What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-02-04 compared with 2021-11-09 · 69 added, 46 removed, 90 unchanged (56% of the section changed)

21 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-month period ended September 30, 2021 and compares these results to the results of the prior year three-month period ended September 30, 2020.

It also analyzes our financial condition and summarizes the results of our operations for the three and six-month period ended December 31, 2021 and compares these results to the results of the prior year three and six-month period ended December 31, 2020.

Operating Highlights:

During the three-month ended September 30, 2021, the Company conducted several exploration programs and continued with its permitting at its Grassy Mountain Project.

During the six-month period ended December 31, 2021, the Company conducted several exploration programs and continued with its permitting at its Grassy Mountain Project.

Highlights include:

Receiving positive assay results from geotechnical drill holes at its Grassy Mountain Project that indicate the potential for additional economic material to be used during mine operations.

Receiving from Malheur County an extension on the Conditional Use Permit for the proposed Grassy Mountain underground mine.

Submitted a modified Consolidated Permit Application (the “CPA”) with the State of Oregon seeking approval to construct and operate its proposed gold mine for its Grassy Mountain Project.

Submitted a modified Plan of Operation to the Bureau of Land Management (the ”BLM”) for its proposes mining operations for its Grassy Mountain Project.

Entering into an option agreement with Nevada Select Royalty to purchase 100% interest in the Bald Peak Project (“Bald Peak”) located in Mineral County, Nevada.

Total consideration of $300,000 will paid based on achieving certain milestones over time.

Commencing a 15-hole reverse circulation drill program at the Frost Project which is located 12 miles from the Company’s Grassy Mountain Project in Eastern Oregon.

Total consideration of $300,000 will be paid based on achieving certain milestones over time.

Initiated a drill exploration program to test several targets identified to bring its Sleeper Gold Project back into production.

Completed surface sampling and a geophysical survey at its Bald Peak Project in Nevada.

Both these programs confirm a large and shallow target that the Company will design and plan a new drill program in 2022.

Received positive assay results from geotechnical drill holes at its Grassy Mountain Project that indicate the potential for additional economic material to be used during mine operations.

Received from Malheur County an extension on the Conditional Use Permit for the proposed Grassy Mountain underground mine.

Commenced a 15-hole reverse circulation drill program at the Frost Project which is located 12 miles from the Company’s Grassy Mountain Project in Eastern Oregon.

Outlook and Plan of Operation:

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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.

As reported in our Annual Report on Form 10-K for the year ended June 30, 2021 the Company expects to undertake the following activities:

Having accomplished many of the activities we outlined in our Annual Report on Form 10-K for the year ended June 30, 2021, the Company now expects to undertake the following activities in the next several months:

Grassy Mountain Project:

Paramount expects to respond to the State of Oregon’s CPA completeness review (“Review”) received in February 2019 during the three-month period ending December 31, 2021.

The Review provided included proposed resolutions and additional information required by the Company and will assist the Company in submitting a revised CPA.

The Company expects the revised CPA to address all the comments and requests for additional information with the objective of submitting a complete revised CPA that allows the State of Oregon to determine whether to issue a state mining permit for the Grassy Mountain Project.

In addition to the State of Oregon permitting activities, Paramount expects to respond to BLM comments it received on its PoO during the period ending March 31, 2022.

The BLM will register a Notice in the Federal Register once the application is deemed complete.

The Notice initiates the EIS process under the National Environmental Policy Act.

To complete these activities Paramount will engage specialized mining consulting firms, work with State and Federal contracted third parties and work directly with both state and federal permitting agencies

As a result of submitting both its state and federal modified permit applications, Paramount with continue to work with both regulators to ensure both applications are deemed complete.

We expect to the interaction between the Company and both the State of Oregon and the BLM to be a highly interactive process.

Due to the amount of information contained in both applications, the Company is allocating significant resources to ensure this stage of permitting is completed in a timely fashion.

For the State of Oregon permitting process, once the CPA is deemed complete, the State of Oregon will initiate an environmental assessment of the proposed operation and commence the preparation of draft permits.

These activities by state law must be completed within a 225 day period.

For federal permitting, once the submitted Plan of Operation (the “PoO”) is deemed complete, the BLM will initiate the National Environmental Policy Act process which includes an Environmental Impact Statement for the proposed mining operation.

Sleeper Gold Project:

During our fiscal year-ended June 30, 2021, Paramount initiated several targeted programs including metallurgical testing to enhance the value of the Sleeper Gold Project.

As a result of a review of all geological, geochemical and geophysical data, the Company has identified several targets for exploration drilling.

The purpose of an exploration drill at the Sleeper Gold Project is to locate additional higher-grade mineralization in the close proximity of the original Sleeper pit or in the large mining claim package owned by the Company and to facilitate further metallurgical testing.

