Paramount Gold Nevada Corp. 10-K

Item 9A. Controls and Procedures. DISCLOSURE CONTROLS AND PROCEDURES Under the supervision and with the participation of our management, including the Principal Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Principal Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under then supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: • Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2021. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated 2013 Framework. Based on this assessment, our management concluded that, as of June 30, 2021, our internal control over financial reporting is effective based on those criteria. Because we are a smaller reporting company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting for so long as we are a smaller reporting company. CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING There were no changes to our internal control over financial reporting that occurred during the year ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None. 31 PART III Item 10. Directors, Executive Officers and Corporate Governance. The information required by Items 401, 405, 406, 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be contained in the Company’s 2021 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2021 (the “2021 Proxy Statement”) and is hereby incorporated by reference thereto. Item 11. Executive Compensation. The information required by Item 402 and paragraph (e)(4) and (e)(5) of Item 407 of Regulation S-K will be contained in the Company’s 2021 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2021 and is hereby incorporated by reference thereto. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. The information required by Item 201(d) and Item 403 of Regulation S-K will be contained in the Company’s 2021 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2021 and is hereby incorporated by reference thereto. Item 13. Certain Relationships and Related Transactions, and Director Independence. The information required by Item 404 and Item 407(a) of Regulation S-K will be contained in the Company’s 2021 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2021 and is hereby incorporated by reference thereto. Item 14. Principal Accounting Fees and Services. The information required by Item 9(e) of Schedule 14A will be filed in the Company’s 2021 Proxy Statement, to be filed with the SEC within 120 days following the end of the Company’s fiscal year ended June 30, 2021 and is hereby incorporated by reference thereto. 32 PART IV Item 15. Exhibits, Financial Statement Schedules. (a) The following report and financial statements are filed together with this Annual Report: (1) Audited Consolidated Financial Statements of Paramount Gold Nevada Corp. Included in Part II of this report: Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of June 30, 2021 and 2020 Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2021 and 2020 Consolidated Statements of Cash Flows for the years ended June 30, 2021 and 2020 Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2021 and 2020 Notes to Consolidated Financial Statements 33 (b) Index to Exhibits Exhibit Number Description 1.1 Controlled Equity Offering SM Sales Agreement, dated as of May 20, 2020, by and between Paramount Gold Nevada Corp., Cantor Fitzgerald & Co. and Canaccord Genuity LLC (Incorporated herein by reference to Exhibit 1.1 to Current Report on Form 8-K of the Company filed on May 20, 2020) 1.2 Agency Agreement, dated as of June 24, 2020, by and between Paramount Gold Nevada Corp., Canaccord Genuity Corp. and Cantor Fitzgerald Canada Corporation. (Incorporated herein by reference to Exhibit 1.2 to Current Report on Form 8-K of the Company filed on June 25, 2020) 2.1 Form of Separation and Distribution Agreement by and between Paramount Gold and Silver Corp. and the Registrant. 1 2.2 Agreement and Plan of Merger among Coeur Mining, Inc., Hollywood Merger Sub, Inc., Paramount Gold and Silver Corp., and the Registrant, Dated as of December 16, 2014. 1 2.3 Arrangement Agreement and Plan of Arrangement dated March 14, 2016, among Paramount Gold Nevada Corp. and Calico Resources Corp. (Incorporated herein by reference to Exhibit 2.1 to Current Report on Form 8-K of the Company filed on March 17, 2016) 3.1 Certificate of Amended and Restated Articles of Incorporation. 2 3.2 Amended and Restated Bylaws. 2 4.1* Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 4.2 Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on February 9, 2017) 4.3 Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on June 29, 2018) 4.4 Form of Senior Secured Convertible Note (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on September 13, 2019) 10.1 2015 Stock Incentive and Equity Compensation Plan. 2 10.2 2016 Stock Incentive and Equity Compensation Plan (Incorporated herein by reference to Exhibit 1 to Definitive Proxy Statement on Schedule 14A of the Company filed on October 28, 2016) 10.3 Form of Stock Subscription Agreement between Coeur Mining, Inc. and the Registrant. 3 10.4 Employment Agreement dated October 26, 2015 between Company and Glen Van Treek (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on October 26, 2015) 10.5 Employment Agreement dated October 26, 2015 between Company and Carlo Buffone (Incorporated herein by reference to Exhibit 10.2 to Current Report on Form 8-K of the Company filed on October 26, 2015) 10.6 Amended Employment Agreement Glen Van Treek dated August 10, 2016 (Incorporated herein by reference to exhibit 10.1 to Current Report on Form 8-K of the Company filed on August 12, 2016) 10.7 Amended Employment Agreement Carlo Buffone dated August 10, 2016 (Incorporated herein by reference to exhibit 10.2 to Current Report on Form 8-K of the Company filed on August 12, 2016) 10.8 Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on February 9, 2017) 10.9 Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on June 29, 2018) 10.10 Form of Security Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on September 13, 2019) 21.1* List of subsidiaries. 23.1* Consent of MNP LLP, Independent Registered Public Accounting Firm 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101.INS XBRL Instance Document 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 34 Exhibit Number Description 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document * Filed herewith. 1 Incorporated by reference to the exhibit filed in the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed on February 23, 2015. 2 Incorporated by reference to the exhibit filed in the Registrant’s Form 10-Q filed on May 22, 2015. 3 Incorporated by reference to the exhibit filed in the Registrant’s Amendment No. 3 to Registration Statement on Form S-1 filed on April 2, 2015. 