i-80 Gold (IAUX) - 2025 Q2 - Quarterly Report

FORWARD-LOOKING INFORMATION This section outlines forward-looking statements, their inherent risks, and the company's disclaimer regarding updates - Forward-looking statements cover future plans, operations, project merits, development timing, and financial outlook, including gold output, growth expenditures, and permitting[9] - Actual results may differ materially due to numerous risks and uncertainties, such as general economic conditions, commodity price volatility, title risks, capital access, currency fluctuations, and operational risks[9] - Readers are advised not to place undue reliance on forward-looking statements, and the Company disclaims any obligation to update them, except as required by law[9] PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements and Supplementary Data This item provides the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and changes in equity, along with detailed notes explaining significant accounting policies, inventory, debt, equity, revenue, expenses, and financial instruments Condensed Consolidated Balance Sheets (unaudited) This section presents the company's unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights (USD thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------- | :-------------- | :---------------- | :----- | | ASSETS | | | | | Cash and cash equivalents | $133,691 | $19,001 | +$114,690 | | Total current assets | $166,579 | $42,304 | +$124,275 | | Total non-current assets | $616,302 | $613,325 | +$2,977 | | Total assets | $782,881 | $655,629 | +$127,252 | | LIABILITIES | | | | | Total current liabilities | $120,531 | $74,050 | +$46,481 | | Total non-current liabilities | $198,810 | $240,915 | -$42,105 | | Total liabilities | $319,341 | $314,965 | +$4,376 | | EQUITY | | | | | Common shares | $790,183 | $606,505 | +$183,678 | | Accumulated deficit | $(356,238) | $(284,818) | -$71,420 | | Total equity | $463,540 | $340,664 | +$122,876 | Condensed Consolidated Statements of Operations (unaudited) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations Highlights (USD thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $27,836 | $7,184 | $41,884 | $15,597 | | Cost of sales | $(26,491) | $(19,422) | $(37,257) | $(27,753) | | Gross profit (loss) | $798 | $(12,312) | $3,704 | $(12,607) | | Loss from operations | $(18,751) | $(31,262) | $(34,527) | $(47,378) | | Net loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Basic and diluted loss per share | $(0.05) | $(0.11) | $(0.14) | $(0.18) | Condensed Consolidated Statements of Cash Flows (unaudited) This section presents the unaudited condensed consolidated statements of cash flows for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows Highlights (USD thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cash used in operating activities | $(11,335) | $(24,559) | $(34,036) | $(49,782) | | Cash used in investing activities | $(1,094) | $(96) | $(1,450) | $(798) | | Cash provided by financing activities | $132,695 | $59,379 | $151,011 | $76,696 | | Change in cash, cash equivalents and restricted cash | $120,266 | $34,724 | $115,525 | $26,116 | | Cash, cash equivalents and restricted cash, end of period | $175,003 | $87,263 | $175,003 | $87,263 | Condensed Consolidated Statements of Changes in Equity (unaudited) This section presents the unaudited condensed consolidated statements of changes in equity for the six months ended June 30, 2025 Condensed Consolidated Statements of Changes in Equity Highlights (USD thousands, except share count) | Metric | December 31, 2024 | June 30, 2025 | Change | | :--------------------------------- | :---------------- | :-------------- | :----- | | Number of shares issued and outstanding | 409,786,957 | 814,697,291 | +404,910,334 | | Common shares | $606,505 | $790,183 | +$183,678 | | Additional paid-in capital | $18,977 | $29,595 | +$10,618 | | Accumulated deficit | $(284,818) | $(356,238) | -$71,420 | | Total equity | $340,664 | $463,540 | +$122,876 | Notes to Condensed Consolidated Financial Statements (unaudited) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining significant accounting policies and financial instrument details NATURE OF OPERATIONS This note describes I-80 Gold Corp.'s business as a Nevada-focused gold and silver mining company and its principal assets - I-80 Gold Corp. is a Nevada-focused, growth-oriented gold and silver mining company[18] - Principal assets include Granite Creek, Ruby Hill, Cove, and Lone Tree properties, all wholly-owned[18] - The Company's shares and warrants are listed on NYSE American (IAUX, IAUX WS) and TSX (IAU, IAU.WT.U)[19] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the significant accounting policies, including revenue recognition, going concern assumptions, and future accounting standard adoptions - The Company's revenue and profitability are substantially dependent on volatile gold and silver prices, which could lead to material adverse effects or impairment charges[20] - Financial statements are prepared on a going concern basis, but material uncertainties exist regarding the Company's ability