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Item 2. Management’s Discussion and Analysis

2024-05-14 compared with 2024-02-13 · 46 added, 45 removed, 131 unchanged (41% of the section changed)

26 unchanged sentences

The following discussion updates our outlook and plan of operations for the foreseeable future.

It also analyzes our financial condition and summarizes the results of our operations for the three and six months ended December 31, 2023 and compares these results to the results of the prior year three and six months ended December 31, 2022.

It also analyzes our financial condition and summarizes the results of our operations for the three and nine months ended March 31, 2024 and compares these results to the results of the prior year three and nine months ended March 31, 2023.

Operating Highlights:

For the three and six months ended December 31, 2023, the Company highlights include:

For the three and nine months ended March 31, 2024, the Company highlights include:

• The BLM filed the Notice of Intent in the Federal Registry, initiating the preparation of an Environmental Impact Statement in compliance with the National Environmental Policy Act process for the proposed Grassy Mountain Gold mine.

• Paramount closed a $15 million financing with Sprott through the issuance of a Debenture.

10 unchanged sentences

We ensure we have sufficient cash on hand to meet our annual land holding costs as the maintenance of mining claims and leases are essential to preserve the value of our mineral property assets.

Comparison of Operating Results for the six months ended December 31, 2023 and 2022

We did not earn any revenue from mining operations for the six months ended December 31, 2023 and 2022.

Our net loss for three months ended December 31, 2023 was $1,574,559 compared to a net loss of $1,432,485 in the previous three months ended December 31, 2022.

Comparison of Operating Results for the nine months ended March 31, 2024 and 2023

We did not earn any revenue from mining operations for the nine months ended March 31, 2024 and 2023.

Our net loss for three months ended March 31, 2024 was $1,814,045 compared to a net loss of $1,647,760 in the previous three months ended March 31, 2023.

The drivers of the increase in net loss of 10% are fully described below.

Our net loss for six months ended December 31, 2023, was $3,648,719 compared to a net loss of $3,272,701 in the previous six month period ended December 31, 2022.

Our net loss for nine months ended March 31, 2024, was $5,462,764 compared to a net loss of $4,920,461 in the previous nine month period ended March 31, 2023.

The drivers of the increase in net loss of 11% are fully described below.

1 unchanged sentence

Exploration and Land Holding Costs

For the three months ended December 31, 2023 and 2022, exploration expenses were $1,773,930 and $465,402, respectively.

For the three months ended March 31, 2024 and 2023, exploration expenses were $965,938 and $597,315, respectively.

This represents an increase of 62% or $368,623.

2 unchanged sentences

These expenses totaled $604,716.

At Sleeper, the Company continued with the conversion of several collection ponds from the previous mining operations to evaporation cells with expenses totaling $1,530,037.

For the three months ended December 31, 2023 and 2022, $1,217,131 and $40,308 of the costs associated with the reclamation work have been reimbursed by an insurance policy and these reimbursements have been recorded as other income on the the Statement of Operations, respectively.

A significant amount of the expenses incurred were related to the State of Oregon completing its environmental evaluation of the proposed gold mine at Grassy Mountain.

At Sleeper, the Company completed the conversion of several collection ponds from the previous mining operations to evaporation cells with expenses totaling $361,222.

For the three months ended March 31, 2024 and 2023, $1,088,339 and $47,123 of the costs associated with the reclamation work have been reimbursed by an insurance policy and these reimbursements have been recorded as other income on the Statement of Operations, respectively.

In the prior year comparable period, the Company focused its efforts on completing permit applications for the Grassy Mountain Project and incurred expenses related to reclamation activities its Sleeper Gold Project.

For the three months ended December 31, 2023 and 2022, land holding costs were $157,143 and $157,143, respectively.

For the three months ended March 31, 2024 and 2023, land holding costs were $157,143 and $157,143, respectively.

There were no changes in our land holdings and costs associated with holding our mining claims remaining unchanged from last year to this year.

For the six months ended December 31, 2023 and 2022, exploration expenses were $3,033,720 and $1,304,997, respectively.

For the nine months ended March 31, 2024 and 2023, exploration expenses were $3,999,659 and $1,902,312, respectively.

This represents a increase of 110% or $2,097,347.

2 unchanged sentences

These expenses totaled $1,170,834.

At Sleeper, the Company completed an updated TRS and continued converting several collection ponds from the previous mining operations to evaporation cells with expenses totaling $2,467,602.

