PERPETUA RESOURCES CORP. 10-Q/A

Item 1. Financial Statements. Perpetua Resources Corp. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2022 2021 ASSETS ​ ​ CURRENT ASSETS ​ ​ Cash and cash equivalents ​ $ 41,168,724 ​ $ 47,852,846 Receivables ​ 62,044 ​ 279,946 Prepaid expenses ​ 958,148 ​ 946,281 ​ ​ 42,188,916 ​ 49,079,073 NON-CURRENT ASSETS ​ ​ ​ Buildings and equipment, net ​ 153,790 ​ 165,256 Right-of-use assets ​ 103,760 ​ 49,103 Environmental reclamation bond (Note 9) ​ ​ 3,000,000 ​ ​ 3,000,000 Mineral properties and interest (Note 3) ​ 72,204,334 ​ 72,204,334 TOTAL ASSETS ​ $ 117,650,800 ​ $ 124,497,766 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND SHAREHOLDERS’ EQUITY ​ ​ CURRENT LIABILITIES ​ ​ Trade and other payables ​ $ 2,032,038 ​ $ 2,838,214 Lease liabilities ​ 80,242 ​ 69,987 Environmental reclamation liabilities (Note 9) ​ ​ 3,963,847 ​ ​ 2,835,000 ​ ​ 6,076,127 ​ 5,743,201 NON-CURRENT LIABILITIES ​ ​ Warrant derivative (Note 4) ​ 85,522 ​ 100,770 Lease liabilities ​ 32,751 ​ — Environmental reclamation liabilities (Note 9) ​ 5,424,450 ​ 7,053,200 TOTAL LIABILITIES ​ 11,618,850 ​ 12,897,171 ​ ​ ​ ​ ​ ​ ​ COMMITMENT AND CONTINGENCIES (Note 10) ​ ​ ​ ​ ​ ​ ​ ​ ​ SHAREHOLDERS’ EQUITY (Note 7) ​ ​ Common stock, no par value, unlimited shares authorized, 62,973,526 and 62,971,859 shares outstanding, respectively ​ 615,371,530 ​ 615,359,152 Additional paid-in capital ​ ​ 30,118,567 ​ ​ 29,454,696 Accumulated deficit ​ ( 539,458,147 ) ​ ( 533,213,253 ) TOTAL SHAREHOLDERS’ EQUITY ​ 106,031,950 ​ 111,600,595 ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY ​ $ 117,650,800 ​ $ 124,497,766 ​ See accompanying notes to the unaudited condensed consolidated financial statements ​ 5 Table of Contents Perpetua Resources Corp. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ 2022 2021 EXPENSES ​ ​ Consulting ​ $ 10,880 ​ $ 104,917 Corporate salaries and benefits ​ 303,411 ​ 889,889 Depreciation ​ 11,466 ​ 19,122 Directors’ fees ​ 262,948 ​ 304,211 Exploration ​ ​ 4,560,053 ​ ​ 6,580,863 Environmental liability expense ​ ​ — ​ ​ 7,473,805 Office and administrative ​ 213,483 ​ 472,268 Professional fees ​ 734,529 ​ 167,336 Shareholder and regulatory ​ 158,973 ​ 251,625 Travel and related costs ​ 5,090 ​ 126 OPERATING LOSS ​ 6,260,833 ​ 16,264,162 ​ ​ ​ ​ ​ ​ ​ OTHER EXPENSES (INCOME) ​ ​ Change in fair value of warrant derivative (Note 4) ​ ( 15,248 ) ​ ( 486,399 ) Change in fair value of convertible note derivative (Note 6) ​ — ​ ( 11,596,790 ) Finance costs ​ — ​ 256,998 Foreign exchange loss ​ 30,751 ​ 302,477 Interest income ​ ( 31,442 ) ​ ( 23,871 ) Total other loss (income) ​ ( 15,939 ) ​ ( 11,547,585 ) ​ ​ ​ ​ ​ ​ ​ NET LOSS ​ $ 6,244,894 ​ $ 4,716,577 ​ ​ ​ ​ ​ ​ ​ NET LOSS PER SHARE, BASIC AND DILUTED ​ $ 0.10 ​ $ 0.10 ​ ​ ​ ​ ​ ​ ​ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED ​ 62,972,155 ​ 47,550,311 ​ See accompanying notes to the unaudited condensed consolidated financial statements ​ ​ 6 Table of Contents Perpetua Resources Corp. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited) Three months ended March 31, 2022 and 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock ​ Additional Paid ​ Accumulated ​ ​ ​ ​ Shares Amount in Capital Deficit Total BALANCE, December 31, 2020 47,481,134 ​ $ 528,715,788 ​ $ 26,176,265 ​ ​ ( 497,261,227 ) ​ ​ 57,630,826 Share based compensation — ​ — ​ ​ 1,929,352 ​ — ​ 1,929,352 Shares issued through stock appreciation rights 30,819 ​ 230,396 ​ ​ ( 226,229 ) ​ — ​ 4,167 Exercise of share purchase options 82,038 ​ 446,407 ​ ​ ( 149,533 ) ​ — ​ 296,874 Net loss for the period — ​ — ​ ​ — ​ ( 4,716,577 ) ​ ( 4,716,577 ) BALANCE, March 31, 2021 47,593,991 ​ $ 529,392,591 ​ $ 27,729,855 ​ $ ( 501,977,804 ) ​ $ 55,144,642 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ BALANCE, December 31, 2021 ​ 62,971,859 ​ $ 615,359,152 ​ $ 29,454,696 ​ $ ( 533,213,253 ) ​ $ 111,600,595 Share based compensation — ​ — ​ ​ 676,249 ​ — ​ 676,249 Restricted shares units distributed ​ 1,667 ​ ​ 12,378 ​ ​ ( 12,378 ) ​ ​ — ​ ​ — Net loss for the period — ​ — ​ ​ — ​ ( 6,244,894 ) ​ ( 6,244,894 ) BALANCE, March 31, 2022 62,973,526 ​ $ 615,371,530 ​ $ 30,118,567 ​ $ ( 539,458,147 ) ​ $ 106,031,950 ​ See accompanying notes to the unaudited condensed consolidated financial statements ​ ​ 7 Table of Contents Perpetua Resources Corp. