What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-08-07 · 52 added, 49 removed, 82 unchanged (55% of the section changed)

25 unchanged sentences

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.

At September 30, 2025, metals that had been sold but not finally settled included 9,533 ounces of which 8,384 ounces were sold at a predetermined price with the remaining 1,149 exposed to future price changes until prices are locked in based on the month of settlement.

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

The asset retirement obligation and asset on 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.

At September 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 September 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.

17 unchanged sentences

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:

Highlights during the third 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.

The Company announced the discovery of a carbonatite with strong REE mineralization at the Lucky Horseshoe prospect within the Lemhi Pass project.

Initial samples taken from outcrop assayed up to 6.14% total rare earth oxides with ratios of 65% magnet rare earth oxides (Nd, Pr, Dy, Tb) and 11% SEG oxides (Sm, Eu, Gd).

Idaho Strategic sampled greater than 17.6% total REEs from its recently added Cardinal prospect.

The Cardinal prospect is the third identified carbonatite occurrence at the Company’s Mineral Hill project, known for its high grade monazite hosted REEs at surface.

Idaho Strategic initiated a large-scale geophysics program across its Mineral Hill and Lemhi Pass projects including LiDAR, magnetics, and radiometrics surveys.

The Company is interpreting and utilizing the data as it is received from the geophysics contractor to aid with additional exploration efforts and drill program planning.

The Company initiated a soil sampling program covering many key prospects across the Idaho portion of its Lemhi Pass project.

Initial success of the program at identifying areas of anomalous REEs in soils has led to an extension of the project scope.

Soil sampling work is ongoing and will be utilized to aid in the planning of drill programs and other future exploration work.

Golden Chest/Operations

At the Golden Chest, ore mined from underground stopes totaled approximately 10,570 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.

During the quarter, a total of 111 meters of development was completed in the MAR and associated workings including and escapeway/ventilation raise.

A total of 2,810 cubic meters of backfilling was completed during the quarter.

For the quarter ended September 30, 2025, a total of 10,570 dry metric tonnes (“dmt”) were processed at the Company’s New Jersey Mill with a flotation feed head grade of 9.94 gpt gold and gold recovery of 93.1%.

With the New Jersey Mill tailings filtration circuit construction completed, construction efforts transitioned to the fabrication of paste backfill equipment and support framework.

Electrical work was also completed on the paste backfill circuit.

Construction also continued on a new surface warehouse and dry building.

An exploration program consisting of surface and underground core drilling was continued during the third quarter at the Golden Chest and the surface core drilling program was completed in the Murray Gold Belt.

A total of 5,335 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.

A total of 3,747 meters of drilling was completed in the Murray Gold Belt at the King Mine, Argus, McComber and Butte Gulch prospects,

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.

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.

Revenue increased 80.1% for the three-month period ended September 30, 2025 when compared to the same period in the prior year.

For the nine-month period ended September 30, 2025, revenue increased 53.1% when compared to the same period in the prior year.

The increase in revenue for both the three and nine-month periods was primarily due to the increased average gold price realized on ounces sold which was $3,578.07 for the three-month period and $3,249.28 for the nine-month period ended September 30, 2025.

For the three and nine-month periods ended September 30, 2024 it was $2,411.16 and $2,178.79, respectively.

Gross profit as a percentage of sales showed an increase of 14.9% from 48.7% in the three-month period ended September 30, 2024 to 63.6% in the three-month period ended September 30, 2025.

When comparing the nine-month periods ended September 30, 2025 and 2024 gross profit as a percentage of sales increased from 49.0% to 58.3%.

Exploration expense increased $2,712,860 and $5,441,150 when comparing the three and nine-month periods ended September 30, 2025 and 2024, respectively.

The increase is due to increased core drilling activity this year compared to last as well as geophysics conducted on multiple properties which did not occur last year.

This quarterly exploration expense is expected to continue throughout the remainder of 2025 as the Company continues to invest in the future of the Golden Chest and advance other exploration properties.

Operating income for the three-month period ended September 30, 2025 was $2,593,970 which is an increase of 80.2% from the same period in 2024.

Operating income for the nine-month period ended September 30, 2025 was $6,512,098 which is an increase of 14.7%.

The increase in both the three and nine-month periods is due to the increase in revenue from the higher gold price on ounces sold.

Other income increased $234,396 and $594,924 for the three and nine-month periods ended September 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 having higher balances in the company’s short term investment account.

Net income for the three-month period ended September 30, 2025 was $2,960,340 which is an 88.4% increase compared to the same period in 2024.

Net income for the nine-month period ended September 30, 2025 was $7,292,163 which is a 24.4% increase compared to the same period in 2024.

The increase in net income is due to the increase in revenue from the higher gold price on ounces sold which overcame the planned increase in exploration expense seen in both periods.

The consolidated net income for the nine-month periods ended September 30, 2025 and 2024 included non-cash charges as follows:

depreciation and amortization of $1,694,427 ($1,443,232 in 2024), loss on sale of equipment of $308,840 ($1,431 in 2024), accretion of asset retirement obligation of $14,907 ($13,954 in 2024), loss on investment in equity securities of $0 ($453 in 2024), equity income on investment in Buckskin of $2,376 ($1,579 in 2024), stock-based compensation expense of $1,247,768 (none in 2024), debt payments made by 3 rd party of $44,951 (none in 2024) and amortization of discount on US treasury notes of $18,832 ($278 in 2024).

Cash cost per ounce for the three and nine-month periods ended September 30, 2025 increased $315.26 and $174.98 per ounce, respectively, compared to the same periods in 2024

All in sustaining cost per ounce increased during the three and nine-month periods ended September 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 $1,468.75 and $1,271.85 per ounce for the three and nine-month periods ended September 30, 2025, respectively and $1,108.41 and $1,126.19 for the three and nine-month periods ended September 30, 2024, respectively.

Non-Generally Accepted Accounting Principles (“Non-GAAP”) Financial Measures

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.

1 unchanged sentence

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

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

During 2024, the Company changed the method of calculating sustaining capital 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

September 30, 2025

September 30, 2024

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

Less depreciation, depletion, amortization and stock-based compensation

Change in concentrate inventory

Less REE exploration costs

Change in inventory

Less non-gold exploration costs

Sustaining capital

5 unchanged sentences

Financial Condition and Liquidity

For the Six-Months

Ended June 30,

For the Nine-Months Ended

September 30,

Net cash provided (used) by:

12 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis