What changed in this filing

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Item 1A. Risk Factors

2023-12-12 compared with 2023-06-14 · 70 added, 60 removed, 249 unchanged (34% of the section changed)

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Risks Related to Our Business

Our business, financial condition and results of operations may be negatively affected by economic and other consequences from Russia's military action against Ukraine and the sanctions imposed in response to that action.

In late February 2022, Russia launched a large scale military attack on Ukraine.

The invasion significantly amplified already existing geopolitical tensions among Russia, Ukraine, Europe, NATO and the West, including the United States.

In response to the military action by Russia, various countries, including the United States, the United Kingdom and European Union issued broad-ranging economic sanctions against Russia.

Such sanctions included, among other things, a prohibition on doing business with certain Russian companies, large financial institutions, officials and oligarchs;

a commitment by certain countries and the European Union to remove selected Russian banks from the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, the electronic banking network that connects banks globally;

a ban of oil imports from Russia to the United States;

and restrictive measures to prevent the Russian Central Bank from undermining the impact of the sanctions.

Additional sanctions may be imposed in the future.

Such sanctions (and any future sanctions) and other actions against Russia may adversely impact, among other things, the Russian economy and various sectors of the economy, including but not limited to, financials, energy, metals and mining, engineering and defense and defense-related materials sectors;

result in a decline in the value and liquidity of Russian securities;

result in boycotts, tariffs, and purchasing and financing restrictions on Russia's government, companies and certain individuals;

weaken the value of the ruble;

downgrade the country's credit rating;

freeze Russian securities and/or funds invested in prohibited assets and impair the ability to trade in Russian securities and/or other assets;

and have other adverse consequences on the Russian government, economy, companies and region.

Further, several large corporations and U.S.

states have announced plans to divest interests or otherwise curtail business dealings with certain Russian businesses.

The ramifications of the hostilities and sanctions may not be limited to Russia, Ukraine and Russian and Ukrainian companies and may spill over to and negatively impact other regional and global economic markets (including Europe and the United States), companies in other countries (particularly those that have done business with Russia and Ukraine) and on various sectors, industries and markets for securities and commodities globally, such as oil and natural gas.

Accordingly, the actions discussed above and the potential for a wider conflict could increase financial market volatility and cause severe negative effects on regional and global economic markets, industries, and companies.

In addition, Russia may take retaliatory actions and other countermeasures, including cyberattacks and espionage against other countries and companies around the world, which may negatively impact such countries and companies.

The extent and duration of the military action or future escalation of such hostilities, the extent and impact of existing and future sanctions, market disruptions and volatility, and the result of any diplomatic negotiations cannot be predicted.

While we expect any direct impacts to our business to be limited, the indirect impacts on the economy and on the mining industry and other industries in general could negatively affect our business and may make it more difficult for us to raise equity or debt financing.

In addition, the impact of other current macro-economic factors on our business, which may be exacerbated by the war in Ukraine - including inflation, supply chain constraints and geopolitical events - is uncertain.

Our business and operations were affected by the COVID-19 pandemic and may, in the future, be materially and adversely impacted by pandemics, epidemics and other health emergencies.

Our business faces risks related to health pandemics, epidemics, and other outbreaks of communicable diseases, which could significantly disrupt our operations and adversely affect our business and financial condition.

The global COVID-19 pandemic has had major impacts on the world and on our industry, and COVID-19 and its variants present ongoing risks and challenges that could continue to impact our business.

Future efforts to control the resurgence and spread of COVID-19 or the spread of other pandemics and health emergencies could disrupt the development of our I-M Mine Property as well as any other mining exploration activities and projects we may undertake in the future.

Increased levels of volatility or a rapid destabilization of global economic conditions could have a material adverse effect on our operations and financial condition.

In recent years, global financial conditions have been characterized by increased volatility which has impacted many industries, including the mining industry.

Global financial conditions are subject to sudden and rapid destabilization in response to current and future events, as governmental authorities may have limited resources to respond to such events.

Global capital markets continue to experience increased volatility in response to global events such as the significant increase in the rate of inflation in recent years, and the effects of certain countermeasures taken by central banks including increased interest rates.

Future economic crises may be precipitated by any number of causes, including natural disasters, epidemics (such as the COVID-19 virus pandemic), geopolitical instability and war (such as the Russian invasion of Ukraine and the current escalating Israel-Palestine conflict), the failure of financial institutions, terrorism, material changes in the price of oil, the volatility of metal prices, and the volatility of global financial markets.

Continued increased levels of volatility or a sudden or rapid destabilization of global economic conditions could negatively impact our ability to obtain equity or debt financing or to make other suitable arrangements to finance our Idaho-Maryland Mine Project which, in turn, could have a material adverse effect on our operations and financial condition.

