Idaho Strategic Resources(IDR) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Presents the company's comprehensive financial statements and related disclosures ITEM 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, financial instrument details, and operational specifics for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets (Unaudited) Summarizes the company's assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights: | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | |:---|:---|:---|:---|:---| | Total Current Assets | $17,185,946 | $11,742,073 | $5,443,873 | 46.36% | | Total Assets | $57,699,260 | $44,021,630 | $13,677,630 | 31.07% | | Total Current Liabilities | $3,360,652 | $2,279,549 | $1,081,103 | 47.43% | | Total Liabilities | $5,701,315 | $3,608,316 | $2,092,999 | 58.01% | | Total Stockholders' Equity | $51,997,945 | $40,413,314 | $11,584,631 | 28.66% | - Cash and cash equivalents increased from $1,106,901 at December 31, 2024, to $2,444,476 at June 30, 2025[11] - Investments in US treasury notes (current and non-current) significantly increased from $14,984,123 at December 31, 2024, to $21,694,018 at June 30, 2025[11] Condensed Consolidated Statements of Operations (Unaudited) Details the company's revenues, expenses, and net income over specific periods Condensed Consolidated Statements of Operations Highlights: | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | YoY Change (%) | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | YoY Change (%) | |:---|:---|:---|:---|:---|:---|:---| | Total Revenue | $9,476,739 | $6,125,382 | 54.7% | $16,755,275 | $12,024,320 | 39.3% | | Gross Profit | $5,475,786 | $3,073,425 | 78.2% | $9,173,872 | $5,911,662 | 55.2% | | Operating Income | $2,516,874 | $2,095,596 | 20.1% | $3,918,128 | $4,237,569 | -7.5% | | Net Income | $2,739,972 | $2,134,922 | 28.3% | $4,331,823 | $4,290,736 | 1.0% | | Net Income Attributable to IDR | $2,767,458 | $2,157,873 | 28.2% | $4,376,437 | $4,328,982 | 1.1% | | Basic EPS | $0.20 | $0.17 | 17.6% | $0.32 | $0.34 | -5.9% | | Diluted EPS | $0.20 | $0.17 | 17.6% | $0.31 | $0.34 | -8.8% | - The increase in revenue for both periods was primarily due to a higher average gold price realized ($3,223.38 for three-month period and $3,049.19 for six-month period ended June 30, 2025, compared to $2,043.84 and $2,102.89, respectively, in 2024)[87] - Exploration expense significantly increased by $1,624,705 (three-month) and $2,728,290 (six-month) due to increased core drilling activity[87] Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) Outlines changes in equity components, including common stock and accumulated deficit Changes in Stockholders' Equity Highlights: | Metric | Balance Jan 1, 2025 | Balance Jun 30, 2025 | Change | |:---|:---|:---|:---| | Common Stock Shares | 13,665,058 | 14,058,339 | 393,281 | | Common Stock Amount | $46,059,318 | $53,296,323 | $7,237,005 | | Accumulated Deficit | $(8,373,953) | $(3,997,516) | $4,376,437 | | Total Stockholders' Equity | $40,413,314 | $51,997,945 | $11,584,631 | - Issuance of common stock for cash, net of offering costs, contributed $6,246,713 to equity during the six months ended June 30, 2025[18] - Stock-based compensation recognized was $990,292 for the six months ended June 30, 2025[18] Condensed Consolidated Statements of Cash Flows (Unaudited) Summarizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Six-Month Periods Ended June 30): | Cash Flow Activity | 2025 | 2024 | |:---|:---|:---| | Net cash provided by operating activities | $5,952,549 | $5,209,442 | | Net cash used by investing activities | $(10,312,403) | $(8,199,280) | | Net cash provided by financing activities | $5,697,429 | $2,517,619 | | Net change in cash and cash equivalents | $1,337,575 | $(472,219) | | Cash and cash equivalents, end of period | $2,444,476 | $1,814,780 | - Significant investing activities included purchases of property, plant, and equipment ($2,436,596) and US treasury notes ($6,709,895) in 2025[20] - Financing activities in 2025 were primarily driven by proceeds from the sale of common stock, net of issuance cost ($6,246,713)[20] Notes to Condensed Consolidated Financial Statements (Unaudited) These notes provide essential details on the Company's accounting policies, estimates, and specific financial statement line items, offering context and further breakdown of the