Summary of capital reserves and accumulated losses

The consolidated financial statements of the Group comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The consolidated financial statements have been prepared on a historical cost basis, unless otherwise stated.

These 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. Our ability to continue as a going concern is contingent upon our ability to raise additional capital as required.

The Company incurred a net loss of approximately $3.2 million for the year ended March 31, 2026 and as of March 31, 2026, the Company had a total deficit of approximately $7.1 million.

The Company will require additional financing for working capital and the continuing development of the Itarantim Project, as well as to pay trade payables. As a result of our continuing operating losses, our continuance as a going concern is dependent upon our ability to obtain adequate financing to pay our current obligations, finance our development activities, and reach profitable levels of operation. The Company has been successful in raising the necessary financing to continue the operations in the normal course, and in November 2025, the Company obtained a $5 million investment from St. James Place Ltd (“SJP”) that we believe, together with the loan facility for $5 million from the UBO, is sufficient to fund our operations through twelve months from the date of the signing of our consolidated financial statements.

To date, we have generated no cash from operations and negative cash flows from operating activities. All costs and expenses in connection with our formation, development, professional fees and administrative support have been funded by our borrowings from the UBO and the investment from SJP. We intend to finance our operations through additional equity and debt.

For the purpose of preparing the consolidated financial statements for the year ended March 31, 2026, the Group has consistently applied the accounting policies which conform with IFRSs, which includes IFRSs, International Accounting Standards (“IAS”) and Interpretations (“IFRIC – Int”) issued by the IASB that are effective for the accounting period beginning on April 1, 2025, throughout the years.

In the current year, the Group has applied the following amendments to IFRSs issued by the IASB for the first time, which are mandatorily effective for the Group’s financial annual periods beginning on or after 1 April 2025 for the preparation of the consolidated financial statements:

The application of the amendments to IFRSs in the current year has had no material impact on the Group’s consolidated financial positions and consolidated performance for the current and prior years and/or on the disclosures set out in these consolidated financial statements.

IMC Rare Earths Ltd

Notes to the consolidated financial statements

March 31, 2026 and 2025

The Group has not early applied the following new and amendments to IFRSs that have been issued but are not yet effective:

Management anticipates that the application of all the new and amendments to IFRSs will have no material impact on the Group’s consolidated financial statements in the future.

Marketable securities consist of investments in highly liquid money market funds, which are classified as financial assets at Fair Value Through Profit or Loss (“FVTPL”) under IFRS 9, as they are held for short-term liquidity management and do not meet the criteria for amortized cost or fair value through other comprehensive income. At the same time, given their highly liquid nature, short-term maturity, and insignificant risk of changes in value, marketable securities qualify as cash equivalents under IAS 7 Statement of Cash Flows.

These assets are initially recognized at fair value, with transaction costs expensed immediately in profit or loss. Subsequent measurement is at fair value, with changes recognized in profit or loss within “finance costs”. Fair value is determined using quoted prices in active markets, reflecting the net asset value of the funds at the reporting date.

Loans from related parties are initially recognized at fair value, net of transaction costs incurred. Subsequent to initial recognition, the loans are measured at amortized cost using effective interest method.

Where the transaction price differs from fair value on initial recognition, any difference is recognized in accordance with the substance of the arrangement, for example, as an equity contribution, or in profit or loss where appropriate.

For loans where balances fluctuate frequently during the financial year due to advances and repayments, management applies an average loan balance basis to determine the imputed interest expense. This method is considered a reasonable approximation of the effective interest method, and any resulting differences are not material to the financial statements. The average balance is determined based on the opening and closing loan balances, and a market-based interest rate is applied to calculate the imputed interest expense.

Loans from related parties are derecognized when the related contractual obligations are discharged, cancelled or otherwise expire. Any difference between the carrying amount of the liability derecognized and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss as other income or finance costs.

Loans from related parties are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date, in which case they are presented as non-current liabilities.

Amounts in the financial statements have been rounded off to the nearest dollar.

 Schedule of general and administrative expenses

IMC Rare Earths Ltd is an exempted company incorporated in the Cayman Islands with limited liability on September 19, 2025. Its registered office is 18 Forum Lane, Camana Bay, 3rd Floor Suite 5304, P.O. Box 31230, Grand Cayman KY1-1205 and principal place of business is Avenida Paulista, 1765, 7th Floor, São Paulo, São Paulo, 0311-930, Brazil. These consolidated financial statements cover the entities consisting of IMC Rare Earths Ltd (“the Company”) and its subsidiaries (together “the Group”). The principal activities of the Group during the year consisted of the exploration, evaluation and development of minerals and metals in Brazil. A list of subsidiaries is included in note 19. Substantial shareholder of the Company is International Mineral Corporation Holdings Ltd, which is a limited company incorporated in the Cayman Islands and is controlled by Francesco Scolaro (the “Ultimate Beneficial Owner” or “UBO”).

The consolidated financial statements are presented in United States dollars which is the Company’s presentation currency (note 2(c)).

The consolidated financial statements of the Group for the years ended March 31, 2026 and 2025 were authorized for issue in accordance with a resolution of the board of directors on May 17, 2026.

The business commenced upon the incorporation of Niobium Brazil Importacao e Exportacao Ltda. (“NBI”) on June 20, 2022 with a share capital of Brazilian Real 50,000 (US$9,724). The parent shareholder of NBI was International Mineral Corporation Holdings Limited (“IMCHL”), a company incorporated in and controlled by the UBO. The business was established for the purpose of exploration, development and commercial realization of minerals in Brazil.

