Surge Battery Metals Provides Update Regarding BCSC Notice of Hearing

Surge Battery Metals Inc. (NILI) announced on November 3, 2026, that the British Columbia Securities Commission issued a Notice of Hearing concerning Graham Leslie Harris, the company’s Chairman and Director. The regulatory action alleges that Mr. Harris sold company shares in September 2023 during a trading blackout, prior to the public disclosure of positive preliminary exploration results from the Nevada North Lithium Project.

In a statement regarding the allegations, Surge Battery Metals emphasized that the claims are not findings of wrongdoing and have not been proven. The company noted that Mr. Harris is cooperating with the regulatory process. The Board of Directors confirmed it was made aware of the Notice and has appointed Owen Taylor as lead independent director. Mr. Harris continues to serve as Chairman and Director. The release did not disclose the formation of a special committee, an independent review, a recusal from board matters, or any changes to Mr. Harris’s role.

The company stated that the conduct in question occurred in 2023 and does not concern current operations, technical results, or ongoing development activities at the Nevada North project. The Nevada North Lithium LLC joint venture is owned 67.5% by Surge Battery Metals and 32.5% by Evolution Mining. A Mineral Resource Estimate (MRE) dated June 30, 2026, defined a pit-constrained Measured & Indicated resource of 657.5 Mt grading 3,007 ppm Li, containing approximately 10.5 Mt LCE at a 1,250 ppm Li cutoff. The mineralized clay body has a strike length exceeding 4,700 m and a known width greater than 2,000 m.

The release did not provide the number of shares allegedly sold, specific trade dates or values, the range of sanctions available to the BCSC, or any comment on the potential impact on the planned 2027 Nasdaq listing. It also did not address the November 3, 2026, name-change announcement issued three days earlier. Prior disclosures included an October 2, 2026, Preliminary Feasibility Study (PFS) reporting an after-tax NPV8% of US$9.81B, an IRR of 23.6%, Phase 1 capex of US$2.77B, and first production in the second half of 2031.

Surge Battery Metals Inc. (NILI) is facing a governance crisis centered on allegations against Chairman Graham Harris, marking a significant departure from the company’s recent news history. Harris, the named spokesperson for the January 2026 LIFE offering, February 2026 financing close, May 2026 Nasdaq application, June 2026 strategic placement, and the November 3, 2026 name change, is the subject of a securities-regulator enforcement proceeding. The allegations concern trading that occurred "prior to the public disclosure of positive preliminary exploration results," a fact pattern that directly impacts investor confidence in management credibility and future disclosure practices.

The board’s response has been limited. While a lead independent director was appointed, the Chairman remains in place, no independent committee was created to oversee the matter, and no information barriers or recusal protocols were disclosed. For a company relying on institutional credibility ahead of a U.S. listing, this mitigation is viewed as weak. The market reaction has been swift and severe. Shares closed at C$0.68 on October 28 and fell to C$0.51 on November 6, representing a roughly 25% decline in seven sessions. The steepest drop, from C$0.62 to C$0.51 (an 18% decline), occurred between the November 3 Notice and the November 6 confirmation. The stock is now at the low end of its 12-month range and approximately 51% below the September 9, 2026 high of C$1.04.

Despite this volatility, the underlying operating facts remain unchanged. The resource, the PFS economics, the Evolution JV, and the approximately US$75M treasury position reported at the June 2026 closing are not affected by the 2023 trading allegation. The damage is therefore limited to valuation mechanics, including a higher cost of capital, a wider discount, and delayed institutional sponsorship, rather than the asset itself.

The market context highlights a disconnect between catalysts and price action. Despite three ostensibly positive developments—the September 15 announcement of battery-grade 99.95% Li2CO3, the October 2 PFS, and the November 3 rebrand/listing plan—the shares fell from C$1.04 to C$0.51. This suggests the market is pricing capex funding and dilution rather than net present value.

This is not an earnings release, so no new financial results are being assessed. Prior-period context, not disclosed in today's release, shows that for the three months ended March 31, 2026, Surge Battery Metals reported a net loss of C$4,650,075 and operating cash flow of -C$1,898,795. The company reported zero revenue, zero debt, total equity of C$41,829,500, and a book value of C$0.18 per share.

Surge Battery Metals Inc., a mineral exploration and development company listed on the TSX-V with OTCQX and Frankfurt listings, is headquartered in West Vancouver, BC. The company currently has no revenue and no producing assets. Its flagship asset is the Nevada North Lithium Project (NNLP), a lithium-bearing sedimentary clay deposit located in the Granite Range, southeast of Jackpot in Elko County, Nevada, approximately 73 km north-northeast of Wells. The mineralised clay horizon has a strike length exceeding 4,700 m and a known width greater than 2,000 m.

The project is held through Nevada North Lithium, LLC, in which Surge holds a 67.5% interest and Evolution Mining Limited holds 32.5%, following Evolution's completion of its staged CA$10 million PFS funding commitment in August 2026. A Mineral Resource Estimate (MRE) filed on June 30, 2026, identified pit-constrained Measured and Indicated resources of 657.5 Mt grading 3,007 ppm Li, containing approximately 10.5 Mt LCE at a 1,250 ppm Li cutoff. Inferred resources total 271.3 Mt at 2,160 ppm Li, containing approximately 3.12 Mt LCE. The Probable and Probable (P&P) reserve used in the Pre-Feasibility Study (PFS) comprises 218.3 Mt at 3,928 ppm Li, containing 4.56 Mt LCE, with no inferred material included in the mine plan.

The PFS, dated October 2, 2026, outlines a 42-year life of mine. Phase 1 is designed for a capacity of approximately 55,900 tpa of battery-grade lithium carbonate, with Phase 2 doubling production to a peak of approximately 111,400 tpa in year 7. The life of mine (LOM) average production is estimated at 92,250 tpa, with total LOM production reaching 3.87 Mt. On a 100% project basis, the PFS economics show an after-tax NPV8% of US$9.81B and a pre-tax NPV of US$11.55B. The after-tax internal rate of return (IRR) is 23.6%, with an after-tax payback period of 4.2 years from production start. LOM average cash operating costs are projected at US$4,719/t, which is 10% below the May 2025 PEA’s estimate of US$5,243/t. Gross LOM revenue is estimated at US$93.0B, based on a price deck of US$24,000/t for lithium carbonate.

Capital expenditure estimates include an initial US$2.77B for Phase 1 (AACE Class 4, +/-25%, including US$442M contingency) and US$2.35B for Phase 2 expansion, totaling US$5.124B. Additional costs include LOM sustaining capital of US$1.65B and closure/reclamation costs of US$120M. Metallurgical testing indicates an overall lithium recovery of 84.9%, an improvement from the 82.8% reported in the PEA. The process involves crude lithium carbonate at 99% Li2CO3 being refined to 99.95% battery grade, utilizing sulfuric acid leach, gravity beneficiation, and an on-site sulfur-burning acid plant. Process support is provided by Fluor as lead engineer, alongside Kemetco, Sepro, Pocock, IMC, and Call & Nicholas.

The project schedule includes FEL 3 engineering commencing in Q4 2026, followed by approximately 53 months of construction and a six-month commissioning period, targeting first production in the second half of 2031. The project is expected to generate approximately US$11.4B in federal and state taxes, property tax, and royalties over its LOM. It also assumes the transferable Section 45X advanced manufacturing production credit, valued at approximately US$330M in the first three years, phasing out after 2033. Additionally, the company holds an option to earn an undivided 80% interest in the San Emidio Lithium Project through cash payments and share issuances, as noted in the MD&A but not covered by today's release.