condensed consolidated financial statements - The unaudited interim condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, relying on estimates and assumptions[22][23] - The Company operates as a single operating segment, with financial information presented on a consolidated basis[42] Note 1. The Company and Significant Accounting Policies Details the company's structure and key accounting principles applied in financial reporting - The condensed consolidated financial statements include the accounts of Idaho Strategic Resources, Inc. and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV)[25] - Gold revenue from direct sales is recognized upon transfer of control; concentrate sales revenue is recognized at shipment based on estimated forward prices, with adjustments until final settlement[26] - Exploration costs are expensed as incurred, while pre-development costs (once ore reserves are identified as economically viable) are capitalized[30][31] Note 2. Investments in US Treasury Notes Provides details on the company's holdings in US Treasury notes, including their classification and fair value Investments in US Treasury Notes (Held to Maturity): | Category | Amortized Cost (Jun 30, 2025) | Fair Value (Jun 30, 2025) | Amortized Cost (Dec 31, 2024) | Fair Value (Dec 31, 2024) | |:---|:---|:---|:---|:---| | US Treasury notes, current (Matures within 1 year) | $10,611,794 | $10,637,000 | $7,775,193 | $7,806,000 | | US Treasury notes, non-current (Matures in 1-5 years) | $11,082,224 | $11,197,000 | $7,208,930 | $7,281,000 | | Total | $21,694,018 | $21,834,000 | $14,984,123 | $15,087,000 | - Fair value of investments in US treasury notes is determined using Level 1 inputs[48] Note 3. Inventories Details the composition and valuation of the company's inventory, including finished goods and supplies Inventories: | Category | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Finished goods (Concentrate) | $513,580 | $334,033 | | Mine parts and supplies | $470,214 | $475,336 | | Mill parts and supplies | $137,199 | $90,555 | | Total Inventories | $1,120,993 | $899,924 | Note 4. Sales of Products Outlines the company's revenue streams from gold and silver sales, including customer information and settlement details - The Company sells gold flotation concentrates to H&H Metals and unrefined gold-silver doré to Cascade Refining[50] - At June 30, 2025, 9,244 ounces of gold had been sold but not finally settled, with 6,986 ounces exposed to future price changes[50] Sales of Products by Metal Type: | Metal | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2024 | |:---|:---|:---|:---|:---| | Gold | $9,588,879 | $16,994,267 | $6,285,048 | $12,410,268 | | Silver | $44,454 | $76,209 | $27,596 | $54,985 | | Less: Smelter and refining charges | $(156,594) | $(315,201) | $(187,262) | $(440,933) | | Total Revenue | $9,476,739 | $16,755,275 | $6,125,382 | $12,024,320 | Note 5. Related Party Transactions Reports on transactions with related parties, specifically lease payments Related Party Lease Payments: | Period | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2024 | |:---|:---|:---|:---|:---| | Lease Payments | $7,688 | $15,376 | $7,688 | $15,308 | Note 6. JV Arrangements Describes the company's joint venture and equity method investments, including ownership and accounting treatment Joint Venture and Equity Method Investments: | JV/Equity | June 30, 2025 Ownership | Significant Influence? | Accounting Method | December 31, 2024 Ownership | Significant Influence? | Accounting Method | |:---|:---|:---|:---|:---|:---|:---| | NJMJV | 65% | Yes | Consolidated | 65% | Yes | Consolidated | | Butte Highlands JV, LLC | 50% | No | Cost | 50% | No | Cost | | Buckskin | 37% | Yes | Equity | 37% | Yes | Equity | Note 7. Earnings per Share Presents the calculation of basic and diluted earnings per share for the reporting periods Earnings Per Share Calculation: | Metric | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2024 | |:---|:---|:---|:---|:---| | Net Income | $2,739,972 | $4,331,823 | $2,134,922 | $4,290,736 | | Weighted Average Shares - Basic | 14,007,582 | 13,837,894 | 12,836,205 | 12,674,789 | | Weighted Average Shares - Diluted | 14,134,531 | 13,939,790 | 12,999,717 | 12,850,749 | | Net Income Per Share - Basic | $0.20 | $0.32 | $0.17 | $0.34 | | Net Income Per Share - Diluted | $0.20 | $0.31 | $0.17 | $0.34 | Note 8. Property, Plant, and Equipment Details the company's property, plant, and equipment, including categories, net values, and depreciation expense Property, Plant, and Equipment (Net): | Category | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Mine Equipment, Net | $6,369,160 | $4,378,247 | | Mill Equipment, Net | $6,170,004 | $5,126,779 | | Buildings, Net | $2,771,157 | $2,420,336 | | Land | $978,703 | $978,703 | | Total | $16,289,024 | $12,904,065 | Depreciation Expense for Property, Plant, and Equipment: | Period | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2024 | |:---|:---|:---|:---|:---| | Depreciation Expense | $488,183 | $1,003,465 | $431,598 | $908,223 | Note 9. Mineral Properties Provides a breakdown of the company's mineral properties, their net values, and associated amortization expense Mineral Properties (Net): | Property | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Golden Chest | $10,994,124 | $9,881,412 | | New Jersey | $256,768 | $256,768 | | McKinley-Monarch | $200,000 | $200,000 | | Potosi | $150,385 | $150,385 | | Park Copper/Gold | $78,000 | $78,000 | | Eastern Star | $250,817 | $250,817 | | Oxford | $40,000 | $40,000 | | Accumulated Amortization | $(371,927) | $(284,033) | | Total | $11,598,167 | $10,573,349 | Amortization Expense for Mineral Properties: | Period | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | 6 Months Ended Jun 30, 2024 | |:---|:---|:---|:---|:---| | Amortization Expense | $53,555 | $87,894 | $24,332 | $49,495 | Note 10. Notes Payable Details the company's outstanding notes payable, including their categories, total amounts, and future principal payment schedule Notes Payable: | Category | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Mine Equipment | $2,451,508 | $962,384 | | Mill Equipment | $606,299 | $540,773 | | Buildings/Land | $221,861 | $229,582 | | Total Notes Payable | $3,279,668 | $1,732,739 | | Due within one year | $1,254,269 | $709,381 | | Due after one year | $2,025,399 | $1,023,358 | Future Principal Payments of Notes Payable (as of June 30, 2025): | Period | Amount | |:---|:---| | 7/1/2025 – 6/30/2026 | $1,254,269 | | 7/1/2026 – 6/30/2027 | $1,022,795 | | 7/1/2027 – 6/30/2028 | $511,630 | | 7/1/2028 – 6/30/2029 | $331,468 | | 7/1/2029 – 6/30/2030 | $159,506 | | Total | $3,279,668 | Note 11. Investment in Buckskin Reports on the company's equity method investment in Buckskin Gold and Silver, Inc., including ownership and financial impact - The Company holds a 37% common stock interest in Buckskin Gold and Silver, Inc., accounted for using the equity method[64] - The investment resulted in an equity loss of $159 for the three-month period and income of $1,187 for the six-month period ended June 30, 2025[64] Note 12. Stockholders' Equity Provides information on the company's stockholders' equity, specifically regarding stock purchase warrants - There were no stock purchase warrants outstanding at June 30, 2025, as all warrants were exercised by December 31, 2024[66] Note 13. Stock Options Details the company's stock option grants, related compensation expense, and option activity - On January 15, 2025, the Company granted 400,000 stock options to employees with an exercise price of $11.50, vesting equally over four periods[67] Stock-Based Compensation Expense: | Period | 3 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2025 | |:---|:---|:---| | Expense | $495,146 | $990,292 | Stock Option Activity: | Metric | Number of Options | Weighted Average Exercise Prices | |:---|:---|:---| | Balance December 31, 2024 | 77,000 | $5.17 | | Granted | 400,000 | $11.50 | | Exercised | (20,000) | $5.25 | | Outstanding at June 30, 2025 | 457,000 | $10.71 | Note 14. Subsequent Events Reports on significant events that occurred after the reporting period but before the financial statements were issued - Subsequent to June 30, 2025, the Company sold 380,000 shares of common stock for net proceeds of $6,246,713[68] - Issued 13,281 shares of common stock for outstanding stock options via cashless exercises by employees after June 30, 2025[68] Forward-Looking Statements This section provides a cautionary statement regarding forward-looking statements made in the Form 10-Q, emphasizing that actual results may differ materially due to various risks and uncertainties - Forward-looking statements, identified by