Unlocking Undervalued Industrial Metal Opportunities: Electric Metals' Strategic Realignments in Nevada and Governance Incentives

In the ever-evolving landscape of critical mineral development, Electric Metals (USA) Limited (EML) has emerged as a pivotal player, navigating a complex web of strategic realignments, governance incentives, and untapped industrial metal opportunities. While the company's flagship Emily Manganese Project in Minnesota remains its core focus, recent shifts in Nevada's mineral portfolio and governance structures reveal a compelling case for investors seeking exposure to undervalued assets.

Strategic Realignment: From Altair to New Partnerships

Electric Metals' decision to terminate its 2023 acquisition agreement with Altair Resources Inc. in July 2025 marks a calculated pivot. By relinquishing its Nevada-based silver and gold projects—Corcoran Canyon, Belmont, and Belmont North—to Altair, EML has freed up capital and strategic flexibility. These projects, located within the Toquima caldera complex, host a combined 33.5 million silver-equivalent ounces (as of 2021) and are situated in a region historically rich in gold and silver deposits. The termination, however, was not a retreat but a recalibration. EML is now actively seeking new strategic partners to develop these assets, leveraging Nevada's status as a mineral-rich hub.

Nevada's geological potential is unparalleled. The state's Toquima caldera complex has long been a focal point for mineral exploration, with historical deposits including five ore bodies containing 24 million ounces of gold and 89 million ounces of silver. EML's projects, with their open-pit and underground cut-off grades, present a compelling case for exploration. For instance, the Corcoran Canyon Project's 15 g/t and 100 g/t silver-equivalent open-pit and underground grades, respectively, suggest high-grade potential. The Belmont Project, meanwhile, sits near the historic Tonopah district, where USGS samples confirmed silver grades of up to 0.5%.

Governance Incentives: Aligning Leadership with Shareholders

EML's governance structure has also evolved to reinforce long-term value creation. In July 2025, the company issued 3.94 million Deferred Share Units (DSUs) to its board under its Omnibus Equity Incentive Plan. These DSUs replace traditional cash-based fees and vest over a minimum one-year period, ensuring directors' interests are tied to shareholder performance. This move aligns with TSXV regulations and reflects a broader trend in mining equities, where governance reforms are increasingly seen as a catalyst for value.

The DSUs also serve a dual purpose: they reduce cash outflows while creating a “skin in the game” scenario for board members. Upon a director's departure, the DSUs convert to common shares, further entrenching long-term alignment. CEO Brian Savage has emphasized that this strategy complements EML's focus on monetizing Nevada assets while advancing its primary manganese project in Minnesota.

Nevada's Tax Incentive Landscape: A Goldmine for Strategic Partners

Nevada's aggressive tax incentive policies provide a fertile ground for EML's strategic pivot. The state's 2014 law offers abatements for capital investments exceeding $3.5 billion, a framework that has historically attracted giants like Tesla and Redwood Materials. Tesla's $6.2 billion Gigafactory expansion, for example, received 100% property tax abatements and a 4.85% sales tax rate for 20 years. Redwood Materials, a key player in battery recycling, secured a $100 million abatement for its $1.1 billion investment in Storey County.

EML's Nevada projects could benefit from similar incentives if they attract partners seeking to leverage the state's tax-friendly environment. The recent Minerals for National Automotive Competitiveness (MINAC) initiative, which includes EML and Lucid Group, further underscores Nevada's role in the EV supply chain. By aligning with partners interested in domestic mineral production, EML could access off-take agreements and federal support under the Trump administration's March 2025 Executive Order on critical mineral development.

Why This Matters for Investors

Electric Metals' strategic realignments in Nevada are not just about exploration—they're about positioning for a future where domestic mineral production is a geopolitical and economic imperative. The termination of the Altair agreement, while seemingly a setback, removes a costly, capital-intensive obligation and opens the door for more agile partnerships. Meanwhile, governance reforms like DSUs signal a management team committed to long-term value.

For investors, the key takeaway is twofold:
1. Undervalued Assets in a High-Potential Region: EML's Nevada projects are situated in a historically productive mining district with minimal exploration capital outlays. A new partner could unlock value through rapid drilling and resource delineation.
2. Governance Alignment as a Catalyst: The DSUs create a governance structure that prioritizes shareholder interests, reducing the risk of short-termism and ensuring leadership is incentivized to drive long-term growth.

Conclusion: A Strategic Pivot with High Rewards

Electric Metals' Nevada pivot, combined with governance reforms, positions the company to capitalize on a dual trend: the global push for EV battery materials and the U.S. push for critical mineral independence. While the Emily Manganese Project remains its cornerstone, the Nevada assets represent a low-cost, high-impact opportunity to diversify EML's portfolio.

Investors with a medium-term horizon should consider EML as a speculative play on two fronts: the potential for new Nevada partnerships and the broader tailwinds of U.S. mineral policy. As the Trump administration accelerates its Section 232 investigations and the MINAC initiative gains traction, Electric Metals is well-positioned to benefit from both private and public sector support.

In a market where governance and strategic agility are increasingly valued, Electric Metals offers a compelling case for those seeking to unlock undervalued industrial metal opportunities in a high-growth sector.