Idaho Strategic Resources, Inc. 10-Q

idr_10q.htm UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to ____________ Commission File No. 001-41320 IDAHO STRATEGIC RESOURCES, INC (Name of small business issuer in its charter) Idaho 82-0490295 (State or other jurisdiction of incorporation or organization) (I.R.S. employer identification No.) 201 N. Third Street , Coeur d’Alene , ID 83814 (Address of principal executive offices) (zip code) ( 208 ) 625-9001 Registrant’s telephone number, including area code Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock, $0.00 par value IDR NYSE American Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act: Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer ☒ Small Reporting Company ☒ Emerging Growth Company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒ APPLICABLE ONLY TO CORPORATE ISSUERS: At August 1, 2025, 14,505,392 shares of the registrant’s common stock were outstanding. IDAHO STRATEGIC RESOURCES, INC QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025 TABLE OF CONTENTS PART I -FINANCIAL INFORMATION 3 ITEM 1. Financial Statements 3 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 16 ITEM 4. Controls and Procedures 16 PART II OTHER INFORMATION 17 ITEM 1. Legal Proceedings 17 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 17 ITEM 3. Defaults Upon Senior Securities 17 ITEM 4. Mine Safety Disclosures 17 ITEM 5. Other Information 17 ITEM 6. Exhibits 18 2 Table of Contents PART I - FINANCIAL INFORMATION ITEM 1: Financial Statements Idaho Strategic Resources, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 2,444,476 $ 1,106,901 Investments in US treasury notes 10,611,794 7,775,193 Gold sales receivable 2,641,438 1,578,694 Inventories 1,120,993 899,924 Joint venture receivable 1,108 2,892 Other current assets 366,137 378,469 Total current assets 17,185,946 11,742,073 Property, plant and equipment, net of accumulated depreciation 16,289,024 12,904,065 Mineral properties, net of accumulated amortization 11,598,167 10,573,349 Investment in Buckskin Gold and Silver, Inc 342,623 341,436 Investment in joint venture 435,000 435,000 Investments in US treasury notes, non-current 11,082,224 7,208,930 Reclamation bond 330,110 249,110 Deposits 436,166 567,667 Total assets $ 57,699,260 $ 44,021,630 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 1,535,858 $ 1,006,078 Accrued payroll and related payroll expenses 570,525 564,090 Notes payable, current portion 1,254,269 709,381 Total current liabilities 3,360,652 2,279,549 Asset retirement obligations 315,264 305,409 Notes payable, long term 2,025,399 1,023,358 Total long-term liabilities 2,340,663 1,328,767 Total liabilities 5,701,315 3,608,316 Commitments Note 5 - - Stockholders’ equity: Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding - - Common stock, no par value, 200,000,000 shares authorized; June 30, 2025- 14,058,339 and December 31, 2024- 13,665,058 shares issued and outstanding 53,296,323 46,059,318 Accumulated deficit ( 3,997,516 ) ( 8,373,953 ) Total Idaho Strategic Resources, Inc stockholders’ equity 49,298,807 37,685,365 Non-controlling interest 2,699,138 2,727,949 Total stockholders' equity 51,997,945 40,413,314 Total liabilities and stockholders’ equity $ 57,699,260 $ 44,021,630 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents Idaho Strategic Resources, Inc. Condensed Consolidated Statements of Operations (Unaudited) For the Three and Six-Month Periods Ended June 30, 2025 and 2024 June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months Revenue: Sales of products $ 9,476,739 $ 16,755,275 $ 6,125,382 $ 12,024,320 Total revenue 9,476,739 16,755,275 6,125,382 12,024,320 Costs of Sales: Cost of sales and other direct production costs 3,459,215 6,490,044 2,596,027 5,154,940 Depreciation and amortization 541,738 1,091,359 455,930 957,718 Total costs of sales 4,000,953 7,581,403 3,051,957 6,112,658 Gross profit 5,475,786 9,173,872 3,073,425 5,911,662 Other operating expenses: Exploration 2,244,761 3,616,194 620,056 887,904 Management 268,214 532,959 90,313 199,413 Professional services 153,260 336,998 84,982 239,226 General and administrative 223,735 460,753 179,456 340,119 Loss on disposal of equipment 68,942 308,840 3,022 7,431 Total other operating expenses 2,958,912 5,255,744 977,829 1,674,093 Operating income 2,516,874 3,918,128 2,095,596 4,237,569 Other (income) expense: Equity (income) loss on investment in Buckskin Gold and Silver, Inc 159 ( 1,187 ) 1,589 ( 278 ) Timber revenue net of costs ( 2,848 ) ( 6,704 ) ( 6,049 ) ( 19,406 ) Loss on investment in equity securities - - - 453 Interest income ( 220,409 ) ( 405,804 ) ( 60,468 ) ( 80,103 ) Interest expense - - 25,602 46,167 Total other (income) expense ( 223,098 ) ( 413,695 ) ( 39,326 ) ( 53,167 ) Net income 2,739,972 4,331,823 2,134,922 4,290,736 Net loss attributable to non-controlling interest ( 27,486 ) ( 44,614 ) ( 22,951 ) ( 38,246 ) Net income attributable to Idaho Strategic Resources, Inc. $ 2,767,458 $ 4,376,437 $ 2,157,873 $ 4,328,982 Net income per common share-basic $ 0.20 $ 0.32 $ 0.17 $ 0.34 Weighted average common share outstanding-basic 14,007,582 13,837,894 12,836,205 12,674,789 Net income per common share-diluted $ 0.20 $ 0.31 $ 0.17 $ 0.34 Weighted average common shares outstanding- diluted 14,134,531 13,939,790 12,999,717 12,850,749 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents Idaho Strategic Resources, Inc. Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) For the Three and Six-Month Periods Ended June 30, 2025 and 2024 Common Stock Shares Common Stock Amount Accumulated Deficit Attributable to Idaho Strategic Resources, Inc Non-Controlling Interest Stockholders’ Equity Balance January 1, 2024 12,397,615 $ 34,963,739 $ ( 17,210,638 ) $ 2,782,497 $ 20,535,598 Contribution from non-controlling interest in New Jersey Mill Joint Venture - - - 1,598 1,598 Issuance of common stock for cash, net of offering costs 127,152 847,492 - - 847,492 Issuance of common stock for warrants exercised 147,026 823,346 - - 823,346 Issuance of common stock for stock options exercised 5,357 29,999 - - 29,999 Issuance of common stock for cashless stock options exercised 5,887 - - - - Net income (loss) - - 2,171,109 ( 15,295 ) 2,155,814 Balance March 31, 2024 12,683,037 36,664,576 ( 15,039,529 ) 2,768,800 24,393,847 Contribution from non-controlling interest in New Jersey Mill Joint Venture - - - 10,647 10,647 Issuance of common stock for cash, net of offering costs 137,864 1,313,392 - - 1,313,392 Issuance of common stock for warrants exercised 29,763 166,673 - - 166,673 Issuance of common stock for stock