words like 'expect' and 'anticipate,' are based on current information but are subject to risks and uncertainties[70] - Readers are cautioned not to place undue reliance on these statements, and the Company does not intend to update or revise them unless required by law[71] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition, results of operations, and liquidity for the periods presented, including strategic plans, critical accounting estimates, and key operational highlights Plan of Operation Outlines the company's strategic objectives, focusing on gold production and critical minerals exploration - Idaho Strategic is a gold producer and critical minerals/rare earth element (REE) exploration company, aiming to generate positive cash flow and increase its asset base[72][73] - Primary focus is on growing gold production at the Golden Chest Mine and reinvesting cash flow into the mine, New Jersey Mill, and REE exploration[74] - The Company has expanded into REE exploration with properties in Idaho (Lemhi Pass, Diamond Creek, Mineral Hill) to diversify holdings and capitalize on anticipated demand[75] Critical Accounting Estimates Discusses key accounting estimates that require significant judgment and can materially impact financial results - Key estimates include ounces of gold in inventory and concentrate sales (subject to final assays and fluctuating gold prices), reclamation bond obligations, and amortization of development costs[77][78] - The reclamation bond obligation is based on estimated future costs to remediate properties, evaluated annually, and discounted using a credit-adjusted risk-free rate[79] - Amortization of development costs at the Golden Chest Mine is calculated using the units-of-production method over the expected life, based on estimated reserves and resources[80] Highlights during the second quarter of 2025 Summarizes significant operational and strategic achievements during the second quarter of 2025 - Executed a long-term lease agreement for approximately 1,500 acres of mineral claims within the Mineral Hill and Lemhi Pass REE projects[83] - Signed a Memorandum of Understanding with Clean Core Thorium Energy, Inc. to evaluate thorium mining and fuel fabrication for a 'Made in America' supply chain[83] - At the Golden Chest, 10,240 tonnes of ore were mined from underground stopes, and 92 meters of development were completed in the Main Access Ramp (MAR)[82][87] - The New Jersey Mill processed 10,240 dry metric tonnes (dmt) with a flotation feed head grade of 9.97 gpt gold and 92.6% gold recovery; the tailings filtration circuit was completed and commissioned[87] - Continued exploration drilling at Golden Chest (2,176 meters) and commenced drilling in the Murray Gold Belt (1,687 meters) and Eastern Star project (1,956 meters)[87] Results of Operations Analyzes the company's financial performance, including revenue, gross profit, operating income, and net income trends Financial Performance Summary: | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | YoY Change (%) | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | YoY Change (%) | |:---|:---|:---|:---|:---|:---|:---| | Revenue | $9,476,739 | $6,125,382 | 54.7% | $16,755,275 | $12,024,320 | 39.3% | | Gross Profit as % of Sales | 57.8% | 50.2% | 7.6 pp | 54.8% | 49.2% | 5.6 pp | | Exploration Expense | $2,244,761 | $620,056 | 262.0% | $3,616,194 | $887,904 | 307.3% | | Operating Income | $2,516,874 | $2,095,596 | 20.1% | $3,918,128 | $4,237,569 | -7.5% | | Net Income | $2,739,972 | $2,134,922 | 28.3% | $4,331,823 | $4,290,736 | 1.0% | - The significant increase in exploration expense is attributed to increased core drilling activity, which is expected to continue or increase throughout 2025[87] - Other income increased substantially due to increased interest income and gains on US treasuries from the Company's short-term investment account, opened mid-Q2 2024[87] Cash Costs and All In Sustaining Costs ("AISC") Reconciliation to Generally Accepted Accounting Principles ("GAAP") Reconciles non-GAAP cash cost and All-In Sustaining Cost (AISC) per ounce to GAAP measures, providing insights into operational efficiency - Cash cost per ounce and AISC per ounce are non-GAAP measures used to assess operating performance and net cash flow after costs for pre-development, exploration, reclamation, and sustaining capital[90] Cash