Idaho Strategic Resources(IDR) - 2025 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements Presents unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and detailed notes Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $48,067,150 | $44,021,630 | | Total Liabilities | $5,564,912 | $3,608,316 | | Total Stockholders' Equity | $42,502,238 | $40,413,314 | | Current Assets | $12,727,803 | $11,742,073 | | Current Liabilities | $2,914,813 | $2,279,549 | Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations | Metric | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Revenue | $7,278,536 | $5,898,938 | | Gross Profit | $3,698,086 | $2,838,237 | | Operating Income | $1,401,254 | $2,141,973 | | Net Income attributable to Idaho Strategic Resources, Inc. | $1,608,979 | $2,171,109 | | Net Income per common share-basic | $0.12 | $0.17 | | Exploration Expense | $1,371,433 | $267,848 | Condensed Consolidated Statement of Changes in Stockholders' Equity Condensed Consolidated Statement of Changes in Stockholders' Equity | Metric | March 31, 2025 | January 1, 2025 | | :--------------------------------------- | :------------- | :-------------- | | Total Stockholders' Equity | $42,502,238 | $40,413,314 | | Stock options issued to management, directors and employees | $495,146 | - | | Net income (loss) | $1,608,979 | - | Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | | Operating activities | $2,409,589 | $2,579,853 | | Investing activities | $(1,993,128) | $(1,004,815) | | Financing activities | $(217,238) | $1,433,420 | | Net change in cash and cash equivalents | $199,223 | $3,008,458 | | Cash and cash equivalents, end of period | $1,306,124 | $5,295,457 | Notes to Condensed Consolidated Financial Statements (Unaudited) Provides detailed information on accounting policies, financial statement line items, and significant transactions, including investments and equity Note 1. The Company and Significant Accounting Policies - The company's unaudited interim financial statements are prepared in accordance with GAAP, with estimates and assumptions that may differ from actual results[19][20] - Consolidates accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV)[22] - Revenue from gold sales is recognized upon transfer of control, with concentrate sales estimated at shipment and adjusted to final settlement prices; timber revenue is recognized upon completion of performance obligations[23][25] - Exploration costs are expensed as incurred, while pre-development costs are capitalized once ore reserves are identified as economically developable[27] - The company operates as a single operating segment, with the CEO as the Chief Operating Decision Maker (CODM) using consolidated net income to assess performance[39] - Adopted ASU 2023-05 (JV Formations) with no material impact; currently evaluating ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures)[40][41][42] Note 2. Investments in US Treasury Notes Investments in US Treasury Notes | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Total Amortized Cost | $15,073,154 | $14,984,123 | | Gross Unrealized Gains | $97,846 | $102,877 | | Fair Value | $15,171,000 | $15,087,000 | Note 3. Inventories Inventories | Inventory Type | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Total Inventories | $1,171,594 | $899,924 | | Finished Goods Concentrate | $643,028 | $334,033 | | Supplies Inventory | $528,566 | $565,891 | Note 4. Sales of Products Sales of Products | Product | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :---------------------- | :-------------------------------------- | :-------------------------------------- | | Gold Sales | $7,405,388 | $6,121,129 | | Silver Sales | $31,755 | $24,245 | | Total Revenue | $7,278,536 | $5,898,938 | - As of March 31, 2025, 6,768 ounces of metals had been sold but not finally settled, with 5,225 ounces exposed to future price changes[47] Note 5. Related Party Transactions Related Party Transactions | Expense Type | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :----------------------- | :-------------------------------------- | :-------------------------------------- | | Related Party Lease Payments | $7,688 | $7,620 | Note 6. JV Arrangements - The company owns 65% of the NJMJV, which is consolidated due to significant influence[35][50] - The company holds a 50% interest in Butte Highlands JV, LLC, accounted for on a cost basis due to lack of significant influence[35][51] JV Arrangements | Metric | March 31, 2025 | December 31, 2024 | | :----------------------- | :------------- | :---------------- | | Joint Venture Receivable | $1,927 | $2,892 | Note 7. Earnings per Share Earnings per Share | Metric | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net Income per Common Share - Basic | $0.12 | $0.17 | | Weighted Average Common Share Outstanding - Basic | 13,666,321 | 12,513,374 | | Incremental Shares (Stock Options) | 69,449 | 109,243 | Note 8. Property, Plant, and Equipment Property, Plant, and Equipment | Asset Category | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Total