35 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Paramount Gold Nevada Corp. Date: September 17, 2021 By: /s/ Rachel Goldman Rachel Goldman (Director and CEO) Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Rachel Goldman Director and CEO (Principal Executive Officer) September 17, 2021 Rachel Goldman /s/ Carlo Buffone Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) September 17, 2021 Carlo Buffone /s/ Glen Van Treek Director, President and Chief Operating Officer September 17, 2021 Glen Van Treek /s/ Rudi Fronk Director September 17, 2021 Rudi Fronk /s/ John Carden Director September 17, 2021 John Carden /s/ Eliseo Gonzalez-Urien Director September 17, 2021 Eliseo Gonzalez-Urien /s/ Christopher Reynolds Director September 17, 2021 Christopher Reynolds /s/ Pierre Pelletier Director September 17, 2021 Pierre Pelletier 36 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of June 30, 2021 and 20 20 F-3 Consolidated Statements of Operations and Comprehensive Loss for the Years ended June 30, 2021 and 20 20 F-4 Consolidated Statements of Stockholders’ Equity for the Years ended June 30, 2021 and 20 20 F-5 Consolidated Statements of Cash Flows for the Years ended June 30, 2021 and 20 20 F-6 Notes to Consolidated Financial Statements F-7 F-1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Paramount Gold Nevada Corp. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Paramount Gold Nevada Corp. (the Company) as of June 30, 2021 and 2020, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended June 30, 2021, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of June 30, 2021 and 2020, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two-year period ended June 30, 2021, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Assessment of the Provision for Reclamation and Environmental Obligations Critical Audit Matter Description As described in Note 8 to the consolidated financial statements, as at June 30, 2021, the provision for reclamation and environmental obligations amounted to $1,849,644. The provision is determined using estimates of the nature, timing and amount of future costs to be incurred to reclaim the mine sites, future inflation and discount rates. These assumptions are subject to change due to continued mining, reclamation of properties and regulatory changes. We identified the assessment of the provision for reclamation and environmental obligations as a critical audit matter due to the subjective judgment involved in assessing the amount of the provision. Significant assumptions included amounts of future reclamation costs, inflation rates and discount rates. These assumptions are challenging to evaluate, as minor changes in these assumptions have a significant effect on the Company’s determination of the provision for reclamation and environmental obligations. Audit Response We responded to this matter by performing audit procedures over the provision for reclamation and environmental obligations. Our audit work in relation to this included, but was not restricted to, the following: • Obtained and evaluated management’s asset retirement obligation working papers and examined assumptions regarding the discount rate, inflation rate, and the amounts and timing of future costs. • Inquired with management whether there have been any changes to the original obligation estimates or activities that would impact the value of the obligation. • Engaged an internal valuation specialist with specialized skill and knowledge to assist in evaluating the discount rates used to determine the amount of the provision. • Assessed the future inflation rate by comparing to a third-party source. • Obtained confirmation from management’s experts regarding the future reclamation costs. • Assessed certain elements of the future costs to be incurred to reclaim the mine sites by comparing the costs to recent rehabilitation activities. • Assessed the appropriateness and completeness of related disclosures in the consolidated financial statements. Chartered Professional Accountants We have served as the Company’s auditor since 2015. Vancouver, Canada September 17, 2021 F-2 PARAMOUNT GOLD NEVADA CORP. Consolidated Balance Sheets as of June 30, 2021 and 2020 As at June 30, As at June 30, 2021 2020 Assets Current Assets Cash and cash equivalents $ 3,113,064 $ 5,434,081 Prepaid expenses and deposits 1,152,396 442,596 Total Current Assets 4,265,460 5,876,677 Non-Current Assets Mineral properties (Note 7) 49,197,704 47,333,313 Property and equipment 5,959 8,467 Reclamation bond (Note 8) 533,703 695,041 Total Non-Current Assets 49,737,366 48,036,821 Total Assets $ 54,002,826 $ 53,913,498 Liabilities and Stockholders' Equity Liabilities Current Liabilities Accounts payable and accrued liabilities $ 638,950 $ 925,260 Reclamation and environmental obligation, current portion (Note 8) 310,022 154,231 Total Current Liabilities 948,972 1,079,491 Non-Current Liabilities Convertible debt (Note 6) 4,161,502 5,256,228 Promissory note (Note 6) — 35,628 Reclamation and environmental obligation, non-current portion (Note 8) 1,539,622 460,939 Total Non-Current Liabilities 5,701,124 5,752,795 Total Liabilities 6,650,096 6,832,286 Stockholders' Equity Common stock, par value $0.01, 200,000,000 authorized shares, 38,154,109 issued and outstanding at June 30, 2021 and 50,000,000 authorized shares, 32,958,404 issued and outstanding at June 30, 2020 (Note 5) 381,542 329,584 Additional paid in capital 107,005,135 100,881,957 Deficit (60,033,947 ) (54,130,329 ) Total Stockholders' Equity 47,352,730 47,081,212 Total Liabilities and Stockholders' Equity $ 54,002,826 $ 53,913,498 The accompanying notes are an integral part of these consolidated financial statements. Commitments and Contingencies: Note 12 Subsequent Events: Note 13 F-3 PARAMOUNT GOLD NEVADA CORP. Consolidated Statements of Operations and Comprehensive Loss for the Years ended June 30, 2021 and 2020 For the Year Ended June 30, 2021 For the Year Ended June 30, 2020 Income Other income (Note 9) $ 330,259 $ 728,910 Total Income 330,259 728,910 Expenses Exploration (Note 10) 2,816,685 4,201,138 Land holding costs (Note 10) 540,401 592,978 Professional fees 174,039 166,894 Salaries and benefits 1,373,451 989,602 Directors compensation 158,694 92,054 General and administrative 483,608 495,628 Insurance 220,480 150,911 Depreciation 2,508 2,555 Accretion (Note 8) 60,040 94,591 Total Expenses 5,829,906 6,786,351 Net Loss before other items 5,499,647 6,057,441 Other items Interest income (2,293 ) (16,509 ) Interest and service charges 442,211 389,209 Gain on forgiveness of promissory note (35,947 ) — Net Loss before Income Taxes $ 5,903,618 $ 6,430,141 Net Loss and Comprehensive Loss $ 5,903,618 $ 6,430,141 