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended March 31, ​ ​ 2022 ​ 2021 OPERATING ACTIVITIES: ​ ​ Net loss ​ $ ( 6,244,894 ) ​ $ ( 4,716,577 ) Noncash items included in net loss: ​ ​ Share based compensation (Note 7) ​ 676,249 ​ 1,933,519 Depreciation ​ 11,466 ​ 19,122 Accretion of convertible debt discount (Note 6) ​ — ​ 256,997 Change in fair value of warrant derivative (Note 4) ​ ( 15,248 ) ​ ( 486,399 ) Change in fair value of convertible note derivative (Note 6) ​ — ​ ( 11,596,790 ) Environmental liability expense ​ ​ — ​ ​ 7,473,805 Unrealized foreign exchange loss ​ ( 555 ) ​ 358,174 Changes in: ​ ​ ​ Receivables ​ 206,251 ​ 77,563 Prepaid expenses ​ ( 11,867 ) ​ ( 333,703 ) Trade and other payables ​ ( 806,176 ) ​ ( 427,386 ) Environmental reclamation liabilities ​ ​ ( 499,903 ) ​ ​ ( 112,007 ) Net cash used in operating activities ​ ( 6,684,677 ) ​ ( 7,553,682 ) ​ ​ ​ ​ ​ ​ ​ INVESTING ACTIVITIES: ​ ​ Purchase of surety bond ​ ​ — ​ ​ ( 3,000,000 ) Net cash used in investing activities ​ — ​ ( 3,000,000 ) ​ ​ ​ ​ ​ ​ ​ FINANCING ACTIVITIES: ​ ​ Proceeds from exercise of share purchase options (Note 7) ​ — ​ 296,874 Net cash provided by financing activities ​ — ​ 296,874 ​ ​ ​ ​ ​ ​ ​ Effect of foreign exchange on cash and cash equivalents ​ 555 ​ ​ 5,097 Net change in cash and cash equivalents ​ ( 6,684,122 ) ​ ​ ( 10,251,711 ) Cash and cash equivalents, beginning of quarter ​ 47,852,846 ​ ​ 25,037,766 Cash and cash equivalents, end of quarter ​ $ 41,168,724 ​ $ 14,786,055 ​ ​ ​ ​ ​ ​ ​ NONCASH INVESTING AND FINANCING ACTIVITIES ​ ​ Recognition of operating lease liability and right-of-use asset ​ $ 78,790 ​ $ — ​ ​ ​ ​ ​ ​ ​ CASH AND CASH EQUIVALENTS ​ ​ Cash ​ $ 5,734,237 ​ $ 2,024,470 Investment savings accounts ​ 20,248,248 ​ 5,595,106 GIC and term deposits ​ 15,186,239 ​ 7,166,479 Total cash and cash equivalents ​ $ 41,168,724 ​ $ 14,786,055 ​ See accompanying notes to the unaudited condensed consolidated financial statements ​ ​ 8 Table of Contents Perpetua Resources Corp. NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Operations and Basis of Presentation Perpetua Resources Corp. (the “Corporation”, the “Company”, “Perpetua Resources” or “Perpetua”) was incorporated on February 22, 2011 under the Business Corporation Act (British Columbia) (the “BCBCA”). The Company was organized to hold shares in wholly owned subsidiaries that locate, acquire, develop and restore mineral properties located principally in the Stibnite – Yellow Pine mining district in Valley County, Idaho, USA. The Company’s principal asset is 100 % ownership in subsidiaries that control the Stibnite Gold Project (“Stibnite Gold Project” or the “Project”). The Company currently operates in one segment, mineral exploration in the United States. The unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of Perpetua Resources Corp. and its wholly owned subsidiaries, Perpetua Resources Idaho, Inc. and Idaho Gold Resource Company, LLC. Intercompany transactions and balances have been eliminated. The unaudited condensed consolidated financial statements do not include all disclosures required of annual consolidated financial statements and, accordingly, should be read in conjunction with our annual financial statements for the year ended December 31, 2021. Operating results for the three months ended March 31, 2022 may not be indicative of results expected for the full year ending December 31, 2022. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2022 and statements of operations, of cash flows and of changes in shareholders’ equity for the three months ended March 31, 2022 and 2021, respectively. Loss per share Basic loss per share is computed by dividing the net loss by the weighted average number of shares outstanding during the reporting period. Diluted loss per share is computed similar to basic loss per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of share purchase options and warrants, if dilutive. The Company’s potential dilutive shares of common stock include outstanding share purchase options, restricted share units, performance share units, deferred share units, warrants and, in 2021, convertible notes. Potentially diluted shares as of March 31, 2022 and March 31, 2021: ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ 2022 2021 Share purchase options ​ 2,068,650 ​ 2,784,350 Share units ​ 725,675 ​ — Warrants 200,000 ​ 200,000 Convertible notes ​ — ​ 4,351,850 Balance 2,994,325 ​ 7,336,200 ​ All potentially dilutive shares were excluded from the calculation of diluted loss per share as their exercise and conversion would be anti-dilutive. ​ 2. Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Update (“ASU”) No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40),” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required for equity contracts to qualify for the derivative scope exception, permitting more contracts to qualify for the exception. In addition, the guidance eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of the if-converted method. The ASU is effective for annual reporting periods beginning after December 15, 2021, including interim reporting periods within those 9 Table of Contents annual periods, with early adoption permitted no earlier than the fiscal year beginning after December 15, 2021. The adoption of this update on January 1, 2022 did not have a material impact on our unaudited condensed consolidated financial statements. From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. ​ ​ 3. Mineral Properties and Interest The Company’s mineral properties and interest at the Stibnite Gold Project totaled $ 72,204,334 as of both March 31, 2022 and December 31, 2021. The Company’s subsidiaries acquired mineral rights to the Stibnite Gold Project through several transactions. All mineral rights held by the Company’s subsidiaries are held through patented and unpatented mineral and mill site claims, except the Cinnabar option claims which are held under an Option to Purchase (“OTP”), and all of the Stibnite Gold Project is subject to a 1.7 % net smelter returns royalty upon the sale of project-related production. Included in mineral properties and interest are annual payments made under option agreements, where the Company is entitled to continue to make annual option payments or, ultimately, purchase certain properties. Annual payments due under option agreements during 2022 are $ 180,000 . As of March 31, 2022, it has not yet been determined that the Project’s mining deposits can be economically and legally extracted or produced because the Project’s estimated reserves do not yet meet the definition of proven reserves under the United States Securities and Exchange Commission (“SEC”) Regulation S-K 1300. Accordingly, development costs related to such reserves will not be considered capitalized unless they are incurred after such determination. Upon commencement of commercial production, capitalized costs will be amortized over their estimated useful lives or units of production, whichever is a more reliable measure. Although the Company has taken steps to review and verify mineral rights to the properties in which it has an interest, in accordance with industry standards for properties in the exploration stage, these procedures do not guarantee the Company’s title and interests. Mineral title may be subject to unregistered prior agreements and noncompliance with regulatory requirements. ​ 4. Warrant Derivative In May 2013, the Company issued to Franco Nevada Company (“Franco”) 200,000 share purchase warrants (“Franco Warrants”) for gross proceeds of $ 350,000 . The Franco Warrants are exercisable into 200,000 common shares of the Company at C$ 12.30 per warrant. The Franco Warrants contain a mandatory conversion feature which requires Franco to exercise 100 % of the outstanding warrants if, at any time, the volume weighted average trading price of the Corporation’s common shares is equal to or greater than C$ 32.30 for a period of 30 consecutive trading days. The Franco Warrants expire on May 9, 2023. The exercise price of the Franco Warrants is denominated in Canadian dollars; however, the functional currency of the Company is the U.S. dollar. As a result of this difference in currencies, the proceeds that will be received by the Company are not fixed and will vary based on foreign exchange rates and the warrants are a derivative and are required to be recognized and measured at fair value at each reporting period. Any changes in fair value from period to period are recorded as a gain or loss in the unaudited condensed consolidated statements of operations. There are no circumstances in which the Company would be required to pay any cash upon exercise or expiry of the warrants. 