What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-03-08 compared with 2023-03-08 · 55 added, 48 removed, 454 unchanged (18% of the section changed)

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of International Tower Hill Mines Ltd.

(the “Company”), as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”).

(the “Company”), as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity, and cash flows for the years ended December 31, 2023 and 2022, and the related notes and schedules (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years ended December 31, 2023 and 2022, in conformity with accounting principles generally accepted in the United States of America.

18 unchanged sentences

Assessment of Impairment Indicators of Mineral Property

As described in Note 4 to the financial statements, the carrying amount of the Company’s mineral property was $55,375,124 as at December 31, 2022.

As described in Note 4 to the financial statements, the carrying amount of the Company’s mineral property was $55,375,124 as of December 31, 2023.

As more fully described in Note 2 to the financial statements, management assesses its mineral property for indicators of impairment at each reporting period.

4 unchanged sentences

● Obtaining an understanding of the key controls associated with evaluating the mineral property for indicators of impairment.

● Evaluating management’s assessment of impairment indicators.

● Obtaining and assessing management’s impairment analysis.

● Evaluating the intent for the mineral property through discussion and communication with management.

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Total liabilities and shareholders’ equity

Nature of operations (Note 1)

General Information, Nature of Operations and Going Concern (Note 1)

Commitments (Note 9)

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Investor relations

Mineral property exploration

Mineral property

Professional fees

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( 3,041,693 )

Other comprehensive income

Other comprehensive income (loss)

Exchange difference on translating foreign operations

Total other comprehensive income for the year

Total other comprehensive income (loss) for the year

Comprehensive loss for the year

9 unchanged sentences

Comprehensive

Share capital

Balance, December 31, 2021

3 unchanged sentences

Exchange difference on translating foreign operations

Exercise of options

Reallocation from contributed surplus

( 3,041,693 )

5 unchanged sentences

Exchange difference on translating foreign operations

Exercise of options

Reallocation from contributed surplus

Share issuance

( 3,397,969 )

31 unchanged sentences

Non-cash transactions:

- Reallocation from contributed surplus from exercise of stock options $ 162,479 (December 31, 2021 - $ nil )

- Reallocation from contributed surplus from issuance of stock $ 381,238 (December 31, 2022 - $ nil )

- Reallocation from contributed surplus from exercise of stock options $ nil (December 31, 2022 - $ 162,479 )

The accompanying notes are an integral part of these consolidated financial statements.

2 unchanged sentences

(Expressed in U.S.

GENERAL INFORMATION, NATURE OF OPERATIONS

GENERAL INFORMATION, NATURE OF OPERATIONS, AND GOING CONCERN

International Tower Hill Mines Ltd.

6 unchanged sentences

The Company is in the business of acquiring, exploring and evaluating mineral properties, and either joint venturing or developing these properties further or disposing of them when the evaluation is completed.

At December 31, 2022, the Company was in the exploration stage and controls a 100 % interest in its Livengood Gold Project in Alaska, U.S.A.

At December 31, 2023, the Company has a 100 % interest in its Livengood Gold Project in Alaska, U.S.A.

These consolidated financial statements have been prepared on a going-concern basis, which presumes the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.

The Company will require significant additional financing to continue its operations in connection with advancing activities at the Livengood Gold Project and for the development of any mine that may be determined to be built at the Livengood Gold Project.

There is no assurance that the Company will be able to obtain the additional financing required on acceptable terms, if at all.

The Company will require significant additional financing to continue its operations (including general and administrative expenses) in connection with advancing activities at the Livengood Gold Project and the development of any mine that may be built at the Livengood Gold Project.

There is no assurance that the Company will make a decision to build a mine at the Livengood Gold Project and, if so, that it will be able to obtain the additional financing required on acceptable terms, if at all.

In addition, any significant delays in the issuance of required permits for the ongoing work at the Livengood Gold Project, or unexpected results in connection with the ongoing work, could result in the Company being required to raise additional funds to advance permitting efforts.