options exercise 21,429 120,002 - - 120,002 Issuance of common stock for cashless stock options exercise 86,481 - - - - Net income (loss) - - 2,157,873 ( 22,951 ) 2,134,922 Balance June 30, 2024 12,958,574 $ 38,264,643 $ ( 12,881,656 ) $ 2,756,496 $ 28,139,483 Balance January 1, 2025 13,665,058 46,059,318 ( 8,373,953 ) 2,727,949 40,413,314 Contribution from non-controlling interest in New Jersey Mill Joint Venture - - - 1,927 1,927 Stock-based compensation - 495,146 - - 495,146 Issuance of common stock for cashless stock options exercised 3,722 - - - - Net income (loss) - - 1,608,979 ( 17,128 ) 1,591,851 Balance March 31, 2025 13,668,780 46,554,464 ( 6,764,974 ) 2,712,748 42,502,238 Contribution from non-controlling interest in New Jersey Mill Joint Venture - - - 13,876 13,876 Stock-based compensation - 495,146 - - 495,146 Issuance of common stock for cash, net of offering costs 380,000 6,246,713 - - 6,246,713 Issuance of common stock for cashless stock options exercise 9,559 - - - - Net income (loss) - - 2,767,458 ( 27,486 ) 2,739,972 Balance June 30, 2025 14,058,339 $ 53,296,323 $ ( 3,997,516 ) $ 2,699,138 $ 51,997,945 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents Idaho Strategic Resources, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six-Month Periods Ended June 30, 2025 and 2024 June 30, 2025 2024 Cash flows from operating activities: Net income $ 4,331,823 $ 4,290,736 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 1,091,359 957,718 Loss on disposal of equipment 308,840 7,431 Accretion of asset retirement obligation 9,855 9,226 Loss on investment in equity securities - 453 Equity income on investment in Buckskin Gold and Silver, Inc ( 1,187 ) ( 278 ) Stock-based compensation 990,292 - Debt payments made by 3 rd party ( 44,951 ) - Change in operating assets and liabilities: Gold sales receivable ( 1,062,744 ) ( 477,647 ) Inventories ( 221,069 ) 110,069 Joint venture receivable 1,784 667 Other current assets 12,332 42,939 Accounts payable and accrued expenses 529,780 248,611 Accrued payroll and related payroll expenses 6,435 19,517 Net cash provided by operating activities 5,952,549 5,209,442 Cash flows from investing activities: Purchases of property, plant, and equipment ( 2,436,596 ) ( 583,841 ) Deposits on equipment ( 62,600 ) ( 345,907 ) Proceeds from sale of equipment 90,400 - Additions to mineral property ( 1,112,712 ) ( 960,388 ) Purchase of US treasury notes ( 6,709,895 ) ( 6,309,340 ) Proceeds from sale of investment in equity securities - 5,196 Purchase of reclamation bond ( 81,000 ) ( 5,000 ) Net cash used by investing activities ( 10,312,403 ) ( 8,199,280 ) Cash flows from financing activities: Proceeds from sale of common stock, net of issuance cost 6,246,713 2,160,884 Proceeds from issuance of common stock for warrants exercised - 990,019 Proceeds from issuance of common stock for stock options exercised - 150,001 Principal payments on notes payable ( 565,087 ) ( 795,530 ) Contributions from non-controlling interest 15,803 12,245 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, beginning of period 1,106,901 2,286,999 Cash and cash equivalents, end of period $ 2,444,476 $ 1,814,780 Non-cash investing and financing activities: Deposit on equipment applied to purchase $ 194,101 $ 30,719 Notes payable for equipment purchase $ 2,156,967 $ 559,752 Note payable for mineral property purchase $ - $ 650,000 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The Company and Significant Accounting Policies These unaudited interim condensed consolidated financial statements have been prepared by the management of Idaho Strategic Resources, Inc. (“IDR”, “Idaho Strategic” or the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair statement of the interim condensed consolidated financial statements have been included. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's consolidated financial position and results of operations. Operating results for the three and six-month periods ended June 30, 2025, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025. Management estimates that the effective tax rate expected for the full year ended December 31, 2025 will be 0% due to the Company’s cumulative loss position, historical net operating losses (“NOLs”), and other available evidence related to the Company’s ability to generate taxable income. Accordingly, there is no income tax provision or benefit for the six month period ended June 30, 2025. For further information refer to the financial statements and footnotes thereto in the Company’s audited consolidated financial statements for the year ended December 31, 2024, in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2025. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the condensed consolidated balance sheets and statements of operations. Revenue Recognition Gold Revenue Recognition and Receivables- Sales of gold sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. The Company obtains the forward metals prices used for each period from Kitco For sales of doré and metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner. Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. Costs charged by customers include fixed costs per ton of concentrate and price escalators. Refining, selling, and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred. See Note 4 for more information on the Company’s sales of products. Other Revenue Recognition -Revenue from harvest of raw timber is recognized when the performance obligation under a contract and transfer of the timber have both been completed. Sales of timber found on the Company’s mineral properties are not a part of normal operations. Inventories Inventories are stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion, and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Supplies inventory is stated at the lower of cost or estimated net realizable value. Mine Exploration and Development Costs The Company expenses exploration costs as such in the period they occur. The exploration stage occurs up until the point ore reserves are identified. The pre-development stage begins once the Company identifies ore reserves which is based on a determination whether an ore body can be economically developed. Expenditures incurred during the pre-development stage are capitalized as deferred development costs and include such costs for drifts, ramps, and infrastructure. Costs to improve, alter, or rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency or safety of such assets are also capitalized. The pre-development stage ends when the production stage of ore reserves begins, thus entering