Loss per Common share Basic $ 0.17 $ 0.23 Diluted $ 0.17 $ 0.23 Weighted Average Number of Common Shares Used in Per Share Calculations Basic 35,533,269 27,583,566 Diluted 35,533,269 27,583,566 The accompanying notes are an integral part of these consolidated financial statements. F-4 PARAMOUNT GOLD NEVADA CORP. Consolidated Statements of Stockholders’ Equity for the Years ended June 30, 2021 and 2020 Shares (#) Common Stock Additional Paid-In Capital Deficit Total Stockholders' Equity Balance at June 30, 2019 26,519,954 $ 265,200 $ 94,764,730 $ (47,700,188 ) $ 47,329,742 Stock based compensation — — 203,192 — 203,192 Capital issued for services (Note 4) 1,096,791 10,968 965,176 — 976,144 Capital issued for payment of interest 161,217 1,612 117,697 — 119,309 Capital issued for financing (Note 5) 5,180,442 51,804 4,831,162 — 4,882,966 Net loss and comprehensive loss — — — (6,430,141 ) (6,430,141 ) Balance at June 30, 2020 32,958,404 $ 329,584 $ 100,881,957 $ (54,130,329 ) $ 47,081,212 Stock based compensation — — 436,777 — 436,777 Capital issued for purchase of mineral properties 257,353 2,574 275,367 — 277,941 Conversion of convertible notes to shares 1,200,000 12,000 1,145,629 — 1,157,629 Capital issued for services (Note 4) 166,792 1,668 179,790 — 181,458 Capital issued for payment of interest 362,427 3,624 395,153 — 398,777 Capital issued for financing (Note 5) 3,209,133 32,092 3,690,462 — 3,722,554 Net loss and comprehensive loss — — — (5,903,618 ) (5,903,618 ) Balance at June 30, 2021 38,154,109 $ 381,542 $ 107,005,135 $ (60,033,947 ) $ 47,352,730 The accompanying notes are an integral part of these consolidated financial statements. F-5 PARAMOUNT GOLD NEVADA CORP. Consolidated Statements of Cash Flows for the Years ended June 30, 2021 and 2020 For the Year Ended June 30, 2021 For the Year Ended June 30, 2020 Net loss and comprehensive loss $ (5,903,618 ) $ (6,430,141 ) Adjustment for: Depreciation 2,508 2,555 Share based payments 181,458 976,144 Stock based compensation 436,777 203,192 Amortization of debt issuance costs 62,903 54,421 Interest expense 359,253 324,160 Accretion expense (Note 8) 60,040 94,591 Gain upon forgiveness of promissory note (35,947 ) — Changes in reclamation bonds and accounts (163,178 ) (16,487 ) (Increase) decrease in prepaid expenses (709,800 ) (93,825 ) Increase (decrease) in accounts payable and accrued liabilities (246,467 ) (259,901 ) Cash used in operating activities (5,956,071 ) (5,145,291 ) Purchase of equipment — (4,719 ) Purchase of mineral properties (87,500 ) — Cash provided by (used in) investing activities (87,500 ) (4,719 ) Capital issued for financing (Note 5) 3,722,554 4,882,966 Convertible debt issued (Note 6) — 5,201,807 Promissory note (Note 6) — 35,628 Cash provided by financing activities 3,722,554 10,120,401 Change in cash during year (2,321,017 ) 4,970,391 Cash at beginning of year 5,434,081 463,690 Cash at end of year $ 3,113,064 $ 5,434,081 See Note 4 for supplemental cash flow information The accompanying notes are an integral part of these consolidated financial statements. F-6 PARAMOUNT GOLD NEVADA CORP. Notes to Consolidated Financial Statements Note 1. Description of Business and Summary of Significant Accounting Policies Paramount Gold Nevada Corp. (the “Company” or “Paramount”), incorporated under the General Corporation Law of the State of Nevada, and its wholly-owned subsidiaries are engaged in the acquisition, exploration and development of precious metal properties. The Company’s wholly owned subsidiaries include New Sleeper Gold LLC, Sleeper Mining Company, LLC, and Calico Resources USA Corp (“Calico”). The Company is in the process of exploring its mineral properties in Nevada and Oregon, United States. The Company’s activities are subject to significant risks and uncertainties, including the risk of failing to secure additional funding to advance its projects and the risks of determining whether these properties contain reserves that are economically recoverable. The Company’s shares of common stock trade on the NYSE AMERICAN LLC under the symbol “PZG”. Basis of Presentation and Preparation The consolidated financial statements are prepared by management in accordance with U.S. generally accepted accounting principles (‘U.S. GAAP”) and are presented in US dollars. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. The Company faces various risks related to the COVID-19 global pandemic. The Company’s primary goal during the COVID-19 pandemic is to safeguard the health of our employees, suppliers and the communities where we operate while minimizing business interruption. To date, COVID-19 pandemic has not had a material impact on our business however because of the highly uncertain and dynamic nature of events relating to the COVID-19 pandemic, it is not currently possible to predict any future impact of the COVID-19 pandemic, but these impacts could have a material adverse effect on the business, financial position, results of operations and/or cash flows. We will continue to monitor the COVID-19 situation closely. The results of operations for the year ending June 30, 2021 is not necessarily indicative of the operating results expected for any future period. Foreign Currency Translation and Transactions The Company’s functional and reporting currency is the United States dollar. Foreign denominated monetary assets and liabilities are translated into their U.S. dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Income and expenses are translated at average rates of exchange during the period. Related translation adjustments as well as gains or losses resulting from foreign currency transactions are reported as part of operating expenses on the statement of operations and comprehensive loss. Use of Estimates The preparation of these consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The recoverability of the costs incurred for the exploration and development of precious mineral properties is dependent on the ability of the Company to obtain the necessary financing to advance the projects to production, upon future profitable production or from proceeds from sale of properties or production royalties. The Company will continue to incur losses and have negative cash flows from operating activities and as such we will require additional capital to fund exploration and development programs, future property acquisitions and for general corporate purposes. If the Company is unable to obtain additional funding, we may be unable to continue operations, and amounts realized for assets may be less than amounts reflected in these consolidated financial statements. These consolidated financial statements have been prepared on the accounting principles applicable to a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the normal course of business. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least twelve months after the date that the financial statements are issued. Management has carried out an assessment of the going concern assumption and, after considering subsequent events, has concluded that the cash position of the Company is sufficient to finance continued operations for the twelve-month period after the issuance of these financial statements. F-7 Significant estimates made by management in the accompanying consolidated financial statements include the adequacy of the Company’s reclamation and environmental obligation , share based compensation, valuation of deferred tax asset, and assessment of impairment of mineral properties. Cash and Cash Equivalents All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash and cash equivalents. The carrying amount of these securities approximates fair value because of the short-term maturity of these instruments. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and cash equivalents. The Company maintains cash in accounts which may, at times, exceed federally insured limits. At June 30, 2021 and 2020, the Company had $2.81 million and $5.13 million, respectively, of balances in excess of federally insured limits. The Company deposits its cash with financial institutions which it believes have sufficient credit quality to minimize the risk of loss. Fair Value Measurements The Company has adopted FASB ASC 820, Fair Value Measurements and Disclosures, which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. The Company applies fair value accounting for all financial assets and liabilities and non – financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has adopted FASB ASC 825, Financial Instruments, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Company has not elected the fair value option for any eligible financial instruments. Stock Based Compensation The Company has adopted the provisions of FASB ASC 718, “ Stock Compensation ” (“ASC 718”), which establishes accounting for equity instruments exchanged for employee services and for acquiring goods and services from nonemployees. Under the provisions of ASC 718, stock-based compensation cost is measured at the grant date and based on the calculated fair value of the award. For grants to employees an expense is recognized over the employee’s requisite service period (generally the vesting period of the equity grant) using the graded vesting method. For grants to nonemployees, an expense is recognized when the good or service is received. For options with performance conditions, the Company accrues compensation if it is probable that the performance condition will be achieved and recognizes the compensation cost over the requisite service period. The requisite service period for options with performance conditions is estimated based on the analysis of the terms of the award and the specific performance conditions. The Company shall recognize the effect of forfeited awards in compensation cost when they occur. New shares of the Company’s common stock will be issued for any options exercised. Mineral Properties Mineral property acquisition costs are capitalized when incurred and will be amortized using the units-of-production method over the estimated life of the reserve following the commencement of production. If a mineral property is subsequently abandoned or impaired, any capitalized costs will be expensed in the period of abandonment or impairment. Acquisition costs include cash consideration and the fair market value of shares issued on the acquisition of mineral properties. Net proceeds from the sale of royalties are deducted from the carrying value of the mineral properties. Exploration Costs Exploration costs, which include maintenance, development and exploration of mineral claims, are expensed as incurred. When it is determined that a mineral deposit can be economically developed as a result of establishing proven and probable reserves, the costs incurred after such determination will be capitalized until the commencement of production and amortized over their useful lives. To date, the Company has not established the commercial feasibility of its exploration prospects; therefore, all exploration costs are being expensed. F-8 Property and Equipment Equipment is recorded at cost less accumulated depreciation. All equipment is depreciated over its estimated useful life at the following annual rates: Computer equipment 30% declining balance Equipment 20% declining balance Impairment of Long-Lived Assets In accordance with ASC 360, “Property, Plant, and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. An impairment loss shall be recognized only if the carrying amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount of the asset (asset group) at the date it is tested for recoverability, whether in use or under development. An impairment loss shall be measured as the amount by which the carrying amount of a long-lived asset (asset group) exceeds its fair value. Reclamation and Environmental Obligation The Company follows the provisions of ASC 410, “Asset Retirement and Environmental Obligations”, which establishes the standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment, or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets. The fair value of a liability for an asset retirement obligation will be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of the associated asset. An accretion cost, representing the increase over time in the present value of the liability, is recorded each period. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability is reduced. Future reclamation costs are accrued based on management’s best estimate at the end of each period of the discounted costs expected to be incurred for the asset. Such costs include facilities removal, earthworks, revegetation and on-going monitoring. Changes in estimates are reflected prospectively in the period an estimate is revised. Net Loss per Share Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares outstanding during each period. Diluted loss per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the years ended June 30, 2021 and 2020, the shares of common stock equivalents related to outstanding stock options have not been included in the diluted per share calculation as they are anti-dilutive as the Company has recorded a net loss from continuing operations for each year. Leases The Company adopted ASU No. 2016-02 Leases effective July 1, 2019. The adoption of this guidance did not have a material effect on the Company’s consolidated financial position, results of operation, cash flows and related disclosures. The Company determines if an arrangement is, or contains, a lease at the inception date. Right-of-use (“ROU”) assets related to operating leases are included in Other assets, non-current with related liabilities included in Accrued liabilities and Other long-term liabilities . ROU assets under finance leases, which primarily represent property and equipment, are included in Property, plant and equipment, net with related liabilities in debt, current and debt, non-current on the Consolidated Balance Sheet. Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. We use our estimated incremental borrowing rate in F-9 determining the present value of lease payments. Variable components of the lease payments such as maintenance costs are expensed as incurred and not included in determining the present value. Our lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. In the adoption of ASU No. 2016, the Company elected the short-term lease recognition exemption. Currently, the Company does not have any leases with terms greater than 12 months. Convertible Debt The Company reviews the terms of its convertible notes payable to determine whether to account for any portion of the proceeds towards the conversion feature. In general, when the convertible notes instrument has the following characteristics and terms no portion of the proceeds from the issuance shall be accounted for as attributable to the conversion feature: a) is convertible into common stock of the Company at a specified price at the option of holder; b) the debt is sold at a price or has value at issuance not significantly in excess of the face amount; c) an interest rate that is lower than the Company could establish for nonconvertible debt; d) an initial conversion price that is greater than the fair value of the common stock at time of issuance and; e) a conversion price that does not decrease except pursuant to antidilution provisions. When proceeds are not attributable to the conversion features of the debt, the Company records the entire amount as a liability. If the fair value option is not elected, the Company will reduce the initial carrying amount of the debt by any direct and incremental issuance costs paid to third parties that are associated with the convertible debt issuance. The Company also reviews the terms of its convertible notes payable to determine whether there are embedded derivatives, including the embedded conversion option, that are required to be bifurcated and accounted for as individual derivative financial instruments. In circumstances where convertible debt contains embedded derivatives that are required to be separated from the host contracts, the total proceeds received are first allocated to the fair value of the derivative financial instruments determined using the binomial model. The remaining proceeds, if any, are then allocated to the debenture cost contracts, usually resulting in those instruments being recorded at a discount from their principal amount. This discount is accreted over the expected life of the instruments to profit (loss) using the effective interest method. The debenture host contracts are subsequently recorded at amortized cost at each reporting date, using the effective interest method. The embedded derivatives are subsequently recorded at fair value at each reporting date, with changes in fair value recognized in profit (loss). As of June 30, 2021 and 2020, there were no embedded derivatives. Income Taxes Income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted FASB ASC 740 “Income Taxes” as of its inception. Pursuant to FASB ASC 740 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future periods; and accordingly is offset by a valuation allowance. FIN No.48 prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of tax positions taken in tax returns. To the extent interest and penalties may be assessed by taxing authorities on any underpayment of income tax, such amounts would be accrued and classified as a component of income tax expense in our Consolidated Statements of Operations and Comprehensive Loss. The Company elected this accounting policy, which is a continuation of our historical policy, in connection with our adoption of FIN 48. F-10 Note 2. Recent Accounting Guidance In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses. The changes will be effective for the Company’s fiscal year beginning July 1, 2020. Among other things, these amendments require the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The adoption of ASU No. 2016-13 did not have a significant impact on the Company's consolidated financial position, results of operations, and cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement. These changes will be effective for the Company’s fiscal year beginning July 1, 2020. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The adoption of ASU No. 2018-13 did not have a significant impact on the Company's consolidated financial position, results of operations, cash flows and related disclosures. In November 26, 2019, the FASB issued ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments – Credit Losses. The changes will be effective for the Company’s fiscal year beginning July 1, 2020. The amendments in this ASU clarify, correct errors in, improve, or address issues about certain topics related to the amendments in ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 was issued on June 16, 2016 and introduced an expected credit loss model for the impairment of financial assets measured at amortized cost basis. The adoption of ASU No. 2019-11 did not have a significant impact on the Company's consolidated financial position, results of operations, cash flows and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for public entities for fiscal years beginning after December 15, 2020, and for interim periods within those fiscal years. The Company is currently evaluating the impact of implementing these changes on the Company’s consolidated financial position, operating results and cash-flows. In August 2020, the FASB issued ASU 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): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which addresses the complexity of its guidance for certain financial instruments with characteristics of liabilities and equity. ASU 2020-06 removes the accounting models that require beneficial conversion features or cash conversion features associated with convertible instruments to be recognized as a separate component of equity, adds certain disclosure requirements for convertible instruments, amends the guidance for the derivatives scope exception for contracts in an entity’s own equity and simplifies the diluted earnings per share calculation for certain situations. This ASU is effective for the Company