to obtain additional financing, which could impact asset valuations[22][23][24] - The Company plans to adopt ASU 2023-09 "Income Taxes (Topic 720): Improvements to Income Tax Disclosures" for its Annual Report for the fiscal year ended December 31, 2025[26] INVENTORY This note details the composition of inventory, including mineralized material, work-in-process, and materials, along with related cost of sales and write-downs Inventory Breakdown (USD thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Mineralized material in stockpiles and on leach pads | $16,432 | $9,634 | | Work-in-process | $3,549 | $2,133 | | Finished goods | $0 | $195 | | Materials and supplies | $1,830 | $3,369 | | Total inventory | $21,811 | $15,331 | - Inventory recognized in cost of sales was $26.5 million for Q2 2025 and $37.3 million for H1 2025, compared to $19.4 million and $27.8 million in the respective 2024 periods[27] - Inventory write-downs were $3.1 million for Q2 2025 and $4.0 million for H1 2025, primarily due to Granite Creek mineralized material stockpile, a decrease from $8.8 million in both 2024 periods[27] PROPERTY, PLANT AND EQUIPMENT, NET This note provides a breakdown of property, plant, and equipment, net of accumulated depreciation, and details depreciation, depletion, and amortization expenses Property, Plant and Equipment, Net (USD thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Pre-development and exploration properties | $363,894 | $363,228 | | Buildings, plant and equipment | $204,278 | $203,137 | | Construction-in-progress | $25,671 | $24,448 | | Total | $593,843 | $590,813 | | Accumulated depreciation | $(19,965) | $(18,371) | | Net carrying amounts | $573,878 | $572,442 | Total Depreciation, Depletion and Amortization (USD thousands) | Period | 2025 | 2024 | | :--------------------------------- | :----- | :----- | | Three months ended June 30, | $951 | $693 | | Six months ended June 30, | $1,694 | $1,450 | LONG-TERM DEBT This note details the company's long-term debt, including convertible loans, debentures, and prepay agreements, along with key terms and deliveries Long-Term Debt Breakdown (USD thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Orion Convertible Loan | $60,521 | $57,121 | | Sprott Convertible Loan | $5,909 | $5,459 | | Convertible Debentures | $76,643 | $73,450 | | Gold Prepay Agreement | $15,496 | $31,718 | | Silver Purchase Agreement | $16,904 | $23,574 | | Other | $339 | $75 | | Total | $175,812 | $191,397 | | Less current portion | $(77,594) | $(37,842) | | Long-term portion | $98,218 | $153,555 | - The Orion Convertible Loan maturity date was extended from December 13, 2025, to June 30, 2026, with additional security provided[32] - During Q2 2025, the Company delivered 9,630 ounces of gold and 322,458 ounces of silver to Orion under the respective prepay agreements[41][44] OTHER LIABILITIES This note outlines other liabilities, including warrant and share-based payment liabilities, embedded derivatives, and deferred revenue, explaining changes and fair value gains Other Liabilities Breakdown (USD thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Warrant liability | $5,884 | $4,623 | | Share-based payment liability | $2,910 | $790 | | Orion - Conversion and change of controls rights | $1,032 | $336 | | Sprott - Conversion and change of controls rights | $10 | $33 | | Gold Prepay Agreement embedded derivative | $9,682 | $9,665 | | Silver Purchase Agreement embedded derivative | $15,245 | $7,999 | | Deferred revenue | $7,102 | $0 | | Lease liability | $1,128 | $685 | | Total other liabilities | $42,993 | $24,131 | - The increase in other liabilities is mainly due to the Silver Purchase Agreement embedded derivative, warrant liability, and deferred revenue from a new gold prepayment[49][57][59] - The Company recorded a fair value gain of $0.7 million on warrant liability and $8.2 million on Gold Prepay Agreement embedded derivative for Q2 2025[51][57] COMMON SHARES This note details common shares issued and outstanding, including changes from public offerings, private placements, and the ATM Program Common Shares Issued and Outstanding (USD thousands, except share count) | Metric | December 31, 2024 | June 30, 2025 | Change | | :--------------------------------- | :---------------- | :-------------- | :----- | | Number of shares issued and outstanding | 409,786,957 | 814,697,291 | +404,910,334 | | Amount | $606,505 | $790,183 | +$183,678 | - A bought deal public offering on May 16, 2025, issued 345.8 million units for $172.9 million gross proceeds, and a concurrent private placement issued 25.2 million units for $12.6 million gross proceeds[62] - The ATM Program expired on March 31, 2025, having issued 4.3 million common shares for $2.5 million gross proceeds in Q1 2025[61] BASIC AND DILUTED LOSS PER SHARE This note presents the calculation of basic and diluted loss per share, including net loss and weighted average shares outstanding Basic and Diluted Loss Per Share (USD thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Basic and diluted weighted average shares outstanding | 608,167,841 | 361,145,495 | 520,243,077 | 333,234,688 | | Basic and diluted loss per share | $(0.05) | $(0.11) | $(0.14) | $(0.18) | - Convertible Debentures, Convertible Loans, stock options, PSUs, and warrants were excluded from diluted EPS calculation as their effect would be anti-dilutive[67] SUPPLEMENTAL CASH FLOW INFORMATION This note provides supplemental cash flow information, detailing net changes in operating assets and liabilities and non-cash items affecting other expense/income Net Change in Operating Assets and Liabilities (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Receivables | $(2,313) | $(1,638) | $(1,369) | $602 | | Prepaids and deposits | $(1,341) | $(1,069) | $(1,707) | $(242) | | Inventory | $2,152 | $4,645 | $(6,412) | $(1,820) | | Accounts payable and accrued liabilities | $(1,627) | $2,466 | $(3,472) | $(5,714) | | Deferred revenue | $7,103 | $0 | $7,103 | $0 | | Net change in operating assets and liabilities | $3,974 | $4,404 | $(5,857) | $(7,174) | Non-Cash Items in Other (Expense) Income (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gain on fair value measurement of warrant liability | $709 | $1,645 | $275 | $4,275 | | Gain (loss) on fair value measurement of Convertible Loans | $765 | $3,030 | $(673) | $9,145 | | Loss on Gold Prepay Agreement | $(2,412) | $(2,478) | $(10,674) | $(5,976) | | Loss on Silver Purchase Agreement | $(1,986) | $(4,445) | $(9,461) | $(5,302) | | Other | $(794) | $79 | $(749) | $94 | | Total non-cash items included in other (expense) income | $(3,718) | $(2,169) | $(21,282) | $2,236 | REVENUE This note breaks down revenue by product, including gold, silver, and mineralized material, and identifies major customer concentrations Revenue by Product (USD thousands) | Product | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gold and silver | $18,071 | $3,896 | $25,931 | $9,111 | | Mineralized material | $9,765 | $3,288 | $15,953 | $6,486 | | Total | $27,836 | $7,184 | $41,884 | $15,597 | - In Q2 2025, one customer accounted for 98% of trade receivables, and all revenues were generated in the United States[72] Sales to Major Customers (USD thousands) | Customer | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Customer 1 | $15,783 | $2,706 | $22,301 | $7,000 | | Customer 2 | $9,765 | $3,473 | $15,952 | $6,746 | | Customer 3 | $0 | $1,149 | $0 | $1,969 | OTHER EXPENSE AND OTHER INCOME This note details other expenses and income, including losses/gains on prepay agreements, convertible loans, warrant liabilities, and foreign exchange Other Expense (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Loss on Gold Prepay Agreement | $(2,412) | $(2,478) | $(10,674) | $(5,976) | | Loss on Silver Purchase Agreement | $(1,986) | $(4,445) | $(9,461) | $(5,302) | | Loss on fair value measurement of Convertible Loans | $0 | $0 | $(673) | $0 | | Other | $(486) | $0 | $(316) | $0 | | Total other expense | $(4,884) | $(6,923) | $(21,124) | $(11,278) | Other Income (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gain on fair value measurement of warrant liability | $709 | $1,645 | $275 | $4,275 | | Gain on fair value measurement of Convertible Loans | $765 | $3,030 | $0 | $9,145 | | Gain on foreign exchange | $295 | $449 | $168 | $380 | | Interest income on restricted cash | $346 | $429 | $686 | $915 | | Other | $0 | $770 | $0 | $802 | | Total other income | $2,115 | $6,323 | $1,129 | $15,517 | INTEREST EXPENSE This note provides a breakdown of interest expense, including accretion on convertible loans, prepay agreements, debentures, and other finance costs Interest Expense Breakdown (USD thousands) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest accretion on Convertible Loans | $2,705 | $2,722 | $5,344 | $5,324 | | Interest accretion on Gold Prepay Agreement | $1,639 | $3,026 | $4,109 | $5,842 | | Interest accretion on Silver Purchase Agreement | $864 | $792 | $2,109 | $1,703 | | Interest accretion on Convertible Debentures | $1,564 | $1,415 | $3,068 | $2,802 | | Interest accretion on long-term debt | $727 | $0 | $727 | $0 | | Amortization of finance costs | $344 | $357 | $691 | $671 | | Finance expense | $521 | $0 | $521 | $0 | | Other interest expense | $331 | $445 | $329 | $451 | | Total interest expense | $8,695 | $8,757 | $16,898 | $16,793 | SEGMENTED INFORMATION This note presents financial information by operating segment, detailing revenue and adjusted loss from operations for each principal asset - The Company's four principal assets (Granite Creek, Ruby Hill, Lone Tree, Cove) are operating segments, all located in Nevada, US[76][18] - The Chief Operating Decision Maker (CODM) uses adjusted loss from operations to evaluate each operation's financial performance[76] Segmented Revenue and Adjusted Loss from Operations (Six Months Ended June 30, 2025, USD thousands) | Segment | Revenue | Adjusted Loss from Operations | | :--------------------------------- | :-------------- | :---------------------------- | | Granite Creek | $28,422 | $(11,959) | | Ruby Hill | $3,678 | $(5,575) | | Lone Tree | $9,784 | $2,527 | | Cove | $0 | $(4,128) | | Corporate and other | $0 | $(384) | | Total | $41,884 | $(19,519) | INCOME TAXES