10 Table of Contents A reconciliation of the change in fair values of the derivative is below: ​ ​ ​ ​ ​ ​ Fair Value of Warrant ​ ​ Derivative Balance, December 31, 2020 ​ $ 874,864 Change in fair value of warrant derivative ​ ​ ( 486,399 ) Balance, March 31, 2021 ​ $ 388,465 ​ ​ ​ ​ Balance, December 31, 2021 ​ $ 100,770 Change in fair value of warrant derivative ​ ( 15,248 ) Balance, March 31, 2022 ​ $ 85,522 ​ The fair value of the warrants was calculated using the Black-Scholes valuation model. As of March 31, 2022 and 2021, the inputs used in the Black-Scholes valuation model are: ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ ​ March 31, ​ March 31, ​ 2022 2021 Share price ​ C$ 5.20 ​ C$ 7.64 Exercise price C$ 12.30 C$ 12.30 Expected term (in years) 1.1 2.1 Expected share price volatility 80 % ​ 82 % Annual rate of quarterly dividends 0 % ​ 0 % Risk-free interest rate 2.3 % ​ 0.2 % ​ ​ ​ 5. Convertible Notes On March 17, 2016, the Company issued unsecured convertible notes (the “2016 Notes”) for gross proceeds of $ 38.5 (C$ 50.0 ) million and a maturity date of March 17, 2023. On March 17, 2020, the Company issued a second round of unsecured convertible notes (the “2020 Notes”) for gross proceeds of $ 35.0 (C$ 47.6 ) million and a maturity date of March 17, 2027. The holders of the convertible notes may convert any portion of their convertible notes at any time prior to the maturity date into common shares of the Company, at a price of C$ 3.541 per share for the 2016 Notes and a price of C$ 4.655 for the 2020 Notes. Each set of convertible notes are deemed to contain an embedded derivative (collectively, the “Convertible Note Derivatives”) relating to the conversion option. The Convertible Note Derivatives were valued upon initial recognition at fair value using partial differential equation methods. At inception, for each set of notes, the face value of the notes was reduced by the estimated fair value of the related convertible note derivative and the transaction costs. During the years ended December 31, 2021 and 2020, convertible notes in the aggregate principal amount of C$ 15,409,901 and C$ 82,102,500 , respectively were converted for 4,351,850 and 19,969,280 common shares of the Company, respectively. As of March 31, 2022 and December 31, 2021, the Corporation has no outstanding convertible notes. ​ ​ ​ 6. Convertible Note Derivative Convertible Note Derivatives related to each set of convertible notes (see Note 5) were valued upon initial recognition at fair value using partial differential equation methods and are subsequently re-measured at fair value at each period end through the unaudited condensed consolidated statements of operations. During the three month period ended March 31, 2021, a change in fair value of $ 11,596,790 was recognized for the convertible note derivative. In 2021, the Convertible Note Derivatives expired upon conversion of all convertible notes (see Note 5). The balance of the derivative at December 31, 2021 and March 31, 2022 is nil . ​ ​ ​ 11 Table of Contents 7. Equity a. Authorized ● Unlimited number of common shares without par value. ● Unlimited number of first preferred shares without par value. ● Unlimited number of second preferred shares without par value. On January 27, 2021, the Corporation completed a one -for-ten (1:10) reverse share split of all of its issued and outstanding common shares (“Share Consolidation”), resulting in a reduction of the issued and outstanding common shares from 475,227,060 to 47,522,706 . The number of shares reserved under the Corporation’s equity and incentive plans were adjusted to reflect the Share Consolidation. All share, per share data, and warrant and option exercise prices presented in the Company’s consolidated financial statements have been retroactively adjusted to reflect the Share Consolidation