What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-04 compared with 2024-07-30 · 37 added, 32 removed, 74 unchanged (48% of the section changed)

24 unchanged sentences

As such, we use the expected value method to price the concentrate until the final settlement date occurs, at which time the final transaction price is known.

At June 30, 2024, metals that had been sold but not finally settled included 6,358 ounces of which 2,666 ounces were sold at a predetermined price with the remaining 3,692 exposed to future price changes.

At September 30, 2024, metals that had been sold but not finally settled included 5,496 ounces of which 1,539 ounces were sold at a predetermined price with the remaining 3,957 exposed to future price changes until prices are locked in based on the month of settlement.

The Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable.

The asset retirement obligation and asset on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations and may differ when we cease operations.

At June 30, 2024 we reviewed our December 31, 2023 estimate that the cost of the machine and man hours probable to be needed to put our properties in the condition required by our permits once we cease operations.

The June 30, 2024 estimated costs would be $104,000 for the Golden Chest Mine property and $224,000 for the New Jersey Mine and Mill.

At September 30, 2024 we reviewed our December 31, 2023 estimate that the cost of the machine and man hours probable to be needed to put our properties in the condition required by our permits once we cease operations.

The September 30, 2024 estimated costs would be $104,000 for the Golden Chest Mine property and $224,000 for the New Jersey Mine and Mill.

For purposes of the estimate, we evaluated the expected life in years and costs that, initially, are comparable to rates that we would incur at the present.

10 unchanged sentences

Separately, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and able to be reasonably estimated.

Highlights during the second quarter of 2024 include:

Highlights during the third quarter of 2024 include:

REE Exploration

Continued discussions with various laboratories, universities, and partners to advance our understanding of Idaho’s rare earth mineralogy and broader mineral endowment.

Attended the Adamas Rare Earth Mines, Magnets and Motors Conference in Toronto, Canada during the quarter.

Subsequent to quarter end, Idaho Strategic representatives attended the International Rare Earth Elements Conference in Washington DC.

Golden Chest/Operations

1 unchanged sentence

A total of 3,820 cubic meters of cemented rockfill (“CRF”) were placed during the quarter which is a new quarterly record.

The Main Access Ramp (“MAR”) and associated drifts and raises were advanced by about 100 meters during the quarter.

For the quarter ended June 30, 2024, a total of 9,260 dry metric tonnes (“dmt”) were processed at the Company’s New Jersey mill with a flotation feed head grade of 10.29 gpt gold and gold recovery of 93.6%.

An exploration program consisting of both underground and surface core drilling was started in the second quarter.

Underground drilling was focused on exploring the Klondike area and the projected northerly strike of the H-vein.

Surface drilling was started in Butte Gulch with plans to move to the northern area of the Golden Chest in the third quarter.

The Main Access Ramp (“MAR”) and associated attack ramps were advanced by approximately 154 meters during the quarter.

For the quarter ended September 30, 2024, a total of 10,470 dry metric tonnes (“dmt”) were processed at the Company’s New Jersey mill with a flotation feed head grade of 9.32 gpt gold and gold recovery of 93.1%.

An exploration program consisting of both underground and surface core drilling was continued during the third quarter.

Underground drilling was focused on exploring the Klondike area and targeting the newly found Red Star zone and northerly projections of the H-vein.

Surface drilling was completed in Butte Gulch and this rig was moved to the northern area of the Golden Chest.

A third drill rig was moved to Wesp Gulch to drill down-dip on the Idaho fault and associated veining during the quarter.

Results of Operations

Our financial performance during the quarter is summarized below:

Revenue increased 89.3% from $3,236,515 to $6,125,382 for the three-month periods ended June 30, 2023 and 2024, respectively, Year to date revenue increased 82.8% from $6,578,111 to $12,024,320 for the six-month periods ended June 30, 2023 and 2024, respectively.

Revenue increased 86.4% from $3,301,221 to $6,153,287 for the three-month periods ended September 30, 2023 and 2024, respectively, Year to date revenue increased 84% from $9,879,332 to $18,177,607 for the nine-month periods ended September 30, 2023 and 2024, respectively.

The increase in revenue is largely due to the increased gold production compared to previous periods as well as a higher average gold price recognized on ounces produced.

Gold production is expected to remain at approximately this level for the remainder of the year as mining on the H-Vein continues.

Gross profit as a percentage of sales increased from 24.5% in the second quarter of 2023 to 50.2% in the second quarter of 2024.

For the six-month periods ending June 30, 2024 and 2023 gross profit as a percentage of sales increased to 49.2% from 25.2%.

Exploration expense increased in both the three-month and six-month periods ending June 30, 2024, when compared to the same periods in 2023, due to an increase in surface and underground drilling activity at the Company’s Golden Chest Mine.

Drilling is expected to continue throughout the third quarter which may result in an increased exploration expense when compared to prior periods.

Operating income for the three-month period ended June 30, 2024 was $2,095,596 which is an increase of $1,805,609 from operating income of $289,987 in the second quarter of 2023.

For the six-month period ending June 30, 2024, operating income of $4,237,569 increased by $3,934,559 over the same period in 2023.

Other income increased $33,491 from $5,835 in the second quarter of 2023, to $39,326 in the same period in 2024.

Other income increased $16,169 from $36,998 in the six months ending June 30, 2023, to $53,167 in the same period in 2024.The increase was from increased interest income and gains on treasuries from the company’s short term investment account due to having a higher cash balance.

Net income increased $1,839,100 from net income of $295,822 for the three-month period ended June 30, 2023 to net income of $2,134,922 for the three-month period ending June 30, 2024.

