Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 333-249533

Fortitude Gold Corporation

(Exact name of registrant as specified in its charter)

Colorado

85-2602691

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

2886 Carriage Manor Point

Colorado Springs, CO 80906

(Address of Principal Executive Offices)

(719) 717 9825

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading symbol	Name of Exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	◻	Accelerated filer	◻

Non-accelerated filer	⌧	Smaller reporting company	☒	Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

As of November 4, 2024, the registrant had 24,173,209 outstanding shares of common stock.

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TABLE OF CONTENTS

		Page

Part I	Financial Information
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (Unaudited)	2
	Condensed Consolidated Statements of Shareholders’ Equity for the three and nine months ended September 30, 2024 and 2023 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4.	Controls and Procedures	20
Part II	Other Information
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	21
Item 6.	Exhibits	22
Signatures		23

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PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

FORTITUDE GOLD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands, except per share data)


	September 30,		December 31,
	2024		2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	30,316	$	48,678
Gold and silver rounds/bullion		1,960		1,532
Accounts receivable		—		42
Inventories		11,974		23,848
Prepaid taxes		387		355
Prepaid expenses and other current assets		805		811
Total current assets		45,442		75,266
Property, plant and mine development, net		26,815		25,365
Operating lease assets, net		—		631
Deferred tax assets		3,338		2,860
Leach pad inventories		51,164		30,533
Other non-current assets		386		344
Total assets	$	127,145	$	134,999
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	2,832	$	3,881
Operating lease liabilities, current		—		631
Mining taxes payable		376		2,309
Other current liabilities		703		1,133
Total current liabilities		3,911		7,954
Asset retirement obligations		9,798		6,500
Total liabilities		13,709		14,454
Shareholders' equity:
Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at September 30, 2024 and December 31, 2023		—		—
Common stock - $0.01 par value, 200,000,000 shares authorized and 24,173,209 shares outstanding at September 30, 2024 and 24,084,542 shares outstanding at December 31, 2023		242		241
Additional paid-in capital		104,801		104,020
Retained earnings		8,393		16,284
Total shareholders' equity		113,436		120,545
Total liabilities and shareholders' equity	$	127,145	$	134,999

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

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FORTITUDE GOLD CORPORATION
Condensed Consolidated Statements of Operations
(U.S. Dollars in thousands, except per share data)
(Unaudited)


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023
Sales, net	$	10,229	$	21,268	$	27,964	$	62,027
Mine cost of sales:
Production costs		3,784		5,992		9,491		16,665
Depreciation and amortization		1,597		3,349		4,535		9,733
Reclamation and remediation		69		91		176		231
Total mine cost of sales		5,450		9,432		14,202		26,629
Mine gross profit		4,779		11,836		13,762		35,398
Costs and expenses:
General and administrative expenses		1,739		1,335		4,150		3,481
Exploration expenses		2,731		3,833		10,621		13,582
Other (income), net		(520)		(491)		(1,680)		(1,252)
Total costs and expenses		3,950		4,677		13,091		15,811
Income before income and mining taxes		829		7,159		671		19,587
Mining and income tax (benefit) expense		(117)		1,437		(135)		3,893
Net income	$	946	$	5,722	$	806	$	15,694
Net income per common share:
Basic	$	0.04	$	0.24	$	0.03	$	0.65
Diluted	$	0.04	$	0.24	$	0.03	$	0.65
Weighted average shares outstanding:
Basic		24,173,209		24,084,542		24,156,816		24,077,772
Diluted		24,261,954		24,212,436		24,242,708		24,217,420

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

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FORTITUDE GOLD CORPORATION
Condensed Consolidated Statements of Shareholders’ Equity
(U.S. Dollars in thousands)
(Unaudited)


	Three Months Ended September 30, 2024 and 2023
		Par
	Number of	Value of						Total
	Common	Common		Additional Paid-			Retained	Shareholders'
	Shares	Shares		in Capital			Earnings	Equity
Balance, June 30, 2023	24,084,542	$	241	$	103,893	$	15,019	$	119,153
Stock-based compensation	—		—		68		—		68
Dividends	—		—		—		(2,890)		(2,890)
Net income	—		—		—		5,722		5,722
Balance, September 30, 2023	24,084,542	$	241	$	103,961	$	17,851	$	122,053

Balance, June 30, 2024	24,173,209	$	242	$	104,396	$	10,348	$	114,986
Stock-based compensation	—		—		405		—		405
Dividends	—		—		—		(2,901)		(2,901)
Net income	—		—		—		946		946
Balance, September 30, 2024	24,173,209	$	242	$	104,801	$	8,393	$	113,436


	Nine Months Ended September 30, 2024 and 2023
		Par
	Number of	Value of						Total
	Common	Common		Additional Paid-			Retained	Shareholders'
	Shares	Shares		in Capital			Earnings	Equity
Balance, December 31, 2022	24,024,542	$	240	$	103,731	$	11,788	$	115,759
Stock-based compensation	—		—		171		—		171
Dividends	—		—		—		(9,631)		(9,631)
Stock options exercised	60,000		1		59		—		60
Net income	—		—		—		15,694		15,694
Balance, September 30, 2023	24,084,542	$	241	$	103,961	$	17,851	$	122,053

Balance, December 31, 2023	24,084,542	$	241	$	104,020	$	16,284	$	120,545
Stock-based compensation	—		—		705		—		705
Dividends	—		—		—		(8,697)		(8,697)
Stock options exercised	76,667		1		76		—		77
Common stock issued for vested restricted stock units	12,000		—		—		—		—
Net income	—		—		—		806		806
Balance, September 30, 2024	24,173,209	$	242	$	104,801	$	8,393	$	113,436

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

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FORTITUDE GOLD CORPORATION
Condensed Consolidated Statements of Cash Flows
(U.S. Dollars in thousands)
(Unaudited)


	Nine months ended
	September 30,
	2024		2023
Cash flows from operating activities:
Net income	$	806	$	15,694
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		4,668		9,804
Stock-based compensation		705		171
Deferred taxes		(478)		(607)
Reclamation and remediation accretion		176		231
Reclamation payments		(83)		—
Unrealized (gain) loss on gold and silver rounds/bullion		(428)		33
Other operating adjustments		—		(55)
Changes in operating assets and liabilities:
Accounts receivable		42		—
Inventories		(8,434)		(3,016)
Prepaid expenses and other current assets		6		(292)
Other non-current assets		(42)		(19)
Accounts payable and other accrued liabilities		(1,407)		347
Income and mining taxes payable		(1,965)		325
Net cash (used in) provided by operating activities		(6,434)		22,616

Cash flows from investing activities:
Capital expenditures		(3,305)		(5,047)
Purchase of gold and silver rounds/bullion		—		(978)
Net cash used in investing activities		(3,305)		(6,025)

Cash flows from financing activities:
Dividends paid		(8,697)		(9,631)
Proceeds from exercise of stock options		77		60
Repayment of loans payable		(3)		(30)
Repayment of capital leases		—		(9)
Net cash used in financing activities		(8,623)		(9,610)

Net (decrease) increase in cash and cash equivalents		(18,362)		6,981
Cash and cash equivalents at beginning of period		48,678		45,054
Cash and cash equivalents at end of period	$	30,316	$	52,035

Supplemental Cash Flow Information
Income and mining taxes paid	$	2,309	$	4,174
Non-cash investing and financing activities:
Change in capital expenditures in accounts payable	$	(69)	$	15
Change in estimate for asset retirement costs	$	2,937	$	—

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

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FORTITUDE GOLD CORPORATION
Notes to Condensed Consolidated Financial Statements
(Dollars in thousands, unless otherwise stated)
(Unaudited)

1. Basis of Presentation of Financial Statements

These interim Condensed Consolidated Financial Statements (“interim financial statements”) of Fortitude Gold Corporation and its subsidiaries (collectively, the “Company”) are unaudited and have been prepared in accordance with the rules of the Securities and Exchange Commission for interim statements. Certain information and footnote disclosures required by United States Generally Accepted Accounting Principles (“U.S. GAAP”) have been condensed or omitted as permitted by such rules, although the Company believes that the disclosures included are adequate to make the information presented not misleading. The interim financial statements included herein are expressed in United States dollars and in the opinion of management, include all adjustments (all of which are of a normal recurring nature) and disclosures necessary for a fair presentation. The results reported in these interim financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s annual report on Form 10-K. The year-end balance sheet data were derived from the audited financial statements. Unless otherwise noted, there have been no material changes to the footnotes from the audited consolidated financial statements contained in the Company’s annual report on Form 10-K. All intercompany accounts and transactions have been eliminated in consolidation.

Certain items in the prior period’s Condensed Consolidated Financial Statements have been reclassified to conform to the current presentation.

Refer to Note 2 to the financial statements included in the Company’s 10-K report for the year ended December 31, 2023 for a description of our Significant Accounting Policies.

2. Revenue

The following table presents the Company’s net sales:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Sales, net
Gold sales	$	10,251	$	21,316	$	28,128	$	62,212
Less: Refining charges		(22)		(48)		(164)		(185)
Total sales, net	$	10,229	$	21,268	$	27,964	$	62,027

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3. Gold and Silver Rounds/Bullion

The Company periodically purchases gold and silver rounds/bullion on the open market for treasury diversification and investment purposes.

At September 30, 2024 and December 31, 2023, the Company’s holdings of rounds/bullion, using quoted market prices, consisted of the following:


	September 30,					December 31,
	2024					2023
	Ounces		Per Ounce		Amount	Ounces		Per Ounce		Amount
					(in thousands)					(in thousands)
Gold	628	$	2,629	$	1,652	628	$	2,062	$	1,296
Silver	9,897	$	31.08	$	308	9,931	$	23.79	$	236
Total holdings				$	1,960				$	1,532

4. Inventories

On September 30, 2024 and December 31, 2023, current inventories consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Stockpiles	$	3,028	$	3,874
Leach pad		8,562		19,579
Doré		34		22
Subtotal - product inventories		11,624		23,475
Materials and supplies		350		373
Total	$	11,974	$	23,848

In addition to the inventories above, as of September 30, 2024 and December 31, 2023, the Company had $51.2 million and $30.5 million, respectively, of non-current leach pad inventory.

5. Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), on a tax jurisdictional basis. The Company files a consolidated U.S. income tax return and at the federal level its income and losses are taxed at 21%. In addition, a 5% Net Proceeds of Minerals tax applies to the Company’s operations in Nevada, and such tax is recorded as an income tax. The Company recorded a mining and income tax benefit of $0.1 million for both the three and nine months ended September 30, 2024. For the three and nine months ended September 30, 2023, the Company recorded a mining and income tax expense of $1.4 million and $3.9 million, respectively. In accordance with ASC 740, the interim provision for taxes was calculated by using the annual effective tax rate. This rate is applied to the year-to-date income before income and mining taxes to determine the income tax expense for the period.

The Company evaluates the evidence available to determine whether a valuation allowance is required on the deferred tax assets. The Company determined that its deferred tax assets were “more likely than not” to be realized as of September 30, 2024 and December 31, 2023, thus no valuation allowance was determined to be necessary.

As of September 30, 2024, the Company believes that it has no liability for uncertain tax positions.

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6. Prepaid Expenses and Other Current Assets

At September 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Contractor advances	$	25	$	100
Prepaid insurance		397		208
Interest receivable		214		355
Other current assets		169		148
Total	$	805	$	811

7. Property, Plant and Mine Development, net

At September 30, 2024 and December 31, 2023, property, plant and mine development consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement costs	$	8,425	$	5,488
Construction-in-progress		14,739		13,615
Furniture and office equipment		781		654
Leach pad and ponds		3,732		3,732
Land		71		41
Light vehicles and other mobile equipment		558		558
Machinery and equipment		17,119		16,547
Process facilities and infrastructure		8,994		8,913
Mineral interests and mineral rights		19,703		18,968
Mine development		24,365		24,365
Software and licenses		346		105
Subtotal ⁽¹⁾		98,833		92,986
Accumulated depreciation and amortization		(72,018)		(67,621)
Total	$	26,815	$	25,365

(1)

Includes capital expenditures in accounts payable of $0.7 million at September 30, 2024 and December 31, 2023.

For the three months ended September 30, 2024 and 2023, the Company recorded depreciation and amortization expense of $1.7 million and $3.4 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded depreciation and amortization expense of $4.7 million and $9.8 million, respectively.

8. Other Current Liabilities

At September 30, 2024 and December 31, 2023, other current liabilities consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Accrued royalty payments	$	317	$	333
Accrued property and excise taxes		386		798
Other accrued expenses		—		2
Total	$	703	$	1,133

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9. Asset Retirement Obligation

The following table presents the changes in the Company’s asset retirement obligation for the nine months ended September 30, 2024 and year ended December 31, 2023:


	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement obligation – balance at beginning of period	$	6,500	$	5,863
Changes in estimate		2,937		317
Payments		(83)		(194)
Accretion		444		514
Asset retirement obligation – balance at end of period	$	9,798	$	6,500

As of September 30, 2024, the Company had a $16.5 million off-balance sheet arrangement for a surety bond. This bond is offset by a $9.8 million asset retirement obligation for future reclamation at the Company’s Isabella Pearl Mine. As of December 31, 2023, the Company had a $12.5 million off-balance sheet arrangement for a surety bond. This bond was offset by a $6.5 million asset retirement obligation for future reclamation at the Company’s Isabella Pearl Mine. The Company’s asset retirement obligations were discounted using a credit adjusted risk-free rate of 11%.

10. Leases

Operating Leases

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases as incurred over the lease term. The Company accounts for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common-area maintenance costs).

The Company had an embedded lease in its Contract Mining Agreement with its previous mining contractor. In November 2022, the Company extended the Contract Mining Agreement for a twelve-month term resulting in the recognition of a $3.8 million right-of-use asset and corresponding $3.8 million operating lease liability. In December 2023, the Company extended the Contract Mining Agreement for a three-month term resulting in the recognition of a $0.6 million right-of-use asset and corresponding $0.6 million operating lease liability. In April 2024, the Company extended the Contract Mining Agreement for a three-month term resulting in the recognition of a $0.7 million right-of-use asset and corresponding $0.7 million operating lease liability. On May 31, 2024, the Contract Mining Agreement was terminated. The Company’s lease payments for its mining equipment embedded lease were determined by tonnage hauled. This embedded lease was within a Contract Mining Agreement entered into for the mining activities at the Company’s Isabella Pearl Mine. The payments, amortization of the right-of-use asset, and interest vary immaterially from forecasted amounts due to variable conditions at the mine. During the three and nine months ended September 30, 2024, the Company capitalized variable lease costs of nil and $0.9 million, respectively, to Inventory. During the three and nine months ended September 30, 2023, the Company capitalized variable lease costs of $0.9 million and $1.9 million, respectively, to Inventory.

On June 1, 2024, the Company entered into the 2024 Contract Mining agreement for a term of three-months. On September 1, 2024, the 2024 Contract Mining agreement auto-renewed for a period of one-month and is therefore not recognized as an operating lease.

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Supplemental cash flow information related to the Company’s operating lease is as follows for the nine months ended September 30, 2024 and 2023:


	Nine months ended
	September 30,
	2024		2023

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,170	$	2,863

11. Other (Income), Net

For the three and nine months ended September 30, 2024 and 2023, other income, net consisted of the following:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Interest (income)	$	(373)	$	(549)	$	(1,349)	$	(1,380)
Charitable contributions		14		41		60		114
Unrealized (gain) loss from gold and silver rounds/bullion ⁽¹⁾		(204)		19		(428)		33
Other expense (income)		43		(2)		37		(19)
Total other (income)	$	(520)	$	(491)	$	(1,680)	$	(1,252)

(1)

Gains and losses due to changes in fair value are non-cash in nature until such time that they are realized through cash transactions. For additional information regarding the Company’s fair value measurements and investments, please see Note 13.

12. Net Income per Common Share

Basic earnings per common share is calculated based on the weighted average number of common shares outstanding for the period. Diluted earnings per common share is calculated based on the assumption that stock options and other dilutive securities outstanding, which have an exercise price less than the average market price of the Company’s common shares during the period, would have been exercised on the later of the beginning of the period or the date granted and that the funds obtained from the exercise were used to purchase common shares at the average market price during the period.

The effect of the Company’s dilutive securities is calculated using the treasury stock method and only those instruments that result in a reduction in net income per common share are included in the calculation. As of September 30, 2024 and 2023, potentially dilutive securities representing 100,000 shares and 66,000 shares, respectively, of common stock were excluded from the computation of diluted earnings per share because their effect would have been antidilutive.

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Basic and diluted net income per common share is calculated as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income (in thousands)	$	946	$	5,722	$	806	$	15,694
Basic weighted average shares of common stock outstanding		24,173,209		24,084,542		24,156,816		24,077,772
Diluted effect of share-based awards		88,745		127,894		85,892		139,648
Diluted weighted average common shares outstanding		24,261,954		24,212,436		24,242,708		24,217,420
Net income per share:
Basic	$	0.04	$	0.24	$	0.03	$	0.65
Diluted	$	0.04	$	0.24	$	0.03	$	0.65

13. Fair Value Measurement

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

As required by accounting guidance, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth certain of the Company’s assets measured at fair value by level within the fair value hierarchy as of September 30, 2024 and December 31, 2023:


	September 30,		December 31,
	2024		2023		Input Hierarchy Level

	(in thousands)
Cash and cash equivalents	$	30,316	$	48,678	Level 1
Gold and silver rounds/bullion		1,960		1,532	Level 1
Accounts receivable		—		42	Level 2

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents consist primarily of cash deposits with an original maturity of 3 months or less and are valued at cost, which approximates fair value. Gold and silver rounds/bullion consist of precious metals used for investment purposes which are valued using quoted market prices. Please see Note 3 for additional information. Accounts receivable includes amounts due to the Company for deliveries of doré sold to customers, which approximates fair value.

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Gains and losses related to changes in the fair value of these financial instruments were included in the Company’s Condensed Consolidated Statements of Operations as shown in the following table:

Three months ended

Nine months ended

September 30,

Statement of

2024

2023

2024

2023

Operations Classification

(in thousands)

Unrealized (gain) loss from gold and silver rounds/bullion

(204)

(428)

Other income, net

14. Stock-Based Compensation

The Fortitude Gold Corporation 2020 Equity Incentive Plan (the “Incentive Plan”) allows for the issuance of up to 5 million shares of common stock in the form of incentive and non-qualified stock options, stock appreciation rights, restricted stock units (“RSUs”), stock grants, and stock units. The Company utilizes this Incentive Plan to attract, retain and incentivize staff.