Our ability to continue to operate as a going concern depends on our ability to obtain adequate financing in the future.

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There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company.

However, management believes that the Company has sufficient working capital to meet its projected minimum financial obligations for the next fiscal year.

However, management believes that the Company can raise sufficient working capital to meet its projected minimum financial obligations for the next fiscal year.

The accompanying financial statements have been prepared under the assumption that we will continue as a going concern.

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We have no history of producing products from any of our properties.

Our I-M Mine Project is a historic, past-producing mine with apart from the exploration work that we have completed since 2016 has had very little recent exploration work since 1956.

Our Idaho-Maryland Mine Project is a historic, past-producing mine which, apart from the exploration work that we have completed since 2016, has had very little recent exploration work since 1956.

We would require further exploration work in order to reach the development stage.

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We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition.

Damage to our reputation could adversely affect our company's operations and financial condition.

Our relationship with the communities where we operate is critical to ensure the future success of our existing operations and the construction and development of our I-M Mine Property.

Reputational damage can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity, whether true or not.

There is an increasing level of public concern relating to the perceived effect of mining activities on the environment and on communities impacted by such activities.

Certain individuals and groups who oppose resource development can often be vocal critics of the mining industry and its practices, including the use of hazardous substances in processing activities and effects on the environment.

The increased use of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users has made it increasingly easier for such individuals and groups to communicate and share their opinions and views regarding our company and our activities.

Adverse publicity generated by such persons related to extractive industries generally, or our operations or development activities specifically, could have an adverse effect on our reputation.

Reputation loss, including reputation loss by other similar mining companies, may result in decreased investor confidence, increased challenges in developing and maintaining community and stakeholder relations and an impediment to our overall ability to advance our I-M Mine Property (including our ability to obtain permits), which could have a material adverse impact on our results of operations, financial condition and prospects.

While we are committed to operating in a socially responsible manner, there is no guarantee that our efforts in this respect will mitigate this potential risk.

We do not ultimately have direct control over how we are perceived by others and reputational damage could adversely affect our operations and financial condition.

Increasing attention to environmental, social, and governance (ESG) matters may impact our business.

Increasing attention to ESG matters, including those related to climate change and sustainability, and increasing societal, investor and legislative pressure on companies to address ESG matters may result in increased costs, increased investigations and litigation or threats thereof, negative impacts on our stock price and access to capital markets, and damage to our reputation.

Increasing attention to climate change, for example, may result in additional governmental investigations and private litigation, or threats thereof, against our company.

In addition, some organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters, including climate change and climate-related risks.

Such ratings are used by some investors to inform their investment and voting decisions.

Unfavorable ESG ratings may lead to negative investor sentiment toward our company and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.

Additionally, evolving expectations on various ESG matters, including biodiversity, waste, and water, may increase costs, require changes in how we operate and lead to negative stakeholder sentiment.

Risks Related to Mining and Exploration

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Unless and until we do so, we cannot earn any revenues from these properties and if we do not do so we will lose all of the funds that we expend on exploration.

If we do not discover any mineral reserve in a commercially exploitable quantity, the exploration component of our business could fail.

If we do not establish the existence of any mineral reserve in a commercially exploitable quantity, the exploration component of our business could fail.

We have not established that any of our mineral properties contain any mineral reserve according to recognized reserve guidelines, nor can there be any assurance that we will be able to do so.

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Any of these risks can materially and adversely affect, among other things, the development of properties, production quantities and rates, costs and expenditures, potential revenues, and production dates.

If we determine that capitalized costs associated with any of our mineral interests are not likely to be recovered, we would incur a write-down of our investment in these interests.

If we were to determine that capitalized costs associated with any of our mineral interests are not likely to be recovered, we would incur a write-down of our investment in these interests.

All of these factors may result in losses in relation to amounts spent that are not recoverable, or that result in additional expenses.

Commodity price volatility could have dramatic effects on the results of operations and our ability to execute our business plan.

The price of commodities varies on a daily basis.

The price of commodities varies daily.

Our future revenues, if any, will likely be derived from the extraction and sale of base and precious metals.

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Any material changes in mineral resource/reserve estimates and grades of mineralization will affect the economic viability of placing a property into production and a property's return on capital.

As we have not completed feasibility studies on our I-M Mine Property and have not commenced actual production, we do not have mineralization resources and any estimates may require adjustments or downward revisions.

As we have not completed feasibility studies on our I-M Mine Property and have not commenced actual production, we do not have mineral resources and any estimates may require adjustments or downward revisions.

