HYCROFT MNG.HLDG.EQ. WARRT(HYMCW) - 2025 Q2 - Quarterly Results

Introduction & Disclaimer Disclaimer The report includes a standard disclaimer regarding forward-looking statements, industry data, and currency, noting that all dollar amounts are in US dollars unless otherwise specified - Information and database are derived from third-party research firms[4] - All dollar amounts are expressed in US dollars, unless otherwise stated[4] Key Investment Proposition Investment Highlights Hycroft Mining presents a compelling investment case due to its substantial gold and silver resources in a Tier 1 jurisdiction, recent high-grade discoveries, ongoing technical studies for milling operations, a robust cash position, and an experienced management team - Substantial Gold and Silver Resource in Tier 1 Jurisdiction[6] - New High-Grade Discovery + Exploration Upside[6] - Cash Position ~ US$68.8 million on June 30, 2025[6] Gold and Silver Resources Overview Hycroft holds significant Measured & Indicated (M&I) and Inferred resources for both gold and silver, with substantial gold and silver equivalent resources calculated at a 77.55:1 gold-to-silver ratio | Resource Type | Gold (g/t) | Silver (g/t) | | :------------ | :------------ | :-------------- | | M&I Gold | 0.401 | - | | M&I Silver | - | 13.68 | | Inferred Gold | 0.389 | - | | Inferred Silver | - | 11.4 | | Resource Type | Gold Eq (g/t) | Silver Eq (g/t) | | :------------ | :--------------- | :----------------- | | M&I Gold | 0.578 | - | | M&I Silver | - | 44.85 | | Inferred Gold | 0.533 | - | | Inferred Silver | - | 41.33 | - Gold and Silver Equivalent is calculated at a gold-to-silver ratio of 77.55:1 (based on $1900 gold and $24.50 silver)[9] Precious Metals Market Context Gold is presented as a traditional safe-haven asset, a long-term store of value, and an inflation hedge, with increasing central bank reserves. Silver is highlighted for its dual role as a precious and industrial metal, driven by growing demand from green energy technologies and limited supply - Gold is the original safe-haven asset, a long-term store of value, and a hedge against inflation, with central bank reserves rising[11] - Silver has a dual role as a precious and industrial metal (50/50) and is experiencing increasing demand from green energy technologies (solar, EVs)[11] - Strong gold-to-silver ratio trending higher[11] Company Profile: Asset, Team & Operations World-Class Asset and Leadership Team Hycroft possesses one of the world's largest gold and silver deposits in a Tier 1 jurisdiction, supported by well-advanced development, a new high-grade silver discovery, significant upside potential, and a proven leadership team. The company maintains an award-winning safety record and a strong cash position - One of the world's largest gold and silver deposits in a Tier 1 Jurisdiction, with development well-advanced and significant infrastructure on site[13] - New high-grade silver discovery represents a significant new value driver for the Hycroft Mine[13] - Award-winning safety record: TRIFR and LTI of 0.00 for more than two and a half consecutive years[13] - Cash Position: **$68.8 million** unrestricted + $30.0 million restricted as of June 30, 2025[13] Management and Technical Team Hycroft's management team consists of experienced 'Mine Finders and Mine Builders' with a strong track record, many of whom previously worked together at Romarco Minerals, where they successfully grew the company from a $20 million to over $1 billion market capitalization - Executive leadership team includes Diane Garrett (President & CEO), Stan Rideout (EVP & CFO), Rebecca Jennings (SVP & General Counsel), David Thomas (SVP & General Manager), Alex Davidson (VP Exploration), and Lily He (VP Finance & Treasury)[15][16] - Many team members were formerly with Romarco Minerals, where they grew the company from a market cap of $20 million to over $1 billion, aiming to apply the same principles at Hycroft[16][17] Nevada: A Premier Mining Jurisdiction Nevada is recognized as a premier mining jurisdiction, leading the nation in mining programs within the lower 48 states. It is a significant producer of gold and silver, characterized by a strong ethic towards reclamation, favorable mining regulations, excellent infrastructure, and accessible labor - Nevada leads the nation with the largest mining program in the lower 48 states and is a significant producer of gold and silver[31] - The state offers a favorable mining jurisdiction with excellent infrastructure and accessible labor/contractors[31] Hycroft Mine: Asset Details The Hycroft mine is one of the world's largest gold and silver deposits, featuring extensive on-site infrastructure and