Net income increased $3,950,728 from net income of $340,008 in the six-month period ending June 30, 2023, to net income of $4,290,736 in the same period in 2024.

The consolidated net income for the six-month periods ending June 30, 2024 and June 30, 2023 included non-cash charges as follows:

depreciation and amortization of $957,718 ($671,079 in 2023), loss on disposal of equipment of $7,431 (gain of $224 in 2023), accretion of asset retirement obligation of $9,226 ($7,856 in 2023), loss on investment in equity securities of $453 ($2,880 in 2023), gain on short term investment of $21,862 (none in 2023) and equity income on investment in Buckskin of $278 ($1,357 in 2023).

Cash cost per ounce for the three-month period ending June 30, 2024 remained relatively flat compared to the same period in 2023.

For the six month-period ending June 30, 2024, cash cost per ounce decreased significantly due to a 55.2% increase in ounces produced when compared to the six-month period ending June 30, 2023.

All in sustaining cost per ounce increased during the three-month period ending June 30, 2024 compared to the same period in 2023 due to an increase in exploration costs from underground and surface drilling at the Golden Chest Mine, as well as higher sustaining capital from deposits on paste backfill plant equipment.

For the six-month period ending June 30, 2024, all in sustaining costs decreased slightly as the increased exploration and sustaining capital was largely made up for by the increased production when compared to the six-month period ending June 30, 2023.

Gold production is expected to remain at approximately this level for the remainder of the year.

Gross profit as a percentage of sales increased from 33.5% in the third quarter of 2023 to 48.7% in the third quarter of 2024.

For the nine-month periods ending September 30, 2024 and 2023 gross profit as a percentage of sales increased to 49% from 28%.

Exploration expense increased in both the three-month and nine-month periods ending September 30, 2024, when compared to the same periods in 2023, due to an increase in surface and underground drilling activity at the Company’s Golden Chest Mine.

Drilling is expected to continue throughout the fourth quarter which may result in an increased exploration expense when compared to prior periods.

Operating income for the three-month period ended September 30, 2024 was $1,439,534 which is an increase of $1,026,073 from operating income of $413,461 in the third quarter of 2023.

For the nine-month period ending September 30, 2024, operating income of $5,677,103 increased by $4,960,632 over the same period in 2023.

Other income increased $559,452 from an expense of $9,478 in the third quarter of 2023, to income of $549,974 in the same period in 2024.

Other income increased $575,621 from $27,520 in the nine months ending September 30, 2023, to $603,141 in the same period in 2024.The increase was from increased interest income and gains on treasuries from the company’s short term investment account due to having a higher cash balance as well as government grant income of $418,000 for an electrical upgrade at the Golden Chest Mine in 2024.

Net income increased $1,585,525 from net income of $403,983 for the three-month period ended September 30, 2023 to net income of $1,989,508 for the three-month period ending September 30, 2024.

Net income increased $5,536,253 from net income of $743,991 in the nine-month period ending September 30, 2023, to net income of $6,280,244 in the same period in 2024.

The consolidated net income for the nine-month periods ending September 30, 2024 and 2023 included non-cash charges as follows:

depreciation and amortization of $1,443,232 ($1,034,521 in 2023), loss on disposal of equipment of $1,431 (gain of $224 in 2023), accretion of asset retirement obligation of $13,954 ($11,874 in 2023), loss on investment in equity securities of $453 ($4,423 in 2023), equity income on investment in Buckskin of $1,579 ($2,965 in 2023), and write down of reclamation bond of $300 (none in 2023).

Cash cost per ounce for the three-month period ending September 30, 2024 remained relatively flat compared to the same period in 2023.

For the nine-month period ending September 30, 2024, cash cost per ounce decreased due to a 53.7% increase in ounces produced compared to the nine-month period ending September 30, 2023.

All in sustaining cost per ounce increased during the three-month period ending September 30, 2024 compared to the same period in 2023 due to an increase in exploration costs from underground and surface drilling at the Golden Chest Mine.

For the nine-month period ending September 30, 2024, all in sustaining costs decreased slightly as the increased exploration cost was largely made up for by the increased production when compared to the nine-month period ending September 30, 2023.

Adjusted all in sustaining costs without exploration expenses were $1,109.79 and $1,128.78 per ounce for the three and nine-month periods ending September, 30 2024, respectively.

Cash Costs and All In Sustaining Costs (“AISC”) Reconciliation to Generally Accepted Accounting Principles (“GAAP”)

Reconciliation of cost of sales and other direct production costs and depreciation, depletion, and amortization (GAAP) to cash cost per ounce and AISC per ounce (non-GAAP).

The table below presents reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion, and amortization to the non-GAAP measures of cash cost per ounce and all in sustaining costs per ounce for the Company’s gold production in the three and six-month periods ended June 30, 2024, and 2023.

Cash cost per ounce is an important operating measure that we utilize to measure operating performance.

1 unchanged sentence

Current GAAP measures used in the mining industry, such as cost of goods sold do not capture all of the expenditures incurred to discover, develop, and sustain gold production.

June 30, 2024

June 30, 2023

At September 30, 2024, the Company changed the way sustaining capital is calculated to better reflect actual costs required to sustain mining operations.

Prior periods have been restated in the table below to reflect this change.

September 30, 2024

September 30, 2023

Cost of sales and other direct production costs and depreciation and amortization

9 unchanged sentences

Financial Condition and Liquidity

For the Six-Months Ended June 30,

For the Nine-Months Ended September 30,

Net cash provided (used) by:

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis