Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We invest substantially all
of our excess cash in U.S. government and debt securities rated “investment grade” or better. The rates received on such investments
may fluctuate with changes in economic conditions. Based on the average cash and investment balances outstanding during the first six
months of 2025, a 1% decrease in interest rates would have resulted in only a nominal reduction in interest income for the period.
Foreign Currency Exchange Risk
Although most of our expenditures
are in U.S. dollars, certain purchases of labor, services, supplies and capital assets are denominated in other currencies, primarily
in Mexico and Argentina. As a result, currency exchange fluctuations may impact the costs of our exploration and mining activities. To
reduce this risk, we maintain minimum cash balances in foreign currencies and complete most of our purchases in U.S. dollars.
Commodity Price Risk
We are primarily engaged in
the exploration of properties containing gold, silver, copper, zinc, lead and other minerals. As a result, decreases in the price of any
of these metals have the potential to negatively impact our ability to establish reserves and mine on our properties. We currently hold
no commodity derivative positions.
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