This note details income tax expense and loss before income taxes by jurisdiction, noting the impact of new tax legislation Income Tax Expense (USD thousands) | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Deferred tax expense (United States) | $0 | $(386) | $0 | $(773) | | Total income tax expense | $0 | $(386) | $0 | $(773) | Loss Before Income Taxes by Jurisdiction (USD thousands) | Jurisdiction | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $(13,941) | $(26,859) | $(25,937) | $(39,261) | | Canada | $(16,274) | $(13,760) | $(45,483) | $(20,671) | | Loss before income taxes | $(30,215) | $(40,619) | $(71,420) | $(59,932) | - The One Big Beautiful Bill Act (OBBBA) signed into U.S. law on July 4, 2025, is not expected to materially impact the Company's financial statements[80] RELATED PARTY TRANSACTIONS This note describes transactions with related parties, including convertible loans, prepay agreements, and warrants with Orion Mine Finance and Sprott Asset Management - The Company has Convertible Loans with Orion Mine Finance and Sprott Asset Management USA, Inc.[85] - The Company has Gold Prepay Agreement and Silver Purchase Agreement with Orion[85] - Warrants and an offtake agreement have been issued/entered into with Orion[82] COMMITMENTS AND CONTINGENCIES This note outlines the company's commitments and contingencies, including surety bonds, royalties, contingent consideration, and an offtake agreement - Outstanding surety bonds for environmental reclamation and exploration permits totaled $137.7 million as of June 30, 2025, secured by restricted cash[83] - Royalties include 1-5% NSR on Granite Creek, 3% NSR on Ruby Hill, and a 10% NPI on Granite Creek, totaling $1.8 million in cost of gold sold for H1 2025[84] - Contingent consideration of $13.8 million (C$20 million) is payable to Victoria Gold Corporation for Cove Deposit production milestones[87] - An Offtake Agreement with Orion for 20% of refined gold and silver from Granite Creek and Ruby Hill projects will begin in December 2028 and end December 2034[88] FINANCIAL INSTRUMENTS This note categorizes financial instruments by fair value hierarchy and details changes in Level 3 instruments, highlighting management judgment on input variables - Financial instruments are categorized into a fair value hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[90] Financial Instruments Measured at Fair Value (USD thousands) | Instrument | Level | June 30, 2025 Carrying Amount | December 31, 2024 Carrying Amount | | :--------------------------------- | :---- | :------------------------------ | :-------------------------------- | | Warrant liability (brokered placement) | 1 | $3,576 | $3,875 | | Warrant liability (other) | 2 | $2,308 | $748 | | Share-based payments | 2 | $2,910 | $790 | Changes in Level 3 Financial Instruments (USD thousands) | Instrument | December 31, 2024 Balance | June 30, 2025 Balance | | :--------------------------------- | :------------------------ | :-------------------- | | Orion conversion and change of control rights | $(336) | $(1,032) | | Sprott conversion and change of control rights | $(33) | $(10) | | Silver Purchase Agreement - silver price derivative | $(7,999) | $(15,245) | | Gold Prepay - gold price derivative | $(9,665) | $(9,682) | - Level 3 instruments (Convertible Loans, Gold Prepay, Silver Purchase embedded derivatives) require management judgment on input variables like probability of change of control, metal prices, volatility, and risk-free rates[96][97][98] ITEM 2. Management's Discussion of Analysis of Financial Condition and Results of Operations This section provides a comprehensive discussion of I-80 Gold Corp.'s operational and financial performance for the three and six months ended June 30, 2025. It covers the Company's strategic development plan, recapitalization efforts, detailed operational results for its key properties, financial results, balance sheet review, liquidity, capital resources, and non-GAAP financial measures Overview This section provides an overview of the company's business, operational and financial highlights, strategic direction, recapitalization plan, and future outlook Company Overview This section introduces I-80 Gold Corp. as a Nevada-focused gold and silver mining company with key assets and stock exchange listings - I-80 Gold Corp. is a Nevada-focused, growth-oriented gold and silver mining company, ranking as the fourth largest gold mineral resource holder in the state[99] - The Company's principal assets include Granite Creek, Ruby Hill, Lone Tree (with processing facility), Cove, and FAD properties, all at various stages of permitting, construction, and technical studies[99] - The Company's common shares and warrants are listed on NYSE American (IAUX, IAUX.WS) and TSX (IAU, IAU.WT, IAU.WT.U)[100] Operational and Financial Highlights This section summarizes key operational and financial metrics, including revenue, net loss, cash flow, gold sales, and drilling activities Operational and Financial Highlights (USD thousands, except per share/ounce) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenue | $27,836 | $7,184 | $41,884 | $15,597 | | Net loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Loss per share | $(0.05) | $(0.11) | $(0.14) | $(0.18) | | Cash flow used in operating activities | $(11,335) | $(24,559) | $(34,036) | $(49,782) | | Gold ounces sold | 8,400 | 3,445 | 13,352 | 7,506 | | Average realized gold price ($/oz) | $3,301 | $2,337 | $3,124 | $2,188 | - Cash balance increased to $133.7 million as of June 30, 2025, primarily due to net proceeds from equity offerings[105] - Completed 8,717 feet of drilling in Q2 2025 and 23,479 feet in H1 2025 at Mineral Point and Granite Creek to enhance resource definition[105][111] - Filed Preliminary Economic Assessments (PEAs) for all five gold projects, outlining a combined net present value of approximately $1.6 billion based on a $2,175/oz gold price[111] Strategy Overview This section outlines the company's long-term strategy to become a mid-tier gold producer in Nevada through phased development of its core projects - The Company aims to become a mid-tier gold producer in Nevada, targeting over 600,000 ounces of annual gold production by the early 2030s[107][108] - Phase one involves ramping up Granite Creek, commencing extraction at Archimedes, and refurbishing the Lone Tree autoclave for owner-operated processing by 2028, targeting 150,000-200,000 ounces annually[108] - Phase two includes bringing Cove and Granite Creek open pit into operation, aiming for 300,000-400,000 ounces annually by 2031. Phase three targets Mineral Point open pit to exceed 600,000 ounces[108] - PEAs for all five gold core projects were released in Q1 2025, outlining a clear and phased path to production and cash flow growth[107] Recapitalization Plan This section details the company's recapitalization efforts, including equity offerings, potential warrant proceeds, and planned allocation of funds for project development - A bought deal public offering and concurrent private placement in May 2025 raised $172.9 million (gross) and $12.6 million (gross), respectively, issuing 345.8 million and 25.2 million units[109] - Warrants issued in these offerings could provide up to approximately $130 million in additional proceeds if fully exercised[109] - Approximately $92 million is expected to be allocated to fund construction, drilling, permitting, and technical studies across all five core projects, including the Lone Tree autoclave, through mid-2026[112] - The Company is seeking additional financing (debt, royalty sale, FAD property sale) to complete its recapitalization plan by mid-2026, aligning with the Orion Convertible Loan maturity[113] Outlook This section provides the company's outlook for 2025, including expected gold extraction, contributions from key properties, and planned growth expenditures - Expected gold extraction for 2025 is 30,000 to 40,000 ounces[114] - Granite Creek underground is projected to contribute 20,000-30,000 ounces, and residual heap leach operations approximately 10,000 ounces in 2025[114] - Growth expenditures for 2025 are expected to total $40 million to $50 million, focusing on permitting, feasibility studies, and Archimedes underground development[114] Financing Overview This section summarizes recent financing activities, including a working capital facility, equity offerings, and the extension of the Orion Convertible Loan - Finalized a working capital facility with Auramet International, Inc. on April 29, 2025, receiving a $12.0 million prepayment for 3,600 ounces of gold[116] - A bought deal public offering and private placement on May 16, 2025, raised $172.9 million and $12.6 million in gross proceeds, respectively[117] - The New Gold Prepay and Silver Purchase Agreement with National Bank, used to satisfy prior Orion deliveries, was fully repaid in May 2025[118][126] - The Orion Convertible Loan maturity was extended to June 30, 2026, and 5 million common share purchase warrants were issued to Orion[123] - The ATM Program expired on March 31, 2025, having issued 4.3 million common shares for $2.5 million gross proceeds in Q1 2025[125] Discussion of Operational Results This section discusses the operational performance and development activities for the company's key properties, including Granite Creek, Ruby Hill, Cove, and Lone Tree Granite Creek Property This section details operational progress at Granite Creek, including mining activities, gold ounces sold, exploration expenses, and future development plans - Granite Creek underground is ramping up towards steady-state gold output, with mining activities exceeding prior-year levels in Q2 2025[131][135] Granite Creek Operational Statistics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total oxide and sulfide mineralized material mined (tonnes) | 35,275 | 19,510 | 65,241 | 32,212 | | Gold ounces sold (oz) | 5,981 | 1,809 | 9,086 | 3,384 | | Pre-development, evaluation and exploration expenses ($000s) | $5,949 | $7,634 | $9,719 | $12,115 | - Infill drilling in the South Pacific Zone began in June 2025, with a feasibility study targeted for completion in Q1 2026[139] - As of June 30, 2025, approximately 28,000 tonnes of sulfide mineralized material