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Item 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the information in this Quarterly Report, including our financial statements and the related notes thereto and Managements Discussion and Analysis of Financial Condition and Results of Operations, as well as any additional risk factors that may be described in our other filings with the SEC from time to time, including our Annual Report on Form 10-K for fiscal year ended December 31, 2024, before deciding whether to invest in our securities. The occurrence of any of the risks, the events or developments described below could harm our business, financial condition, operating results, and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. You should consider carefully the risks and uncertainties included in this Quarterly Report and elsewhere in our Annual Report and other SEC filings before you decide to invest in our common stock.
Tariffs, trade restrictions and other changes in international trade policy could adversely affect our business, financial condition and results of operations.
Materials and products impoBeginning in the second quarted into the EU, the United States and otherr of 2025, sweeping new U.S. tariffs were announced, and in response, several countries are subjecthave imposed, or threatened to import duties. In addition, we cannot predict whese, reciprocal tariffs on imports from the U.S. and other future Braziretalian, U.S. or interntory measures. Various modificational laws, regulations, trade remedy actions or international agreements may impose additional duties or os and delays to the U.S. tariffs have been announced, further changes are expected to be made in the future, and ther restrictions on expor details and effects of minerals from Brazil. In recremain uncertain.
In early July 2025, President periods,Trump the U.S. government has announcedreatened to impose a 50% tariff on and, iy and all Brazilian particular followingroducts imported to the U.S. presidenti, separate from any sectoral eltariffs, effection in November 2024, may continue to announce, various import tariffs on goods imported from certainve August 1, and ordered the Office of the U.S. Trade Representative to initiate an analysis into Brazils trade partners, such as ractices under Section 301 of the EU and China, which have Trade Act of 1974. In response, Brazilian Presulted, and may coident Lula issued a presidential decree implementinue to result, in rg the Economic Reciprocal tariffs on goods exported from tity Act, which would allow Brazil to take countermeasures against the Unit.S. On July 30, 2025, President Trump signed States to such trade partners. For example, on April 2an Executive Order increasing the existing 10% tariff on U.S. imports from Brazil to 50%, effective August 6, 2025, the Trump Administration announced sweeping global tariffs, which hasalthough several categories of products were excluded. It is uncertain at this time what resulted in a period of considerable voltaliatory measures may be taken by Brazil or how an escalatility,ng trade negotiations war between the U.S. and consideration of retaliatory trade measures. Then, oBrazil may affect the Companys business and growth prospects.
Additionally, in April 23, 2025, tPresident Trump issued an executive order instructing the U.S. Department of Commerce startedto initiate an analysis under Section 232 of the Trade Expansion Act of 1962 (Section 232) to to evaluate the national security impacts of reliance on foreign irisks from imports of cprocessed critical minerals. Such analysis may result in and their derivative products, which was initiated later that month. Following the imposition ofSection 232 analysis, it is possible that sectoral tariffs on certain critical mineral imports to the U.S., including lithium. We are unable to pred, other import restrict wheions or other such tariffs woulnon-trade actions may be implemented be directed primarily at Chinay the Trump Administration.
The current trade environment continues to be dynamic, asnd the global leader of critical mineultimate impact remains uncertain and will depend on several exportfactors, orincluding whether exporters of cradditiconal minerals from Brazil, including or incremental U.S. tariffs or othe Company, would ber measures are announced, ultimately impacted. An escalating global trade war, includingosed or changed, to what extent other countries implement tariffs under Section 232 oor other trade policies, such as traretaliatory measures in response, and the overall magnitude restrictions between the United States and China or retaliatory trade measures by global policymakand duration of these measures. If disputes and conflicts further escalate, actions by governments in response could be significantly more severe and restrictive. Any of the foregoing could materially advers, couldely harm our business and growth prospects. Trade barriers and other governmental action related to tariffs or international trade agreements around the world have the potential to decrease demand for our minerals and adversely impact the markets in which we opare contractually obligated to sell our products and plan to operate. In addition, uncertainty and rapid changes in global trade policy may continue to result in general macroeconomic volatility. Our ability to mitigate the impacts of such trade policies on our business will be limited, and there can be no assurances that such mitigation efforts would be successful. As such, any changes in legislation and government policy by the U.S., China or other critical producers or consumers of critical minerals may have a material ad direct or indirect adverse effect on our business.
The economic viability of our Neves Project has several risks and uncertainties, notwithstanding the Definitive Feasibility Study supports a commercially viable project.
Feasibility studies, including the Definitive Feasibility Study related to the Neves Project, are used to determine the economic viability of a mineral deposit, including estimated capital and operating costs. While these studies are based on the best information available to us for the level of study, we cannot be certain that actual costs will not significantly exceed the estimated cost. It is not uncommon for commercial mining operations to experience unexpected costs, problems, and delays during construction, commissioning and start-up. Any of these factors or those listed below could result in changes to our estimated capital and operating expenditures, and the expected economic returns of the Neves Project.
-a significant, prolonged decrease in the market price of lithium;
-significant delays, reductions, or stoppages in operating activities;
-construction delays, procurement issues and workforce sourcing;
-significant shortages of adequate and skilled labor or a significant increase in labor costs;
-more stringent regulatory or environmental, health or safety laws and more stringent regulatory or environmental, health or safety laws and regulations; and
-general economic and political conditions, such as recessions, interest rates, inflation and acts of war or terrorism.
Our future lithium production activities may change as a result of any one or more of these risks and uncertainties. We cannot assure you that any of our activities will result in achieving and maintaining the estimated net present value or internal rate of return as set forth in the Definitive Feasibility Study.