HYCROFT MINING HOLDING CORP
For the period ended Jun 30, 2024. Filed Aug 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 6, 2024
HYMC$18.77+10.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0001718405-24-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0001718405-24-000025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 89 current paragraphs.
44 unchanged; 29 reworded; 13 added; 8 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
During the six months ended June 30, 2024, the Company advanced with metallurgical test and design work necessary for designing a sulfide milling operation. The Company has been actively testing composite samples from around the ore body that represents the various material characteristics in the sulfide ore. Crushing, grinding, and flotation work has identified significant improvements in gold and silver recoveries compared to the current technical report that increase the economic benefits to the project. Roasting, leaching, sulfuric acid generation, and power co-generation work progressed during the quarter ended June 30, 2024. Process plant flow sheets, equipment selection, plant layout, tailing storage facility designs, and other designs continued to be developed. With the roasting option, there is a significant quantity of sulfuric acid generated and the Company engaged a third-party specialist to complete a focused market study and to assist in identifying local and regional markets with specific current and emerging consumers. The Company is still conducting trade-off studies to determine if utilizing roasting technology instead of pressure oxidation technology could further deliver superior economics for the Hycroft Mine.
Current report
The 2024 Drill Program is designed to test the lateral and at depth extensions of the newly discovered high-grade silver trends at Brimstone and Vortex. This new system remains open in all directions and at depth having the potential to expand and be developed as an underground mine. Additionally, geophysical surveys and structural geology reviews in the first half of 2024 have identified anomalous opportunities in and around the primary resource area indicative of high-grade mineralization. The anomalies have created a target area two kilometers north to south and extending one kilometer east of the current resource pit, which is mostly within the current plan of operation. The Company is in the process of refining drill targets for these areas.
Current report
During the three and six months ended June 30, 2024, General and administrative expenses totaled $3.9 million and $6.8 million, respectively, compared to $3.7 million and $7.0 million, respectively, during the same periods of 2023.
Current report
•On May 15, 2024, the Company filed a new $350.0 million prospectus subject to Instruction I.B.6 to Form S-3, referred to as a universal shelf registration statement, that included the New ATM Program. The universal shelf registration statement became effective on May 31, 2024, at 4:00 p.m. Eastern Daylight Time, which replaced the prior universal shelf registration statement that was originally filed June 30, 2021.
Current report
•There were no sales of common stock under the New ATM Program during June 2024, accordingly up to $100.0 million of common stock was available for issuance under the New ATM Program at June 30, 2024.
Current report
(1)In May 2024, the Company entered into an Equipment Purchase Agreement to sell two substation transformers for consideration of $2.0 million. As of June 30, 2024, the Company has received $0.3 million in non-refundable deposit payments.
Current report
Six months ended June 30, 2024 compared to six months ended June 30, 2023
Current report
Cautionary Statement Regarding Forward-Looking Statements
Current report
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the SEC, all as may be amended from time to time. All statements, other than statements of historical fact, included herein or incorporated by reference, that address activities, events, or developments that we expect or anticipate will or may occur in the future, are forward-looking statements, including but not limited to such things as:
Current report
The words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe”, “project”, “target”, “budget”, “may”, “can”, “will”, “would”, “could”, “should”, “seeks”, or “scheduled to”, or other similar words, or negatives of these terms or other variations of these terms or comparable language or any discussion of strategy or intentions identify forward-looking statements. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefit of the “safe harbor” provisions of such laws. These statements involve known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual results, performance or achievements to be materially different from any results, performance, or achievements expressed or implied by such forward-looking statements. Forward-looking statements are based on current expectations.
Current report
Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results, performance or achievements may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results, performance, or achievements are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results, performance or achievements may not be indicative of results, performance or achievements in subsequent periods.
Current report
Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make in this Quarterly Report on Form 10-Q speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Current report
See Risk Factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2023, as the same may be updated from time to time, and other SEC filings, for more information about these and other risks.
