Rise Gold Corp. 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS", "INTENDS", "WILL", "HOPES", "SEEKS", "ANTICIPATES", "EXPECTS" AND THE LIKE OFTEN IDENTIFY SUCH FORWARD-LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD-LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO PRESENT AND FUTURE OPERATIONS, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE US TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS QUARTERLY REPORT ON FORM 10-Q AND IN OUR OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS. Description of Business We are a mineral exploration company that was incorporated in the state of Nevada in 2007. Our primary asset is our interest in the Idaho-Maryland Gold Mine property (the "I-M Mine Property"), which is a major past producing high-grade property near Grass Valley, California, United States, which we own outright through our wholly owned Nevada subsidiary, Rise Grass Valley Inc. ("Rise Grass Valley"). Our common stock is currently listed in Canada on the Canadian Securities Exchange (the "CSE") under the symbol "RISE". We are a reporting issuer in British Columbia, Alberta, and Ontario in Canada. Our common stock is also currently traded in the United States on the OTC Market under the symbol "RYES". We are an SEC reporting company by virtue of our class of common stock being registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Business Development On May 22, 2025, the Company granted a total of 3,320,000 stock options to directors, officers, and consultants of the Company. The stock options are exercisable at a price of US$0.10 per share until May 22, 2030. On May 16, 2025, the Company entered into an agreement to sell its drilling equipment for a sale price of $200,000. $100,000 was received on June 6, 2025 and subsequent payments of $50,000 payable for each of the two drilling rigs sold are to be received when each rig drills its first hole to a depth of 200m. On May 9, 2025, the Company closed a financing and raised $3,000,000 through the issuance of up to 36,585,361 units at a price of US$0.082 per Unit (~CDN$0.11), with each unit comprising one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one share of common stock at an exercise price of US$0.15 (~CDN$0.21) for a period of three years from the date of issuance. On March 25, 2025 the Company granted a total of 1,142,410 stock options to directors and officers of the Company. The stock options are exercisable at a price of US$0.10 per share until March 25, 2030. On November 27, 2024 the Company announced it had contracted to sell 66 acres of industrial land located adjacent to the Company's I-M Mine Property for $4.3 million. The sale transaction is subject to two sale agreements with the same, arm's length third party. The first agreement covers 16 acres of land for total consideration of $1.8 million. That contract closed on November 27, 2024 with the payment of half the sale price, minus certain deductions. The balance of the purchase price is due on November 27, 2026. The buyer will pay monthly interest at an annual rate of 5% per year on the balance of the purchase price until it is paid in full. On January 14, 2025, the Company and the Purchaser negotiated a discounted, accelerated payment with the purchaser whereby the Company received $702,000 in lieu of the second $900,000 payment due in November 2026. 21 The second sale agreement covers 50 acres of land for total sale price of $2.5 million and closed on May 27, 2025, at which point half of the sale price will be due, with the other half due on May 27, 2027. Commencing on the closing date, the buyer will pay monthly interest at an annual rate of 5% per year on the balance of the purchase price until it is paid in full. The Company and the purchaser have also executed an option agreement whereby the Company may repurchase the 66 acres of land being sold for the sale price plus the cost of any capital improvements plus an increase of five percent per year on the condition that Rise acquires final government approvals to perform mining operations at the I-M Mine Property. The Company retains ownership of the I-M Mine Property, which is comprised of 53 acres of land surrounding the New Brunswick shaft, as well as its nearby 56-acre Centennial property, and it retains all of its 2,585 acres of mineral rights. On November 20, 2024, the Company appointed Mihai Draguleasa as the Company's Chief Financial Officer in place of Vince Boon and Catherine Cox as the Company's Corporate Secretary in place of Eileen Au. On October 30, 2024, John Proust, Murray Flanigan and Benjamin Mossman resigned as directors of the Company. On October 21, 2024, the Company granted 1,006,750 stock options to a consultant of the Company. The stock options are exercisable at a price of $0.11 per share until October 21, 2029. On October 10, 2024, the Company finalized a secured loan agreement with Myrmikan Gold Fund, LLC (the "Lender") for a $500,000 loan (the "Loan") which will be used for the Company's working capital. The Loan has a term of 4 years with an interest rate of 15% per annum with interest accruing and payable along with the principal upon maturity. The Company issued 2,882,514 share purchase warrants at an exercise price of $0.1735 with a 4 year expiry period as additional consideration