are awaiting processing under a new toll milling agreement[137] Ruby Hill Property This section describes the Ruby Hill property, its mineralization, and development plans for the Archimedes underground and Mineral Point open pit projects - Ruby Hill property contains gold, silver, and base metal mineralization within the Archimedes underground project and Mineral Point open pit project[141] - Initial development of the Archimedes underground exploration drift is anticipated to commence in Q3 2025, with permitting for mining above the 5100-foot level nearing completion[142][143] Ruby Hill Operational Statistics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gold ounces sold (oz) | 665 | 510 | 1,117 | 954 | | Drilling (ft) | 5,739 | 0 | 5,739 | 4,032 | | Pre-development, evaluation and exploration expenses ($000s) | $1,898 | $296 | $5,089 | $713 | - A drill program for the Mineral Point open pit project commenced in June 2025, completing approximately 5,800 feet of surface core drilling to support geotechnical, metallurgical, and hydrogeology studies[145] Cove Project This section outlines the Cove project as a high-grade underground development, detailing permitting activities, drilling programs, and future resource estimates - Cove is a high-grade underground development project, expected to be the Company's third underground mine, contributing to production by mid-2029[148][149] - NEPA permitting activities are underway with the BLM for regulatory approvals aligned with development timelines[149] Cove Project Operational Statistics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Drilling (ft) | 0 | 14,382 | 14,762 | 17,976 | | Pre-development, evaluation and exploration expenses ($000s) | $1,174 | $2,343 | $3,721 | $4,615 | - An infill drill program was completed in Q1 2025, with an updated mineral resource estimate expected in Q3 2025 and a feasibility study targeted for Q1 2026[150] Lone Tree Processing Facility This section highlights the Lone Tree Processing Facility as a strategic asset for refractory material, detailing refurbishment studies and planned processing timelines - Lone Tree Processing Facility, with one of Nevada's three autoclaves, is a strategic asset for processing high-grade underground refractory material[151] - A refurbishment feasibility-level Class 3 engineering study is underway with Hatch Ltd., targeted for completion in Q4 2025[152][153] - The autoclave is envisioned to process refractory material from Granite Creek, Archimedes, and Cove by December 31, 2027[152][128] Lone Tree Operational Statistics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Gold ounces sold (oz) | 1,754 | 1,126 | 3,149 | 3,168 | | Capital expenditure ($000s) | $597 | $93 | $661 | $507 | Discussion of Financial Results This section analyzes the company's financial performance for the three and six months ended June 30, 2025, focusing on revenue, gross profit, and key expenses Financial results for the three months ended June 30, 2025 This section reviews key financial results for Q2 2025, including revenue, gold sales, gross profit, and changes in cost of sales and depreciation Key Financial Results (Three Months Ended June 30, USD thousands, except per ounce) | Metric | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Revenue | $27,836 | $7,184 | +287.5% | | Gold ounces sold | 8,400 | 3,445 | +143.9% | | Average realized gold price ($/oz) | $3,301 | $2,337 | +41.2% | | Gross profit (loss) | $798 | $(12,312) | N/A | | Pre-development, evaluation and exploration expenses | $9,045 | $10,436 | -13.4% | | Other income and expenses, net | $(2,769) | $(600) | +361.5% | | Interest expense | $8,695 | $8,757 | -0.7% | - Cost of sales increased to $26.5 million (from $19.4 million) due to higher gold ounces sold, partially offset by lower inventory write-downs ($3.1 million vs. $8.8 million)[158] - Depreciation, depletion, and amortization expense increased to $0.5 million (from $0.1 million) due to leach pad depreciation associated with Granite Creek material[159] Financial results for the six months ended June 30, 2025 This section reviews key financial results for H1 2025, including revenue, gold sales, gross profit, and the impact of other expenses on net income Key Financial Results (Six Months Ended June 30, USD thousands, except per ounce) | Metric | 2025 | 2024 | % Change | | :--------------------------------- | :----- | :----- | :------- | | Revenue | $41,884 | $15,597 | +168.5% | | Gold ounces sold | 13,352 | 7,506 | +77.9% | | Average realized gold price ($/oz) | $3,124 | $2,188 | +42.8% | | Gross profit (loss) | $3,704 | $(12,607) | N/A | | Pre-development, evaluation and exploration expenses | $18,590 | $17,710 | +4.9% | | Other income and expenses, net | $(19,995) | $4,239 | N/A | | Interest expense | $16,898 | $16,793 | +0.6% | - Cost of sales increased to $37.3 million (from $27.8 million) due to higher gold ounces sold, partially offset by lower inventory write-downs ($4.0 million vs. $8.8 million)[165] - The significant increase in other expenses, net, was driven by losses on Gold Prepay Agreement and Silver Purchase Agreement due