The Company’s review of its financing options includes pursuing a future strategic alliance to assist in further development, permitting and future construction costs.

The Company’s review of its financing options includes considering a future strategic alliance to assist in further development, permitting and future construction costs, although there can be no assurance that any such strategic alliance will, in fact, be pursued or realized.

Despite the Company’s success to date in raising significant equity financing to fund its operations, there is significant uncertainty that the Company will be able to secure any additional financing in the current or future equity markets.

Even if the Company is able to secure some additional equity financing, the Company may be unable to raise enough capital to continue its operations in connection with advancing all activities at the Livengood Gold Project through 2024 and beyond.

As a result, there is substantial doubt about its ability to continue as a going concern.

The amount of funds to be raised and the terms of any proposed equity financing that may be undertaken will be negotiated by management as opportunities to raise funds arise.

Specific plans related to the use of proceeds will be devised once financing has been completed and management knows what funds will be available for these purposes.

Due to this uncertainty, if the Company is unable to secure additional financing, it may be required to reduce all discretionary activities at the Project to preserve its working capital to fund anticipated non-discretionary expenditures beyond the 2023 fiscal year.

Due to this uncertainty, if the Company is unable to secure sufficient additional financing, the Company may be required to reduce all discretionary activities at the Project to preserve its working capital to fund anticipated non-discretionary expenditures beyond the 2024 fiscal year.

As at March 7, 2024, management believes that the Company has sufficient financial resources to maintain its operations for the next twelve months.

The COVID-19 pandemic of three years has resulted in supply chain disruptions, record high inflation and rising interest rates which all have impeded adversely the global economy and tightened the financial markets.

The COVID-19 pandemic has resulted in supply chain disruptions, record high inflation and rising interest rates which all have impeded adversely the global economy and tightened the financial markets.

It is indeterminable when inflation will be back to a normal level and the economy will recover.

These have created uncertainties to whether financing would be available to the Company if the need for funding was to arise.

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary were the going concern adjustment appropriate.

Such adjustments could be material.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

18 unchanged sentences

Cash and cash equivalents

Cash equivalents include highly liquid investments with original maturities of twelve months or less, and which are subject to an insignificant risk of change in value.

Cash equivalents include highly liquid investments with original maturities of three months or less at the date of purchase, and which are subject to an insignificant risk of change in value.

Cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes.

9 unchanged sentences

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.

Mineral properties and exploration and evaluation expenditures

The Company’s mineral project is currently in the exploration and evaluation phase.

Mineral property acquisition costs are capitalized when incurred.

Mineral property exploration costs are expensed as incurred.

Mineral property assets

Mineral property costs are expensed as incurred.

At such time that the Company determines that a mineral property can be economically developed, subsequent mineral property expenses will be capitalized during the development of such property.

The Company assesses interests in exploration properties for impairment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount.

The Company assesses interests in its mineral property assets for impairment at least annually, but will also conduct an assessment when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount.

The assets that are tested for recoverability are the Company’s long-lived assets related to mineral property rights and claims.

At December 31, 2023, the Company’s mineral property assets totaled approximately $ 55 million.

As these assets are all similar in nature (they represent mining claims or rights to mining claims all within the same area), they are viewed as one asset group for impairment testing purposes.

The Company evaluates recoverability of its mineral property assets based on the undiscounted cash flows using the life of mine cash flows beginning with production as stated in the Technical Report Summary (the “TRS”) attached as Exhibit 96.1 to the 2022 Annual Report on Form 10-K/A filed with the SEC on October 17, 2023 for the Livengood Gold Project, which uses a life of mine of approximately 21 years .

The estimates used in the life of mine cash flows are subject to uncertainty, including as a result of the assumed gold price.

As at December 31, 2023, the Company concluded that the recoverability of the mineral property assets exceeded the carrying value.

Impairment analysis includes assessment of the following circumstances:

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Impairment of long-lived assets and long-lived assets to be disposed of

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Long-lived assets are reviewed for impairment at least annually, but are also reviewed whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset.

