Mr. Trent Mell reports

ELECTRA COMPLETES FINANCING AND debt eRESTRUCTURING, FULLY FUNDING NORTH AMERICA'S FIRST COBALT sulphate REFINERY

Electra Battery Materials Corp. has closed its $34.5-million (U.S.) financing and $40-million (U.S.) debt eequitization, marking a major transformation of its balance sheet and funding outlook. With over $80-million (U.S.) now secured from investors and government commitments, Electra has obtained all the capital required to complete construction and commissioning of North America's first cobalt sulphate refinery, a critical asset that will strengthen the region's battery and defence supply chains.

With the successful closing of these transactions and previously announced government commitments, the construction and commissioning of Electra's cobalt sulphate refinery in Temiskaming Shores, Ont., are now fully financed. The refinery is a flagship asset that will be the first of its kind in North America. As a fully permitted and construction-ready project, the refinery will strengthen the region's battery and defence supply chains, playing a critical role in reshoring cobalt processing, a capability that both the United States and Canadian governments have identified as essential to national security and industrial resilience.

Highlights:

• $82-million (U.S.) secured from investors and committed by government partners fully finances construction and commissioning of North America's first cobalt sulphate refinery;
• $40-million (U.S.) debt eequitization reduces total debt efrom $67-million (U.S.) to $27-million (U.S.), simplifying Electra's capital structure;
• Significant insider participation, including directors and management, bolstering strategic alignment with shareholders.

"With construction of our cobalt refinery now fully financed and our balance sheet reset, we are entering the execution phase with the resources and focus needed to deliver North America's first cobalt sulphate facility," said Trent Mell, chief executive officer. "This marks a turning point for Electra and a critical step in reducing foreign dependence in the battery supply chain. The coming together of our lenders, shareholders and three levels of government underscores the strategic importance of this asset.

"Today, more than 90 per cent of global cobalt sulphate production comes from China," Mr. Mell added. "Establishing a resilient, transparent and domestically controlled supply chain is essential for our most critical industries including automotive, defence, energy and infrastructure. Electra is proud to be part of the solution to strengthen North American supply security."

"The financing and debt erestructuring significantly derisk Electra's path forward," said Marty Rendall, chief financial officer. "A simplified capital structure and stronger financial position give us greater flexibility to advance construction and prepare for commissioning. Institutional demand for this offering highlights the growing conviction in the critical minerals sector and in Electra's leadership within it."

As previously announced, Electra has also recently added three directors to its board: David Stetson, a seasoned energy and mining executive; Gerard Hueber, a retired United States Navy Rear Admiral and former Raytheon executive; and Jody Thomas, Canada's former National Security and Intelligence Advisor to the Prime Minister. These appointments enhance the company's depth of leadership and reinforce its positioning at the intersection of critical mineral supply, industrial policy and national security.

Electra's Ontario cobalt sulphate refinery will be the first facility on the continent to produce battery-grade cobalt sulphate. Once operational, it is expected to produce up to 6,500 tonnes of cobalt sulphate annually, enough to support production of batteries for approximately one million vehicles, or to supply strategic sectors such as national defence, energy storage and grid infrastructure.

Electra will continue to advance its portfolio of projects during the construction phase; projects aligned with long-term demand growth and domestic sourcing priorities. This pipeline includes expanding the potential of Electra's Idaho cobalt project, Iron Creek, a possible future source of U.S.-sourced feedstock, to support the development of domestic supply in U.S., advancing its black mass recycling program to recover critical minerals from production scrap for reuse in the domestic supply chain, and evaluating opportunities for nickel sulphate refining capacity in North America to meet projected cathode material bottlenecks.

Together, these initiatives position Electra as a key contributor to North America's secure and sustainable critical minerals supply chain, supporting the production of low-carbon, ethically sourced materials essential to national defence, grid infrastructure and industrial resilience.