beginning on January 1, 2024. The Company is currently evaluating the impact of implementing these changes on the Company’s consolidated financial position, operating results and cash-flows. In July 2021, the FASB issued ASU No. 2021-5, Leases. These changes will be effective for fiscal years beginning after December 15, 2021. The amendments affect lessors with lease contracts that have variable lease payments that do not depend on a reference index or a rate and would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. The Company is currently evaluating the potential impact of implementing these changes on the Company’s consolidated financial position, results of operation, cash flows and related disclosures. Note 3. Fair Value Measurements Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization with the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: F-11 The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs that are both significant to the fair value measurement and unobservable. The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. As required by ASC 820, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair Value at June 30, 2021 June 30, 2020 Assets Total Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,113,064 3,113,064 — — $ 5,434,081 The carrying values of accounts payable and accrued liabilities and convertible debt (Note 6) approximate fair value as of June 30, 2021 and 2020. Note 4. Non-Cash Transactions During the year-ended June 30, 2021, the Company issued 257,353 shares of its common stock with a fair value of $277,941 for the acquisition of mining claims. During the year-ended June 30, 2021, the Company issued 362,427 shares of Common Stock for payment of interest accrued and owing on its outstanding 2019 Convertible Notes with a fair value of $398,777. Additionally, 1,200,000 shares of Common Stock were issued upon the conversion of 1,200 of its outstanding 2019 Convertible Notes. The Company also issued 166,792 shares of Common Stock to Ausenco Engineering USA South Inc. in exchange for consulting services to complete the Grassy Mountain feasibility study valued at $181,458. During the comparative year-ended June 30, 2020, the Company issued 1,096,791 shares to Ausenco in exchange for services valued at $976,144 to complete a feasibility study at its Grassy Mountain Project. Note 5. Capital Stock Authorized Capital Authorized capital stock consists of 200,000,000 shares of Common Stock with par value of $0.01 per common share (2020- 50,000,000 shares of Common Stock with par value $0.01 per common share). An increase to authorized capital stock was approved by the Company’s stockholders during the year-ended June 30, 2021. During the year-ended June 30, 2021, the Company issued 3,209,133 shares at an approximate average price of $1.21 through its at-the market offering. Share issuance costs related to this were $157,979. The Company also issued 362,427 shares for payment of interest accrued and owing (Note 4 and Note 6) with a fair value of $398,777. The Company also issued 1,200,000 shares upon the conversion of 1,200 of the 2019 Senior Secured Convertible Notes (Note 4 and Note 6). In addition, during the year-ended June 30, 2021, the Company issued 166,792 shares at a value of $1.09 per share of Common Stock to Ausenco in exchange for services to complete a feasibility study at its Grassy Mountain Project (Note 4). It also issued 257,353 shares for the purchase of a mineral property with a fair value of $$277,941 (Note 4 and 7). F-12 During the year-ended June 30, 2020, the Company issued 1,096,791 shares at a value of $0.89 per share to Ausenco in exchange for services to complete a feasibility study at its Grassy Mountain Project (Note 4) . The Company also issued 161,217 shares for payment of interest accrued and owing at December 31, 2019 (Note 4 and 6). During the year-ended June 30, 2020, the Company issued 4,807,700 shares at a price of $1.04 per share for gross proceeds of $5,000,008. Share issuance costs were $421,558 for net proceeds of $4,578,450. During the year ended June 30, 2020, the Company issued 372,742 shares at an average approximate price of $1.17 for gross proceeds of $436,783 through its at-the-market offering. Share issuance costs, including one-time transaction costs and commissions were $124,265 for net proceeds of $312,518. At June 30, 2021 there were 38,154,109 common shares issued and outstanding (June 30, 2020 – 32,958,404 common shares). Warrants A summary of warrants exercisable into common stock as of June 30, 2021, and changes during years-ended June 30, 2021 and 2020 are presented below: Warrants Weighted Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value ($) Outstanding at July 1, 2019 1,200,000 $ 1.40 1.03 — Issued — — — — Expired — — — — Exercised — — — — Outstanding at June 30, 2020 1,200,000 $ 1.40 0.03 — Issued — — — — Expired (1,200,000) 1.40 — — Exercised — — — — Outstanding at June 30, 2021 — $ — — — Stock Options and Stock Based Compensation Paramount’s 2015 and 2016 Stock Incentive and Compensation Plan, which is shareholder-approved, permits the grant of share options and shares to its employees for up to 2.169 million shares of common stock. Option awards are generally granted with an exercise price equal to the market price of Paramount’s stock at the date of grant and have contractual lives of 5 years. To better align the interests of its key executives, employee and directors with those of its shareholders a significant portion of those share option awards will vest contingent upon meeting certain stock price appreciation performance goals and other performance conditions. Option and share awards provide for accelerated vesting if there is a change in control (as defined in the employee share option plan).For the year-ended June 30, 2021, the Company granted 755,000 stock options to employees, directors and consultants. For the year-ended June 30, 2020, the Company granted 690,000 stock options. For the year-ended June 30, 2021, share-based compensation expense relating to service conditions options and performance conditions were $286,096 and $150,681, respectively (2020 - $73,509 and $129,683). F-13 The fair value for these options was calculated using the Black-Scholes option valuations method. The weighted average assumptions used for the fiscal years ending June 30, 2021 and 2020 were as follows: 2021 2020 Weighted average risk-free interest rate 0.22 % 1.60 % Weighted-average volatility 60.00 % 61.00 % Expected dividends 0.00 0.00 Weighted average expected term (years) 5 5 Weighted average fair value $ 0.57 $ 0.39 A summary of option activity under the Stock Incentive and Compensation Plan as of June 30, 2021 and 2020, and changes during the years ended June 