to increasing metal forward prices, and a loss on fair value measurement of Convertible Loans[168][169][170] Discussion of Financial Position This section discusses the company's financial position, including changes in cash, inventory, and total liabilities as of June 30, 2025 Balance Sheet Review This section reviews key balance sheet changes, including increases in cash and inventory, and the slight increase in total liabilities - Cash and cash equivalents increased by $114.7 million to $133.7 million as of June 30, 2025, from $19.0 million at December 31, 2024[172] - Inventory increased to $21.8 million from $15.3 million, primarily due to the buildup of stockpiled sulfide material for toll mill processing[172] - Total liabilities increased slightly to $319.3 million from $315.0 million, driven by increases in other liabilities (Silver Purchase Agreement derivative) partially offset by a decrease in long-term debt[173] Liquidity and Capital Resources This section assesses the company's liquidity position and capital resources, including working capital, debt, equity, and cash flow activities Liquidity Outlook This section provides the liquidity outlook, highlighting the short-term position, need for additional long-term capital, and risks related to debt servicing Working Capital (USD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $133,691 | $19,001 | | Working capital | $46,048 | $(31,746) | - The Company is in a solid short-term liquidity position but needs to raise additional capital for long-term requirements to execute its development plan[175] - Ability to service or refinance debt depends on future performance, capital markets, and compliance with covenants, with risks of default if unable to generate sufficient cash flow or secure financing[176][177][178][179] Debt This section details the company's debt structure, including convertible debentures, loans, and prepay agreements, along with key terms and repayment status Debt Breakdown (USD thousands) | Debt Type | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :-------------- | :---------------- | | Convertible Debentures | $76,643 | $73,450 | | Orion Convertible Loan | $60,521 | $57,121 | | Sprott Convertible Loan | $5,909 | $5,459 | | Gold Prepay Agreement | $15,496 | $31,718 | | Silver Purchase Agreement | $16,904 | $23,574 | | Other | $339 | $75 | | Total | $175,812 | $191,397 | - The Orion Convertible Loan maturity date was extended from December 13, 2025, to June 30, 2026, with additional security provided[183][185] - The Gold Prepay Agreement liability was $15.5 million with 8,760 ounces of gold remaining to be delivered, and the Silver Purchase Agreement liability was $16.9 million with 96,299 ounces of silver remaining[189][191] - The New Gold Prepay and Silver Purchase Agreement with National Bank, used to satisfy prior Orion deliveries, was fully repaid in May 2025[193] Equity This section provides an overview of the company's equity, including common shares, warrants, stock options, and other share-based instruments Outstanding Share Data (As of August 12, 2025) | Instrument | Count | | :--------------------------------- | :-------------- | | Common Shares | 816,047,291 | | Warrants | 233,749,025 | | Stock Options | 9,179,066 | | Restricted Share Units ("RSU") | 14,533,867 | | Performance Share Units ("PSU") | 3,339,000 | | Deferred Share Units ("DSU") | 2,005,172 | Shares Issued in H1 2025 (USD thousands, except share count) | Issuance Type | Number of Shares Issued | Amounts | | :--------------------------------- | :---------------------- | :-------- | | Shares issued in brokered placement | 345,760 | $153,158 | | Shares issued in private placement | 25,240 | $11,790 | | Shares issued in private placement (Jan 2025) | 29,210 | $16,015 | | ATM Program | 4,341 | $2,426 | | Exercise of stock options | 20 | $52 | | Shares issued from settlement of DSUs | 338 | $237 | | Total | 404,909 | $183,678 | - Warrant liability was $5.9 million as of June 30, 2025, including 5 million warrants issued to Orion in January 2025[204] Cash Flows This section summarizes cash flow activities from operations, investing, and financing, explaining the drivers of changes in cash and cash equivalents Cash Flow Summary (USD thousands) | Activity | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Cash used in operating activities | $(11,335) | $(24,559) | $(34,036) | $(49,782) | | Cash used in investing activities | $(1,094) | $(96) | $(1,450) | $(798) | | Cash provided by financing activities | $132,695 | $59,379 | $151,011 | $76,696 | | Change in cash, cash equivalents and restricted cash | $120,266 | $34,724 | $115,525 | $26,116 | - The increase in cash provided by financing activities was primarily due to higher proceeds from share issuances in brokered placements and equity offerings[208][211] - Investing activities primarily involved capital expenditures for autoclave studies at Lone Tree and construction for an access portal at Ruby Hill[207][210] Non-GAAP Financial Performance Measures This section defines and reconciles non-GAAP financial measures, including average realized gold price and adjusted