During the nine months ended September 30, 2024, the Company granted RSUs of 1,100,000 to employees. The RSU’s vest over a period of three years and were issued with a weighted average fair value of $4.59 per share. No RSU’s were granted during the three months ended September 30, 2024. During the nine months ended September 30, 2023, the Company granted RSUs of 36,000 to employees. The RSU’s vest over a period of three years and were issued with a weighted average fair value of $7 per share. No RSU’s were granted during the three months ended September 30, 2023.

During the nine months ended September 30, 2024, a total of 12,000 RSUs vested, and shares were issued with an intrinsic value of $0.1 million, and a fair value of $0.1 million. No RSUs vested during the three months ended September 30, 2024. No RSUs vested during the three and nine months ended September 30, 2023.

During the nine months ended September 30, 2024, stock options to purchase an aggregate of 76,667 shares of the Company’s common stock were exercised at a weighted average exercise price of $1.00 per share. During the nine months ended September 30, 2023, stock options to purchase an aggregate of 60,000 shares of the Company’s common stock were exercised at a weighted average exercise price of $1.00 per share. No stock options were exercised during the three months ended September 30, 2024 and 2023.

Stock-based compensation is included in general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. Stock-based compensation expense for stock options and RSUs is as follows:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Stock options	$	7	$	48	$	49	$	144
Restricted stock units		398		20		656		27
Total	$	405	$	68	$	705	$	171

15. Shareholders’ Equity

During the three and nine months ended September 30, 2024, the Company declared and paid dividends of $2.9 million or $0.12 per share and $8.7 million or $0.36 per share, respectively. During the three and nine months ended September 30, 2023 the Company declared and paid dividends of $2.9 million or $0.12 per share and $9.6 million or $0.40 per share, respectively.

See Note 14 for information concerning shares and options granted pursuant to the Company's Equity Incentive Plan.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We are a Colorado corporation and our subsidiaries are GRC Nevada Inc. (“GRCN”), Walker Lane Minerals Corp. (“WLMC”), County Line Holdings Inc. (“CLH”), County Line Minerals Corp. (“CLMC”), and Golden Mile Minerals Corp. (“GMMC”). WLMC, CLH, CLMC and GMMC are wholly-owned subsidiaries of GRCN. We are a mining company which pursues gold and silver projects that are expected to have both low operating costs and high returns on capital. We are presently focused on mineral production from our Isabella Pearl Mine in Nevada. The ore mined at Isabella Pearl is processed on site at our processing facilities and sold to a refiner as doré, which contains precious metals of gold and silver. We also continue exploration and evaluation work on our portfolio of other precious metal properties in Nevada and continue to evaluate other properties for possible acquisition.

In February 2021, we began trading on the OTC Market “pink sheets” operated by the OTC Markets Group and subsequently up listed to the OTCQB on March 5, 2021 with a symbol change to “FTCO”.

The following discussion summarizes our results of operations for the three and nine months ended September 30, 2024 and 2023. It also analyzes our financial condition at September 30, 2024. This discussion should be read in conjunction with the management’s discussion and analysis and the audited consolidated financial statements and footnotes for the year ended December 31, 2023 contained in our annual report on Form 10-K for the year ended December 31, 2023.

The discussion also presents certain financial measures that are not prepared in accordance with U.S. Generally Accepted Accounting Principles (“Non-GAAP”) but which are important to management in its evaluation of our operating results and are used by management to compare our performance with what we perceive to be peer group mining companies and are relied on as part of management’s decision-making process. Management believes these measures may also be important to investors in evaluating our performance. For a detailed description of each of the non-GAAP financial measures, please see the discussion below under Non-GAAP Measures.

See Forward-Looking Statements at the end of this Item 2 for important information regarding statements contained herein.

Third Quarter 2024 Financial Results and Highlights

●

$10.2 million net sales

●

$30.3 million cash balance on September 30, 2024

●

4,220 gold ounces produced

●

$41.5 million working capital at September 30, 2024

●

$4.8 million mine gross profit

●

$2.7 million exploration expenditures

●

$906 total cash cost after by-product credits per gold ounce sold

●

$990 per ounce total all-in sustaining cost

●

$2.9 million dividends paid

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Operating Data: The following tables summarize certain information about our operations at our Isabella Pearl Mine for the periods indicated:



	Three months ended September 30,		Nine months ended September 30,
	2024	2023	2024	2023
Ore mined
Ore (tonnes)	149,259	110,456	336,025	329,765
Gold grade (g/t)	0.66	2.04	0.62	3.07
Low-grade stockpile
Ore (tonnes)	—	—	—	2,118
Gold grade (g/t)	—	—	—	0.46
Waste (tonnes)	208,176	434,571	1,008,173	965,312
Metal production (before payable metal deductions)⁽¹⁾
Gold (ozs.)	4,220	11,122	12,353	32,293
Silver (ozs.)	11,488	25,012	48,781	56,272

(1)

The difference between what we report as “metal production” and “metal sold” is attributable to the difference between the quantities of metals contained in the doré we produce versus the portion of those metals for which we received payment according to the terms of our sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades and recoveries which impact the amounts of metals contained in doré produced and sold.

During the three months ended September 30, 2024 and 2023, we produced 4,220 and 11,122 ounces of gold, respectively. The decreased production in 2024 is primarily due to lower leach pad recoveries due to overall lower-grade ore mined and delays in permitting our next targeted mine build at County Line. Mining and placement of ore on the heap leach pad continued to be limited to lower grade ore being mined from the Civit Cat area of the Isabella Pearl deposit and the utilization of the low-grade ore stockpile prior to receiving permit approval to mine deeper in the Pearl pit on September 18, 2024.

During the nine months ended September 30, 2024 and 2023, we produced 12,353 and 32,293 ounces of gold, respectively. The decreased production in 2024 is primarily due to lower leach pad recoveries due to overall lower-grade ore mined and delays in permitting our next targeted mine build at County Line. Mining and placement of ore on the heap leach pad continued to be limited to lower grade ore being mined from the Civit Cat area of the Isabella Pearl deposit and the utilization of the low-grade ore stockpile prior to receiving permit approval to mine deeper in the Pearl pit on September 18, 2024.

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	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Metal sold
Gold (ozs.)		4,199		11,042		12,292		32,173
Silver (ozs.)		11,380		24,694		48,052		55,638
Average metal prices realized ⁽¹⁾
Gold ($per oz.)		2,441		1,931		2,288		1,934
Silver ($per oz.)		29.07		23.54		26.57		23.51
Precious metal gold equivalent ounces sold
Gold Ounces		4,199		11,042		12,292		32,173
Gold Equivalent Ounces from Silver		136		301		558		676
		4,335		11,343		12,850		32,849

Total cash cost before by-product credits per gold ounce sold	$	985	$	600	$	889	$	564
Total cash cost after by-product credits per gold ounce sold	$	906	$	547	$	785	$	523
Total all-in sustaining cost per gold ounce sold	$	990	$	651	$	929	$	633

(1)

Average metal prices realized vary from the market metal prices due to final settlement adjustments from our provisional invoices when they are settled. Our average metal prices realized will therefore differ from the market average metal prices in most cases.

Cash cost after by-product credit increased due mainly to lower sales volumes.

Consolidated Results of Operations – Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023

Sales, net. For the three months ended September 30, 2024, consolidated sales, net were $10.2 million as compared to $21.3 million for the same period in 2023. The decrease is attributable to lower sales volumes, partially offset by higher average sales price. Third quarter 2024 gold sales volumes decreased 62%, while the average realized price for gold increased 26%, from the same period in 2023.

Lower sales volumes during the three months ended September 30, 2024 were the result of decreased production which was primarily due to lower leach pad recoveries due to overall lower-grade ore mined, and delays in permitting our next targeted mine build at County Line. Mining and placement of ore on the heap leach pad continued to be limited to lower grade ore being mined from the Civit Cat area of the Isabella Pearl deposit and the utilization of the low-grade ore stockpile prior to receiving permit approval to mine deeper in the Pearl pit on September 18, 2024.

Mine gross profit. For the three months ended September 30, 2024, we recorded $4.8 million mine gross profit compared to $11.8 million mine gross profit for the same period in 2023. The decrease is primarily attributable to lower sales, as discussed above, and increased cost per ounce due to lower-grade ore mined.

General and administrative. For the three months ended September 30, 2024, general and administrative expenses were $1.7 million as compared to $1.3 million in the same period in 2023. The increase is primarily attributable to an increase in stock-based compensation.

Exploration expenses. For the three months ending September 30, 2024, property exploration expenses of $2.7 million as compared to $3.8 million for the same period of 2023. The decrease is primarily due to decreased exploration spending to preserve capital due to permit delays of our next targeted mine build at County Line. Exploration spending in the third quarter of 2024 primarily related to exploration, hydrogeological investigations, and permitting studies at East Camp Douglas, County Line and the Isabella Pearl trend properties.

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Other income, net. For the three months ending September 30, 2024, other income totaling $0.5 million did not materially change from $0.5 million in the same period in 2023.

Mining and income tax (benefit) expense. For the three months ended September 30, 2024, mining and income tax benefit was $0.1 million as compared to mining and income tax expense of $1.4 million for the same period in 2023. The decrease is the result of our lower income before income and mining taxes. See Note 5 to the Condensed Consolidated Financial Statements.