Removed paragraphs (8)
Previous report
During the three months ended March 31, 2024, the Company completed a substantial portion of the metallurgical and flotation variability test work necessary for designing a sulfide milling operation. The Company has also been engaged in trade-off studies and alternatives analyses to optimize the development plan for the Hycroft Mine to build, mine and process gold and silver from sulfide ore that yields the best economic return for shareholders. Through this work, the Company identified that roasting the sulfide ore has the potential to generate by-product sulfuric acid revenue that may create significant economic benefits for the project. Sulfuric acid has several commercial uses including in the production of lithium from sedimentary style deposits, of which there are five such projects in Nevada in addition to other locations. The preliminary internal work indicates Hycroft could produce a significant quantity of by-product sulfuric acid and potentially generate significant revenues in addition to the gold and silver. There is also the potential to co-generate “green” electricity as part of the roasting process. Due to the potential by-product revenues opportunities, the Company has initiated additional metallurgical studies to determine if utilizing roasting technology instead of pressure oxidation technology would deliver superior economics for the Hycroft Mine.
Previous report
During the three months ended March 31, 2024, General and administrative expenses totaled $2.9 million compared to $3.3 million during the same period of 2023. The decrease of $(0.4) million during the three months ended March 31, 2024, was primarily due to reduced spend on outside legal and accounting services and contractors.
Previous report
Fair value adjustments to warrants
Previous report
For the three months ended March 31, 2024, and March 31, 2023, the Fair value adjustments to warrants resulted in a non-cash gain of Nil and $0.1 million, respectively, as the market trading values of the publicly listed warrants decreased during the period.
Previous report
For additional details, see Note 17 – Loss Per Share in the Notes to the Financial Statements.
Previous report
Three months ended March 31, 2024 compared to three months ended March 31, 2023
Previous report
During the three months ended March 31, 2023, the Company used $8.8 million of cash in operating activities primarily attributable to a net loss of $13.9 million, the cash impact of which was $9.5 million, and $0.7 million was provided by working capital, that included $2.8 million cash received on the collection of Accounts receivableas the Company collected its remaining receivables related to gold and silver sales during 2022 and an increase in Prepaids and depositsof $0.8 million, partially offset by cash used to reduce Other liabilitiesof $1.8 million and Accounts payable and accrued liabilities of $1.1 million. The largest non-cash item included in net loss during the three months ended March 31, 2023, was Non-cash portion of interest expense of $3.0 million.
Previous report
For the three months ended March 31, 2023, investing activities used cash of $0.3 million primarily to purchase equipment and patented mining claims.
Reworded paragraphs (29)
Previous wording
The following discussion, which has been prepared based on information available to us as of May 6, 2024, provides information we believe is relevant to an assessment and understanding of our consolidated operating results and financial condition. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements for the three months ended March 31, 2024 (the “Financial Statements”) and the notes thereto (the “Notes”) included in this Quarterly Report on Form 10-Q for the three months ended March 31, 2024, as well as our other reports filed with the Securities Exchange Commission (“SEC”) from time to time, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023. Terms not defined herein have the same meaning defined in the Financial Statements and the Notes.
Current wording
The following discussion, which has been prepared based on information available to us as of August 6, 2024, provides information we believe is relevant to an assessment and understanding of our consolidated operating results and financial condition. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024 (the “Financial Statements”) and the notes thereto (the “Notes”) included in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024, as well as our other reports filed with the Securities and Exchange Commission (“SEC”) from time to time, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2023. Terms not defined herein have the same meaning defined in the Financial Statements and the Notes.
Previous wording
We are a U.S.-based gold and silver exploration and development company that owns the Hycroft Mine in Nevada, USA. We are focused on exploring the Hycroft Mine’s claims comprising approximately 64,000 acres, and developing the Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. We ceased mining activities in November 2021, and as of December 31, 2022, we completed processing of gold and silver ore previously placed on leach pads. We do not expect to generate revenues from gold and silver sales until after completing the technical work and recommencing mining operations.