loss, used to assess performance - Non-GAAP measures include "Average realized gold price" and "Adjusted loss" (and "adjusted loss per share"), which are not defined under US GAAP[215][216][217] - "Average realized gold price" is used to improve the understanding of revenue[216] - "Adjusted loss" excludes temporary or non-recurring items such as gains/losses on warrants, Convertible Loans, and fair value measurements of Gold Prepay and Silver Purchase Agreements[217] Adjusted Loss and Adjusted Loss Per Share (USD thousands, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(30,215) | $(41,005) | $(71,420) | $(60,705) | | Total adjustments | $9,949 | $(1,187) | $(7,660) | $3,203 | | Adjusted loss | $(40,164) | $(39,818) | $(63,760) | $(63,908) | | Weighted average shares | 608,167,841 | 361,145,495 | 520,243,077 | 333,234,688 | | Adjusted loss per share | $(0.07) | $(0.11) | $(0.12) | $(0.19) | ITEM 3. Quantitative and Qualitative Disclosure about Market Risk This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - No quantitative and qualitative disclosures about market risk are applicable[219] ITEM 4. Controls and Procedures The CEO and CFO have concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes in internal control over financial reporting during the three months ended June 30, 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[220] - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[221] PART II - OTHER INFORMATION This part contains other information not included in the financial statements, such as legal proceedings, risk factors, equity sales, and corporate governance updates ITEM 1. Legal Proceedings There are no legal proceedings material to the Company or its subsidiaries, nor are any contemplated, as of the date of this report - No material legal proceedings are ongoing or contemplated for the Company or its subsidiaries[222] ITEM 1A. Risk Factors The Company's business, operations, and financial condition are subject to various risks and uncertainties inherent in the mining industry and exploration stage. There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - The Company's business is subject to various risks and uncertainties inherent in the mining industry and exploration stage[223] - No material changes to the risk factors from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, have occurred[223] ITEM 2. Unregistered Sales Of Equity Securities And Use Of Proceeds On June 17, 2025, the Company closed a private placement of 3,000,000 units for $1.5 million gross proceeds, with each unit comprising one common share and one-half warrant. The proceeds are intended for general working capital and corporate purposes. This private placement was exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D - On June 17, 2025, the Company closed a private placement of 3,000,000 units at $0.50 per unit, raising $1.5 million in gross proceeds[224] - Each unit consisted of one common share and one-half common share purchase warrant, exercisable at $0.70 per share[224] - The private placement was exempt from registration under Section 4(a)(2) and Rule 506(b) of Regulation D, with proceeds intended for general working capital and corporate purposes[224][225] ITEM 3. Defaults Upon Senior Securities The Company reported no defaults upon senior securities - There were no defaults upon senior securities[226] ITEM 4. Mine Safety Disclosures Information regarding mine safety matters is reported in Exhibit 95.1, in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act - Mine safety disclosures are provided in Exhibit 95.1, as required by Section 1503(a) of the Dodd-Frank Act[227] ITEM 5. Other Information On June 17, 2025, shareholders approved changes to the director-nomination process by adopting an advance notice policy. This policy sets deadlines and requirements for shareholders to submit director nominations for annual or special meetings - Shareholders approved changes to the director-nomination process on June 17, 2025, by adopting an advance notice policy[228] - The policy sets deadlines for shareholders to submit director nominations, typically 30 days before an annual meeting or 15 days after public announcement of a special meeting[230] - The Chair of the meeting has the authority to determine if nominations comply with the policy and to declare non-compliant nominations ineligible[229] ITEM 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including the Underwriting Agreement, Form of Warrant Indenture, Employment Agreement, various certifications (CEO, CFO), Mine Safety Disclosure, and Inline XBRL documents - Exhibits include the Underwriting Agreement, Form of Warrant Indenture, Employment Agreement, CEO/CFO certifications (Sarbanes-Oxley Act), Mine Safety Disclosure, and Inline XBRL documents[231] Signatures The report is duly signed on August 12, 2025, by Richard Young, President and Chief Executive Officer, and Ryan Snow, Chief Financial Officer, certifying its submission pursuant to the Securities Exchange Act of 1934 - The report was signed on August 12, 2025, by Richard Young (President and CEO) and Ryan Snow (CFO)[234]