For the six months ended December 31, 2023 and 2022, $1,292,933 and $40,308 of the costs associated with the reclamation work have been reimbursed by an insurance policy and these reimbursements have been recorded as other income on the the Statement of Operations, respectively.

At Sleeper, the Company completed an updated TRS and completed converting several collection ponds from the previous mining operations to evaporation cells with expenses totaling $2,828,825.

For the nine months ended March 31, 2024 and 2023, $2,381,272 and $87,431 of the costs associated with the reclamation work have been reimbursed by an insurance policy and these reimbursements have been recorded as other income on the Statement of Operations, respectively.

For the six months ended December 31, 2023 and 2022, land holding costs were $314,287 and $318,199, respectively.

For the nine months ended March 31, 2024 and 2023, land holding costs were $471,429 and $475,341, respectively.

This represents a decrease of 1% or $3,912.

1 unchanged sentence

Salaries and Benefits

For the three month period ended December 31, 2023 and 2022, salary and benefits were $259,194 and $260,920, respectively.

This represents a decrease of 1%.

For the three month period ended March 31, 2024 and 2023, salary and benefits were $675,952 and $393,219, respectively.

This represents an increase of 72%.

Salary and benefits are comprised of cash and equity based compensation of the Company’s executive and corporate administration teams.

The indiscernible change primarily reflects comparable compensation levels that was recorded during the three month period ended December 31, 2023 compared to the three month period ended December 31, 2022.

Included in the salary and benefits expense amount for the three months ended December 31, 2023 and 2022 was non-cash equity based compensation of $40,084 and $60,268, respectively.

For the six months ended December 31, 2023 and 2022, salary and benefits were $538,790 and $568,294, respectively.

This represents a decrease of 5% or $29,504.

The increase primarily reflects annual bonuses for 2023 paid to employees in the three month period ended March 31, 2024 compared to the three month period ended March 31, 2023.

Included in the salary and benefits expense amount for the three months ended March 31, 2024 and 2023 was non-cash equity based compensation of $65,134 and $72,490, respectively.

For the nine months ended March 31, 2024 and 2023, salary and benefits were $1,214,742 and $961,512, respectively.

This represents an increase of 26% or $253,230.

Salary and benefits are comprised of cash and equity based compensation of the Company’s executive and corporate administration teams.

The decrease primarily reflects lower equity based compensation that was recorded during the six month period ended December 31, 2023 compared to the six month period ended December 31, 2022.

Included in the salary and benefits expense amount for the six months ended December 31, 2023 and 2022 was non-cash equity based compensation of $103,337 and $165,439.

The increase primarily reflects annual bonuses for 2023 paid to employees during the nine month period ended March 31, 2024 compared to the nine month period ended March 31, 2023.

Included in the salary and benefits expense amount for the nine months ended March 31, 2024 and 2023 was non-cash equity based compensation of $168,471 and $237,037.

Directors’ Compensation

For the three month period ended December 31, 2023 and 2022, directors’ compensation expenses were $28,951 and $23,233, respectively.

For the three month period ended March 31, 2024 and 2023, directors’ compensation expenses were $90,076 and $55,366, respectively.

This represents an increase of 63%.

1 unchanged sentence

The increase reflects higher equity based compensation recorded in the current quarter compared to the prior year’s comparable period.

For the six months ended December 31, 2023 and 2022, directors' compensation expenses were $57,984 and $58,574, respectively.

This represents a decrease of 1%.

This indiscernible change reflects comparable compensation recorded in the current quarter compared to the prior year’s period.

For the nine months ended March 31, 2024 and 2023, directors' compensation expenses were $148,059 and $113,940, respectively.

This represents an increase of 30%.

The increase reflects higher equity based compensation recorded in the current quarter compared to the prior year’s period.

Professional Fees and General and Administration

For the three months ended December 31, 2023 and 2022, professional fees were $98,315 and $135,295, respectively.

This represents a decrease of $36,980.

The decrease was mainly due to less one-time consulting fees and legal fees incurred in the period.

For the three months ended March 31, 2024 and 2023, professional fees were $52,156 and $12,919, respectively.

This represents an increase of $39,237.

The increase was mainly due to in one-time consulting fees and legal fees incurred in the period.

Professional fees include legal, audit, advisory and consultant expenses incurred on corporate and operational activities being performed by the Company on a period-by-period basis.

For the six months ended December 31, 2023 and 2022, professional fees were $153,567 and $268,622, respectively.

For the nine months ended March 31, 2024 and 2023, professional fees were $205,722 and $281,542, respectively.

This represents a decrease of $75,820.

