Mr. Brian Savage reports

ELECTRIC METALS LAUNCHES MULTI-WORKSTREAM PROGRAM TO STRENGTHEN ECONOMICS OF THE US$1.39 BILLION NORTH STAR MANGANESE PROJECT

Electric Metals (USA) Ltd. has launched an integrated optimization program comprising multiple technical and engineering workstreams at its North Star manganese project in Minnesota, host to the highest-grade manganese deposit in North America.

The programs are designed to identify opportunities to improve ore selectivity and recovery, reduce material-handling and processing costs, optimize downstream plant design, and advance the project toward prefeasibility. With several workstreams now under way in parallel, Electric Metals expects to report results progressively, creating multiple potential project cost savings and income-enhancing results through the balance of 2026 and into 2027.

The project's previously announced preliminary economic assessment (PEA) defined an after-tax net present value of $1.39-billion (U.S.) at a 10-per-cent discount rate, a 43.5-per-cent after-tax internal rate of return, average annual after-tax cash flow of $249.6-million (U.S.) and a 23-month payback period.

North Star manganese project investment highlights:

• $1.39-billion (U.S.) after-tax NPV (net present value) and 43.5-per-cent after-tax IRR (internal rate of return) outlined in the PEA;
• $249.6-million (U.S.) in average annual after-tax cash flow and 23-month payback period estimated in the PEA;
• Highest-grade manganese deposit in North America, located in Minnesota;
• Initial HPMSM production of 100,000 tonnes per year, expanding to 200,000 tonnes per year in year 3, as outlined in the PEA (preliminary economic assessment);
• A 10,000-tonne-per-year EMM production circuit, not included in the PEA, is now incorporated into the project's FEL-1 engineering and broader development concept;
• United States-import dependence for manganese and the absence of an integrated domestic mine-to-high-purity-manganese supply chain;
• Multiple optimization workstreams now under way, establishing a pipeline of potential project cost savings and income-enhancing updates through 2026 and into 2027.

Manganese has been designated a U.S. critical mineral since 2018, and the U.S. Geological Survey classifies it as having an elevated supply-disruption risk. The United States is 100 per cent import-reliant, has not mined manganese ore domestically in more than 50 years, and has extremely limited intermediate and no advanced domestic manganese chemical processing capacity. With virtually no substitutes and global recycling averaging only 9 per cent, this dependence is particularly significant given manganese's essential role in steelmaking, metal alloys, high performance lithium-ion batteries, aerospace, drones, defence systems, infrastructure, transportation, power generation, electronics, and other industrial and consumer applications. Compounding this vulnerability, China controls an estimated 96 per cent of global HPMSM capacity and approximately 98 per cent of global EMM capacity.

Against this backdrop, the North Star manganese project is among the most advanced primary manganese projects in the United States. The optimization program announced today is designed to strengthen Electric Metals' potential to become a secure, competitive and capital-efficient domestic source of high-purity manganese products.

"The PEA told us what the North Star manganese project is worth, but it wasn't optimized; this program is about making the project better and worth more," said Brian Savage, chief executive officer of Electric Metals. "Manganese sits on America's critical minerals list, yet this country hasn't mined manganese ore in more than 50 years, and almost none of the world's high-purity manganese chemistry happens outside China. The North Star manganese project is one of the few projects in the United States with the grade and scale to change that. These programs are how we sharpen an already compelling project's economics as we move toward prefeasibility."

Multiple workstreams targeting project value

The company is advancing geology, ore sorting, metallurgy, downstream engineering and environmental review in parallel so that results from each workstream can inform the others as they become available. Work now under way includes:

1. Improve mine planning and ore selectivity

Development of a mineral-speciation block model to map manganese mineral types and grade variation throughout the Emily deposit.

Investor benefit -- Better definition of mineable ore types and grades could support more selective mine planning, reduce waste material sent to the plant, and improve metallurgical recoveries.

2. Increase feed grade through water- and chemical-free ore sorting

Expanded sensor-based ore-sorting evaluation, including particle-size recovery, crush-size optimization, staged sorting and additional modeling.

Investor benefit -- Preliminary ore sorting demonstrated doubling ore grades with less than 5 per cent loss of manganese. Enhanced sorting could further increase plant feed grade and recovery while reducing material movement, transportation requirements, plant size, capital costs and operating costs.

3. Reduce chemical consumption and processing costs

Creation of deposit-wide mineralogical, petrographic and geochemical data sets to support advanced geometallurgical investigations.

Investor benefit -- The work is designed to improve the company's understanding of acid consumption, recovery, impurities and mineral liberation -- the variables that most directly affect downstream chemical-processing costs and product quality.

4. Evaluate additional low-cost mineral separation opportunities

Development of deposit-wide density and magnetic-property data in partnership with the University of Minnesota's Institute for Rock Magnetism.

Investor benefit -- The data could improve exploration targeting and help determine whether magnetic separation can further improve mineral separation and recovery, while adding independent university research capability at low incremental cost.

5. Optimize U.S. HPMSM and EMM plant design and economics

Completion of a preliminary engineering and economic design for HPMSM production with an EMM circuit through the front-end loading 1 (FEL-1) study.

Investor benefit -- The independent engineering review will test the capital-cost assumptions underpinning the PEA and identify opportunities for further engineering and optimization. This workstream most directly advances Electric Metals' strategy to become a domestic producer of battery-grade manganese and EMM rather than solely an ore supplier.

Path toward prefeasibility and future development

In parallel with the workstreams above, Electric Metals continues evaluating the project-level technical work required to support future resource-to-reserve conversion and prefeasibility activities. This work includes additional evaluation of historical U.S. Steel drilling information, resource confidence, rock mechanics, hydrology, mining methods, metallurgical performance and environmental assessment. Completion and timing will depend on technical priorities, funding, permitting considerations and the results of preceding work.

"We're running geology, ore sorting, metallurgy, downstream engineering and environmental review in parallel because that's the fastest way to let each workstream inform the others in real time," said Mr. Savage. "Shareholders should expect a steady flow of substantive project updates through the balance of 2026 and into 2027 as these programs reach meaningful milestones."

Next steps

Results will be reported progressively as the individual programs achieve meaningful milestones. Together, these workstreams are intended to provide the technical and economic inputs needed to evaluate potential improvements in recovery, feed grade, material movement, chemical consumption, process plant configuration, capital efficiency, environmental considerations and overall project economics, while supporting the North Star manganese project's advancement toward prefeasibility and future development.

Qualified person

The scientific and technical information contained in this news release has been reviewed and approved by Donald E. Hulse, PE, SME registered member No. 1533190RM, a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. Mr. Hulse is an independent consultant and managing director with Frenchman Creek Consultants LLC.

About Electric Metals (USA) Ltd.

Electric Metals (USA) is a United States-domiciled critical minerals and advanced materials company advancing the North Star manganese project in Minnesota, host to the Emily manganese deposit, the highest-grade manganese deposit in North America. The company's strategy is to build an integrated, domestic manganese supply chain, from mine to battery-grade, high-purity manganese sulphate monohydrate and electrolytic manganese metal, serving U.S. battery, defence, aerospace, drone, steel and industrial customers. Electric Metals trades on the TSX Venture Exchange under the symbol EML and on the OTCQB under the symbol EMUS.

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