unless otherwise noted. b. Share based compensation Share based compensation was recognized in the unaudited condensed consolidated statements of operations for the three month periods ended March 31, 2022 and 2021 as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three month period ended March 31, ​ 2022 2021 Exploration ​ $ 235,683 ​ $ 1,198,692 Consulting ​ — ​ 4,040 Corporate salaries and benefits ​ 174,385 ​ 426,575 Directors’ fees ​ 266,181 ​ 304,212 Total ​ $ 676,249 ​ $ 1,933,519 ​ Share purchase options A summary of share purchase option activity within the Company’s share-based compensation plan (the “Plan”) for the year ended December 31, 2021 and three month period ended March 31, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Number of Options Exercise Price (C$) Balance December 31, 2020 1,959,588 ​ $ 7.40 Options granted 1,013,500 ​ 11.40 Options expired ( 240,550 ) ​ 9.17 Options terminated via SAR ( 109,850 ) ​ 6.00 Options exercised ( 125,538 ) ​ 4.99 Balance, December 31, 2021 2,497,150 ​ $ 9.15 Options cancelled or forfeited ( 150,500 ) ​ 9.03 Options expired ​ ( 278,000 ) ​ ​ 8.86 Balance, March 31, 2022 2,068,650 ​ $ 9.20 ​ During the three month periods ended March 31, 2022 and 2021, the Company’s total share based compensation from options was $ 252,900 and $ 1,933,519 , respectively. ​ No options were granted during the three month period ended March 31, 2022. The grant date fair value of options granted during the three month period ended March 31, 2021 was approximately $ 4.9 million. The fair value of options granted is estimated at the time of the grant using the Black-Scholes option pricing model. The Company uses the Black-Scholes option valuation model. The risk-free interest rate is based on the government security rate with an equivalent term in effect as of the date of grant. The expected option lives and volatility assumptions are based on historical data of the Company. The weighted 12 Table of Contents average inputs used in the Black-Scholes option pricing model for options granted during the three month period ended March 31, 2021 are: ​ ​ ​ ​ ​ ​ ​ Three month period ended ​ March 31, 2021 Fair value options granted ​ $ 6.52 Risk-free interest rate ​ 0.5 % Expected term (in years) ​ 5.0 Expected share price volatility ​ 73 % Expected dividend yield ​ — ​ An analysis of outstanding share purchase options as of March 31, 2022 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options Outstanding Options Exercisable Range of Exercise ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Prices (C$) Number Price (C$) 1 Remaining Life 2 Number Price (C$) 1 Remaining Life 2 $ 3.50 - $ 5.90 213,150 ​ ​ 5.22 1.49 ​ 176,900 ​ ​ 5.44 1.18 $ 5.90 - $ 7.20 465,375 ​ ​ 6.31 2.57 ​ 353,375 ​ ​ 6.34 2.51 $ 7.21 - $ 9.70 599,625 ​ ​ 9.42 2.15 ​ 429,625 ​ ​ 9.55 1.79 $ 9.71 - $ 11.80 790,500 ​ ​ 11.80 3.81 ​ 396,750 ​ ​ 11.80 3.81 $ 3.50 - $ 11.80 2,068,650 ​ ​ 9.20 2.81 ​ 1,356,650 ​ ​ 8.84 2.49 ​ 1 Weighted Average Exercise Price (C$) 2 Weighted Average Remaining Contractual Life (Years) As of March 31, 2022, all unvested options are expected to vest and unvested compensation of approximately $ 1.3 million will be recognized. The weighted average remaining period of vesting options is 1.2 years. As of March 31, 2022, the intrinsic value of outstanding and exercisable share purchase options is $ 71,259 and $ 42,927 , respectively. During the three month periods ended March 31, 2022 and 2021, the intrinsic value of share purchase options exercised was nil and $ 432,153 respectively. Restricted Share Units The following table summarizes activity for restricted share units (“RSUs”) awarded under the Plan that vest over the required service period of the participant. ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ Share ​ Grant Date ​ ​ Units Fair Value Unvested, January 1, 2021 ​ — $ — Granted ​ 63,500 ​ 5.66 Distributed (vested) ​ ( 21,166 ) ​ 5.66 Unvested, December 31, 2021 ​ 42,334 ​ 5.66 Granted ​ ​ 330,098 ​ ​ 4.03 Distributed (vested) ​ ​ ( 1,667 ) ​ ​ 4.03 Cancelled ​ ​ ( 1,255 ) ​ ​ 4.03 Unvested, March 31, 2022 ​ ​ 369,510 ​ ​ 4.22 ​ During the three month period ended March 31, 2022, the Company awarded 330,098 RSUs that had a weighted average grant date fair value of $ 4.03 per RSU or approximately $ 1.3 million in total. During the three months ended March 31, 2022, the Company has recognized $ 110,740 in compensation expense related to RSUs and expects to record an additional $ 1.4 million in compensation expense over the next 1.9 years. There was no 13 Table of Contents compensation expense for RSUs recorded during the three month period ended March 31, 2021. The unvested units at March 31, 2022 are scheduled to vest as follows: ​ ​ ​ ​ Remainder of 2022 21,166 2023 ​ 130,781 2024 109,615 2025 ​ 107,948 Total 369,510 ​ Unvested units will be forfeited by participants upon termination of employment in advance of vesting, with the exception of termination due to retirement if certain criteria are met. ​ Performance Share Units The following table summarizes activity for performance share units (“PSUs”) and market-based performance share units (“MPSUs”) awarded under the Plan: ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ Share ​ Grant Date ​ ​ Units ​ Fair Value Unvested, January 1, 2021 — $ — Granted 10,750 5.66 Unvested, December 31, 2021 10,750 5.66 Granted ​ 257,451 ​ ​ 6.90 Cancelled ​ ( 3,918 ) ​ ​ 5.80 Unvested, March 31, 2022 ​ 264,283 ​ ​ 6.87 ​ During the three months ended March 31, 2022, the Company has recognized $ 55,666 in compensation expense related to PSUs and MPSUs and expects to record an additional $ 1.75 million in compensation expense over the next 2.8 years. The PSUs and MPSUs are scheduled to vest as follows: 7,250 awards in September 2022, 7,500 awards in September 2023, and 249,533 in March 2025. There was no compensation expense for PSUs and MPSUs recorded during the three-month period ended March 31, 2021. PSUs : These PSUs vest upon completion of the performance period (through September 2022 and 2023) and specific performance conditions set forth for each individual grant for individually defined reporting and operating measurement objectives. The Company determines the factor to be applied to that target number of PSUs, with such percentage based on level of achievement of the performance conditions. Upon the achievement of the conditions, any unvested PSUs become fully vested. During the three month period ended March 31, 2022, the Company awarded 7,500 PSUs that had a weighted average grant date fair value of $ 4.03 per PSU, or $ 30,225 in total. Market-based PSUs : On March 5, 2022, the Company granted MPSUs where vesting is based on the Company’s cumulative total shareholder return (“TSR”) as compared to the constituents that the comprise the VanEck Junior Gold Miners ETF (“GDXJ Index”) a group of similar junior gold mining companies, over the period from March 5, 2022 to March 5, 2025 (the “Performance Period”). The ultimate number of MPSUs that vest may range from 0 % to 200 % of the original target number of shares depending on the relative achievement of the TSR performance measure at the end of the Performance Period. Because the number of MPSUs that are earned will be based on the Company’s TSR over the Performance Period, the MPSUs are considered subject to a market condition. Compensation cost is recognized ratably over the Performance Period regardless as to whether the market condition is actually satisfied; however, the compensation cost will reverse if an employee terminates prior to satisfying the requisite service period. During the three month period ended March 31, 2022, the Company awarded 249,533 MPSUs that had a weighted grant date fair value of $ 6.99 per MPSU or approximately $ 1.75 million in total. The grant date fair value of MPSUs was estimated using a Monte Carlo simulation model. Assumptions and estimates utilized in the model include expected volatilities of the Corporation’s stock and the GDXJ Index, the Company’s risk-free interest rate and expected dividends. The probabilities of the actual number of MPSUs expected to vest and resultant actual number of shares of common stock expected to be awarded 14 Table of Contents are reflected in the grant date fair values of the various MPSU awards. The per MPSU grant date fair value of $ 6.99 for the market condition was based on the following variables: ​ ​ ​ ​ ​ Three month period