Financial Performance Overview

The company reported a net loss of $20.7 million in the first quarter of 2024, compared to a net loss of $13.9 million in the first quarter of 2023. The increased net loss was primarily driven by higher interest expense related to the company’s debt.

The company is currently not generating revenue as mining operations were ceased in 2022 after recovering all accessible gold and silver from the leach pad. The company is now focused on exploration and technical studies to develop a future sulfide ore mining and processing operation.

Key Expenses

Projects, exploration, and development costs increased by $1.4 million year-over-year to $4.9 million. These costs related to metallurgical studies, exploration drilling, engineering, and other technical work to assess the potential for a future sulfide ore mining and processing operation.

General and administrative costs decreased due to reduced legal and accounting costs. Mine site period costs to maintain the idle mine also decreased year-over-year.

Interest Expense

Interest expense increased significantly to $10.1 million in Q1 2024, up from $4.4 million in Q1 2023. This was driven by $6.9 million in accelerated amortization of debt issuance costs due to the early repayment of $38 million of the company’s first lien debt in January 2024.

Liquidity & Capital Resources

The company’s cash position decreased from $106.2 million at December 31, 2023 to $57.6 million at March 31, 2024. Cash was used primarily to prepay debt and fund ongoing exploration and technical study work.

To preserve liquidity, the company has undertaken several cost reduction initiatives, reduced capital spending, and monetized non-core assets. The company will require additional capital from financing or asset sales to fund the large capital costs of building a future sulfide ore mining and processing operation.

Outlook

The company expects to operate safely while continuing exploration drilling and technical studies over 2024. Trade-off studies are underway to determine the optimal processing method, including assessing the potential economic benefits of adding a sulfuric acid plant to generate by-product revenue.

The company continues to evaluate financing options and is considering strategic initiatives to enhance shareholder value. Updates will be provided as more information becomes available on the timing and costs of developing a sulfide ore mining and processing operation.

Tables and Data

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