Property, Plant and Equipment, Net | $15,868,020 | $12,904,065 | | Mine Equipment, Net | $6,310,470 | $4,378,247 | | Mill Equipment, Net | $5,819,693 | $5,126,779 | Note 9. Mineral Properties Mineral Properties | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Total Mineral Properties, Net | $10,994,040 | $10,573,349 | | Golden Chest Infrastructure | $5,177,358 | $4,722,328 | | Capitalized Interest Expense (Golden Chest) | $43,387 (Q1 2025) | $19,377 (Q1 2024) | Note 10. Notes Payable Notes Payable | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Total Notes Payable | $3,670,541 | $1,732,739 | | Mine Equipment Notes | $2,804,567 | $962,384 | | Current Portion of Notes Payable | $1,330,738 | $709,381 | Note 11. Investment in Buckskin - The company holds a 37% common stock interest in Buckskin Gold and Silver, Inc., accounted for using the equity method[57] - The company makes an annual payment of $12,000 to Buckskin per a mineral lease[57] Investment in Buckskin | Metric | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Equity Income on Investment | $1,346 | $1,867 | Note 12. Stockholders' Equity - In Q1 2025, 3,722 shares of common stock were issued for outstanding stock options via cashless exercises by employees[58] - There were no stock purchase warrants outstanding at March 31, 2025, as all remaining warrants were exercised in 2024[60] Note 13. Stock Options - On January 15, 2025, the company granted 400,000 stock options to employees with an exercise price of $11.50, resulting in $495,146 in stock-based compensation expense for the period[61] Stock Options | Metric | March 31, 2025 | December 31, 2024 | | :--------------------------------------- | :------------- | :---------------- | | Outstanding Stock Options | 471,000 | 77,000 | | Weighted Average Exercise Price (Outstanding) | $10.55 | $5.17 | Note 14. Subsequent Events - Subsequent to March 31, 2025, 380,000 shares of common stock were issued for net proceeds of $6,246,713[64] - Subsequent to March 31, 2025, 11,000 stock options were exchanged for 7,658 shares of common stock in cashless exercises by employees[64] Forward-Looking Statements Provides a safe harbor statement for forward-looking statements, cautioning about risks and uncertainties that could cause actual results to differ - Forward-looking statements cover current expectations and projections about future results, performance, litigation, prospects, and opportunities, including reserves and other mineralization[63] - These statements are subject to risks, uncertainties, and other factors detailed in the Company's 2024 Form 10-K and this Form 10-Q[65] - The Company does not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by federal securities laws[65] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses operational strategy, critical accounting estimates, and Q1 2025 financial performance, highlighting gold production and REE exploration Plan of Operation - Idaho Strategic is a gold producer and critical minerals/REE exploration company focused on generating positive cash flow and increasing its gold production and asset base[66][67] - Primary focus is to grow production at the Golden Chest Mine and reinvest cash flow into the mine, New Jersey Mill, and REE exploration efforts[68] - Strategic expansion into REEs is driven by anticipated demand in electrification, defense spending, and domestic supply chain security, with the company believing it has a first-mover advantage in Idaho's REE land holdings[69] - The company plans to continue seeking partnerships to advance the U.S.' domestic REE supply chain[70] Critical Accounting Estimates - Key estimates include ounces of gold in process and concentrate inventory, and in shipped concentrate, which are subject to final assays and gold price fluctuations between shipment and settlement[71][72] - The asset retirement obligation (ARO) is based on an estimate of future remediation costs, discounted using a credit-adjusted risk-free rate, and is reviewed annually[71][73] - Estimated ARO costs at March 31, 2025, are $104,000 for the Golden Chest Mine and $224,000 for the New Jersey Mine and Mill[73] Highlights during the first quarter of 2025 - Announced REE exploration plans for the 2025 field season[74] - Golden Chest operations: 11,400 tonnes of ore mined, 176 meters of exploration drifting, 77 meters of ramping, and 3,430 cubic meters of backfilling completed[76] - New Jersey Mill operations: 11,337 dry metric tonnes processed with a flotation feed head grade of 8.67 gpt gold and 91.7% gold recovery[76] - Construction of the new tailings filtration circuit at the New Jersey Mill was 80% complete, with commissioning expected in Q2[76] - Exploration drilling: 4,230 meters of surface core drilling completed, and underground drilling restarted focusing on the Klondike area and Red Star zone[76] Results of Operations - Revenue increased 23.4% to $7,278,536 in Q1 2025, driven by an increased average gold price realized of $2,848.74 per ounce (up from $1,968.28 in Q1 2024)[76] - Gross profit as a percentage