for advancing the Loan. The Loan may be repaid prior to the maturity date, in whole or in part, provided that all accrued interest is paid. The Loan will be secured against the assets of the Company and its subsidiary. Daniel Oliver Jr., a director of the Company (a related party), is the managing member of the Lender. Mr. Oliver disclosed his interest in the transaction and abstained from voting on the Company's resolution approving the Loan. On September 20, 2024, the Company granted 1,006,750 stock options to the Company's President and CEO. The stock options are exercisable at a price of $0.10 per share until September 20, 2029. On September 10, 2024, the Company finalized the amended debt agreement with Eridanus Capital LLC ("Eridanus") to extend an existing loan by one year to September 4, 2025 along with a reduction in interest rate to 15% per annum for a period of 12 months (commencing September 4, 2024). The Company issued 1,700,000 share purchase warrants at an exercise price of $0.115 to Eridanus as consideration for the extension. The share purchase warrants have a 4 year expiry period from the date of issuance. Eridanus directed that 340,000 of the 1,700,000 share purchase warrants be issued to Daniel Oliver Jr., a member of Eridanus, and a director of the Company. On May 13, 2024, the Company reported that it had submitted a Writ of Mandamus to the Superior Court of California (the "Court") asking the Court to compel the Board of Supervisors of Nevada County (the "Board of Supervisors") to follow applicable law and grant recognition of the Company's vested right to operate our I-M Mine Property. The Company's position in this matter is that the Board of Supervisors' December 2023 decision to deny the Company's vested rights petition adversely infringed on our fundamental and constitutional property rights. The Company contends that the Court is compelled to use its independent judgement and consider the administrative record de novo (i.e., "afresh" or "from the beginning") and without deference to the Board of Supervisors arguments or conclusions. On May 1, 2024, the Company granted a total of 1,004,479 stock options to directors and an officer of the Company. The stock options are exercisable at a price of $0.17 per share until May 1, 2029. On April 29, 2024, the Company completed a non-brokered private placement over two tranches for gross proceeds totalling $954,253 through the issuance of 10,044,765 units in total at a price of $0.095 per unit with each unit consisting of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one additional share of common stock at an exercise price of $0.158 for a period of three years from the date of issuance. Certain directors of the Company purchased an aggregate of 5,669,478 units of the private placement for gross proceeds of $538,600. The Company paid fees of $1,995 and issued 21,000 finder's warrants where each finder's warrant entitles the holder to acquire one share at a price of $0.158 for a period of two years. The Company paid legal fees of $4,515 in connection with this financing. 22 On February 20, 2024, the Company announced that the Board of Supervisors adopted a resolution in a public hearing on February 16, 2024, denying the Company's application for a Use Permit to allow the re-opening of the I-M Mine Property and not certifying the "FEIR". On February 6, 2024, the Company entered into a credit facility arrangement with an arm's length lender that also provides services to the Company. Pursuant to the arrangement, each month, the lender will defer and add to the loan principal an amount equal to half of the fees billed by the lender up to $1,000,000. Amounts loaned will bear interest at a rate of 12% per annum compounded annually and will be due four years from the date of the arrangement. The Company may repay any amounts owing under the credit facility at any time without penalty. In connection with the credit facility, the Company has issued 1,000,000 non-transferable share purchase warrants to the lender, with each warrant exercisable into one share of common stock of the Company at a price of $0.16 per share for a period of four years from the date of issuance. In addition, for each $100,000 loaned under the arrangement, the Company has agreed to issue to the lender 200,000 additional non-transferable warrants ("Additional Warrants"). Each Additional Warrant will be exercisable into one share of common stock of the Company at any time within a four-year period from the date of issuance at an exercise price equal to the market price of the shares of the Company on grant. On December 13 and 14, 2023, the Board of Supervisors held a public hearing regarding the Company's Petition and the Board of Supervisors adopted a resolution rejecting the Company's vested rights petition to operate the I-M Mine Property. To view the full version of the December 14, 2023 press release, please visit https://www.risegoldcorp.com/news_items. On December 12, 2023, the Company granted a total of 707,752 stock options with a fair value of $140,624 to directors of the Company. The stock options are exercisable at a price of $0.25 per share until December 12, 2028. On December 7, 2023, the Company announced that it had completed two tranches of non-brokered private placements that total $967,957 through the sale of 5,377,541 total units at a price of $0.18 per unit with each unit consisting of one share of common stock and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one additional share of common stock at an exercise price of $0.26 for a period of two years from the date of issuance. The Company paid fees of $6,480 and issued 36,000 finder's warrants where each finder's warrant entitles the holder to acquire one share at a price of $0.26 until November 7, 2025. On September 26, 2023, the Company granted a total of 397,780 stock options to officers and directors of the Company. The stock options are exercisable at a price of $0.26 per share until September 22, 2028. The Company appointed Joseph Mullin as President and CEO of the Company as at September 25, 2023. Ben Mossman will continue in his position as a director of the Company and serve as an advisor. The Company also appointed two new directors in Clynton Nauman on September 7, 2023, and Daniel Oliver Jr. on July 10, 2023. On September 6, 2023, the Company submitted a Petition to the County of Nevada, California (the "County") asserting its vested right to mine at the I-M Mine Property. The Company's position as demonstrated in the Petition is that 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 (the "Vested Mine Property"), 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. 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). In addition, the vested right was already confirmed in 1980 by the County. The Company is subject to the vested rights being confirmed by the County. A decision on the Petition is not discretionary, rather the Board of Supervisors must decide whether to confirm the vested rights by reviewing the historical facts in light of how the California Supreme Court has interpreted the relevant legal principles. 23 Plan of Operations As at April 30, 2025, the Company had a cash balance of $ $2,327,424, compared to a cash balance of $243,669 as at July 31, 2024. Our plan of operations for the next 12 months is to continue to review litigation options in pursuit of protecting the Company's property rights under both California state and US federal laws, including asserting its 5th Amendment rights under the US Constitution and other due process rights under the 14th Amendment of the US Constitution. The Company is also asking the Court to overturn the County of Nevada's decision denying the Company's Vested Mining Rights. On May 13, 2024, the Company reported that we had submitted a Writ of Mandamus to the Superior Court of California (the "Court") asking the Court to compel the Board of Supervisors of Nevada County (the "Board of Supervisors") to follow applicable law and grant recognition of the Company's vested right to operate our I-M Mine Property. The Company's position in this matter is that the Board of Supervisors' December 2023 decision to deny the Company's vested rights petition adversely infringed on our fundamental and constitutional property rights. The Company contends that the Court is compelled to use its independent judgement and consider the administrative record de novo (i.e., "afresh" or "from the beginning") and without deference to the Board of Supervisors arguments or conclusions. Project Design The Use Permit application proposes underground mining to recommence at an average throughput of 1,000 tons per day. The existing Brunswick Shaft, which extends to ~3400 feet depth below surface, would be used as the primary rock conveyance from the I-M Mine Property. A second service shaft would be constructed by raising from underground to provide for the conveyance of personnel, materials, and equipment. Gold processing would be done by gravity and flotation to produce gravity and flotation gold concentrates. Processing equipment and operations would be fully enclosed in attractive modern buildings and numerous mature trees located on the perimeter of the Brunswick site would be retained to provide visual shielding of aboveground project facilities and operations. The Company would produce barren rock from underground tunnelling 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 the 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. Detailed studies by professionals in the fields of civil and electrical engineering, biology, hydrology, cultural resources, traffic, air quality, human health, vibration, and sound have guided the design of the project. Approximately 300 employees would be required if the mine reaches full production. 