Net income. For the three months ended September 30, 2024, we recorded net income of $0.9 million as compared to $5.7 million in the corresponding period for 2023. The decrease is due to lower sales volumes during the three months ended September 30, 2024 resulting from decreased production.

Consolidated Results of Operations – Nine months Ended September 30, 2024 Compared to Nine months Ended September 30, 2023

Sales, net. For the nine months ended September 30, 2024, consolidated sales, net were $28.0 million as compared to $62.0 million for the same period in 2023. The decrease is attributable to lower sales volumes, partially offset by higher average sales price. For the nine months ending September 30, 2024, gold sales volumes decreased 62% in 2024, while the average realized price for gold increased 18%, from the same period in 2023.

Lower sales volumes during the nine months ended September 30, 2024 were the result of decreased production which was primarily due to lower leach pad recoveries due to overall lower-grade ore mined, and delays in permitting our next targeted mine build at County Line. Mining and placement of ore on the heap leach pad continued to be limited to lower grade ore being mined from the Civit Cat area of the Isabella Pearl deposit and the utilization of the low-grade ore stockpile prior to receiving permit approval to mine deeper in the Pearl pit on September 18, 2024.

Mine gross profit. For the nine months ended September 30, 2024, we recorded $13.8 million mine gross profit compared to $35.4 million mine gross profit for the same period in 2023. The decrease is primarily attributable to lower sales, as discussed above, and increased cost per ounce due to lower-grade ore mined.

General and administrative. For the nine months ended September 30, 2024, general and administrative expenses were $4.2 million compared to $3.5 million for the same period in 2023. The increase is primarily attributable to an increase in stock-based compensation.

Exploration expenses. For the nine months ending September 30, 2024, property exploration expenses were $10.6 million as compared to $13.6 million for the same period of 2023. The decrease is primarily due to decreased exploration spending to preserve capital due to permit delays of our next targeted mine build at County Line. Exploration spending in 2024 primarily related to the East Camp Douglas, County Line and the Isabella Pearl trend Scarlet target properties.

Other income, net. For the nine months ending September 30, 2024, other income totaled $1.7 million as compared to $1.3 million for the same period of 2023. The change is due to an increase in unrealized gains on our gold and silver bullion/rounds as a result of increasing gold and silver prices and an increase in interest income.

Mining and income tax (benefit) expense. For the nine months ended September 30, 2024, mining and income tax benefit was $0.1 million as compared to mining and income tax expense of $3.9 million for the same period in 2023. The decrease is the result of our lower income before income and mining taxes. See Note 5 to the Condensed Consolidated Financial Statements.

Net income. For the nine months ended September 30, 2024, we recorded a net income of $0.8 million as compared to $15.7 million in the corresponding period for 2023. The decrease is due to lower sales volumes during the nine months ended September 30, 2024 resulting from decreased production.

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Non-GAAP Measures

Throughout this report, we have provided information prepared or calculated according to U.S. GAAP and have referenced some non-GAAP performance measures which we believe will assist with understanding the performance of our business. These measures are based on precious metal gold equivalent ounces sold and include cash cost before by-product credits per ounce, total cash cost after by-product credits per ounce, and total all-in sustaining cost per ounce (“AISC”). Because the non-GAAP performance measures do not have any standardized meaning prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation, or as a substitute for measures of performance prepared in accordance with U.S. GAAP. These non-GAAP measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.

Revenue generated from the sale of silver is considered a by-product of our gold production for the purpose of our total cash cost after by-product credits for our Isabella Pearl Mine. We periodically review our revenues to ensure that our reporting of primary products and by-products is appropriate. Because we consider silver to be a by-product of our gold production, the value of silver continues to be applied as a reduction to total cash costs in our calculation of total cash cost after by-product credits per precious metal gold equivalent ounce sold. Likewise, we believe the identification of silver as by-product credits is appropriate because of its lower individual economic value compared to gold and since gold is the primary product we produce.

Total cash cost, after by-product credits, is a measure developed by the World Gold Institute to provide a uniform standard for comparison purposes. AISC is calculated based on the current guidance from the World Gold Council.

Total cash cost before by-product credits includes all direct and indirect production costs related to our production of metals (including mining, crushing and conveying and other plant facility costs, royalties, and site general and administrative costs) plus treatment and refining costs.

Total cash cost after by-product credits includes total cash cost before by-product credits less by-product credits, or revenues earned from silver.

AISC includes total cash cost after by-product credits plus other costs related to sustaining production, including sustaining allocated general and administrative expenses and sustaining capital expenditures. We determined sustaining capital expenditures as those capital expenditures that are necessary to maintain current production and execute the current mine plan.

Cash cost before by-product credits per ounce, total cash cost after by-product credits per ounce and AISC are calculated by dividing the relevant costs, as determined using the cost elements noted above, by gold ounces sold for the periods presented.

Reconciliations to U.S. GAAP

The following table provides a reconciliation of total cash cost after by-product credits to total mine cost of sales (a U.S. GAAP measure) as presented in the Consolidated Statements of Operations:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Total cash cost after by-product credits	$	3,806	$	6,040	$	9,655	$	16,850
Treatment and refining charges		(22)		(48)		(164)		(185)
Depreciation and amortization		1,597		3,349		4,535		9,733
Reclamation and remediation		69		91		176		231
Total consolidated mine cost of sales	$	5,450	$	9,432	$	14,202	$	26,629

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The following table presents the non-GAAP measures of total cash cost and AISC:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

	(in thousands, except ounces sold and cost per gold ounce sold)
Total cash cost before by-product credits ⁽¹⁾	$	4,137	$	6,621	$	10,932	$	18,158
By-product credits ⁽²⁾		(331)		(581)		(1,277)		(1,308)
Total cash cost after by-product credits	$	3,806	$	6,040	$	9,655	$	16,850
Sustaining capital expenditures		48		530		500		1,152
Sustaining exploration expenses		305		622		1,267		2,386
Total all-in sustaining cost	$	4,159	$	7,192	$	11,422	$	20,388

Gold ounces sold		4,199		11,042		12,292		32,173

Total cash cost before by-product credits per gold ounce sold	$	985	$	600	$	889	$	564
By-product credits per gold ounce sold⁽²⁾		(79)		(53)		(104)		(41)
Total cash cost after by-product credits per gold ounce sold		906		547		785		523
Other sustaining expenditures per gold ounce sold⁽³⁾		84		104		144		110
Total all-in sustaining cost per gold ounce sold	$	990	$	651	$	929	$	633

(1)

Production cost plus treatment and refining charges.

(2)

Please see the tables below for a summary of our by-product revenue and by-product credit per precious metal equivalent ounces sold.

(3)

Sustaining capital expenditures and sustaining exploration expenses divided by gold ounces sold.

The following tables summarize our by-product revenue and by-product credit gold ounce sold:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
By-product credits by dollar value:
Silver sales	$	331	$	581	$	1,277	$	1,308
Total sales from by-products	$	331	$	581	$	1,277	$	1,308


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
By-product credits per gold pounce sold:
Silver sales	$	79	$	53	$	104	$	41
Total by-product credits per gold ounce sold	$	79	$	53	$	104	$	41

Liquidity and Capital Resources

As of September 30, 2024, we had a cash position of $30.3 million compared to $48.7 million at December 31, 2023. The change is primarily due to decreased cash from operations, exploration spending and dividends paid.

As of September 30, 2024, we had working capital of $41.5 million compared to $67.3 million at December 31, 2023. Our working capital balance fluctuates as we use cash to fund our operations, financing and investing activities, including exploration, mine development and income taxes. With our working capital balance as of September 30, 2024, we believe that our liquidity and capital resources are adequate to fund our operations, exploration, capital, and corporate activities for the next twelve months.

Net cash used in operating activities for the nine months ended September 30, 2024 was $6.4 million, compared to $22.6 million net cash provided by operating activities for nine months ended September 30, 2023. The decrease is

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primarily due to lower net income and changes in inventory, depreciation and amortization, income and mining taxes payable and accounts payable.

Net cash used in investing activities for the nine months ended September 30, 2024 was $3.3 million compared to $6.0 million during the same period in 2023. The decrease is primarily due to less capital expenditures.

Net cash used in financing activities for the nine months ended September 30, 2024 was $8.6 million compared to $9.6 million for the same period in 2023. The decrease is primarily attributable to lower dividends due to the special dividend paid in May 2023.

Development and Exploration Activities

Isabella Pearl Mine: During the third quarter, operations continued at the Isabella Pearl (“IP”) Mine open-pit and heap leach operations. Piezometer installations were completed at the Isabella Pearl Mine to monitor groundwater levels. Mapping and sampling campaigns continued to the northwest of the Isabella Pearl Mine to further understand the gold-bearing structures that are exposed on surface, and to identify optimal areas to drill along the IP mineralized structural corridor. Analysis of final phase mining along the south rim of the pit and possible opportunities to extract the mineralized access ramp once the oxide mineralization deep is exhausted. In September 2024, we received permit approval to mine deeper in the Isabella Pearl pit.

County Line property: Permitting activities continued with regulatory authorities relating to the development of the County Line mine. A piezometer installation program was planned to test the groundwater in the vicinity of the County Line and East pits; the program is scheduled to commence in the fourth quarter of 2024. This water level information will be used to plan the optimal location and depth of an additional water well once operations start. Geochemical studies of the rock units, in and around the historic pits, continued in the third quarter to determine the neutralizing potential of the units during mining. Internal geological and resource estimation modeling on the property continued during the third quarter. This information, in addition to other supportive datasets, is being used to plan another resource drill program on the property for the modified Notice of Intent (“NOI”).