ended ​ March 31, 2022 Risk-free interest rate 1.61 % Expected term (in years) 3.0 Expected share price volatility 63.35 % Expected dividend yield — ​ The expected volatility utilized is based on the historical volatilities of the Corporation’s common stock and the GDXJ Index in order to model the stock price movements. The volatility used was calculated over the most recent three year period. The risk-free interest rates used are based on the implied yield available on a U.S. Treasury zero-coupon bill with a term equivalent to the Performance Period. The expected dividend yield of zero was used since it is the mathematical equivalent to reinvesting dividends in each issuing entity over the Performance Period. Deferred Share Units The following table summarizes activity for deferred share units (“DSUs”) awarded under the Plan: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ Share ​ Grant Date ​ Units Fair Value Outstanding, January 1, 2021 ​ — ​ $ — Granted ​ 29,213 ​ ​ 5.39 Outstanding, December 31, 2021 29,213 ​ 5.39 Granted 62,669 ​ 4.10 Outstanding, March 31, 2022 91,882 ​ 4.51 ​ Under the Plan, the Company may issue DSUs to non-employee directors. During the three month period ended March 31 2022, 62,669 shares with a fair value of $ 256,943 were granted to the non-employee directors and the related compensation expense was charged to directors’ fees in the unaudited condensed consolidated statements of operations. There was no compensation expense for DSUs recorded during the three-month period ended March 31, 2021. c. Warrants There was a total of 200,000 warrants outstanding as of March 31, 2022. See Note 4. ​ 8. Financial Instruments and Fair Value Measurements At March 31, 2022, the Company’s financial instruments consist of cash and cash equivalents and environmental reclamation bond which approximate their fair value due to their short-term nature. The Company’s financial instruments also consist of the warrant derivative at March 31, 2022 and December 31, 2021. The derivative is valued at fair value at the end of each reporting period. At March 31, 2022 and December 31, 2021, the levels in the fair value hierarchy into which the Company’s financial assets and liabilities are measured and recognized on the balance sheet at fair value are categorized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Level 1 Level 2 Level 3 ​ ​ March 31, 2022 Warrant Derivative (Note 4) ​ $ — ​ $ — ​ $ 85,522 Total ​ $ — ​ $ — ​ $ 85,522 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 Warrant Derivative (Note 4) ​ — — 100,770 Total ​ $ — ​ $ — ​ $ 100,770 ​ 15 Table of Contents The Company uses the Black-Scholes option pricing model or other valuation models for valuation of its warrant derivative. Valuation models require the input of subjective assumptions including expected share price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company's net loss. ​ 9. Environmental Reclamation Liability On January 15, 2021, the Company agreed to an Administrative Settlement and Order on Consent (“ASAOC”). The Company has accounted for its obligation under the ASAOC as an environmental reclamation liability. The aggregate cost of the obligation was estimated to be approximately $ 7,473,805 . Upon the signing of the ASAOC, the Company recorded an immediate expense of $ 7,473,805 and a corresponding environmental reclamation liability. The provision for the liability associated with the terms of the ASAOC is based on cost estimates developed with the use of engineering consultants, independent contractor quotes and the Company’s internal development team. The timing of cash flows is based on the latest schedule for early action items. The estimated environmental reclamation liability may be subject to change based on changes to cost estimates and is adjusted for actual work performed. Movements in the environmental reclamation liability during the quarter ended March 31, 2022, are as follows: ​ ​ ​ ​ ​ ​ Three month period ended ​ ​ March 31, 2022 Balance at beginning of period $ 9,888,200 Additions — Work performed on early action items ( 499,903 ) Balance at end of period $ 9,388,297 Current portion 3,963,847 Long-term portion ​ $ 5,424,450 ​ The Company provided $ 7.5 million