the secondary development stage. Drilling, and related costs are either classified as exploration, pre-development or secondary development, as defined above, and charged to operations as incurred, or capitalized, based on the following criteria: · whether the costs are incurred to further define resources or exploration targets at and adjacent to existing reserve areas or intended to assist with mine planning within a reserve area; · whether the drilling or development costs relate to an ore body that has been determined to be commercially mineable, and a decision has been made to put the ore body into commercial production; and · whether, at the time the cost is incurred: (a) the expenditure embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows, (b) the Company can obtain the benefit and control others’ access to it, and (c) the transaction or event giving rise to the Company’s right to or control of the benefit has already occurred. If all of these criteria are met, drilling, development and related costs are capitalized. Drilling and development costs not meeting all of these criteria are expensed as incurred. The following factors are considered in determining whether or not the criteria listed above have been met, and capitalization of drilling and development costs is appropriate: · completion of a favorable economic study and mine plan for the ore body targeted; 7 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The Company and Significant Accounting Policies (continued) · authorization of development of the ore body by management and/or the Board of Directors; and · there is a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues and/or contractual requirements necessary for the Company to have the right to or control of the future benefit from the targeted ore body have been met. Amortization of development costs is calculated using the units-of-production method over the expected life as per the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 360-10-35-4. This includes the cost to define proven and probable reserves and measured and indicated resources accessible via the Main Access Ramp (“MAR”). Measured resources are 90-100% interpolated, and indicated resources 75-80% interpolated, using a 2 grams per tonne gold cut-off grade at the diluted minimum mining width. Conservative estimation parameters (three samples within 25 meters for measured, two within 50 meters for indicated) and economic factors ensure viability. Inferred resources are excluded to reduce uncertainty, and therefore, the volumes are risk-adjusted. Assumptions are regularly evaluated, with material deviations disclosed to ensure a systematic and rational cost allocation. More information on the Company’s reserves and resources can be found in the Technical Report Summary For the Golden Chest Mine which was included as Exhibit 96.1 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2025. Fair Value Measurements When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At June 30, 2025 and December 31, 2024, the Company had no assets or liabilities that required measurement at fair value on a recurring basis other than its gold sales receivable. Accounting for Investments in Joint Ventures (“JV”) and Equity Method Investments Investment in JVs -For JVs where the Company holds more than 50% of the voting interest and has significant influence, the JV is consolidated with the presentation of non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee. For JVs in which the Company does not have joint control or significant influence, the cost method is used. For those JVs in which there is joint control between the parties, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in JVs and its investments therein are adjusted by a similar amount. The Company periodically assesses its investments in JVs for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations. Equity Method Investments -Investments in companies and joint ventures in which the Company has the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and representation on governing bodies. Under the equity method of accounting, the Company’s share of the net earnings or losses of the investee are included in net income (loss) in the condensed consolidated statements of operations. The Company evaluates equity method investments whenever events or changes in circumstance indicate the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. At June 30, 2025, and December 31, 2024, the Company's 37 % common stock holding of Buckskin Gold and Silver, Inc. (“Buckskin”) is accounted for using the equity method (Note 11). At June 30, 2025 and December 31, 2024, the Company’s percentage ownership and method of accounting for each JV and equity method investment is as follows: June 30, 2025 December 31, 2024 JV/Equity % Ownership Significant Influence? Accounting Method % 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 Reclassifications Certain prior period amounts have been reclassified to conform to the 2025 financial statement presentation. Reclassifications had no effect on net income or stockholders’ equity as previously reported. Cash flows were reclassified due to the US treasury notes. Investments in US Treasury Notes The Company holds short term investments in United States Treasury notes and are classified as held to maturity based on management’s intent and ability to hold them to maturity. Such debt securities are stated at cost, adjusted for unamortized purchase premiums and discounts and are amortized using the interest method over the stated terms of the securities. Amortization of the premium or discount is included in interest income on the condensed consolidated statement of operations. Segment Reporting The Company operates as a single operating segment. All financial information is presented on a consolidated basis and reviewed by the Company’s Chief Executive Officer as the Chief Operating Decision Maker (“CODM”). The CODM uses consolidated net income, as presented in the condensed consolidated statement of operations, to assess segment performance and allocate resources. The measure of segment assets is reported on the condensed consolidated balance sheet as total assets. 8 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 1. The Company and Significant Accounting Policies (continued) Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. The Company does not believe there will be an impact from this update on its condensed consolidated financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company's annual periods for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine the impact on its condensed consolidated financial statements and disclosures. Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements. 2. Investments in US Treasury Notes The table below provides the components of investments in US treasury notes held to maturity at amortized cost and fair value at June 30, 2025 and December 31, 2024. June 30, 2025 Amortized Cost Gross Unrealized gains Gross Unrealized losses Fair value US Treasury notes, current (Matures within 1 year) $ 10,611,794 $ 25,206 $ - $ 10,637,000 US Treasury notes, non-current (Matures in 1-5 years) 11,082,224 114,776 - 11,197,000 Total $ 21,694,018 $ 139,982 $ - $ 21,834,000 December 31, 2024 US Treasury notes, current (Matures within 1 year) $ 7,775,193 $ 30,807 $ - $ 7,806,000 US Treasury notes, non-current (Matures in 1-5 years) 7,208,930 72,070 - 7,281,000 Total $ 14,984,123 $ 102,877 $ - $ 15,087,000 Fair value of investments in US treasury notes is determined using Level 1 inputs. 3. Inventories At June 30, 2025 and December 31, 2024, the Company’s inventories consisted of the following: June 30, 2025 December 31, 2024 Concentrate inventory: Finished goods $ 513,580 $ 334,033 Total concentrate inventory 513,580 334,033 Supplies inventory: Mine parts and supplies 470,214 475,336 Mill parts and supplies 137,199 90,555 Total supplies inventory 607,413 565,891 Total $ 1,120,993 $ 899,924 9 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 4. Sales of Products The Company’s products consist of both gold flotation concentrates which are sold to a single broker (H&H Metals (“H&H”)), and an unrefined gold-silver product known as doré which is sold to a precious metal refinery (Cascade Refining). At June 30, 2025, gold concentrate that had been sold but not finally settled included 9,244 ounces of gold of which 2,258 ounces were sold at a predetermined price with the remaining 6,986 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 Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable. Sales of products by metal type for the three and six-month periods ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months 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 $ 9,476,739 $ 16,755,275 $ 6,125,382 $ 12,024,320 Sales by significant product type for the three and six-month periods ended June 30, 2025, and 2024 were as follows: June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months Concentrate sales to H&H Metal $ 9,476,739 $ 16,755,275 $ 5,852,389 $ 11,751,327 Dore sales to refinery - - 272,993 272,993 Total $ 9,476,739 $ 16,755,275 $ 6,125,382 $ 12,024,320 At June 30, 2025 and December 31, 2024 the gold sales receivable balance of $ 2,641,438 , and $ 1,578,694 , respectively, consisted only of amounts due from H&H. There is no allowance for doubtful accounts. 5. Related Party Transactions The Company leases office space from certain related parties on a month-to-month basis. $ 2,000 per month is paid to NP Depot LLC, a company owned by the Company’s president, John Swallow and approximately $ 1,700 is paid quarterly to Mine Systems Design, Inc. which is partially owned by the Company’s vice president, Grant Brackebusch. Payments under these short-term lease arrangements are included in general and administrative expenses on the condensed consolidated statement of operations and for the three and six-month periods ended June 30, 2025 and 2024 are as follows: June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months $ 7,688 $ 15,376 $ 7,688 $ 15,308 6. JV Arrangements NJMJV Agreement The Company owns 65% of the NJMJV and has significant influence in its operations . Thus, the JV is included in the condensed consolidated financial statements along with presentation of the non-controlling interest. At June 30, 2025 and December 31, 2024, an account receivable existed with Crescent Silver, LLC (“Crescent”), the other JV participant, for $ 1,108 and $ 2,892 , respectively, for shared operating costs as defined in the JV agreement. This account receivable is included in the condensed consolidated balance sheet as Joint venture receivable. Butte Highlands JV, LLC On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) for a total consideration of $ 435,000 . Highland Mining, LLC (“Highland”) is the other 50 % owner and manager of the JV. Under the agreement, Highland will fund all future project exploration and mine development costs. The agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $ 2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the JV’s activities, it accounts for its investment on a cost basis. 7. Earnings per Share The following table presents the calculation of basic and diluted net income per common share for the three and six-month periods ended June 30, 2025 and 2024. June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months 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 Effect of dilutive potential common shares from stock options 126,949 101,896 125,446 129,410 Effect of dilutive potential common shares from warrants - - 38,066 46,550 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 10 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 8. Property, Plant, and Equipment Property, plant and equipment at June 30, 2025 and December 31, 2024 consisted of the following: June 30, 2025 December 31, 2024 Mine Equipment $ 10,461,808 $ 8,223,596 Accumulated Depreciation ( 4,092,648 ) ( 3,845,349 ) Total Mine Equipment 6,369,160 4,378,247 Mill Equipment 9,069,657 7,580,452 Accumulated Depreciation ( 2,899,653 ) ( 2,453,673 ) Total Mill Equipment 6,170,004 5,126,779 Buildings 3,111,516 2,715,931 Accumulated Depreciation ( 340,359 ) ( 295,595 ) Total Buildings 2,771,157 2,420,336 Land 978,703 978,703 Total $ 16,289,024 $ 12,904,065 For the three and six-month periods ended June 30, 2025 and 2024, depreciation expense for property, plant, and equipment was as follows. June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months $ 488,183 $ 1,003,465 $ 431,598 $ 908,223 9. Mineral Properties Mineral properties at June 30, 2025 and December 31, 2024 consisted of the following: June 30, 2025 December 31, 2024 Golden Chest Mineral Property $ 5,159,084 $ 5,159,084 Infrastructure 5,835,040 4,722,328 Total 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 For the three and six-month periods ended June 30, 2025 and 2024, amortization expense for mineral properties was as follows. June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months $ 53,555 $ 87,894 $ 24,332 $ 49,495 For the three and six-month periods ended June 30, 2025 and 2024, interest expense was capitalized in association with infrastructure at the Golden Chest Mine as follows. June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months $ 52,552 $ 95,939 $ 23,797 $ 43,174 10. Notes Payable At June 30, 2025 and December 31, 2024, notes payable are as follows: June 30, 2025 December 31, 2024 Mine Equipment Monthly payments of $ 107,574 and $ 55,803 as of June 30, 2025 and December 31, 2024, respectively $ 2,451,508 $ 962,384 Mill Equipment Monthly payments of $ 15,621 and $ 11,498 as of June 30, 2025 and December 31, 2024, respectively 606,299 540,773 Buildings/Land Monthly payments of $ 2,500 and $ 2,500 as of June 30, 2025 and December 31, 2024, respectively 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 All notes are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at June 30, 2025 are as follows: 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 11. Investment in Buckskin The investment in Buckskin is being accounted for using the equity method and resulted in a change in equity from the loss of $ 159 and income of $ 1,187 for the respective three and six-month periods ended June 30, 2025 and a loss of $ 1,589 and income of $ 278 for the respective three and six-month periods ended June 30, 2024. The Company makes an annual payment of $ 12,000 to Buckskin per a mineral lease covering 218 acres of patented mining claims. As of June 30, 2025, the Company holds 37 % of Buckskin’s outstanding shares. 11 Table of Contents Idaho Strategic Resources, Inc Notes to Condensed Consolidated Financial Statements (Unaudited) 12. Stockholders’ Equity Stock Issuance Activity In the first six months of 2025 the Company issued common stock as follows: · Sold 380,000 shares of common stock at an average price of $ 16.95 per share for net proceeds of $ 6,246,713 . · Issued 13,281 shares of common stock for outstanding stock options via cashless exercises by employees. Stock Purchase Warrants Outstanding There was no activity in the Company’s stock purchase warrants since December 31, 2024, therefore there were no stock purchase warrants outstanding at June 30, 2025. Activity in stock purchase warrants is as follows: Number of Warrants Exercise Prices Balance December 31, 2023 289,294 $ 5.60 - 7.00 Exercised ( 147,026 ) $ 5.60 Balance March 31, 2024 142,268 $ 5.60 - 7.00 Exercised ( 29,763 ) $ 5.60 Balance June 30, 2024 112,505 $ 5.60 - 7.00 Exercised ( 112,505 ) $ 5.60 - 7.00 Balance December 31, 2024 and June 30, 2025 - $ - 13. Stock Options On January 15, 2025, the Company granted 400,000 stock options to employees with an exercise price of $ 11.50 . These options expire on January 15, 2028, and vest equally on June 30, 2025, December 31, 2025, June 30, 2026 and December 31, 2026. The stock-based compensation expense recognized for these options for the three and six-month periods ended June 30, 2025 was $ 495,146 and $ 990,292 , respectively. Future expense for this stock option grant will be $ 257,476 for Q3 and Q4 2025 each, $ 138,641 for Q1 and Q2 2026 each, and $ 59,418 for Q3 and Q4 2026 each. The fair value of stock option awards granted, and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows: Fair value $ 1,901,360 Options issued 400,000 Exercise price $ 11.50 Expected term (in years) 3.0 Risk-free rate 4.34 % Volatility 64.2 % Activity in the Company’s stock options is as follows: 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 In the three and six-month periods ended June 30, 2025, 14,000 options were exchanged for 9,559 shares, and 20,000 options were exchanged for 13,281 shares, respectively, in cashless exercises by employees. The intrinsic value of these options was $ 160,355 and $ 211,831 for the three and six-month periods ended June 30, 2025, respectively. At June 30, 2025, outstanding stock options have a weighted average remaining term of approximately 2.25 years and have an intrinsic value of $ 1,084,250 . 14. Subsequent Events Subsequent to June 30, 2025: · 399,687 shares of common stock have been issued for net proceeds of $ 7,045,108 . · Issued 9,500 shares of common stock upon the exercise of outstanding stock options for $ 56,750 . · Issued 37,866 shares of common stock upon the exercise of 68,250 outstanding stock options in cashless exercises by employees. 12 Table of Contents Forward-Looking Statements Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s forward-looking statements include current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. The Company has tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These forward-looking statements are based on information currently available to the Company and are expressed in good faith and believed to have a reasonable basis. However, these forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause the Company’s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item 1A.–Risk Factors in the Company’s 2024 Form 10-K and in Part II, Item 1.A.-Risk Factors in this Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements. All subsequent written and oral forward-looking statements attributable to Idaho Strategic or to persons acting on the Company’s behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, the Company does not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF O PERATIONS Plan of Operation Idaho Strategic is a gold producer and critical minerals/rare earth element (“REE”) exploration company focused on a diversified asset base and cash flows from operations. Its portfolio of mineral properties are located in the historic producing silver and gold districts of the Coeur d’Alene Mining region of north Idaho and the Elk City region of north-central Idaho, as well as the historic REE-Thorium Belt located near the city of Salmon in central Idaho. The Company’s plan of operation is to generate positive cash flow, increase its gold production and asset base over time while being mindful of corporate overhead. The Company’s management is focused on utilizing its in-house technical and operating skills to build a portfolio of producing mines and milling operations with a focus on gold production and exploration for REEs. The Company’s gold properties include: the Golden Chest Mine (currently in production), and the New Jersey Mill (majority ownership interest), as well as the Eastern Star exploration property and other less advanced properties. The Company’s primary focus as it relates to its gold properties is to continue to grow production at the Golden Chest Mine and look to reinvest the cash flow into both the Golden Chest, the New Jersey Mill, and furthering its exploration efforts near the Golden Chest, as well as at its REE