of sales increased slightly from 48.1% in Q1 2024 to 50.8% in Q1 2025[76] - Operating income decreased by $740,719 to $1,401,254 in Q1 2025, primarily due to a significant increase in exploration expense[76] - Net income decreased to $1,591,851 in Q1 2025 from $2,155,814 in Q1 2024, attributed to higher exploration expense and $495,146 in stock-based compensation[83] - Other income increased by $176,756 to $190,597 in Q1 2025, due to increased interest income and gains on US treasuries[83] Cash Costs and All In Sustaining Costs ("AISC") Reconciliation to Generally Accepted Accounting Principles ("GAAP") Cash Costs and All In Sustaining Costs ("AISC") Reconciliation to Generally Accepted Accounting Principles ("GAAP") | Metric | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :--------------------------------------- | :-------------------------------------- | :-------------------------------------- | | Cash Cost per Ounce | $846.22 | $846.84 | | AISC per Ounce | $1,430.90 | $1,173.10 | | Ounces Produced | 2,900 | 3,116 | | Exploration Costs | $1,371,433 | $267,848 | - Cash cost per ounce remained flat year-over-year, indicating diligence in keeping production costs low[83] - AISC per ounce increased due to higher exploration costs from underground and surface drilling at the Golden Chest Mine[83] - Adjusted AISC without exploration expenses were $993.74 per ounce in Q1 2025, compared to $1,115.11 per ounce in Q1 2024[83] Financial Condition and Liquidity Financial Condition and Liquidity | Cash Flow Activity | Three-Month Period Ended March 31, 2025 | Three-Month Period Ended March 31, 2024 | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | | Operating activities | $2,409,589 | $2,579,853 | | Investing activities | $(1,993,128) | $(1,004,815) | | Financing activities | $(217,238) | $1,433,420 | | Net change in cash and cash equivalents | $199,223 | $3,008,458 | | Cash and cash equivalents, end of period | $1,306,124 | $5,295,457 | - The company is currently producing profitably from underground at the Golden Chest Mine[84] - Management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months, supported by profitable production, equity sales, and potential debt borrowings or restructurings[84] ITEM 3. Quantitative and Qualitative Disclosures about Market Risk States that quantitative and qualitative disclosures about market risk are not required for small reporting companies - Quantitative and qualitative disclosures about market risk are not required for small reporting companies[85] ITEM 4. Controls and Procedures Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2025, with no material changes in internal control Disclosure Controls and Procedures - The Company's disclosure controls and procedures were evaluated by the President (CEO) and Vice President (CFO) and concluded to be effective as of March 31, 2025[86][87] - These controls are designed to ensure timely and accurate reporting of information required under the Exchange Act[86][87] Changes in internal control over financial reporting - There was no material change in internal control over financial reporting during the quarter ended March 31, 2025[88] PART II - OTHER INFORMATION ITEM 1. Legal Proceedings No legal proceedings were reported during the period - No legal proceedings were reported[90] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds Shares were issued via cashless stock option exercises in Q1 2025 and for warrants/options in Q1 2024, relying on Securities Act exemptions - In the first quarter of 2025, 3,722 shares of common stock were issued for outstanding stock options via cashless exercise[92] - In the first quarter of 2024, 147,026 shares of common stock were issued for warrants (net proceeds of $823,346) and 5,357 shares for stock options (net proceeds of $29,999), along with 5,887 shares for cashless stock options[92] - The company relied on the transaction exemption afforded by Section 4(a)(2) of the Securities Act of 1933 and Regulation D Rule 506(b) for these unregistered sales[93] ITEM 3. Defaults Upon Senior Securities The company reported no outstanding senior securities - The company has no outstanding senior securities[94] ITEM 4. Mine Safety Disclosures Mine safety information, including violations and regulatory matters, is included in exhibit 95 to this report - Mine safety information required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in exhibit 95[95] ITEM 5. Other Information No other information was reported in this section - No other information was disclosed in this item[96] ITEM 6. Exhibits Lists all exhibits filed with the Form 10-Q, including corporate governance documents, option grants, certifications, and XBRL - Exhibits include Amended and Restated Articles of Incorporation and By-laws[97] - Registrant's Grant of Options to Employees and Directors dated January 15, 2025 (Exhibit 10.1) is included[97] - Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed[97] - Mine safety information (Exhibit 95) and various XBRL documents are also part of the exhibits[97]