in financial assurance for Phase 1 projects under the ASAOC. The Company paid $ 3.0 million in cash collateral for a surety bond related to the ASAOC statement of work in early 2021. ​ 10. Commitments and Contingencies a. Mining Claim Assessments The Company currently holds mining claims on which it has an annual assessment obligation to the Bureau of Land Management of $ 250,470 to maintain the claims in good standing. The Company is committed to these payments indefinitely. Related to the mining claims assessments is a $ 335,000 bond related to the Company’s exploration activities. b. Stibnite Foundation Upon formation of the Stibnite Foundation on February 26, 2019, the Company became contractually liable for certain future payments to the Stibnite Foundation based on several triggering events, including receipt of a final Record of Decision issued by the USFS, receipt of all permits and approvals necessary for commencement of construction, commercial production, and of the final reclamation phase. These payments could begin as early as late 2023 based on the current permitting schedule and range from $ 0.1 million to $ 1 million (upon commencement of final reclamation phase) in cash and 150,000 shares of the Corporation’s common stock. During commercial production, the Company will make payments to the Stibnite Foundation equal to 1 % of Total Comprehensive Income less debt repayments, or a minimum of $ 0.5 million each year. The Stibnite Foundation will support projects that benefit the communities surrounding the Stibnite Gold Project and was created through the establishment of the Community Agreement between Perpetua Resources Idaho, Inc. and eight communities and counties throughout the West Central Mountains region of Idaho. c. Option Payments on Other Properties The Company is obligated to make option payments on mineral properties in order to maintain an option to purchase these properties. As of March 31, 2022, the option payments due on these properties in 2022 are $ 180,000 , which will be paid in the next year. The agreements include options to extend. 16 Table of Contents d. Off balance sheet arrangements The Company has no off-balance sheet arrangements as of March 31, 2022 and the date of this report. e. Legal Update The Company is a party to ongoing legal proceedings with the Nez Perce Tribe for alleged violations of the Clean Water Act related to historical mining activities. In August 2019, the Nez Perce Tribe filed suit in the United States District Court for the District of Idaho. The Company promptly filed a motion to dismiss and, in the alternative, a motion to stay the litigation. Both motions were denied. Later, the court allowed the Company to amend its answer and file a third-party complaint and the Company also filed a separate citizen suit against the USFS alleging the point source discharges, referred to by the Nez Perce Tribe in its complaint, were alleged to be occurring on lands owned and controlled by the United States. Pursuant to the terms of the Comprehensive Environmental Response, Compensation, and Liability Act (the “CERCLA”) ASAOC executed with the U.S. EPA and the United States Department of Agriculture, the Company dismissed its pending actions against USFS. The remaining parties to the ongoing legal proceeding agreed to stay the litigation and explore Alternative Dispute Resolution (“ADR”) options. The stay has been extended on subsequent occasions, and a request to extend the stay through July 31, 2022 was filed jointly by the parties on April 28, 2022 and subsequently ordered by the court on April 29, 2022. The CERCLA ASAOC entered into by the Company, the U.S. EPA, and the United States Department of Agriculture requires numerous voluntary early cleanup actions to occur over the next several years. Perpetua Resources Idaho, Inc. is presently executing the development of the Phase 1 early cleanup actions (known as “time critical removal actions”) that, upon final work plan approval by the federal agencies, will be designed and constructed to efficiently improve water quality in a number of areas on the Site while other, longer-term proposed actions relating to Project operations are being evaluated through the NEPA process. ​ ​