30, 2021 and 2020 are presented below. Options Options Weighted Average Exercise Price Weighted-Average Remaining Contractual Term (In Years) Aggregate Intrinsic Value ($) Outstanding at July 1, 2019 1,568,995 $ 1.50 1.95 $ — Granted 690,000 1.00 4.47 165,600 Exercised — — — — Forfeited or expired (1,015,000 ) 1.53 0.05 — Outstanding at June 30, 2020 1,243,995 $ 1.20 3.63 $ 165,600 Granted 755,000 1.13 4.44 — Exercised — — — — Forfeited or expired — — — — Outstanding at June 30, 2021 1,998,995 $ 1.17 $ 3.31 $ — Exercisable at June 30, 2021 964,997 $ 1.19 $ 3.08 $ — A summary of the status of Paramount’s non-vested options as of June 30, 2021 and 2020 and changes during the years ended June 30, 2021 and 2020 are presented below. Non-vested Options Options Weighted- Average Grant-Date Fair Value Non-vested at July 1, 2019 340,660 $ 0.79 Granted 690,000 0.38 Vested (66,668 ) 0.74 Forfeited (20,000 ) 0.74 Nonvested at June 30, 2020 943,992 $ 0.51 Granted 755,000 0.56 Vested (664,994 ) 0.50 Forfeited — — Nonvested at June 30, 2021 1,033,998 $ 0.55 As of June 30, 2021 and 2020, there was $143,998 and $153,802 respectively of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the employee share option plan. That cost is expected to be recognized over a weighted-average period of 0.78 years (2020 – $1.05). The total fair value of shares vested during the years ended June 30, 2021 and 2020, was $332,835 and $202,121, respectively. Note 6. Debt F-14 Convertible Debt June 30, 2021 June 30, 2020 Current Non-Current Current Non-Current 2019 Secured Convertible Notes $ — $ 4,277,690 $ — $ 5,477,690 Less: unamortized discount and issuance costs — (116,188 ) — (221,462 ) $ — $ 4,161,502 $ — $ 5,256,228 In September 2019, the Company completed a private offering of 5,478 Senior Secured Convertible Notes (“2019 Convertible Notes”) at $975 per $1,000 face amount due in September 2023. Each 2019 Convertible Note will bear an interest rate of 7.5% per annum, payable semi-annually. The effective interest rate of the 2019 Convertible Notes is 9.24%. The principal amount of the 2019 Convertible Notes will be convertible at a price of $1.00 per share of Paramount common stock. Unamortized discount and issuance costs of $275,883 will be amortized as an additional interest expense over the four-year term of the 2019 Convertible Notes. During the year-ended June 30, 2021, the Company amortized $62,903 (2020-$54,421) of discount and issuance costs. At any point after the second anniversary of the issuance of the convertible notes, Paramount may force conversion if the share price of its common stock remains above $1.75 for 20 consecutive trading days. The convertible notes are secured by a lien on all assets of the Company and the Company is required to maintain a working capital balance of $250,000. At June 30, 2021, the working capital covenant was met by the Company. During the year-ended June 30, 2021, a total of 1,200 notes were converted in 1,200,000 shares of Common Stock (2020 – nil). Also during the year-ended June 30, 2021, the Company recorded an interest expense of $359,253 (2020 - $324,160). On May 5, 2020, the Company was granted a loan (the “PPP Loan”) from Wells Fargo Bank, N.A. in the amount of $35,628 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan which was in the form of a Promissory Note matures on May 3, 2022 and bears interest at a rate of 0.98% per annum, payable monthly commencing on November 1, 2020. The Note many be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. During the year-ended June 30, 2021, the PPP Loan and accrued interest was forgiven and a gain of $35,947 was recorded on the Company’s Consolidated Statements of Operation and Comprehensive Loss. Note 7. Mineral Properties The Company has capitalized acquisition costs on mineral properties as follows: June 30, 2021 June 30, 2020 Sleeper $ 26,011,976 $ 24,147,585 Grassy Mountain 23,185,728 23,185,728 $ 49,197,704 $ 47,333,313 Sleeper: Sleeper is located in Humbolt County, Nevada approximately 26 miles northwest of the town of Winnemucca. The Sleeper Gold Mine consists of 2,322 unpatented mining claims totaling approximately 38,300 acres. During the year-ended June 30, 2021, the Company recorded an increase in reclamation and environmental obligation of $1,498,950 (2020 - $278,181) (Note 8) for the Sleeper Gold Project. Also, during the year-ended June 30, 2021, the Company purchased 152 unpatented lode mining claims by issuing 257,353 shares of common stock for a fair value of $277,941 and cash payment of $87,500 for a total consideration of $365,441. These claims have been included as part of the Sleeper Gold Project. Grassy Mountain: The Grassy Mountain Project is located in Malheur County, Oregon, approximately 22 miles south of Vale, Oregon, and roughly 70 miles west of Boise, Idaho. It consists of 442 federal mining claims, 3 patented lode claims, and various leased fee land surface and surface/mineral rights, all totaling approximately 9,300 acres . F-15 Note 8. Reclamation and Environmental Obligation: Reclamation and environmental costs are based principally on legal requirements. Management estimates costs associated with reclamation of mineral properties and properties under mine closure. On an ongoing basis the Company evaluates its estimates and assumptions; however, actual amounts could differ from those based on estimates and assumptions. The Company has posted several cash bonds as financial security to satisfy reclamation requirements. The balance of posted cash reclamation bonds at June 30, 2021 is $533,703 (June 30, 2020 - $695,041). Paramount is responsible for managing the reclamation activities from the previous mine operations at the Sleeper Gold Mine as directed by the BLM and the Nevada State Department of Environmental Protection (“NDEP”). Paramount has estimated the undiscounted reclamation costs for existing disturbances at the Sleeper Gold Project required by the BLM to be $3,557,944. These costs are expected to be incurred between the years calendar 2021 and 2060. Paramount has also estimated undiscounted reclamation cost as required by the NDEP to be $1,470,000. These costs include on-going monitoring and new requests from the NDEP to convert three processing ponds from the historical operations to evaporation cell ponds by 2023. These costs are expected to be incurred between 2021 and 2039. The sum of expected costs by year are discounted using the Company’s credit adjusted risk free interest rate from the time it expects to pay the retirement to the time it incurs the obligation. The asset retirement obligation for the Sleeper Gold Project recorded on the balance sheet is equal to the present value of the estimated reclamation costs as required by both the BLM and