This commencement of this exploration program is subject to having sufficient capital on hand.

Frost Project:

The Company commenced and will complete an initial reverse circulation drill program to test historical drill results and additional selective targets.

With results pending from its recent drill exploration program and results of a comprehensive review of all geological, geochemical and geophysical data, Paramount will commission a new technical and economic analysis of its Sleeper Gold Project.

In addition to providing updated information on the project, the technical report will allow the Company to provide disclosures specified by the Securities Exchange Commission amendments that modernize the property disclosure requirements for mining registrants under Regulation S-K (Subpart 1300).

COVID-19 Update

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We continue to perform the majority of our activities remotely with a limited amount of on-site or in-office attendance only when required.

Comparison of Operating Results for the three months ended September 30, 2021 and 2020

Comparison of Operating Results for the three and six-months ended December 31, 2021 and 2020

Results of Operations

We did not earn any revenue from mining operations for the three-months ended September 30, 2021 and 2020.

Our net loss for the three-months ended September 30, 2021 was $1,913,746 compared to a net loss of $1,331,508 in the previous three-month period ended September 30, 2020.

We did not earn any revenue from mining operations for the three and six-months ended December 31, 2021 and 2020.

Our net loss for the three-months ended December 31, 2021 was $2,702,425 compared to a net loss of $1,774,899 in the previous three-month period ended December 31, 2020.

The drivers of the increase in net loss of 52% are fully described below.

Our net loss for the six-months ended December 31, 2021 was $4,616,170 compared to a net loss of $3,106,407 in the previous six-months period ended December 31, 2020.

The drivers of the increase in net loss of 49% are fully described below.

The Company expects to incur losses for the foreseeable future as we continue with our planned exploration and development programs.

Exploration and Land Holding Costs

For the three-month period ended September 30, 2021 and 2020, exploration expenses were $1,256,805 and $636,027, repectively.

For the three-month period ended December 31, 2021 and 2020, exploration expenses were $1,907,861 and $874,488, respectively.

This represents an increase of 118% or $1,033,373.

The increase was primarily a result of, the Company continuing with permitting activities with the State of Oregon and the BLM for its Grassy Mountain Project.

Total exploration expenses at the Grassy Mountain Project during the current three-month period were $465,348.

The Company also commenced a drill program at the Frost Project.

Expenses incurred during the period ended September 30, 2021 for the drill program at the Frost Project were $456,215.

Included were expenses related to the Company’s reclamation activities at the Sleeper Project.

The increase was a result of the Company completing several activities at both its Oregon and Nevada based projects.

At Grassy Mountain the Company continued with permitting activities with the State of Oregon and the BLM and submitted modified permit applications and at our Frost Project the Company completed a drill program.

These expenses totaled $1,244,835.

At Sleeper, the Company initiated a small drill program to test zones of mineralization and at its Bald Peak Project the Company conducted rock surface sampling.

Total exploration expenses at the Sleeper Gold Project and Bald Peak during the current three-month period were $648,703.

In the prior year comparable period the company focused its efforts on completing the feasibility study for the Grassy Mountain Project and incurred expenses related to reclamation activities its Sleeper Gold Project.

For the three-month period ended September 30, 2021 and 2020, land holding costs were $141,193 and $131,183, repectively.

For the three-month period ended December 31, 2021 and 2020, land holding costs were $173,134 and $130,400, respectively.

The increase of land holding costs was primarily due to the acquisition of Bald Peak Project in Nevada.

For the six-month period ended December 31, 2021 and 2020, exploration expenses were $3,164,668 and $1,510,515, respectively.

This represents an increase of 110% or $1,654,153.

The increase was a result of the Company completing several activities at both its Oregon and Nevada based projects.

At Grassy Mountain the Company continued with permitting activities with the State of Oregon and the BLM and submitted modified permit applications and at our Frost Project completed a drill program.

These expenses totaled $2,166,400.

At Sleeper, the Company initiated a small drill program to test zones of mineralization and at its Bald Peak Project conducted rock surface sampling and completed a geophysical survey.

Total exploration expenses at the Sleeper Gold Project and Bald Peak during the current six-month period were $983,945.

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

For the six-month period ended December 31, 2021 and 2020, land holding costs were $314,327 and $261,584, respectively.

The increase of land holding costs was primarily due to the acquisition of Bald Peak Property in Nevada.

Salaries and Benefits

For the three-month period ended September 30, 2021, salary and benefits decreased by 10% or by $25,192 to $230,749 from the prior year’s three-month period ended September 30, 2020.

For the three-month period ended December 31, 2021, salary and benefits decreased by 63% or by $363,872 to $216,063 from the prior year’s three-month period ended December 31, 2020.