Golden Mile property: Permitting activities for development of the Golden Mile mine continued during the quarter. A land reclamation and reseeding program of disturbed U.S. Department of the Interior Bureau of Land Management (“BLM”) land on the property began in the third quarter. Once growth is established and accepted by the BLM to be reclaimed sufficiently, the BLM may release this land and allow for more drilling to be completed on the property, if required.

East Camp Douglas property: Reverse circulation drilling continued in the project’s northern White Rock Springs area. Sampling and mapping campaigns advanced in the project’s southern Lithocap area. Cultural resource and biological surveys continued in the third quarter, as these studies are the main baseline studies required to establish the existing conditions for the pending Plan of Operations application and are the primary references to evaluate potential effects of the proposed exploration activities during analysis under the National Environmental Policy Act.

Intrepid property: A NOI was submitted and approved by the BLM in the third quarter. Construction of roads into the newly approved drilling areas commenced.

Accounting Developments

Recently issued accounting pronouncements have been evaluated and do not presently impact our financial statements and supplemental data.

Forward-Looking Statements

This report contains or incorporates by reference “forward-looking statements,” as that term is used in federal securities laws, about our financial condition, results of operations and business. These statements include, among others:

●

statements about our future exploration, permitting, production, development, and plans for development of our properties

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●

statements concerning the benefits that we expect will result from our business activities and certain transactions that we contemplate or have completed, such as receipt of proceeds, decreased expenses and prevented expenses and expenditures

●

statements of our expectations, beliefs, future plans and strategies, our targets, exploration activities, anticipated developments and other matters that are not historical facts

These statements may be made expressly in this document or may be incorporated by reference from other documents that we will file with the SEC. You can find many of these statements by looking for words such as “believes,” “expects,” “targets,” “anticipates,” “estimates,” “proposes,” or similar expressions used in this report or incorporated by reference in this report.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause our actual results to be materially different from any future results expressed or implied in those statements. Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied. We caution you not to put undue reliance on these statements, which speak only as of the date of this report. Further, the information contained in this document or incorporated herein by reference, is a statement of our present intention and is based on present facts and assumptions, which may change at any time and without notice, based on changes in such facts or assumptions.

Risk Factors Impacting Forward-Looking Statements

The important factors that could prevent us from achieving our stated goals and objectives include, but are not limited to, those set forth in other reports we have filed with the SEC, including our Form 10-K for the year ended December 31, 2023, and the following:

●

The Biden/Harris administration’s stance on mining and mine development

●

The BLM and Nevada Division of Environmental Protection staffing shortages and permit review timelines

●

Changes in the worldwide price for gold and/or silver

●

Inflationary pressures and supply chain disruptions, with particular consideration on the outlook for increased costs specific to labor, materials, consumables and fuel and energy on operations

●

Government freezes on issuing resource permits

●

Political and regulatory risks

●

Untimely permit issuance

●

Volatility in the equities markets

●

Adverse results from our exploration or production efforts

●

Producing at rates lower than those targeted

●

Global pandemics such as COVID-19 and governmental responses designed to control the pandemic

●

Weather conditions, including unusually heavy rains

●

Earthquakes or other unforeseen ground movements impacting mining or processing

●

Failure to meet our revenue or profit goals or operating budget

●

Technological innovations by competitors or in competing technologies

●

Cybersecurity threats

●

Investor perception of our industry or our prospects

●

Lawsuits

●

General economic trends

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Smaller Reporting Companies are not required to provide the information required by this item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 15d-15 under the 1934 Act, as of September 30, 2024, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2024.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the 1934 Act) during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Smaller Reporting Companies are not required to provide the information for this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 4. Mine Safety Disclosures

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Quarterly Report.

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Item 5. Other Information

None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarterly period ending September 30, 2024.

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Item 6. Exhibits

The following exhibits are filed or furnished herewith.


Exhibit Number		Description

3.1		Articles of Incorporation (1)
3.2		Bylaws of the Company (1)
4.1.1		Equity Incentive Plan (1)
4.1.2		Form of Stock Option Award Agreement (1)
4.1.3		Form of RSU Award Agreement (1)
4.2		Shareholder Rights Agreement (1)
10.3		Reserved
10.5		Employment Agreement with Jason D. Reid (2)
10.6		Employment Agreement with Gregory A. Patterson (2)
10.9		Employment Agreement with Allan Turner (4)
10.10		Employment Agreement with Janet Turner (4)
14		Code of Ethics (1)
21		Subsidiaries (3)
31.1*		Certification of Chief Executive Officer Pursuant to Rule 13a-15(e) or Rule 15d-15(e)
31.2*		Certification of Chief Financial Officer Pursuant to Rule 13a-15(e) or Rule 15d-15(e)
32*		Certification of Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350
95*		Mine Safety Disclosures
101*		Financial statements from the Quarterly Report on Form 10-Q of Fortitude Gold Corporation for the three months ended September 30, 2024, formatted in inline XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to the Condensed Consolidated Financial Statements.
104		Cover Page Interactive Data File (embedded within the XBRL document)

(1) Incorporated by reference to the same exhibit filed with the Company's registration statement on Form S-1 (File No. 333-249533).

(2) Incorporated by reference to same exhibit filed with the Company's 8-K report dated March 1, 2021 (File No. 333-249533).

(3) Incorporated by reference to same exhibit filed with the Company's 10-K/A report dated December 15, 2022 (File No. 333-249533).

(4)

Incorporated by reference to same exhibit filed with the Company's 8-K report dated June 3, 2024 (File No. 333-249533).

*Filed with this Quarterly Report on Form 10-Q.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 5, 2024.


	FORTITUDE GOLD CORPORATION

	By:	/s/ Jason D. Reid
	Name:	Jason D. Reid
	Title:	Chief Executive Officer and President

	By:	/s/ Janet H.N. Turner
	Name:	Janet H.N. Turner
	Title:	Chief Financial Officer

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jason D. Reid, certify that:

I have reviewed this quarterly report on Form 10-Q of Fortitude Gold Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2024



	By:	/s/ Jason D. Reid
	Name:	Jason D. Reid
	Title:	Chief Executive Officer and President

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Janet H.N. Turner, certify that:

I have reviewed this quarterly report on Form 10-Q of Fortitude Gold Corporation;

(a)

(b)

(c)

(d)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2024

J.

	By:	/s/ Janet H.N. Turner
	Name:	Janet H.N. Turner
	Title:	Chief Financial Officer

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Fortitude Gold Corporation (the “Company”) on Form 10-Q for the three month period ended September 30, 2024 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, we, Jason D. Reid, Chief Executive Officer and President, and Janet H.N. Turner, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 5, 2024




	By:	/s/ Jason D. Reid
	Name:	Jason D. Reid
	Title:	Chief Executive Officer and President

	By:	/s/ Janet H.N. Turner
	Name:	Janet H.N. Turner
	Title:	Chief Financial Officer

Exhibit 95

The following disclosures are provided pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) and Item 104 of Regulation S-K, which require certain disclosures by companies required to file periodic reports under the Securities Exchange Act of 1934, as amended, that operate mines regulated under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). The disclosures reflect our U.S. mining operations only as the requirements of the Act and Item 104 of Regulation S-K do not apply to our mines operated outside the United States.

Mine Safety Information. Whenever the Federal Mine Safety and Health Administration (“MSHA”) believes a violation of the Mine Act, any health or safety standard or any regulation has occurred, it may issue a citation which describes the alleged violation and fixes a time within which the U.S. mining operator (e.g. our subsidiary, Walker Lane Minerals Corp.) must abate the alleged violation. In some situations, such as when MSHA believes that conditions pose a hazard to miners, MSHA may issue an order removing miners from the area of the mine affected by the condition until the alleged hazards are corrected. When MSHA issues a citation or order, it generally proposes a civil penalty, or fine, as a result of the alleged violation, that the operator is ordered to pay. Citations and orders can be contested and appealed, and as part of that process, are often reduced in severity and amount, and are sometimes dismissed. The number of citations, orders and proposed assessments vary depending on the size and type (underground or surface) of the mine as well as by the MSHA inspector(s) assigned. In addition to civil penalties, the Mine Act also provides for criminal penalties for an operator who willfully violates a health or safety standard or knowingly violates or fails or refuses to comply with an order issued under Section 107(a) or any final decision issued under the Act.

The below table reflects citations and orders issued to us by MSHA during the three months ended September 30, 2024. The proposed assessments for the three months ended September 30, 2024 were taken from the MSHA data retrieval system as of October 24, 2024.

Additional information about the Act and MSHA references used in the table follows:

●

Section 104(a) S&S Citations: Citations received from MSHA under section 104(a) of the Mine Act for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard.

●

Section 104(b) Orders: Orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated.

●

Section 104(d) S&S Citations and Orders: Citations and orders issued by MSHA under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory, significant and substantial health or safety standards.

●

Section 110(b)(2) Violations: Flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act.

●

Section 107(a) Orders: Orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an “imminent danger” (as defined by MSHA) existed.