Closing of the transactions

The previously announced $34.5-million (U.S.) financing was completed on a best efforts basis pursuant to the terms of an agency agreement, dated as of the date hereof, and entered into by the company with Cantor Fitzgerald Canada Corp. and ECM Capital Advisors Ltd., as co-lead agents, each on its own behalf, and on behalf of a syndicate of agents which included Independent Trading Group (ITG) Inc. and Kernaghan & Partners Ltd. In accordance with the agency agreement an aggregate of 46 million units of the company, such aggregate amount being inclusive of the exercise in full of an overallotment option which was granted to the agents, were issued by the company in a private placement at a price of 75 cents per unit, for aggregate gross proceeds to the company of $34.5-million (U.S.).

Each unit consists of one common share and one common share purchase warrant, with each warrant entitling the holder thereof to purchase one common share at a price of $1.25 for a period commencing on the date that is 60 days following the completion of the offering until Oct. 22, 2028.

Given the strong demand for the offering, Electra successfully completed the offering without requiring the lenders' previously announced $10-million (U.S.) conditional commitment.

Net proceeds from the offering, along with previously announced government commitments in press releases dated March 21, 2025, and Sept. 12, 2025, are intended to be used to advance the completion and ramp-up of Electra's cobalt refinery, advance the company's black mass recycling program, to repay the $2-million (U.S.) aggregate principal amount of unsecured 90-day promissory notes issued to the lenders on Aug. 22, 2025, to pay expenses in connection with the restructuring and to support general working capital and corporate purposes.

Each of Trent Mell, chief executive officer; Marty Rendall, chief financial officer; Heather Smiles, vice-president, investor relations and corporate development; George Puvvada, vice-president, metallurgy and technology; Michael Insulan, vice-president, commercial, purchased units in the offering; and David Stetson, Gerard Hueber, John Pollesel and Alden Greenhouse, each a director of the company, also participated in the offering by purchasing units.

By virtue of their participation, the offering constituted a related party transaction under applicable Canadian securities laws. The company did not file a material change report more than 21 days before closing of the offering as the details of the abovementioned insider participation were not settled until shortly prior to closing, and the company wished to close the offering on an expedited basis. As neither the fair market value of the subject matter, nor the fair market value of the consideration for the transaction, insofar as it involves the related parties, exceeded 25 per cent of the company's market capitalization, neither a formal valuation nor minority shareholder approval were required in connection with the offering.

As consideration for their services, at the closing of the offering, the company paid aggregate cash commission of $1,851,331.52 to the agents. The company also issued an aggregate of 2,416,884 non-transferable warrants to purchase common shares to the agents. Each broker warrant entitles the holder to acquire one common share at the Issue Price, at any time on or before the date that is 36 months following the closing date.

The units were offered on a private placement basis to purchasers resident in each of the provinces and territories of Canada (the Canadian selling jurisdictions) pursuant to (i) the accredited investor exemption outlined in Part 2 of National Instrment 45-106 and (ii) the listed issuer financing exemption as set out under Part 5A of National Instrument 45-106 -- Prospectus Exemptions, as amended by Coordinated Blanket Order 45-935 -- Exemptions from Certain Conditions of the Listed Issuer Financing Exemption, as well as to purchasers resident outside of Canada pursuant to Ontario Securities Commission Rule 72-503 -- Distributions Outside Canada. There is an offering document related to the portion of the offering conducted under the listed issuer financing exemption accessible under the company's profile on SEDAR+ and at the company's website. Prospective investors should read this offering document before making any investment decision.

The common shares issuable from the sale of 6.4 million units, and the common shares issuable upon the exercise of the warrants at least 60 days from the completion of the offering, from these units, issued under the listed issuer financing exemption will not be subject to a hold period in accordance with Canadian securities laws and are expected to be immediately freely tradeable in Canada. All other securities issued in the offering to purchasers in Canada will be subject to a statutory hold period in Canada of four months and one day following issuance to the extent required by applicable securities laws. Any securities sold outside of Canada to non-residents of Canada will be free of any hold period under applicable Canadian securities legislation. In addition, an aggregate of 6,782,802 units issued to insiders under the offering are subject to a four-month hold period in Canada pursuant to applicable policies of the TSX Venture Exchange.