In addition, the grade of ore ultimately mined, if any, may differ from that indicated by future feasibility studies and drill results.

Minerals recovered in small scale tests may not be duplicated in large scale tests under on-site conditions or in production scale.

Minerals recovered in small scale tests might not be duplicated in large scale tests under on-site conditions or in production scale.

Our exploration activities on our properties may not be commercially successful, which could lead us to abandon our plans to develop our properties and our investments in exploration.

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and government regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection.

We may invest significant capital and resources in exploration activities and may abandon such investments if we are unable to identify commercially exploitable mineral reserves.

We may invest significant capital and resources in exploration activities and may find it necessary to abandon such investments if we are unable to identify commercially exploitable mineral reserves.

The decision to abandon a project may have an adverse effect on the market value of our securities and the ability to raise future financing.

We are subject to significant governmental regulations that affect our operations and costs of conducting our business and may not be able to obtain all required permits and licenses to place our properties into production.

Our current and future operations, including exploration and, if warranted, development of the I-M Mine Property, do and will require permits from governmental authorities and will be governed by laws and regulations, including:

Mining operations on the I-M Mine Property are a vested use, protected under the California and federal Constitutions, and a use permit is not required for mining operations to continue.

The Company owns the I-M Mine Property, consisting of 175 acres of surface land and a 2,560 acre mineral estate, located in the County.

Before the I-M Mine Property was consolidated into its current configuration in 1941, it existed as multiple historical mines and operations.

For the vested right to be recognized by the County, the Company needs to demonstrate the fact that mine operations were being conducted both before and immediately after the County first required a permit to mine in 1954.

The Petition and its exhibits are replete with historical evidence that mining was conducted at the I-M Mine Property prior to, during, and after 1954, when the County first required a use permit.

Once vested, this right to mine endures unless it is abandoned, which has not occurred.

Abandonment only occurs if two conditions are met:

(1) there is evidence of a property owner's actual intent to abandon the vested mining right;

and (2) an overt act (or failure to act) demonstrating such intent.

The California Supreme Court has held that a vested mining right is not abandoned merely because the mine has been inactive for periods of time, and the Court has found that cessation of use alone does not constitute abandonment of a mine.

The evidence set out in the Petition establishes the various previous owners evidenced their intent to retain the vested right to mine by continuously recording mineral reservations, entering into leases, and making plans for resuming mining in the future, even when mining operations were suspended.

There is no evidence that any owner of the I-M Mine Property intended to abandon the vested mining right or took an overt act demonstrating that intent (let alone both).

We are subject to the vested rights being confirmed by the County.

On September 6, 2023, the Company submitted a Petition to the County asserting its vested right to mine at the I-M Mine Property.

The Board of Supervisors will hold a public hearing regarding the Company's Petition on December 13 and 14, 2023.

While the Company understands that it has sufficient evidence to support its vested rights position, there is no assurance that the County will recognize it.

As previously applied by the Company, under the Use Permit process, the Company's operations, including exploration and, if warranted, development of the I-M Mine Property, require permits from governmental authorities and will be governed by laws and regulations, including:

laws and regulations governing mineral concession acquisition, prospecting, development, mining, and production;

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Our I-M Mine Property is located in California, which has numerous clearly defined regulations with respect to permitting mines, which could potentially impact the total time to market for the project.

Subsurface mining is allowed in the Nevada County M1 Zoning District, where the I-M Mine Property is located, with approval of a "Use Permit".

Approval of a Use Permit for mining operations requires a public hearing before the County Planning Commission, whose decision may be appealed to the County Board of Supervisors ("County Board").

Subsurface mining is allowed in the County M1 Zoning District, where the I-M Mine Property is located, with approval of a "Use Permit".

Approval of a Use Permit for mining operations requires a public hearing before the County Planning Commission, whose decision may be appealed to the Board of Supervisors.

Use Permit approvals include conditions of approval, which are designed to minimize the impact of conditional uses on neighboring properties.

On November 21, 2019 we submitted an application for a Use Permit to Nevada County (the "County").

On April 28, 2020, with a vote of 5-0, the County Board approved the contract for Raney Planning & Management Inc.

to prepare an Environmental Impact Report and conduct contract planning services on behalf of the County for the proposed I-M Mine Project.

On November 21, 2019, the Company submitted an application for a Use Permit to the County.

On April 28, 2020, with a vote of 5-0, the Board of Supervisors approved the contract for Raney to prepare an EIR and conduct contract planning services on behalf of the County for the proposed Idaho-Maryland Mine Project.

The Planning Commission held a public hearing on May 10 and May 11, 2023 to consider the FEIR.

At the conclusion of the public hearing, the Planning Commission recommended to the Board of Supervisors that the FEIR not be certified and that the Use Permit be denied.