The estimates used to determine future net cash flows are subject to uncertainty, including as a result of the assumed gold price.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

33 unchanged sentences

Accounting Standards Update No.

2019-12—Income Taxes (Topic 740).

In December 2019, the FASB issued guidance intended to simplify various aspects related to accounting for income taxes and removes certain exceptions to the general principles and also clarifies and amends existing guidance to improve consistent application.

The Company adopted the standard on January 1, 2021 and adoption had no impact on the Company’s financial statements.

Recently issued accounting pronouncements

Accounting Standards Update No.

2016-13—Measurement of Credit Losses on Financial Instruments .

10 unchanged sentences

Instead, impairment of receivables arising from operating leases should be accounted for in accordance with ASC 842, Leases.

These updates are effective beginning January 1, 2023, and the Company has evaluated ASU 2016-13 and ASU 2018-19 and adoption of this guidance is expected to have no impact on its financial reporting.

These updates were adopted on January 1, 2023, and had no impact on the Company’s financial statements.

FAIR VALUE OF FINANCIAL INSTRUMENTS

12 unchanged sentences

Balance, December 31, 2023

The following table presents costs incurred for exploration and evaluation activities for the years ended December 31, 2022 and 2021:

The following table presents costs incurred for mineral property activities for the years ended December 31, 2023 and 2022:

December 31, 2023

December 31, 2022

Exploration costs:

Mineral property costs:

Aircraft services

17 unchanged sentences

Details of the leases are as follows:

a) a lease of the Alaska Mental Health Trust mineral rights having a term commencing July 1, 2004 and extending 19 years until June 30, 2023, subject to further extensions beyond June 30, 2023 by either commercial production or payment of an advance minimum royalty equal to 125 % of the amount paid in year 19 and diligent pursuit of development.

a) a lease of the Alaska Mental Health Trust mineral rights having a term commencing July 1, 2004 and extending 19 years until June 30, 2023, subject to further extensions beyond June 30, 2023 by either (1) commercial production or (2) payment of an annual advance minimum royalty equal to 125 % of the amount paid in year 19 and diligent pursuit of development.

Both requirements of (2) above have been satisfied through June 30, 2024.

The lease requires minimum work expenditures and advance minimum royalties (all of which minimum royalties are recoverable from production royalties) which escalate annually with inflation.

37 unchanged sentences

Expected income tax (recovery)

( 1,614,678 )

Change in statutory, foreign tax, foreign exchange rates and other

2 unchanged sentences

Change in unrecognized deductible temporary differences

( 1,530,604 )

Total income tax expense (recovery)

The significant components of the Company’s deferred tax assets are as follows:

The significant components of the Company’s deferred tax assets that have not been included on the consolidated statement of financial position are as follows:

Deferred tax assets (liabilities):

Exploration and evaluation assets

Mineral property assets

Property and equipment

4 unchanged sentences

( 70,724,000 )

Net deferred tax asset

Net deferred tax assets

At December 31, 2023, the Company has available non-capital losses for Canadian income tax purposes of approximately C$ 28,659,000 and net operating losses for US income tax purposes of approximately $ 35,706,000 that do not have an expiration date and $ 137,152,000 available for carry-forward to reduce future years’ taxable income, if not utilized, expiring as follows:

United States ($)

The Company also has available mineral resource expenses that are related to the Company’s exploration activities in the United States of approximately $ 114,162,000 which may be deductible for U.S.

The Company also has available mineral resource expenses that are related to the Company’s activities in the United States of approximately $ 114,162,000 , which may be deductible for U.S.

tax purposes.

4 unchanged sentences

Share issuances

At the Company’s 2023 Annual General Meeting of Shareholders held on May 23, 2023, Mr.

Stephen Lang did not stand for re-election as director.

On June 22, 2023, in accordance with the approved Deferred Share Unit Plan, the Company issued 572,347 common shares to Mr.

Lang and transferred related contributed surplus of $ 381,238 to share capital.