	Mine or Operation⁽¹⁾
	Isabella Pearl Mine
	MSHA ID #2602812
Total # of "Significant and Substantial" Violations Under §104(a)		-
Total # of Orders Issued Under §104(b)		-
Total # of Citations and Orders Issued Under §104(d)		-
Total # of Flagrant Violations Under §110(b)(2)		-
Total # of Imminent Danger Orders Under §107(a)		-
Total Amount of Proposed Assessments from MSHA under the Mine Act	$	-
Total # of Mining-Related Fatalities		-
Received Notice of Pattern of Violations under Section 104(e)		No
Received Notice of Potential to have Patterns under Section 104(e)		No
Pending Legal Actions		-
Legal Actions Instituted		-
Legal Actions Resolved		-

(1)

MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. The definition of “mine” under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and minerals preparation facilities.

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Nov. 04, 2024
Document and Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Entity File Number	333-249533
Entity Registrant Name	Fortitude Gold Corporation
Entity Incorporation, State or Country Code	CO
Entity Tax Identification Number	85-2602691
Entity Address, Address Line One	2886 Carriage Manor Point
Entity Address, City or Town	Colorado Springs
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80906
City Area Code	719
Local Phone Number	717 9825
Title of 12(b) Security	N/A
No Trading Symbol Flag	true
Security Exchange Name	NONE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		24,173,209
Entity Central Index Key	0001828377
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 30,316	$ 48,678
Gold and silver rounds/bullion	1,960	1,532
Accounts receivable		42
Inventories	11,974	23,848
Prepaid taxes	387	355
Prepaid expenses and other current assets	805	811
Total current assets	45,442	75,266
Property, plant and mine development, net	26,815	25,365
Operating lease assets, net		631
Deferred tax assets	3,338	2,860
Leach pad inventories	51,164	30,533
Other non-current assets	386	344
Total assets	127,145	134,999
Current liabilities:
Accounts payable	2,832	3,881
Operating lease liabilities, current		631
Mining taxes payable	376	2,309
Other current liabilities	703	1,133
Total current liabilities	3,911	7,954
Asset retirement obligations	9,798	6,500
Total liabilities	13,709	14,454
Shareholders' equity:
Preferred stock - $0.01 par value, 20,000,000 shares authorized and nil outstanding at September 30, 2024 and December 31, 2023
Common stock - $0.01 par value, 200,000,000 shares authorized and 24,173,209 shares outstanding at September 30, 2024 and 24,084,542 shares outstanding at December 31, 2023	242	241
Additional paid-in capital	104,801	104,020
Retained earnings	8,393	16,284
Total shareholders' equity	113,436	120,545
Total liabilities and shareholders' equity	$ 127,145	$ 134,999

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	20,000,000	20,000,000
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, outstanding (in shares)	24,173,209	24,084,542

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Sales, net	$ 10,229	$ 21,268	$ 27,964	$ 62,027
Mine cost of sales:
Production costs	3,784	5,992	9,491	16,665
Depreciation and amortization	1,597	3,349	4,535	9,733
Reclamation and remediation	69	91	176	231
Total mine cost of sales	5,450	9,432	14,202	26,629
Mine gross profit	4,779	11,836	13,762	35,398
Costs and expenses:
General and administrative expenses	1,739	1,335	4,150	3,481
Exploration expenses	2,731	3,833	10,621	13,582
Other (income), net	(520)	(491)	(1,680)	(1,252)
Total costs and expenses	3,950	4,677	13,091	15,811
Income before income and mining taxes	829	7,159	671	19,587
Mining and income tax (benefit) expense	(117)	1,437	(135)	3,893
Net income	$ 946	$ 5,722	$ 806	$ 15,694
Net income per common share:
Net income per common share, Basic	$ 0.04	$ 0.24	$ 0.03	$ 0.65
Net income per common share, Diluted	$ 0.04	$ 0.24	$ 0.03	$ 0.65
Weighted average shares outstanding:
Weighted average shares outstanding, Basic	24,173,209	24,084,542	24,156,816	24,077,772
Weighted average shares outstanding, Diluted	24,261,954	24,212,436	24,242,708	24,217,420

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common shares	Additional Paid-in Capital	Retained Earnings	Total
Balance, at Beginning of period at Dec. 31, 2022	$ 240	$ 103,731	$ 11,788	$ 115,759
Balance, at Beginning of period (in shares) at Dec. 31, 2022	24,024,542
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		171		171
Dividends			(9,631)	(9,631)
Stock options exercised	$ 1	59		60
Stock options exercised (in shares)	60,000
Net income			15,694	15,694
Balance, at End of period at Sep. 30, 2023	$ 241	103,961	17,851	122,053
Balance, at End of period (in shares) at Sep. 30, 2023	24,084,542
Balance, at Beginning of period at Jun. 30, 2023	$ 241	103,893	15,019	119,153
Balance, at Beginning of period (in shares) at Jun. 30, 2023	24,084,542
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		68		68
Dividends			(2,890)	(2,890)
Net income			5,722	5,722
Balance, at End of period at Sep. 30, 2023	$ 241	103,961	17,851	122,053
Balance, at End of period (in shares) at Sep. 30, 2023	24,084,542
Balance, at Beginning of period at Dec. 31, 2023	$ 241	104,020	16,284	120,545
Balance, at Beginning of period (in shares) at Dec. 31, 2023	24,084,542
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		705		705
Dividends			(8,697)	(8,697)
Stock options exercised	$ 1	76		77
Stock options exercised (in shares)	76,667
Common stock issued for vested restricted stock units (in shares)	12,000
Net income			806	806
Balance, at End of period at Sep. 30, 2024	$ 242	104,801	8,393	113,436
Balance, at End of period (in shares) at Sep. 30, 2024	24,173,209
Balance, at Beginning of period at Jun. 30, 2024	$ 242	104,396	10,348	114,986
Balance, at Beginning of period (in shares) at Jun. 30, 2024	24,173,209
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation		405		405
Dividends			(2,901)	(2,901)
Net income			946	946
Balance, at End of period at Sep. 30, 2024	$ 242	$ 104,801	$ 8,393	$ 113,436
Balance, at End of period (in shares) at Sep. 30, 2024	24,173,209

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Cash flows from operating activities:
Net income	$ 806	$ 15,694
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	4,668	9,804
Stock-based compensation	705	171
Deferred taxes	(478)	(607)
Reclamation and remediation accretion	176	231
Reclamation payments	(83)
Unrealized (gain) loss on gold and silver rounds/bullion	(428)	33
Other operating adjustments		(55)
Changes in operating assets and liabilities:
Accounts receivable	42
Inventories	(8,434)	(3,016)
Prepaid expenses and other current assets	6	(292)
Other non-current assets	(42)	(19)
Accounts payable and other accrued liabilities	(1,407)	347
Income and mining taxes payable	(1,965)	325
Net cash (used in) provided by operating activities	(6,434)	22,616
Cash flows from investing activities:
Capital expenditures	(3,305)	(5,047)
Purchase of gold and silver rounds/bullion		(978)
Net cash used in investing activities	(3,305)	(6,025)
Cash flows from financing activities:
Dividends paid	(8,697)	(9,631)
Proceeds from exercise of stock options	77	60
Repayment of loans payable	(3)	(30)
Repayment of capital leases		(9)
Net cash used in financing activities	(8,623)	(9,610)
Net (decrease) increase in cash and cash equivalents	(18,362)	6,981
Cash and cash equivalents at beginning of period	48,678	45,054
Cash and cash equivalents at end of period	30,316	52,035
Supplemental Cash Flow Information
Income and mining taxes paid	2,309	4,174
Non-cash investing and financing activities:
Change in capital expenditures in accounts payable	(69)	$ 15
Change in estimate for asset retirement costs	$ 2,937

Basis of Presentation of Financial Statements

9 Months Ended

Sep. 30, 2024

Basis of Presentation of Financial Statements

Basis of Presentation of Financial Statements

1. Basis of Presentation of Financial Statements

Certain items in the prior period’s Condensed Consolidated Financial Statements have been reclassified to conform to the current presentation.

Refer to Note 2 to the financial statements included in the Company’s 10-K report for the year ended December 31, 2023 for a description of our Significant Accounting Policies.

Revenue

9 Months Ended

Sep. 30, 2024

Revenue

Revenue

2. Revenue

The following table presents the Company’s net sales:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Sales, net
Gold sales	$	10,251	$	21,316	$	28,128	$	62,212
Less: Refining charges		(22)		(48)		(164)		(185)
Total sales, net	$	10,229	$	21,268	$	27,964	$	62,027

Gold and Silver Rounds/Bullion

9 Months Ended

Sep. 30, 2024

Gold and Silver Rounds/Bullion

Gold and Silver Rounds/Bullion

3. Gold and Silver Rounds/Bullion

The Company periodically purchases gold and silver rounds/bullion on the open market for treasury diversification and investment purposes.

At September 30, 2024 and December 31, 2023, the Company’s holdings of rounds/bullion, using quoted market prices, consisted of the following:


	September 30,					December 31,
	2024					2023
	Ounces		Per Ounce		Amount	Ounces		Per Ounce		Amount
					(in thousands)					(in thousands)
Gold	628	$	2,629	$	1,652	628	$	2,062	$	1,296
Silver	9,897	$	31.08	$	308	9,931	$	23.79	$	236
Total holdings				$	1,960				$	1,532

Inventories

9 Months Ended

Sep. 30, 2024

Inventories

Inventories

4. Inventories

On September 30, 2024 and December 31, 2023, current inventories consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Stockpiles	$	3,028	$	3,874
Leach pad		8,562		19,579
Doré		34		22
Subtotal - product inventories		11,624		23,475
Materials and supplies		350		373
Total	$	11,974	$	23,848

In addition to the inventories above, as of September 30, 2024 and December 31, 2023, the Company had $51.2 million and $30.5 million, respectively, of non-current leach pad inventory.