properties. In addition to its gold properties, Idaho Strategic has three REE exploration properties in Idaho known as Lemhi Pass, Diamond Creek, and Mineral Hill. Following observation of industry dynamics and in early response to events impacting long-term domestic critical mineral supply and demand trends, the Company’s strategic expansion into REE’s also aids in diversifying its holdings. The Company believes the anticipated demand for these elements in the electrification of motorized vehicles, defense spending, and a renewed focus on the United States’ domestic critical minerals supply chain security may benefit domestic holders of such assets. The Company also believes it has a first-mover advantage with its addition of recognized REE land holdings in Idaho. To date, Idaho Strategic has conducted numerous exploration programs on its REE properties which include drilling, trenching, sampling, and mapping of certain areas within the Company’s 19,090-acre landholdings. Idaho Strategic has been able to demonstrate and utilize its track record of operations and experience in mining, milling, and exploring at the Golden Chest to develop relationships with different state government agencies, universities, national labs, and other government and non-government entities to advance its REE exploration activities on multiple fronts. Idaho Strategic plans to continue to look for additional partnerships to find mutually beneficial solutions to advance the U.S.' domestic REE supply chain. Critical Accounting Estimates The Company has three critical accounting estimates. The ounces of gold contained in process and concentrate inventory is based on assays taken at the time the ore is processed and the ounces of gold contained in shipped concentrate which is based upon assays taken prior to shipment, however, subject to final assays at the refinery, these shipments are also subject to the fluctuation in gold prices between shipment date and estimated and actual final settlement date. Additionally, the reclamation bond obligation on the Company’s balance sheet is based on an estimate of the future cost to recover and remediate its properties as required by permits upon cessation of operations and may differ when operations are actually ceased. Finally, the amortization of development costs at the Golden Chest Mine is based on an estimate of reserves and measured and indicated resources calculated annually by the Company’s mine engineers. The Company’s concentrate sales sometimes involve variable consideration, as they can be subject to changes in metals prices between the time of shipment and their final settlement. However, the Company can reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the estimated month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement for financial reporting purposes. The embedded derivative contained in the Company’s concentrate sales is adjusted to fair value through earnings each period prior to final settlement. It is unlikely a significant reversal of revenue for the concentrate receivable will occur upon final settlement of the lots. As such, the Company uses 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, 2025, metals that had been sold but not finally settled included 9,244 ounces of which 2,258 ounces were sold at a predetermined price with the remaining 6,986 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. 13 Table of Contents The asset retirement obligation and asset on the Company’s balance sheet is based on an estimate of the future cost to recover and remediate its properties as required by permits upon cessation of operations and may differ when operations are actually ceased. At June 30, 2025 the Company reviewed its December 31, 2024 estimate that the cost of the machine and man hours probable to be needed to put its properties in the condition required by permits once operations are ceased. The June 30, 2025 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, the Company evaluated the expected life in years and costs that, initially, are comparable to rates that it would incur at the present. An expected present value technique is used to estimate the fair value of the liability. This includes inflating the estimated costs in today’s dollars using a reasonable inflation rate up to the date of expected retirement and discounting the inflated costs using a credit-adjusted risk-free rate. Upon initial recognition of the liability, the carrying amount of the related long-lived asset is increased by the same amount. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is amortized over the life of the related asset. The Company is adding to the liability each year, and amortizing the asset over the estimated life, which decreases net income in total each year. Changes resulting from revisions to the timing or amount of the original estimate of undiscounted cash flows are recognized as either an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. Upward revisions of the amount of undiscounted estimated cash flows are discounted using the current credit-adjusted risk-free rate. Downward revisions in the amount of undiscounted estimated cash flows are discounted using the credit-adjusted risk-free rate that existed when the original liability was recognized. The Company reviews, on an annual basis, unless otherwise deemed necessary, the asset retirement obligations. 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. Amortization of development costs is calculated using the units-of-production method over the expected life as per the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 360-10-35-4. This includes the cost to define proven and probable reserves and measured and indicated resources accessible via the Main Access Ramp (“MAR”). Measured resources are 90-100% interpolated, and indicated resources 75-80% interpolated, using a 2 grams per tonne gold cut-off grade at the diluted minimum mining width. Conservative estimation parameters (three samples within 25 meters for measured, two within 50 meters for indicated) and economic factors ensure viability. Inferred resources are excluded to reduce uncertainty, and therefore, the volumes are risk-adjusted. Assumptions are regularly evaluated, with material deviations disclosed to ensure a systematic and rational cost allocation. More information on the Company’s reserves and resources can be found in the Technical Report Summary For the Golden Chest Mine which was included as Exhibit 96.1 to the Company’s Form 10-K filed with the Securities and Exchange Commission on March 31, 2025. Highlights during the second quarter