right to participate with such subsidiaries in the exercise of certain contractual
rights. The Option Payment was allocated to PNRP and PNGP (defined below) for $2,500,000 and $250,000, respectively.

As
the NSR options are exercisable entirely at the discretion of Cymbria and the underlying projects are in the exploration stage, the fair
value of the call and put on the options as at December 31, 2024 and December 31, 2023 is nil. The Option payment received in cash was
recorded as a non-current liability.

PREM’s
indirect wholly-owned subsidiary Premium Nickel Resources Proprietary Limited (“PNRP”) acquired the Selebi Mines in
January 2022 out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a 2%
net smelter returns royalty on the Selebi Mines. PNRP has a contractual right to repurchase one-half of the Selebi NSR at a future time
on payment by PNRP to the liquidator of $28,778,000
(US$20,000,000).

    F-22

Notes
to the Consolidated Financial Statements

For
the years ended December 31, 2024 and 2023

(Expressed
in Canadian dollars)

PREM’s
indirect wholly-owned subsidiary Premium Nickel Group Proprietary Limited (“PNGP”) acquired the Selkirk Mine in August
2022 out of liquidation. Pursuant to the acquisition agreement, the liquidator retained a 1%
net smelter returns royalty on the Selkirk Mine. PNGP has a contractual right to repurchase the entirety of the Selkirk NSR at a future
time on payment by PNGP to the liquidator of $2,877,800
(US$2,000,000).

Each
of PNRP and PNGP has agreed to grant Cymbria, in exchange for the Option Payment, an option to participate in any such repurchase of
the applicable portion of its NSR from the relevant liquidator. Cymbria will, following the exercise of its