Income Taxes

9 Months Ended

Sep. 30, 2024

Income Taxes

Income Taxes

5. Income Taxes

As of September 30, 2024, the Company believes that it has no liability for uncertain tax positions.

Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2024

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

6. Prepaid Expenses and Other Current Assets

At September 30, 2024 and December 31, 2023, prepaid expenses and other current assets consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Contractor advances	$	25	$	100
Prepaid insurance		397		208
Interest receivable		214		355
Other current assets		169		148
Total	$	805	$	811

Property, Plant and Mine Development, net

9 Months Ended

Sep. 30, 2024

Property, Plant and Mine Development, net

Property, Plant and Mine Development, net

7. Property, Plant and Mine Development, net

At September 30, 2024 and December 31, 2023, property, plant and mine development consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement costs	$	8,425	$	5,488
Construction-in-progress		14,739		13,615
Furniture and office equipment		781		654
Leach pad and ponds		3,732		3,732
Land		71		41
Light vehicles and other mobile equipment		558		558
Machinery and equipment		17,119		16,547
Process facilities and infrastructure		8,994		8,913
Mineral interests and mineral rights		19,703		18,968
Mine development		24,365		24,365
Software and licenses		346		105
Subtotal ⁽¹⁾		98,833		92,986
Accumulated depreciation and amortization		(72,018)		(67,621)
Total	$	26,815	$	25,365

(1)

Includes capital expenditures in accounts payable of $0.7 million at September 30, 2024 and December 31, 2023.

Other Current Liabilities

9 Months Ended

Sep. 30, 2024

Other Current Liabilities

Other Current Liabilities

8. Other Current Liabilities

At September 30, 2024 and December 31, 2023, other current liabilities consisted of the following:


	September 30,		December 31,
	2024		2023

	(in thousands)
Accrued royalty payments	$	317	$	333
Accrued property and excise taxes		386		798
Other accrued expenses		—		2
Total	$	703	$	1,133

Asset Retirement Obligation

9 Months Ended

Sep. 30, 2024

Asset Retirement Obligation

Asset Retirement Obligation

9. Asset Retirement Obligation

The following table presents the changes in the Company’s asset retirement obligation for the nine months ended September 30, 2024 and year ended December 31, 2023:


	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement obligation – balance at beginning of period	$	6,500	$	5,863
Changes in estimate		2,937		317
Payments		(83)		(194)
Accretion		444		514
Asset retirement obligation – balance at end of period	$	9,798	$	6,500

Leases

9 Months Ended

Sep. 30, 2024

Leases

Leases

10. Leases

Operating Leases

Supplemental cash flow information related to the Company’s operating lease is as follows for the nine months ended September 30, 2024 and 2023:


	Nine months ended
	September 30,
	2024		2023

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,170	$	2,863

Other (Income), Net

9 Months Ended

Sep. 30, 2024

Other (Income), Net

Other (Income), Net

11. Other (Income), Net

For the three and nine months ended September 30, 2024 and 2023, other income, net consisted of the following:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Interest (income)	$	(373)	$	(549)	$	(1,349)	$	(1,380)
Charitable contributions		14		41		60		114
Unrealized (gain) loss from gold and silver rounds/bullion ⁽¹⁾		(204)		19		(428)		33
Other expense (income)		43		(2)		37		(19)
Total other (income)	$	(520)	$	(491)	$	(1,680)	$	(1,252)

(1)

Net Income per Common Share

9 Months Ended

Sep. 30, 2024

Net Income per Common Share

Net Income per Common Share

12. Net Income per Common Share

Basic and diluted net income per common share is calculated as follows:


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income (in thousands)	$	946	$	5,722	$	806	$	15,694
Basic weighted average shares of common stock outstanding		24,173,209		24,084,542		24,156,816		24,077,772
Diluted effect of share-based awards		88,745		127,894		85,892		139,648
Diluted weighted average common shares outstanding		24,261,954		24,212,436		24,242,708		24,217,420
Net income per share:
Basic	$	0.04	$	0.24	$	0.03	$	0.65
Diluted	$	0.04	$	0.24	$	0.03	$	0.65

Fair Value Measurement

9 Months Ended

Sep. 30, 2024

Fair Value Measurement

Fair Value Measurement

13. Fair Value Measurement

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).


	September 30,		December 31,
	2024		2023		Input Hierarchy Level

	(in thousands)
Cash and cash equivalents	$	30,316	$	48,678	Level 1
Gold and silver rounds/bullion		1,960		1,532	Level 1
Accounts receivable		—		42	Level 2

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Gains and losses related to changes in the fair value of these financial instruments were included in the Company’s Condensed Consolidated Statements of Operations as shown in the following table:

Three months ended

Nine months ended

September 30,

Statement of

2024

2023

2024

2023

Operations Classification

(in thousands)

Unrealized (gain) loss from gold and silver rounds/bullion

(204)

(428)

Other income, net

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Stock-Based Compensation

Stock-Based Compensation

14. Stock-Based Compensation


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Stock options	$	7	$	48	$	49	$	144
Restricted stock units		398		20		656		27
Total	$	405	$	68	$	705	$	171

Shareholders' Equity

9 Months Ended

Sep. 30, 2024

Shareholders' Equity

Shareholders' Equity

15. Shareholders’ Equity

See Note 14 for information concerning shares and options granted pursuant to the Company's Equity Incentive Plan.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 946	$ 5,722	$ 806	$ 15,694

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Revenue (Tables)

9 Months Ended

Sep. 30, 2024

Revenue

Schedule of company's net sales disaggregated by source


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Sales, net
Gold sales	$	10,251	$	21,316	$	28,128	$	62,212
Less: Refining charges		(22)		(48)		(164)		(185)
Total sales, net	$	10,229	$	21,268	$	27,964	$	62,027

Gold and Silver Rounds/Bullion (Tables)

9 Months Ended

Sep. 30, 2024

Gold and Silver Rounds/Bullion

Summary of investment holdings


	September 30,					December 31,
	2024					2023
	Ounces		Per Ounce		Amount	Ounces		Per Ounce		Amount
					(in thousands)					(in thousands)
Gold	628	$	2,629	$	1,652	628	$	2,062	$	1,296
Silver	9,897	$	31.08	$	308	9,931	$	23.79	$	236
Total holdings				$	1,960				$	1,532

Inventories (Tables)

9 Months Ended

Sep. 30, 2024

Inventories

Schedule of current inventories


	September 30,		December 31,
	2024		2023

	(in thousands)
Stockpiles	$	3,028	$	3,874
Leach pad		8,562		19,579
Doré		34		22
Subtotal - product inventories		11,624		23,475
Materials and supplies		350		373
Total	$	11,974	$	23,848

Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2024

Prepaid Expenses and Other Current Assets

Schedule of prepaid expenses and other current assets


	September 30,		December 31,
	2024		2023

	(in thousands)
Contractor advances	$	25	$	100
Prepaid insurance		397		208
Interest receivable		214		355
Other current assets		169		148
Total	$	805	$	811

Property, Plant and Mine Development, net (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Mine Development, net

Schedule of property, plant and mine development


	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement costs	$	8,425	$	5,488
Construction-in-progress		14,739		13,615
Furniture and office equipment		781		654
Leach pad and ponds		3,732		3,732
Land		71		41
Light vehicles and other mobile equipment		558		558
Machinery and equipment		17,119		16,547
Process facilities and infrastructure		8,994		8,913
Mineral interests and mineral rights		19,703		18,968
Mine development		24,365		24,365
Software and licenses		346		105
Subtotal ⁽¹⁾		98,833		92,986
Accumulated depreciation and amortization		(72,018)		(67,621)
Total	$	26,815	$	25,365

(1)

Includes capital expenditures in accounts payable of $0.7 million at September 30, 2024 and December 31, 2023.

Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2024

Other Current Liabilities

Schedule of other current liabilities


	September 30,		December 31,
	2024		2023

	(in thousands)
Accrued royalty payments	$	317	$	333
Accrued property and excise taxes		386		798
Other accrued expenses		—		2
Total	$	703	$	1,133

Asset Retirement Obligation (Tables)

9 Months Ended

Sep. 30, 2024

Asset Retirement Obligation

Schedule of asset retirement obligation


	September 30,		December 31,
	2024		2023

	(in thousands)
Asset retirement obligation – balance at beginning of period	$	6,500	$	5,863
Changes in estimate		2,937		317
Payments		(83)		(194)
Accretion		444		514
Asset retirement obligation – balance at end of period	$	9,798	$	6,500

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases

Schedule of supplemental cash flow information of leases.