permits for both heap leach and milling operations. It is considered de-risked and ahead of other developers, with a vast, largely unexplored district-scale land package - Among the world's largest gold and silver deposits[35] - Extensive infrastructure on-site and permitted for heap leach and milling operations[35] - De-risked and ahead of other developers[35] - Large untapped district-scale land package of over 64,000 acres, with less than 10% explored[35] Property and Infrastructure Hycroft's property spans over 64,000 acres, with less than 10% explored, and features comprehensive onsite infrastructure including a lab, maintenance, crusher, Merrill-Crowe facility, and a new permitted leach pad - The land package is over 64,000 acres (25,900 hectares), with the resource area comprising less than 10% and remaining open in all directions and at depth[36][61] - Onsite infrastructure includes lab, admin, maintenance, truck shop, warehouse, crusher and conveyor belt circuit, Merrill-Crowe facility, and a new permitted leach pad[39][42] Property Overview - Land package is over 64,000 acres (25,900 hectares)[36] - Resource area comprises less than 10% of the land package and remains open in all directions and at depth[36] Current Infrastructure - Onsite facilities include lab, admin, maintenance, truck shop, and warehouse[39] - Operational equipment includes a crusher and conveyor belt circuit, and a Merrill-Crowe facility[39][42] - A new leach pad is permitted and available for ore loading[42] Strategic Objectives & Recent Achievements 2025 Strategic Catalysts Hycroft's key catalysts for 2025 include finalizing metallurgical recoveries for both POX and Roasting, launching a drill program on high-grade silver systems, completing a PEA/PFS with updated economics and resource, and assessing the restart of heap-leach operations prior to milling - Finalize Metallurgical Recoveries on both POX and Roasting (3Q-25)[21][84] - Launch Drill Program on High-Grade Silver Systems to Establish Resource & Potential Mine Plan (3Q-25)[21][84] - Complete PEA / PFS with Economics and Updated Resource (4Q-25)[21][84] - Assess Restart of Heap-Leach Operation Prior to Milling Operation (3Q-25)[21][84] - Strengthen Balance Sheet & Reduce Debt (3Q-25)[21][84] Operational Approach Hycroft's operational approach emphasizes outstanding safety, expanding high-grade discoveries, advancing technical studies for sulfide milling to move towards production, and uncovering district potential through ongoing exploration of its vast, largely unexplored land package - Committed to outstanding safety performance and a strong company culture focused on delivering value to stakeholders[24] - Develop untapped potential by expanding recent high-grade discoveries and evaluating new potential underground opportunities[24] - Advance towards production by completing technical studies for sulfide milling operation and finalizing Roaster vs POx process flow sheet[24] - Uncover district potential on the 64,000-acre land package (only 10% explored) through ongoing exploration to identify new targets[24] Key Accomplishments Hycroft has achieved an industry-leading safety record, executed its largest exploration program in over a decade resulting in significant high-grade silver discoveries, improved flotation recoveries, and strengthened its treasury and market presence through strategic shareholder investment - Industry-leading Safety Record: Award-winning safety culture with a trailing 30-month TRIFR of ZERO and over 1.3 million man-hours without a Lost Time Incident[27] - Largest Exploration Program In +10 Years: Drilled two best holes at Hycroft in 2023 and 2024[27] - Improved Flotation Recoveries: Average flotation recoveries 10% higher than previously modeled (89% gold | 93% silver)[27] - Strengthened Treasury And Market Presence: Recognized as a major silver player, with Eric Sprott at 21% ownership and additional institutional investors representing ~33%[27] 2025 Focus Areas For 2025, Hycroft is strategically focused on maintaining operational excellence, completing a comprehensive technical report with economic analysis, and expanding its district exploration efforts to target high-grade silver systems - Operational Excellence[44] - Technical Report with Economics[44] - District Expansion of High-Grade Silver Systems[44] ESG, Technical Studies & Exploration ESG Commitment Hycroft is deeply committed to integrating ESG principles across its operations, focusing on environmental stewardship (climate change, water, waste), social responsibility (diversity, health & safety, community engagement), and robust governance (ethical standards, transparency, board diversity). The company boasts an