24 Employees During the year ended July 31, 2023, and until September 23, 2023, the Company had one full-time employee, which was the former Chief Executive Officer and President, who now serves as an advisor to the Company. Our current Chief Executive Officer and President provides services pursuant to a consulting agreement, and other officers and directors provide services to us on an as-needed Basis. We plan to rely on their efforts, as well as those of a number of independent consultants, to manage our operations for the foreseeable future. Government Regulations We plan to engage in mineral exploration and development activities and will accordingly be exposed to environmental risks associated with mineral exploration activity. We are the operator of the I-M Mine Property. Our exploration and development activities will be subject to extensive federal, state and local laws, regulations and permits governing protection of the environment. Among other things, our operations must comply with the provisions of the Federal Mine Safety and Health Act of 1977 as administered by the United States Department of Labor. Our plan is to conduct our operations in a way that safeguards public health and the environment. We believe that our operations comply with applicable environmental laws and regulations in all material respects. The costs associated with implementing and complying with environmental requirements can be substantial and possible future legislation and regulations could cause us to incur additional operating expenses, capital expenditures, restrictions and delays in developing or conducting operations on our properties, including the I-M Mine Property, the extent of which cannot be predicted with any certainty. Results of Operations For the Periods Ended April 30, 2025 and 2024 Three months ended April 30, 2025 Three months ended April 30, 2024 Nine months ended April 30, 2025 Nine months ended April 30, 2024 EXPENSES Accretion expense (Note 9 and 11) $ 63,765 $ 19,897 $ 222,460 $ 69,419 Consulting 49,769 69,472 171,659 235,655 Directors' fees 20,000 30,000 70,000 88,022 Filing and regulatory 5,341 8,959 41,261 30,545 Foreign exchange (gain) loss 360 20,081 5,773 27,980 General and administrative 72,171 76,937 197,143 339,088 Geological, mineral, and prospect costs (Note 5) 7,131 337,158 72,984 732,924 Interest expense (Note 9 and 11) 55,592 62,569 220,708 192,230 Professional fees 104,335 276,858 329,909 872,136 Promotion and shareholder communication 6,525 8,079 20,908 51,558 Salaries - (43 ) - 89,526 Share-based compensation (Note 12) 59,696 - 258,415 230,985 Loss $ (444,685 ) $ (909,967 ) $ (1,611,220 ) $ (2,960,068 ) Gain on fair value adjustment on derivative liability (Note 10) - 8,742 - 137,457 Impairment of assets held for sale (Note 6) (311,530 ) - (311,530 ) - Loss on note receivable (Note 5) - - (155,727 ) - Write-off of receivable - 40 - (64,524 ) Other income 181 8,374 7,717 18,413 Net loss and comprehensive loss for the period $ (756,034 ) $ (892,811 ) $ (2,070,760 ) $ (2,868,722 ) Basic and diluted loss per common share $ (0.01 ) $ (0.02 ) $ (0.04 ) $ (0.07 ) Weighted average number of common shares outstanding (basic and diluted) 55,785,106 47,128,914 55,785,106 43,108,301 25 The Company's operating results for the periods ended April 30, 2025 and 2024 are summarized as follows: Liquidity and Capital Resources Working Capital At April 30, 2025 At July 31, 2024 At July 31, 2023 Current Assets $ 2,638,570 $ 894,638 $ 980,843 Current Liabilities 2,062,447 2,661,598 508,571 Working Capital 576,123 (1,766,960 ) 472,272 Cash Flows For the nine-month period ended April 30, 2025 For the nine-month period ended April 31, 2024 Net Cash used in Operating Activities $ (815,193 ) $ (1,826,580 ) Net Cash from Investing Activities $ 1,614,349 $ - Net Cash provided by /(used in) Financing Activities $ 1,319,065 $ 1,698,598 Net increase/(decrease) in Cash During the Period $ 2,083,755 $ (127,982 ) As of April 30, 2025, the Company had $2,327,424 in cash, $2,638,570 in current assets, $ $5,088,693 in total assets, $2,062,447 in current liabilities and $336,140 in non-current liabilities, a working capital surplus of $576,123 and an accumulated deficit of $32,305,377. During the nine-month period ended April 30, 2025, the Company used $849,659 (2024 - $1,826,580) in net cash on operating activities. The difference in net cash used in operating activities during the two periods was largely due to the professional fees related to the Use Permit and Vested Rights petition.. The Company had $1,614,349 cash received from investing activities during the nine-month period ended April 30, 2025 (April 30, 2024 - $Nil) from the contracts to sell the 66 acres of land. For the nine-month period ended April 30, 2025, the Company had a positive net cash of $1,319,065 (2024 - positive $1,698,598) from financing activities related to loans received and private placements and payments made towards the outstanding loans. The Company expects to operate at a loss for at least the next 12 months. With the recent financing activities in the month of May 2025, the Company expects to be able to continue its planned operations until 2027. However, the Company cannot provide any assurance that additional funding will be available in the future to finance its operations on acceptable terms in order to enable it to carry out its business plan. There are no assurances that the Company will be able to complete further sales of its common stock or any other form of additional financing. If the Company is unable to achieve the financing necessary to continue its plan of operations, then it will not be able to carry out any exploration work on the Idaho-Maryland Property or the other properties in which it owns an interest and its business may fail. As such, these material uncertainties cast a substantial doubt regarding the Company's ability to continue as a going concern. Off Balance Sheet Arrangements The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. 26 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Not applicable.