On March 19, 2024 the ownership of NBI was transferred to IMC Rare Earths Participacoes Ltda. (“IMC Brazil”) a company incorporated in Brazil on March 18, 2024 with a share capital of Brazilian Real 1,000 (US$199). The sole shareholder of IMC Brazil was International Mining Corp, a company incorporated in Saint Vincent and the Grenadines (“IMCSVG”) with the sole shareholder being IMCHL. IMC Brazil had no business activity prior to this transaction.

On April 24, 2024, IMC Rare Earths Ltd, incorporated in Saint Vincent and the Grenadines (“IMC St Vincent”) on January 23, 2024 with 1 issued share with a par value of $10,000, acquired IMC Brazil for US$0.18 (Brazilian Real 1) from IMCSVG. The sole shareholder of IMC St Vincent was IMCHL. Prior to the transaction, IMC St Vincent was a newly incorporated entity without material business activities, while IMC Brazil was the parent NBI (collectively, “IMC RE Brazil Group”), which had been operating since June 20, 2022. The transaction resulted in IMC St Vincent becoming the immediate holding company of the IMC Brazil Group.

On September 30, 2025, IMC Rare Earths Ltd, incorporated in the Cayman Islands (“IMC Cayman”) on September 19, 2025 with 1,000 issued ordinary shares at a par value of $0.0001, completed a share exchange transaction with IMC St Vincent. Prior to the share exchange transaction, the IMC Cayman had issued 1,000 shares to International Mineral Corporation Holdings Ltd (a company incorporated in Cayman Islands with the UBO as the controlling shareholder) with a par value of USD$0.00001. The transaction resulted in IMC Cayman becoming the immediate holding company of IMC St Vincent.

On October 29, 2025, Ionic Clays Brazil Ltda (“Ionic”), a company incorporated in Brazil on April 15, 2024, with 1,000 issued shares with a par value of Brazilian Real 1 (US$209), was transferred to IMC Brazil for zero consideration. Prior to the transfer, Ionic had minimal operational activities and was incorporated by International Mining Participacoes Ltda (“IMP”) on March 19, 2024, where IMP was a company incorporated by IMCSVG on January 22, 2024. ICMSVG was incorporated by the UBO on April 7, 2022 with the 100% shareholding transferred to IMCHL on July 4, 2023.

Upon completion of these transactions (the “Group Reorganization”), the Company became the holding company of the companies now comprising the Group, where the Company, NBI, IMC Brazil, IMC St Vincent and Ionic operated under the common control of UBO. The Group comprising of the Company and its subsidiaries resulting from the Group Reorganization is regarded as a continuing entity, accordingly, the consolidated financial statements for the year ended March 31, 2026 and 2025 have been prepared as if the Company had always been the holding company of the Group with the reserves being retrospectively adjusted to reflect the group reorganization.

IMC Rare Earths Ltd

Notes to the consolidated financial statements

March 31, 2026 and 2025

SJP Warrants

On November 11, 2025, the Company and SJP entered into a subscription agreement for SJP to acquire 1% of the issued share capital of the Company and warrants for $5 million. The subscription was completed on December 1, 2025, with 11 ordinary shares issued to SJP and 5,000,000 warrants granted to SJP with an exercise price of $15 per warrant. SJP warrants, if fully exercised, convert into 15% of the issued ordinary share capital of the Company at the time of exercise. If SJP Warrants are not fully exercised the ordinary shares will be issued on a pro rata basis. SJP Warrants have a maturity date of December 1, 2028. The SJP Warrants also include a contingent settlement provision triggered by a change of control event. Under this provision, any unexercised SJP Warrants are automatically exchanged for ordinary shares equivalent to 15% of the Company’s issued ordinary share capital immediately prior to the event, without payment of the exercise price or any other consideration.

SJP Warrants are classified as a financial liability on the basis that they do not meet the fixed-for-fixed condition due to the contingent settlement provision triggered by a change of control event. SJP Warrants were initially recognized at their fair value on the date of issuance and subsequently at the end of each reporting period, with changes in fair value recognizing in the profit or loss.

No SJP Warrants had been exercised during the year ended March 31, 2026.

To provide an indication about the reliability of the inputs used in determining fair value, the Group has classified its financial instruments and non-financial assets into the three levels prescribed under the accounting standards. The fair value measurement of SJP Warrants is classified at level 3. Binomial option-pricing model was used to determine the fair value of SJP Warrants with key inputs and assumption set out as follow:

Schedule of warrant liability 

On date of issuance, the fair value of the SJP Warrants was $3,912,514. As of March 31, 2026, the fair value of SJP Warrants was $3,785,924, with a gain on fair value of $126,590 credited to profit or loss.

Schedule of warrant liability 

Schedule of gains on fair value changes 

Schedule of gains on fair value changes 

14.1 Capital reserves

 Summary of capital reserves and accumulated losses

As of March 31, 2026, capital reserve comprised of capital contribution of $367,189 (2025: $183,017) in respect of interest-free loans provided by the related party. At initial recognition, the loan was measured at fair value in accordance with IFRS 9, with the difference between the cash received and fair value credited directly to equity as capital contribution by the related party.

In addition, capital reserve of $20,132 as of March 31, 2026 (2025: $20,132) arose from the group reorganization and common control acquisitions of IMC St Vincent, IMC Brazil, NBI and Ionic, as detailed in note 1b. This reserve ensures that the total shareholders equity both pre- and post the transactions remains as if the entities comprising the Group have always been combined throughout both years.

14.2 Accumulated losses

Accumulated losses are the cumulative net loss of the Group sustained in the business.