The Use Permit application proposes underground mining to recommence at the I-M Mine Property at an average throughput of 1,000 tons per day.

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Processing would be done by gravity and flotation to produce gravity and flotation gold concentrates.

We propose to produce barren rock from underground tunneling and sand tailings as part of the project which would be used for creation of approximately 58 acres of level and useable industrial zoned land for future economic development in Nevada County.

A water treatment plant and pond, using conventional processes, would ensure that groundwater pumped from the mine is treated to regulatory standards before being discharged to the local waterways.

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Pursuant to SMARA, we would be required to obtain approval of a Reclamation Plan from and provide financial assurances to the County for any surface component of the underground mining operation before mining operations could commence.

Approval of a Reclamation Plan will require a public hearing before the County Planning Commission.

Approval of a Reclamation Plan will require a public hearing before the Planning Commission.

To approve a Reclamation Plan and Use Permit, the County would need to satisfy the requirements of California Environmental Quality Act ("CEQA").

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If such assessments are required, additional time and costs will delay the execution of, and may even require us to re-evaluate the feasibility of, our business plan.

The Nevada County Planning Commission held a public hearing on May 10 and May 11, 2023 to consider the FEIR.

At the conclusion of the public hearing, the Planning Commission recommended to the Nevada County Board of Supervisors that the FEIR not be certified and that the Use Permit be denied.

The remaining milestone in the Use Permit process, including the consideration of the FEIR will take place at a Board of Supervisors public hearing to consider and make a final decision on the IMM Project.

A majority vote of the five supervisors is required for approval.

The County has stated that the Board of Supervisors hearing will take place no sooner than August 2023.

Our activities are subject to environmental laws and regulations that may increase our costs of doing business and restrict our operations.

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It is possible that future changes in these laws or regulations could have a significant adverse impact on our properties or some portion of our business, causing us to re-evaluate those activities at that time.

Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on our business.

Regulations and pending legislation governing issues involving climate change and our obligation to monitor and report on how our operations may impact climate change could result in increased operating costs, which could have a material adverse effect on our business.

A number of governments or governmental bodies have introduced or are contemplating legislative and/or regulatory changes in response to concerns about the potential impact of climate change.

Legislation and increased regulation regarding climate change could impose significant costs on us, on our future venture partners, if any, and on our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting, and other costs necessary to comply with such regulations.

Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.

Many governments and other stakeholders are seeking enhanced disclosure and are moving to enact climate change legislation and treaties at the international, national, state, provincial and local levels.

In the United States, the U.S.

Securities and Exchange Commission (the "SEC") has proposed climate-related disclosure rules:

"The Enhancement and Standardization of Climate-Related Disclosures for Investors ".

In Canada, the Canadian Securities Administrators have proposed their own climate-related disclosure rules in National Instrument 51-107 - Disclosure of Climate-related Matters.

The International Sustainability Standards Board has two proposed international standards for disclosure ( "General Requirements for Disclosure of Sustainability Related Information" and "Climate Related Disclosures") which were developed to provide a global baseline of financial reporting disclosure rules for reporting environmental, social and governance (ESG) related issues.

Any adopted future climate change regulations and our obligations to report on them could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.

Given the emotional and political significance and uncertainty surrounding the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation will ultimately affect our financial condition, operating performance, and ability to compete.

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The potential physical impacts of climate change on our operations are highly uncertain, could be particular to the geographic circumstances in areas in which we operate and may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels, and changing temperatures.

These impacts may adversely impact the cost, production, and financial performance of our operations.

Extreme weather events, such as forest fires, severe storms, floods, drought or more extreme temperatures, all of which may be more frequent and more extreme due to climate change, may affect our operations.

Our operations could be adversely affected in various ways, including through damage to our facilities or from increased costs for insurance.

Such extreme weather events can also lead to community evacuations, temporary labour shortages, and delays in receiving critical supplies.

Water will be a key resource for our operations and inadequate water management and stewardship could have a material adverse effect on our company and our operations.

While certain aspects relating to water management are within our ability to control, extreme weather events, resulting in too much or too little water, can negatively impact our water management practices.

The effects of climate change may adversely impact the cost, production, and financial performance of our operations.

Land reclamation requirements for our properties may be burdensome and expensive.

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If the CSE or any other exchange or market were to delist the common stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for the common stock, reduced liquidity, decreased analyst coverage, and/or an inability for us to obtain additional financing to fund our operations.

We are an "emerging growth company," and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the "JOBS Act").

For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any July 31 before that time, in which case we would no longer be an emerging growth company as of the following April 30.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.

We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

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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 1A. Risk Factors