impressive safety record with zero incidents over 1.3 million man-hours - Committed to conducting business in a manner that prioritizes ESG principles[47] - Environmental focus includes climate change, GHG emissions, energy management, water management, waste management, and biodiversity[47] - Social focus includes diversity & equal opportunity, labor relations, health and safety, working conditions, human rights, and community engagement[47] - Achieved TRIFR 0.00 and over 1.3 million incident-free man-hours[46] Metallurgical Studies Hycroft has significantly improved gold and silver flotation recoveries to 89% and 93% respectively, with consistent results, and is advancing technical studies for a full report, including roaster and POx testing, capital equipment, and operating cost assessments - Statistically significant improvement in gold and silver recoveries, with statistical reduction in variability[52] - Results are consistent and repeatable across formation, depth, domain, geochemistry, silicification, and grade[52] - Ongoing technical studies include benchtop roaster testing, capital equipment selection, operating cost assessment, and benchtop autoclave testing (POx)[54] Positive Flotation Recoveries | Metal | Recovery (%) | | :---- | :----------- | | Gold | 89% | | Silver | 93% | - Statistically significant improvement in gold and silver recoveries, with statistical reduction in variability[52] - Results are consistent and repeatable across formation, depth, domain, geochemistry, silicification, and grade[52] Technical Report Bridge & Program Details - Aiming for PFS - FS with Economics and Initial Mine Plan by 4Q 2025[54] - Ongoing studies include Benchtop Roaster Testing, Capital Equipment Selection, Operating Cost Assessment, and Benchtop Autoclave Testing (POx)[54] - Metallurgical program involved 219 variability samples, including duplicates and triplicates, representing seven mine pits and various geological characteristics[100] Mineral Resources & Estimation Hycroft's combined Measured + Indicated resources total 819,162 Thousand Tonnes at 0.401 g/t Gold and 13.68 g/t Silver, containing 10.581 million ounces of gold and 360.664 million ounces of silver. These estimates are based on metal prices of $1,900/oz Gold and $24.50/oz Silver, with detailed mining and processing cost assumptions - Mineral resources are based on metal prices of $1,900/oz Gold and $24.50/oz Silver[95] - Cutoffs are income - process cost = NPR = NSR - Process OpEx[95] - Mineral resources are contained within a computer-generated optimized pit[95] Detailed Mineral Resources | Classification | Thousand Tonnes | Gold (g/tonne) | Silver (g/tonne) | Contained Gold (Thousand Ounces) | Contained Silver (Thousand Ounces) | | :------------- | :------ | :-------------- | :---------------- | :------------------------- | :---------------------------- | | Measured | 450,785 | 0.413 | 14.93 | 5,989 | 216,690 | | Total Indicated | 368,377 | 0.387 | 12.14 | 4,592 | 143,974 | | Total Meas + Ind | 819,162 | 0.401 | 13.68 | 10,581 | 360,664 | | Total Inferred | 268,179 | 0.389 | 11.14 | 3,356 | 96,117 | - Source: Technical Report Summary, dated March 27, 2023[94] Resource Estimation Parameters | Assumption | Unit of measure | Value | | :--------- | :-------------- | :---- | | Gold price | $/oz | $1,900 | | Silver price | $/oz | $24.50 | | Mining cost, base | Per ton material moved | $1.45 | | Recovery Type | % | | :------------ | :- | | Flotation recovery - gold | 80.0% | | Flotation recovery - silver | 80.0% | | Overall recovery, mill | 76.0% | | Cost Type | $/ton ore | | :-------- | :-------- | | Mill + Concentrate POX + G&A | $14.83 | | ROM leach + G&A (oxide) | $3.19 | | ROM leach + G&A (transition & sulfide) | $3.59 | Exploration Program & Results Hycroft's 2025 drill program targets 14,500 meters of core drilling to expand high-grade silver systems at Vortex and Brimstone. Recent 2024 drill highlights from these areas show exceptional high-grade silver and gold mineralization, with visible silver in core samples. The company is also exploring potential high-grade extensions and new targets outside the current resource area, indicating significant district-scale potential - 2025 drill program targets 14,500 meters of core drilling using two rigs[58] - Focus on expanding high-grade silver systems at Vortex and Brimstone[58] - High-grade mineralization remains open along trends and at depth[62] - Extensive surface mapping, soils geochemistry, geophysics, and high-resolution drone imaging indicate additional strong mineralization trends to the east and northeast[79] 2025 Drill Program - 14,500 meters of core drilling planned[58] - Two core drill rigs will be