of 2025 include: REE Exploration · During the quarter the Company executed a long-term lease agreement for the mineral claims comprising approximately 1,500 acres of various in-holdings within the Company’s Mineral Hill and Lemhi Pass REE projects. Key prospects covered by the mineral claims leased by the Company include Cardinal (Mineral Hill), Lucky Horseshoe (Lemhi Pass, Idaho), Silver Queen (Lemhi Pass, Idaho), Last Chance (Lemhi Pass, Montana), Trapper (Lemhi Pass, Montana), and other prospects. · The Company announced the signing of a Memorandum of Understanding with Clean Core Thorium Energy, Inc. (“CCTE”) to evaluate the feasibility of thorium mining, processing, and fuel fabrication the facilitate a “Made in America” thorium-based nuclear fuel supply chain utilizing thorium from the Company’s Lemhi Pass project and CCTE’s ANEEL fuel- an advanced nuclear fuel comprised of thorium and high assay low-enriched uranium for use in existing nuclear reactors. Golden Chest/Operations · At the Golden Chest, ore mined from underground stopes totaled approximately 10,240 tonnes with all of the tonnage coming from H-Vein stopes. · During the quarter, a total of 92 meters of development was completed in the MAR while most of the development effort was spent driving attack ramps to the 754 and 742 stopes. A total of 3,460 cubic meters of backfilling was completed during the quarter and operational improvements made by the miners significantly reduced the time to fill a stope from 20 shifts to 10 shifts. Four boreholes designed to deliver paste backfill from the surface to various areas within the mine were completed during the quarter as work continued on the paste backfill plant. · For the quarter ended June 30, 2025, a total of 10,240 dry metric tonnes (“dmt”) were processed at the Company’s New Jersey Mill with a flotation feed head grade of 9.97 gpt gold and gold recovery of 92.6%. · The construction of the tailings filtration circuit at the New Jersey Mill was completed and commissioning of the circuit was also completed. The haulage of tailings back to the Golden Chest mine commenced in the second quarter as well. · An exploration program consisting of surface and underground core drilling was continued during the second quarter at the Golden Chest and a surface core drilling program commenced in the Murray Gold Belt. A total of 2,176 meters of drilling was completed at the Golden Chest targeting the Paymaster, the Red Star, and the H-vein. A total of 1,687 meters of drilling was completed in the Murray Gold Belt targeting two prospects, the Buckskin and the King Mine. · The Company completed its first core drilling program at the Eastern Star project near Elk City, Idaho. A total of 1,956 meters were drilled in April and May targeting three areas, the Carter, the Bema Zone, and the Alberta. Quartz veining was intercepted in many of the holes with assays pending from the laboratory, and some core remaining to be logged. Results of Operations Idaho Strategic’s financial performance during the quarter is summarized below: · Revenue increased 54.7% for the three-month period ended June 30, 2025 when compared to the same period in the prior year. For the six-month period ended June 30, 2025, revenue increased 39.3% when compared to the same period in the prior year. The increase in revenue for both the three and six-month periods was due to the increased average gold price realized on ounces sold which was $3,223.38 for the three-month period and $3,049.19 for the six-month period ended June 30,2025. For the three and six-month periods ended June 30, 2024 it was $2,043.84 and $2,102.89, respectively. · Gross profit as a percentage of sales increased slightly from 50.2% in the three-month period ended June 30, 2024 to 57.8% in the three-month period ended June 30, 2025. When comparing the six-month periods ended June 30, 2025 and 2024 gross profit as a percentage of sales increased from 49.2% to 54.8%. · Exploration expense increased $1,624,705 and $2,728,290 when comparing the three and six-month periods ended June 30, 2025 and 2024, respectively. The increase is due to increased core drilling activity this year compared to last. This quarterly exploration expense is expected to continue, and may increase, throughout the remainder of 2025 as the Company continues to invest in the future of the Golden Chest and advance other exploration properties. 14 Table of Contents · Operating income for the three-month period ended June 30, 2025 was $2,516,874 which is an increase of 20.1% from the same period in 2024. Operating income for the six-month period ended June 30, 2025 was $3,918,128 which is a decrease of 7.5%. The small increase in the three-month period and decrease in the six-month period is due to the planned increase in exploration expense this year compared to last. · Other income increased $183,772 and $360,528 for the three and six-month periods ended June 30, 2025, respectively, when compared to the same periods in the prior year. The increase was from increased interest income and gains on US treasuries from the company’s short term investment account which was opened mid Q2 2024. · Net income for the three-month period ended June 30, 2025 was $2,739,972 which is a 28.3% increase compared to the same period in 2024. Net income for the six-month period ended June 30, 2025 was $4,331,823 which is a 1.0% increase compared to the same period in 2024. The small increase in net income is due to the large increase in exploration expense, as well as the stock-based compensation expense of $495,146 and $990,292 in the three and six-month periods ended June 30, 2025 and none in the same periods in 2024. · The consolidated net income for the six-month periods ended June 30, 2025 and 2024 included non-cash charges as follows: depreciation and amortization of $1,091,359 ($957,718 in 2024), loss on sale of equipment of $308,840 ($7,431 in 2024), accretion of asset retirement obligation of $9,855 ($9,226 in 2024), loss on investment in equity securities of $0 ($453 in 2024), equity income on investment in Buckskin of $1,187 ($278 in 2024), and stock-based compensation expense of $990,292 (none in 2024). · Cash cost per ounce for the three and six-month periods ended June 30, 2025 increased $160.01 and $82.75 per ounce, respectively, compared to the same periods in 2024. · All in sustaining cost per ounce increased during the three and six-month periods ended June 30, 2025 compared to the same periods in 2024 due to an increase in exploration costs from underground and surface drilling at the Golden Chest Mine as well as increased exploration costs across many of the Company’s projects. Adjusted all in sustaining costs without exploration expenses were $1,313.31 and $1,156.50 per ounce for the three and six-month periods ended June 30, 2025, respectively and $1,197.99 and $1,155.08 for the three and six-month periods ended June 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 AISC per ounce for the Company’s gold production in the three and six-month periods ended June 30, 2025, and 2024. Cash cost per ounce is an important operating measure that is utilized to measure operating performance. AISC per ounce is an important measure that is utilized to assess net cash flow after costs for pre-development, exploration, reclamation, and sustaining capital. 