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

The decrease primarily reflects lower stock-based compensation that was recorded during the three-month period ended September 30, 2021 compared to the three-month period ended September 30, 2020.

Included in the salary and benefits expense amount for the three-month period ended September 30, 2021 and 2020 was a non-cash stock-based compensation of $ 42,671 and $ 58,929 , respectively.

The decrease primarily reflects lower cash bonus and stock-based compensation that was recorded during the three-month period ended December 31, 2021 compared to the three-month period ended December 31, 2020.

Included in the salary and benefits expense amount for the three-month period ended December 31, 2021 and 2020 was a non-cash stock-based compensation of $33,575 and $57,922, respectively.

For the six-month period ended December 31, 2021, salary and benefits decreased by 45% or by $372,399 to $463,478 from the prior year’s six-month period ended December 31, 2020.

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

The decrease primarily reflects lower cash bonus and stock-based compensation that was recorded during the six-month period ended December 31, 2021 compared to the six-month period ended December 31, 2020.

Included in the salary and benefits expense for the six-month period ended December 31, 2021 and 2020 was non-cash stock-based compensation of $79,669 and $116,851, respectively.

Directors’ Compensation

For the three-month period ended September 30, 2021, directors’ compensation decreased by 55% or by $17,105 to $13,837 from the three-month period ended September 30, 2020.

For the three-month period ended December 31, 2021, directors’ compensation decreased by 57% or by $25,888 to $19,281 from the three-month period ended December 31, 2020.

Directors’ compensation consists of cash and stock-based compensation of the Company’s board of directors.

The increase reflects the additional stock-based compensation recorded in the current quarter compared to the prior year’s comparable period.

The decrease reflects lower stock-based compensation recorded in the current quarter compared to the prior year’s comparable period.

For the six-month period ended December 31, 2021, directors’ compensation decreased by 56% or by $42,993 to $33,118 from the six-month period ended December 31, 2020.

Directors’ compensation consists of cash and stock-based compensation of the Company’s board of directors.

The decrease reflects the lower stock-based compensation recorded in the current quarter compared to the prior year’s comparable period.

Professional Fees and General and Administration

For the three-month period ended September 30, 2021 and 2020, professional fees were $44,963 and $44,452, respectively.

This represents a increase of 1% or $511.

For the three-month period ended December 31, 2021 and 2020, professional fees were $21,050 and $28,699, respectively.

This represents a decrease of 27% or $7,649.

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

For the three-month period ended September 30, 2021, general and administration expenses increased by 5% to $119,863 from $114,123 from the three-month period ended September 30, 2020.

The increase in general and administration expenses from the previous year’s comparable period was mainly due to an increase in travel related expenses.

For the three-month period ended December 31, 2021, general and administration expenses increased by 29% to $161,346 from $124,752 from the three-month period ended December 31, 2020.

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

For the six-month period ended December 31, 2021 and 2020, professional fees were $66,014 and $73,151, respectively.

This represents an decrease of 10%.

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

For the six-month period ended December 31, 2021, general and administration expenses increased by 18% to $281,207 from $238,877 from the previous six-month period ended December 31, 2020.

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

Liquidity and Capital Resources

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

At September 30, 2021, we had cash and cash equivalents of $3,659,067 compared to $3,113,064 as at June 30, 2021.

At December 31, 2021, we had cash and cash equivalents of $1,441,101 compared to $3,113,064 as at June 30, 2021.

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 three-months ended September 30, 2021, the Company issued 2,202,352 shares for net proceeds of $1,829,551 under the program.

The main uses of cash for the three-month period ended September 30, 2021 comprised of the following material amounts:

Cash used in operating activities which included general and administration expenses, land holding costs, exploration programs at our Grassy Mountain and Sleeper Gold Projects and reclamation activities of $1,280,825

During the six-months ended December 31, 2021, the Company issued 2,301,058 shares for net proceeds of $1,898,475 under the program.

The main uses of cash for the six-month period ended December 31, 2021 comprised of the following material amounts:

We anticipate our cash expenditures for the remainder of our fiscal year ending June 30, 2022 to be as follows:

$1.1 million on corporate and general expenses

For discretionary exploration and permitting programs, subject to available cash on hand and additional share issuances, we are budgeting the following amounts for the remainder of our fiscal year ending June 30, 2022 as follows:

$1.5 million on the Grassy Mountain Project state and federal permitting activities

$0.2 million on the Frost Project exploration programs

$1.0 million on the Sleeper Gold Project exploration programs

$0.3 million on a new technical report for the Sleeper Gold Project

Our anticipated expenditures will be funded by our cash on hand and by other capital resources.

32 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