utilized[58] - Target expansion of high-grade silver systems at Vortex and Brimstone[58] Geological Context & High-Grade Trends - Resource area comprises less than 10% of the land package and remains open in all directions and at depth[61] - New high-grade silver and gold mineralization trends identified[62] - High-grade mineralization remains open along trends and at depth, offering open pit and underground optionality[62] 2024 Drill Highlights: Brimstone - Visible silver in core from HD24_6010 from Brimstone, including 18.2 meters of 1,987.35 g/t Silver[63] - Ultra-high-grade intercepts include 0.9 meters @ 10,289 g/t Silver and 0.3 meters @ 20,280 g/t Silver[63] | Hole ID | FROM (m) | TO (m) | INTERVAL (m) | Silver (g/t) | Gold (g/t) | Gold Eq (g/t) | | :------ | :------- | :----- | :----------- | :------- | :------- | :--------- | | H24D-6010 | 328.4 | 346.6 | 18.2 | 1,987.35 | 0.35 | 25.98 | | including | 340.2 | 341.1 | 0.9 | 10,289.00 | 0.72 | 133.39 | | H24D-6018 | 306.6 | 327.9 | 21.2 | 2,359.68 | 0.38 | 30.81 | | including | 317.4 | 317.6 | 0.2 | 80,017.00 | 1.62 | 1,033.42 | 2024 Drill Highlights: Vortex | Hole ID | FROM (m) | TO (m) | INTERVAL (m) | Silver (g/t) | Gold (g/t) | Gold Eq (g/t) | | :------ | :------- | :----- | :----------- | :------- | :------- | :--------- | | H23D-6001 | 383.2 | 507.5 | 124.4 | 102.6 | 0.95 | 2.3 | | including | 451.7 | 452.0 | 0.3 | 4,170.0 | 0.03 | 53.8 | | H24D-6002 | 357.3 | 458.2 | 100.9 | 100.6 | 0.38 | 1.7 | | including | 441.9 | 442.4 | 0.5 | 3,310.0 | 5.90 | 48.6 | High Grade Trends Visuals - Grade shells based on 10ft x 10ft x 10ft block model for Brimstone and Vortex illustrate the continuity of high-grade mineralization[69][72] Conceptual Underground Access - Conceptual diagrams illustrate potential underground access points and layouts for both the Brimstone and Vortex high-grade zones[75] Potential Extensions & New Targets - Extensive surface mapping, soils geochemistry, Induced Polarity Geophysics, and high-resolution drone imaging indicate additional strong mineralization trends to the east and northeast[79] - Testing high priority exploration targets outside the currently known resource[82] - The entire land package and historical data provide insight into structural intersections of mineralization[82] Corporate Governance & Financials Capitalization & Ownership As of July 24, 2025, Hycroft has a market capitalization of $144.5 million with 39.1 million shares outstanding. Key shareholders include Eric Sprott (21%), AMC Entertainment (6%), and institutional investors (33%), with retail investors holding the largest share at 38%. The company reported $68.8 million in unrestricted cash as of June 30, 2025 | Metric | Value | | :----- | :---- | | Share Price - HYMC (NASDAQ) ($) | $3.69 | | Shares Outstanding (Million) | 39.1 | | Market Capitalization ($ Million) | 144.5 | | Unrestricted Cash (June 30, 2025) ($ Million) | 68.8 | | Debt (June 30, 2025) ($ Million) | 131 | | Shareholder | Ownership (%) | | :---------- | :------------ | | Eric Sprott | 21% | | AMC Entertainment | 6% | | Institutional | 33% | | Insiders | 2% | | Retail | 38% | Debt Structure Hycroft's debt comprises $15 million in Senior Secured debt held by Sprott Resource Lending Corp. (10.55% interest, maturity May 31, 2027) and $118 million in Subordinated Notes held by various institutional investors (10% interest, maturity December 1, 2027). Sprott also holds a 1.5% royalty on the company | Debt Type | Held By | Face Value ($ Million) | Interest Rate (%) | Maturity Date | | :-------- | :------ | :--------- | :------------ | :------------ | | Senior Secured | Sprott Resource Lending Corp. | $15 | 10.55 | May 31, 2027 | | Subordinated Notes | Mudrick, Whitebox Advisors, Highbridge Capital, Aristeia Capital | $118 | 10 | December 1, 2027 | - Sprott lending holds a 1.5% royalty[101] - Subordinated Notes interest is paid-in-kind, accrued and capitalized to principal quarterly (non-cash until maturity)[101] Board of Directors The Board of Directors is composed of experienced professionals from the mining and finance sectors, including Chairman Thomas Weng, President & CEO Diane Garrett, and independent directors with diverse backgrounds from notable companies such as Deutsche Bank, Newmont, AMC Entertainment, and Sprott Resource Holdings - Board members include Thomas Weng (Chairman), Diane Garrett (President & CEO), David Naccarati, Sean Goodman (AMC Appointee), Stephen Lang, Marni Wieshofer, and Michael Harrison[91][92] - Directors bring diverse experience from companies such as Alta Capital Partners, Deutsche Bank, Romarco Minerals, Newmont, AMC Entertainment, Centerra Gold Inc., and Sprott Streaming and Royalty Fund[91][92]