During the year ended December 31, 2022, the Company issued 405,000 common shares pursuant to the exercise of stock options for total proceeds of $ 290,290 and transferred related contributed surplus of $ 162,479 to share capital.

There were no share issuances during the year ended December 31, 2021.

Stock options

24 unchanged sentences

March 21, 2024

March 16, 2023

March 21, 2024

February 1, 2025

August 8, 2025

● Expiry dates automatically extended to March 25, 2022, the tenth business day following the end of a blackout period imposed on the holders of the stock options, pursuant to the terms of the Stock Option Plan.

A summary of the non-vested options as of December 31, 2023 and 2022 and changes during the fiscal years ended December 31, 2023 and 2022 is as follows:

11 unchanged sentences

As at December 31, 2023, the maximum aggregate number of common shares that could be issued under the DSU Plan and the Stock Option Plan was 19,588,553 , representing 10 % of the number of issued and outstanding common shares on that date (on a non-diluted basis).

As at December 31, 2022, the Company had stock options to potentially acquire 2,287,049 common shares outstanding under the Stock Option Plan (representing approximately 1.17 % of the outstanding common shares), leaving up to 17,244,269 common shares available for future grants under the DSU Plan and under the Stock Option Plan (combined) based on the number of outstanding common shares as at that date on a non-diluted basis (representing an aggregate of approximately 8.83 % of the outstanding common shares).

During the year ended December 31, 2022, in accordance with the DSU Plan, the Company granted each of the members of the Company’s Board of Directors (other than those directors nominated for election by Paulson & Co.

As at December 31, 2023, the Company had stock options to potentially acquire 1,787,049

common shares outstanding under the Stock Option Plan (representing approximately 0.91 % of the outstanding common shares), leaving up to 17,801,504 common shares available for future grants under the DSU Plan and under the Stock Option Plan (combined) based on the number of outstanding common shares as at that date on a non-diluted basis (representing an aggregate of approximately 9.09 % of the outstanding common shares).

During the year ended December 31, 2023, in accordance with the DSU Plan, the Company granted each of the members of the Board as of May 23, 2023 (other than those directors nominated for election by Paulson & Co.

Inc.) 131,746 DSUs for a total of 526,984 DSUs with a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five trading days immediately preceding the grant) of C$ 0.63 per DSU, representing C$ 83,000 per director or C$ 332,000 in the aggregate.

On July 12, 2023, in accordance with the DSU Plan, the Company granted a new member of the Board 145,614 DSUs with a grant date fair value (defined as the weighted average of the prices at which the common shares traded on the exchange with the most volume for the five days immediately preceding the grant) of C$ 0.57 per DSU, representing C$ 83,000 .

47 unchanged sentences

Under the terms of the Company’s mineral property purchase agreements, mineral leases and the terms of the unpatented mineral claims held by it, the Company is required to make certain scheduled acquisition payments, incur certain levels of expenditures, make lease or advance royalty payments, make payments to government authorities and incur assessment work expenditures as summarized in the table below in order to maintain and preserve the Company’s interests in the related mineral properties.

If the Company is unable or unwilling to make any such payments or incur any such expenditures, it is likely that the Company would lose or forfeit its rights to acquire or hold the related mineral properties.

If the Company is unable or unwilling to make any such payments or incur any such expenditures, it is likely that the Company would lose or forfeit its rights to acquire or hold the related mineral

The following table assumes that the Company retains the rights to all of its current mineral properties, but does not exercise any lease purchase or royalty buyout options:

8 unchanged sentences

Accordingly, office lease costs will continue to be reported as rent expense on the Consolidated Statements of Operations and Comprehensive Loss and the Company will not recognize a right-of-use (ROU) asset and lease liability on the Consolidated Balance Sheets.

SUBSEQUENT EVENT

Subsequent to December 31, 2023, the Company completed a $ 2.5 million non-brokered private placement pursuant to which it issued 3,807,911 common shares of the Company, at a price of $ 0.664 per common share to existing major shareholders of the Company.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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-K

Item 8. Financial Statements and Supplementary Data