Cost and AISC Per Ounce: | Metric | 3 Months Ended Jun 30, 2025 | 3 Months Ended Jun 30, 2024 | YoY Change | 6 Months Ended Jun 30, 2025 | 6 Months Ended Jun 30, 2024 | YoY Change | |:---|:---|:---|:---|:---|:---|:---| | Ounces Produced | 3,010 | 2,903 | 3.7% | 5,910 | 6,019 | -1.8% | | Cash Cost per Ounce | $1,064.68 | $904.67 | +$160.01 | $957.48 | $874.73 | +$82.75 | | AISC per Ounce | $1,980.41 | $1,387.34 | +$593.07 | $1,710.77 | $1,276.43 | +$434.34 | - The increase in AISC per ounce is primarily due to higher exploration costs from underground and surface drilling at the Golden Chest Mine and other projects[87] Financial Condition and Liquidity Assesses the company's financial health and ability to meet short-term and long-term obligations, including cash flow projections - The Company is currently producing profitably from the Golden Chest Mine[93] - Management believes that cash flows from operations, existing cash, and potential capital raising activities (equity sales, debt) are sufficient to fund planned operations and meet contractual obligations for the next 12 months[93] Net Cash Provided (Used) by Activities (Six-Months Ended June 30): | Activity | 2025 | 2024 | |:---|:---|:---| | Operating activities | $5,952,549 | $5,209,442 | | Investing activities | $(10,312,403) | $(8,199,280) | | Financing activities | $5,697,429 | $2,517,619 | | Net change in cash and cash equivalents | $1,337,575 | $(472,219) | | Cash and cash equivalents, end of period | $2,444,476 | $1,814,780 | ITEM 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Idaho Strategic Resources, Inc. is not required to provide quantitative and qualitative disclosures about market risk - Disclosure regarding market risk is not required for small reporting companies[94] ITEM 4. Controls and Procedures This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and concluded to be effective as of June 30, 2025, ensuring timely and accurate reporting[96][97] - There was no material change in internal control over financial reporting during the quarter ended June 30, 2025[98] PART II - OTHER INFORMATION Presents additional non-financial information and disclosures required for the reporting period ITEM 1. Legal Proceedings This section confirms that there are no legal proceedings to report for the Company - The Company has no legal proceedings to report[100] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the Company's unregistered sales of equity securities, primarily common stock issued through cashless exercises of stock options and warrants, and the reliance on specific Securities Act exemptions - In the second quarter of 2025, 9,559 shares of common stock were issued for outstanding stock options via cashless exercises by employees[101] - In the second quarter of 2024, the Company issued shares for warrants exercised (29,763 shares for $166,673) and stock options exercised (21,429 shares for $120,002, and 86,481 shares via cashless exercises)[102] - These transactions relied on the exemption afforded by Section 4(a)(2) of the Securities Act of 1933 and Regulation D Rule 506(b)[103] ITEM 3. Defaults Upon Senior Securities This section states that the Company has no outstanding senior securities - The Company has no outstanding senior securities[104] ITEM 4. Mine Safety Disclosures This section indicates that information regarding mine safety violations and regulatory matters is provided in an exhibit to the 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[105] ITEM 5. Other Information This section confirms that there is no other information to report - No other information is reported in this section[106] ITEM 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, option grants, policies, certifications, and XBRL data Key Exhibits Filed: | Exhibit Number | Description | |:---|:---| | 3.1 | Amended and Restated Articles of Incorporation | | 3.2 | Amended and Restated By-laws | | 10.1 | Registrant's Grant of Options to Employees and Directors (Jan 15, 2025) | | 19 | Insider trading policy | | 31.1, 31.2 | Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002 | | 32.1, 32.2 | Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002 | | 95 | Mine safety information listed in Section 1503 of the Dodd-Frank Act | | 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE | XBRL Instance Document and Taxonomy Extensions |