NDEP. The following variables were used in the calculation for the fiscal years ending June 30, 2021 and 2020: 2021 2020 Weighted average credit adjusted risk free rate 9.89 % 9.76 % Weighted-average inflation rate 2.31 % 1.60 % Changes to the Company’s asset retirement obligation for the Sleeper Gold Mine for the year ended June 30, 2021 are as follows: June 30, 2021 June 30, 2020 Balance at beginning of year $ 615,170 $ 965,677 Accretion 60,040 94,591 Additions and changes in estimates 1,498,950 278,181 Settlements (324,516 ) (723,279 ) Balance at end of year $ 1,849,644 $ 615,170 The balance of the reclamation and environmental obligation of $1,849,644 (2020 - $615,170) is comprised of a current portion of $310,022 (2020 - $154,231) and a non-current portion of $1,539,622 (2020 - $460,939). Note 9. Other Income The Company’s other income details were as follows: Year Ended Year Ended 2021 2020 Re-imbursement of reclamation costs $ 324,516 $ 723,279 Leasing of water rights to third party 5,743 5,631 Total $ 330,259 $ 728,910 Note 10. Segmented Information F-16 Segmented information has been compiled based on the material mineral properties in which the Company performs exploration activities. Expenses and mineral property carrying values by material project for the year ended June 30, 2021: Exploration Expenses Land Holding Costs Mineral Properties As at June 30, 2021 Sleeper Gold Project $ 866,932 $ 437,671 $ 26,011,976 Grassy Mountain Project 1,949,753 102,730 23,185,728 $ 2,816,685 $ 540,401 $ 49,197,704 Expenses and mineral property carrying values by material project for the year ended June 30, 2020: Exploration Expenses Land Holding Costs Mineral Properties As at June 30, 2020 Sleeper Gold Project $ 852,958 $ 423,508 $ 24,147,585 Grassy Mountain Project 3,348,180 169,470 23,185,728 $ 4,201,138 $ 592,978 $ 47,333,313 Note 11. Income Taxes At June 30, 2021, the Company has net operating loss carry forwards of $38,219,334 expiring between the years 2022 and 2038 which are available to reduce future taxable income. Tax losses incurred after June 30, 2018 may be carried forward indefinitely. The tax effects of the significant components within the Company’s deferred tax asset (liability) at June 30, 2021 and 2019 are as follows: United States 2021 2020 Mineral properties $ 868,970 $ 1,206,528 Asset retirement obligation 388,425 129,186 Fixed assets 386 — Stock options 447,913 356,189 Net operating losses 11,676,822 9,933,638 $ 13,382,516 $ 10,936,166 Valuation allowance (11,333,208 ) (10,257,518 ) Mineral properties $ 2,049,308 $ (678,648 ) Net deferred tax asset $ — $ — The income tax recovery differs from the amounts computed by applying statutory tax to pre-tax losses as a result of the following: 2021 2020 Income (Loss) before taxes $ (5,903,618 ) $ (6,430,141 ) US Statutory tax rate 21.00 % 21.00 % Expected income tax (recovery) (1,239,760 ) (1,350,330 ) Non-deductible items 157 2,426 Change in estimates 1,196,349 (57,853 ) Change in valuation allowance 43,254 1,405,757 Total income taxes (recovery) $ — $ — Current tax expense (recovery) — — Deferred tax expense (recovery) — — $ — $ — The potential tax benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. F-17 Accounting for uncertainty for Income Tax Income taxes are determined using assets and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. Effective July 1, 2009, the Company adopted the interpretation for accounting for uncertainty in income taxes which was an interpretation of the accounting standard accounting for income taxes. This interpretation created a single model to address accounting for uncertainty in tax positions. This interpretation clarifies the accounting for income taxes, by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. As at June 30, 2021 and 2020, the Company’s consolidated balance sheets did not reflect a liability for uncertain tax positions, nor any accrued penalties or interest associated with income tax uncertainties. The Company is subject to income taxation at the federal and state levels. The Company is subject to US federal tax examinations for the tax years 2019 through 2021. Loss carryforwards generated or utilized in years earlier than 2019 are also subject to examination and adjustment. The Company has no income tax examinations in process. Note 12. Commitments and Contingencies: Other Commitments Paramount has an agreement to acquire 44 mining claims (“Cryla Claims”) covering 589 acres located immediately to the west of the proposed Grassy Mountain site from Cryla LLC. Paramount is obligated to make annual lease payments of $40,000 per year the first two years of the lease term and $60,000 per year thereafter with an option to purchase the Cryla Claims for $560,000 at any time. The term of the agreement is 25 years. In the event Paramount exercises its option to acquire the Cryla Claims, all annual payments shall be credited against a production royalty that will be based on a prevailing price of the metals produced from the Cryla Claims. The royalty rate ranges between 2% and 4% based on the daily price of gold. The agreement with Cryla can be terminated by Paramount at any time. Paramount made the annual lease payment of $60,000 as required by the agreement during the year ended June 30, 2021. The Cryla Claims are without known mineral reserves and there is no current exploratory work being performed. Paramount has an agreement with Nevada Select Royalty (“Nevada Select”) to purchase 100% in the Frost Project, which consists of 40 mining claims located approximately 12 miles west of its Grassy Mountain Project. A total consideration of $250,000 payable to Nevada Select will be based on certain events over time. Upon signing the agreement, Paramount made a payment of $10,000 to Nevada Select. Nevada Select will retain a 2% NSR on the Frost Claims and Paramount has the right to reduce the NSR to 1% for a payment of $1 million. All required payments under the agreement due at June 30, 2021 have been paid. The Frost Claims are without known mineral reserves. Note 13. Subsequent Events Subsequent to June 30, 2021, the Company issued 2,189,521 ATM shares at an average price of $0.86 per share and for gross proceeds of approximately $1,875,521. The Company also issued 168,690 shares at a fair value price of $0.99 per share for the payment of interest accrued and owing at June 30, 2021 for its outstanding convertible debt. Subsequent to June 30, 2021, the Company entered into an option agreement with Nevada Select to purchase mining claims in the State of Nevada for a total consideration of $300,000. Payments under the agreement will based on achieving certain events over time. Upon, signing the agreement Paramount made a payment of $20,000 to Nevada Select. F-18