The decrease was mainly due to less one-time consulting fees and legal fees incurred in the period and the recording of audit fees for our fiscal year ended June 30, 2022 during the three months ended September 30, 2022.

The decrease was mainly due to the recording of audit fees for our fiscal year ended June 30, 2022 during the three months ended September 30, 2022.

Professional fees include legal, audit, advisory and consultant expenses incurred on corporate and operational activities being performed by the Company on a period-by-period basis.

For the three months ended December 31, 2023 and 2022, general and administration expenses decreased by 16% to $181,012 from $214,365.

For the three months ended March 31, 2024 and 2023, general and administration expenses decreased by 39% to $148,306 from $242,858.

The decrease in general and administration expenses from the previous year’s comparable period was mainly due to lower insurance and travel costs.

For the six months ended December 31, 2023 and 2022, general and administration expenses decreased by 16% to $314,644 from $373,539.

For the nine months ended March 31, 2024 and 2023, general and administration expenses decreased by 25% to $462,951 from $616,396.

The decrease in general and administration expenses from the previous year’s comparable period was mainly due to lower insurance and travel costs.

1 unchanged sentence

As an exploration and development company, Paramount funds its operations, reclamation activities and discretionary exploration programs with its cash on hand.

At December 31, 2023, we had cash and cash equivalents of $8,572,919 compared to $824,920 as at June 30, 2023.

At March 31, 2024, we had cash and cash equivalents of $7,012,365 compared to $824,920 as at June 30, 2023.

We had working capital of approximately $4,245,018.

1 unchanged sentence

In May 2020, the Company established an $8.0 million “at the market” equity offering program with Cantor Fitzgerald & Co.

and Canaccord Genuity LLC to proactively increase its financial flexibility.

During the six months ended December 31, 2023, the Company issued 3,761,515 shares under the program for net proceeds of $1,140,652.

Subsequent to the period ended December 31, 2023, the Company sold 500,000 shares under the program for gross proceeds of $182,500.

("Cantor") and Canaccord Genuity LLC to proactively increase its financial flexibility.

In March 2024, the Company established a new $3.1 million "at the market" offering program with Cantor and A.G.P./Alliance Global Partners.

During the nine months ended March 31, 2024, the Company issued 4,261,515 shares under the program for net proceeds of $1,167,893.

Subsequent to the period ended March 31, 2024, the Company sold 1,727,026 shares under the program for gross proceeds of $719,351.

During the month of December 2023, the Company entered into a Debenture in favor of Sprott.

1 unchanged sentence

Proceeds from the Debenture were also used for the repayment of the Company’s outstanding 2019 secured convertible notes and its bridge promissory note in favor of Seabridge Gold Inc.

The main uses of cash for the six months ended December 31, 2023 were:

The main uses of cash for the nine months ended March 31, 2024 were:

• Cash used in operating activities of $3,064,814 were mainly used to fund our permitting and exploration activities at our projects, salary and benefits costs of our employees and ongoing general and administration costs.

• Cash used in investing activities of $50,000 for the payment on the agreement to purchase the Bald Peak claims.

In addition to cash used in operating and investing activities, the Company received cash during the six months ended December 31, 2023 as follows:

• Cash used in investing activities of $100,000 for the payment on the agreement to purchase the Bald Peak claims and on the agreement to purchase the Frost claims.

In addition to cash used in operating and investing activities, the Company received cash during the nine months ended March 31, 2024 as follows:

• Cash provided by financing activities of $9,352,259 which included sales under the ATM program, proceeds from the issuance of the Debenture to Sprott which were offset by the repayment of the 2019 convertible notes and Seabridge Loan.

8 unchanged sentences

• $1.8 million on the Grassy Mountain Project state and federal permitting activities

• $0.2 million on the Sleeper Gold Project

• $1.0 million for E-Cell conversions at the Sleeper Gold Project

For the planned reclamation activities required by state and federal regulators at Sleeper, the Company expects that these expenditures will be reimbursed by insurance proceeds.

• $1.7 million on the Bald Peak Project

For any interest that accrues and is owing on the outstanding Debenture, the Company expects to elect to pay the quarterly-annual interest payment in shares of its Common Stock.

Subsequent to February 13, 2024, the Company expects to fund operations as follows:

Subsequent to May 14, 2024, the Company expects to fund operations as follows:

• Existing cash on hand and working capital.

• The existing ATM program with Cantor Fitzgerald & Co.

and Canaccord Genuity LLC.

and A.G.P./Alliance Global Partners

• Insurance proceeds to fund reclamation and environmental obligations at its Sleeper Gold Project.

38 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