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. During 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. Idaho Strategic calculates sustaining capital by including depreciation and amortization as an estimate of property, plant, and equipment wear and tear necessary to maintain production capacity, plus Golden Chest capitalized development costs, net of current period amortization, to reflect expenses for sustaining mine access and gold production. June 30, 2025 June 30, 2024 Three Months Six Months Three Months Six Months Cost of sales and other direct production costs and depreciation and amortization $ 4,000,953 $ 7,581,403 $ 3,051,957 $ 6,112,658 Less depreciation, depletion, amortization and stock-based compensation (846,872 ) (1,701,627 ) (455,930 ) (957,718 ) Change in concentrate inventory 50,601 (221,069 ) 30,224 110,069 Cash Cost $ 3,204,682 $ 5,658,707 $ 2,626,251 $ 5,265,009 Exploration 2,244,761 3,616,194 620,056 887,904 Less REE exploration costs (236,790 ) (340,462 ) (70,381 ) (157,526 ) Sustaining capital 788,722 1,412,966 681,321 1,364,148 General and administrative 223,735 460,753 179,456 340,119 Less stock-based compensation and other non-cash items (264,081 ) (697,532 ) (9,262 ) (16,832 ) AISC $ 5,961,029 $ 10,110,626 $ 4,027,441 $ 7,682,822 Divided by ounces produced 3,010 5,910 2,903 6,019 Cash cost per ounce $ 1,064.68 $ 957.48 $ 904.67 $ 874.73 AISC per ounce $ 1,980.41 $ 1,710.77 $ 1,387.34 $ 1,276.43 Financial Condition and Liquidity For the Six-Months Ended June 30, Net cash provided (used) by: 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, beginning of period 1,106,901 2,286,999 Cash and cash equivalents, end of period $ 2,444,476 $ 1,814,780 15 Table of Contents The Company is currently producing profitably from underground at the Golden Chest Mine. In the past, the Company has been successful in raising required capital from sale of common stock, forward gold contracts, and debt. As a result of its profitable production, equity sales and potential debt borrowings or restructurings, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months. ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for small reporting companies. ITEM 4: CONTROLS AND PROCEDURES Disclosure Controls and Procedures At June 30, 2025, the Company’s President, who serves as Chief Executive Officer, and the Company’s Vice President, who serves as Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), which disclosure controls and procedures are designed to insure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within required time periods specified by the Securities and Exchange Commission rules and forms. Based upon that evaluation, it was concluded that the Company’s disclosure controls were effective as of June 30, 2025, to ensure timely reporting with the Securities and Exchange Commission. Specifically, the Company’s corporate governance and disclosure controls and procedures provided reasonable assurance that required reports were timely and accurately reported in periodic reports filed with the Securities and Exchange Commission. Changes in internal control over financial reporting There was no material change in internal control over financial reporting in the quarter ended June 30, 2025. 16 Table of Contents PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Neither the constituent instruments defining the rights of the Company’s securities filers nor the rights evidenced by the Company’s outstanding common stock have been modified, limited or qualified. In the second quarter of 2025, 9,559 shares of common stock were issued in exchange for outstanding stock options via cashless exercises by employees. During the second quarter of 2024, 29,763 shares of common stock were issued in exchange for outstanding warrants for net proceeds of $166,673. 21,429 shares of common stock were issued in exchange for outstanding stock options for net proceeds of $120,002 and 86,481 shares of common stock were issued for outstanding stock options via cashless exercises by employees. The Company relied on the transaction exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D Rule 506(b). The common shares are restricted securities which may not be publicly sold unless registered for resale with the Securities and Exchange Commission or exempt from the registration requirements of the Securities Act of 1933, as amended. ITEM 3. DEFAULTS UPON SENIOR SECURITIES The Company has no outstanding senior securities. ITEM 4. MINE SAFETY DISCLOSURES The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95 to this report. ITEM 5. OTHER INFORMATION None. 17 Table of Contents ITEM 6. EXHIBITS Exhibits 3.1 Amended and Restated Articles of Incorporation, incorporated by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on October 27, 2021 3.2 Amended and Restated By-laws of Idaho Strategic Resources, Inc., incorporated by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on October 27, 2021 10.1 Registrant’s Grant of Options to Employees and Directors of the Company dated January 15, 2025, incorporated herein by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on January 17, 2025. 19* Insider trading policy 31.1* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 95* Mine safety information listed in Section 1503 of the Dodd-Frank Act. 101.INS* XBRL Instance Document 101.SCH* XBRL Taxonomy Extension Schema Document 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* XBRL Taxonomy Extension Label Linkbase Document 101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document * Filed herewith. 18 Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. IDAHO STRATEGIC RESOURCES, INC By: /s/ John Swallow John Swallow, its: President and Chief Executive Officer Date August 7, 2025 By: /s/ Grant Brackebusch Grant Brackebusch, its: Vice President and Chief Financial Officer Date: August 7, 2025 29