Concurrently with the closing of the offering, the company also closed a concurrent financial restructuring transaction with the holders of the company's existing Notes, pursuant to which:

• The lenders and the company entered into exchange agreements dated as of the date hereof pursuant to which each of the lenders exchanged 60 per cent of the aggregate principal amount of the senior secured convertible notes beneficially owned or held by each of the lenders, plus the aggregate amount of all accrued and unpaid interest (including any deferred interest amounts) to but excluding Oct. 9, 2025, for units at a deemed price of 75 cents per unit.
• The lenders exchanged the remaining 40 per cent of the aggregate principal amount and the aggregate amount of all accrued and unpaid interest of the notes for an equal aggregate principal amount of a new term loan pursuant to a credit agreement and common shares at a deemed price of 90 cents per common share. Interest on the new term loan will be payable in cash or in kind at the company's election at a rate per annum of 8.99 per cent if paid in cash or 11.125 per cent if paid in kind. The new term loan matures on Oct. 22, 2028.
• To the extent that the equity exchange and the debt exchange would result in any lender, individually or together with any person or company acting jointly or in concert (as such terms are defined in the Securities Act (Ontario)) with such lender, beneficially owning common shares in excess of 9.90 per cent of the issued and outstanding common shares following the offering and the restructuring, such lender received prefinanced warrants in lieu of the excess amount of common shares underlying the units which would otherwise have been issuable. Each prefinanced warrant is exercisable by the holder thereof to acquire one common share at an exercise price of 0.0001 cent per prefinanced warrant share, subject to adjustment in accordance with the terms thereof, for an indefinite period without expiry. As a result, the company issued an aggregate of 27,128,396 common shares, 55,041,712 warrants and 31,735,657 prefinanced warrants to the lenders under the equity exchange and the debt exchange.
• An aggregate of 3,835,378 common share purchase warrants held by the lenders were cancelled.
• The company entered into amended and restated royalty agreements with the lenders, dated as of the date hereof, amending the royalty agreements dated as of Feb. 13, 2023, to (i) extend the length of the royalty on revenues from five years following the commencement of commercial production to seven years following the commencement of commercial production and (ii) raise the aggregate cap under all royalty agreements from $6-million (U.S.) to $10-million (U.S.).
• The company redeemed the $2-million (U.S.) aggregate principal amount of unsecured 90-day promissory notes for an aggregate of $2.04-million (U.S.), inclusive of interest.

In connection with the closing of the restructuring, the company and the lenders also entered into a registration rights agreement, pursuant to which the company has agreed to file one or more registration statements with the Securities and Exchange Commission covering the resale of the securities issued under the equity exchange and the debt exchange. Following the closing and repayment of the unsecured promissory notes as disclosed above, the lenders do not have any continuing right to appoint members of the board.

Whitebox Advisors LLC, Highbridge Capital Management LLC and O'Connor (a distinct business unit of UBS Asset Management (Americas) LLC) have informed the company that they, each together with the funds they respectively manage, have ceased to be joint actors in respect of the company.

Corporate update

The company also announces its engagement with Epstein Research, a research and analysis firm owned by Peter Epstein, based in Montebello, N.Y., and active in the metals and mining industry. Epstein Research increases awareness of the company through social media platforms, and produces management interviews and written, visual and video content. The engagement commenced on Oct. 17, 2025, for a period of three months, during which time Epstein Research will be paid an aggregate of $7,500, representing a monthly cash fee of $2,500. The company is at arm's length from Epstein Research, and Mr. Epstein, and the compensation paid to Epstein Research does not include any securities of the company.

About Electra Battery Materials Corp.

Electra is a leader in advancing North America's critical minerals supply chain for lithium-ion batteries. Currently focused on developing North America's only cobalt sulphate refinery, Electra is executing a phased strategy to onshore critical minerals refining and reduce reliance on foreign supply chains. In addition to establishing the cobalt sulphate refinery, Electra's strategy includes nickel refining and battery recycling. Growth projects include integrating black mass recycling at its existing refining complex, evaluating opportunities for cobalt production in Becancour, Que., and exploring nickel sulphate production potential in North America.

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