Idaho Strategic Resources, Inc. 10-Q

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.