	Nine months ended
	September 30,
	2024		2023

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,170	$	2,863

Other (Income), Net (Tables)

9 Months Ended

Sep. 30, 2024

Other (Income), Net

Schedule of other income, net


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Interest (income)	$	(373)	$	(549)	$	(1,349)	$	(1,380)
Charitable contributions		14		41		60		114
Unrealized (gain) loss from gold and silver rounds/bullion ⁽¹⁾		(204)		19		(428)		33
Other expense (income)		43		(2)		37		(19)
Total other (income)	$	(520)	$	(491)	$	(1,680)	$	(1,252)

(1)

Net Income per Common Share (Tables)

9 Months Ended

Sep. 30, 2024

Net Income per Common Share

Schedule of basic and diluted net income per common share


	Three months ended				Nine months ended
	September 30,				September 30,
	2024		2023		2024		2023
Net income (in thousands)	$	946	$	5,722	$	806	$	15,694
Basic weighted average shares of common stock outstanding		24,173,209		24,084,542		24,156,816		24,077,772
Diluted effect of share-based awards		88,745		127,894		85,892		139,648
Diluted weighted average common shares outstanding		24,261,954		24,212,436		24,242,708		24,217,420
Net income per share:
Basic	$	0.04	$	0.24	$	0.03	$	0.65
Diluted	$	0.04	$	0.24	$	0.03	$	0.65

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Measurement

Schedule of assets and liabilities measured at fair value


	September 30,		December 31,
	2024		2023		Input Hierarchy Level

	(in thousands)
Cash and cash equivalents	$	30,316	$	48,678	Level 1
Gold and silver rounds/bullion		1,960		1,532	Level 1
Accounts receivable		—		42	Level 2

Schedule of gains and losses related to changes in the fair value

Three months ended

Nine months ended

September 30,

Statement of

2024

2023

2024

2023

Operations Classification

(in thousands)

Unrealized (gain) loss from gold and silver rounds/bullion

(204)

(428)

Other income, net

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Stock-Based Compensation

Schedule of stock-based compensation expense


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023

	(in thousands)				(in thousands)
Stock options	$	7	$	48	$	49	$	144
Restricted stock units		398		20		656		27
Total	$	405	$	68	$	705	$	171

Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Revenue (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Revenue
Less: Refining charges	$ (22)	$ (48)	$ (164)	$ (185)
Sales, net	10,229	21,268	27,964	62,027
Gold sales
Revenue
Sales, net	$ 10,251	$ 21,316	$ 28,128	$ 62,212

Gold and Silver Rounds/Bullion (Details) $ in Thousands	Sep. 30, 2024 USD ($) $ / oz oz	Dec. 31, 2023 USD ($) $ / oz oz
Gold and Silver Rounds/Bullion
Gold and silver rounds/bullion	$ 1,960	$ 1,532
Gold
Gold and Silver Rounds/Bullion
Investment owned balance in ounces \| oz	628	628
Investment owned balance in per ounce \| $ / oz	2,629	2,062
Gold and silver rounds/bullion	$ 1,652	$ 1,296
Silver
Gold and Silver Rounds/Bullion
Investment owned balance in ounces \| oz	9,897	9,931
Investment owned balance in per ounce \| $ / oz	31.08	23.79
Gold and silver rounds/bullion	$ 308	$ 236

Inventories - Current (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventories
Stockpiles	$ 3,028	$ 3,874
Leach pad	8,562	19,579
Dore	34	22
Subtotal - product inventories	11,624	23,475
Materials and supplies	350	373
Total	$ 11,974	$ 23,848

Inventories - Non-current (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventories
Leach pad	$ 51,164	$ 30,533

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Income Taxes
Federal tax rate			21.00%
Minerals tax rate			5.00%
Mining and income tax expense (benefit)	$ (117)	$ 1,437	$ (135)	$ 3,893
Valuation allowance	0		0		$ 0
Uncertain tax positions	$ 0		$ 0

Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Prepaid Expenses and Other Current Assets
Contractor advances	$ 25	$ 100
Prepaid insurance	397	208
Interest receivable	214	355
Other current assets	169	148
Total	$ 805	$ 811

Property, Plant and Mine Development, net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Mine Development, net
Subtotal	$ 98,833		$ 98,833		$ 92,986
Accumulated depreciation and amortization	(72,018)		(72,018)		(67,621)
Total	26,815		26,815		25,365
Capital expenditures included in accounts payable			700		700
Depreciation and amortization	1,700	$ 3,400	4,668	$ 9,804
Asset retirement costs
Property, Plant and Mine Development, net
Subtotal	8,425		8,425		5,488
Construction-in-progress
Property, Plant and Mine Development, net
Subtotal	14,739		14,739		13,615
Furniture and office equipment
Property, Plant and Mine Development, net
Subtotal	781		781		654
Leach pad and ponds
Property, Plant and Mine Development, net
Subtotal	3,732		3,732		3,732
Land
Property, Plant and Mine Development, net
Subtotal	71		71		41
Light vehicles and other mobile equipment
Property, Plant and Mine Development, net
Subtotal	558		558		558
Machinery and equipment
Property, Plant and Mine Development, net
Subtotal	17,119		17,119		16,547
Process facilities and infrastructure
Property, Plant and Mine Development, net
Subtotal	8,994		8,994		8,913
Mineral interests and mineral rights
Property, Plant and Mine Development, net
Subtotal	19,703		19,703		18,968
Mine development
Property, Plant and Mine Development, net
Subtotal	24,365		24,365		24,365
Software and licenses
Property, Plant and Mine Development, net
Subtotal	$ 346		$ 346		$ 105

Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Other Current Liabilities
Accrued royalty payments	$ 317	$ 333
Accrued property and excise taxes	386	798
Other accrued expenses		2
Total	$ 703	$ 1,133

Asset Retirement Obligation (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Asset Retirement Obligation
Asset retirement obligation - balance at beginning of period	$ 6,500	$ 5,863
Changes in estimate	2,937	317
Payments	(83)	(194)
Accretion	444	514
Asset retirement obligation - balance at end of period	9,798	6,500
Off-balance sheet arrangement	$ 16,500	$ 12,500
Risk-free rate	11.00%

Leases - Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 01, 2024	Jun. 01, 2024	Apr. 30, 2024	Dec. 31, 2023	Nov. 30, 2022
Leases
Renewal Term					1 month		3 months	3 months	12 months
Right-of-use asset							$ 700	$ 631	$ 3,800
Operating lease liability							$ 700	$ 600	$ 3,800
Term of contract mining agreement						3 months
Inventory
Leases
Variable Lease Costs Capitalized	$ 0	$ 900	$ 900	$ 1,900

Leases (Details) - USD ($) $ in Thousands	9 Months Ended
Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Leases
Operating cash flows from operating leases	$ 1,170	$ 2,863

Other (Income), Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Other (Income), Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Other (Income), Net
Interest (income)	$ (373)	$ (549)	$ (1,349)	$ (1,380)
Charitable contributions	14	41	60	114
Unrealized (gain) loss from gold and silver rounds/bullion	(204)	19	(428)	33
Other expense (income)	43	(2)	37	(19)
Total other (income)	$ (520)	$ (491)	$ (1,680)	$ (1,252)

Net Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Net Income per Common Share
Net income	$ 946	$ 5,722	$ 806	$ 15,694
Basic weighted average shares of common stock outstanding	24,173,209	24,084,542	24,156,816	24,077,772
Diluted effect of share-based awards	88,745	127,894	85,892	139,648
Diluted weighted average common shares outstanding	24,261,954	24,212,436	24,242,708	24,217,420
Net income per share:
Net income per share, basic	$ 0.04	$ 0.24	$ 0.03	$ 0.65
Net income per share, diluted	$ 0.04	$ 0.24	$ 0.03	$ 0.65
Anti-dilutive instruments outstanding			100,000	66,000

Fair Value Measurement (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Level 1
Fair Value Measurement
Cash and cash equivalents	$ 30,316	$ 48,678
Gold and silver rounds/bullion	$ 1,960	1,532
Level 2
Fair Value Measurement
Accounts receivable		$ 42

Fair Value Measurement - Changes in the fair value (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Fair Value Measurement
Unrealized (gain) loss from gold and silver rounds/bullion	$ (204)	$ 19	$ (428)	$ 33

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Restricted Stock Units
Stock-Based Compensation
Granted RSU	0	0	1,100,000	36,000
Share-Based Payment Arrangement, Grantee Status [Extensible Enumeration]			us-gaap:ShareBasedPaymentArrangementEmployeeMember	us-gaap:ShareBasedPaymentArrangementEmployeeMember
Vesting period			3 years	3 years
Weighted average grant date fair value			$ 4.59	$ 7
Incentive Plan \| Employee Stock Option
Stock-Based Compensation
Stock options exercised (in shares)	0	0	76,667	60,000
Options, exercised, weighted average exercise price			$ 1.00	$ 1.00
Incentive Plan \| Restricted Stock Units
Stock-Based Compensation
Vested RSU	0	0	12,000	0
Intrinsic value			$ 0.1
Fair value of vested award			$ 0.1
Incentive Plan \| Maximum
Stock-Based Compensation
Shares available for issuance	5,000,000		5,000,000

Stock-Based Compensation - Stock-based compensation included in general and administrative expenses (Details) - General and administrative expenses - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Stock-Based Compensation
Share based compensation expense	$ 405	$ 68	$ 705	$ 171
Employee Stock Option
Stock-Based Compensation
Share based compensation expense	7	48	49	144
Restricted Stock Units
Stock-Based Compensation
Share based compensation expense	$ 398	$ 20	$ 656	$ 27

Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Shareholders' Equity
Dividends	$ 2,901	$ 2,890	$ 8,697	$ 9,631
Dividend per share	$ 0.12	$ 0.12	$ 0.36	$ 0.40