Current wording
We are a U.S.-based gold and silver exploration and development company that owns the Hycroft Mine in Nevada, USA. We are focused on exploring the Hycroft Mine’s claims comprising approximately 64,000 acres, and developing the Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. We ceased mining activities in November 2021, and as of December 31, 2022, we completed processing of gold and silver ore previously placed on leach pads. We do not expect to generate significant revenues from gold and silver sales until after completing the technical work and recommencing mining operations.
Previous wording
We reported no lost time incidents during the first quarter of 2024 and continue to operate in excess of one million workhours without a lost time incident. The Hycroft Mine’s total recordable injury frequency rate (“TRIFR”) for the trailing 12 months, which includes other reportable incidents, is one of the metrics we use to assess safety performance, and it is well below industry averages and significantly below pre-2021 historical levels experienced at the Hycroft Mine. During the first three months of 2024, we continued our critical focus on safety, including allocating personnel, resources, workforce time, and communications to operate safely. These actions contributed to maintaining our TRIFR of Nil (0.00) at March 31, 2024 and December 31, 2023. We will continue to evolve our safety efforts as needed to keep our workforce, contractors, and visitors safe.
Current wording
We reported no lost time incidents during the first half of 2024 and continue to operate in excess of one million workhours without a lost time incident. The Hycroft Mine’s total recordable injury frequency rate (“TRIFR”) for the trailing 12 months, which includes other reportable incidents, is one of the metrics we use to assess safety performance, and it is well below industry averages and significantly below pre-2021 historical levels experienced at the Hycroft Mine. During the first six months of 2024, we continued our critical focus on safety, including allocating personnel, resources, workforce time, and communications to operate safely. These actions contributed to maintaining our TRIFR of 0.00 at June 30, 2024 and December 31, 2023. We will continue to evolve our safety efforts as needed to keep our workforce, contractors, and visitors safe.
Previous wording
During the first quarter of 2024, the Company continued its exploration drill program, completed portions of the metallurgical and variability test work, and continued to analyze new drill assay data and information received in the period. The ongoing metallurgical and variability test work continues to follow up on the March 2023 Hycroft Property Initial Assessment Technical Report Summary Humboldt and Pershing Counties, Nevada (“2023 Hycroft TRS”) that was completed utilizing a conventional crushing, grinding, and flotation circuit that generates a concentrate to be fed to a pressure oxidation (“POX”) autoclave facility commonly used for refractory gold ores. The Company also focused on improving its balance sheet primarily by reducing debt, and on January 5, 2024, the Company voluntarily pre-paid $38 million of the senior secured debt with Sprott Resource Lending.
Current wording
During the first six months of 2024, the Company continued its exploration drill program, completed portions of the metallurgical and variability test work, and continued to analyze new drill assay data and information received in the period. The ongoing metallurgical and variability test work continues to follow up on the March 2023 Hycroft Property Initial Assessment Technical Report Summary Humboldt and Pershing Counties, Nevada (“2023 Hycroft TRS”) that was completed utilizing a conventional crushing, grinding, and flotation circuit that generates a concentrate to be fed to a pressure oxidation (“POX”) autoclave facility commonly used for refractory gold ores. The Company is also focused on strengthening its balance sheet primarily by reducing debt and raising cash through its at-the-market (“ATM Program”). Additionally, on May 31, 2024, the Company implemented a new $100.0 million at-the-market public offering program (the “New ATM Program”). The Company voluntarily pre-paid $38.0 million of the senior secured debt with Sprott Resource Lending on January 5, 2024, and through the ATM Program and the New ATM Program has raised $10.4 million aggregate gross proceeds, before commissions and offering expense, during the first six months of 2024.
Previous wording
In February 2024, the Company launched its 2024 exploration drill program (“the “2024 Drill Program”), to follow up on the high-grade underground silver discovery announced in November 2023. The 2023 drilling reflected significant high-grade silver mineralization that has continuity with historical drilling along trends not previously identified. The objective of the 2024 Drill Program is to define the structural framework of these new trends and identify target areas that have not been drilled to establish continuity of the two high-grade silver trends. The 2024 Exploration Program currently includes approximately 5,200 meters of core drilling with the flexibility to expand the program.
Current wording
In February 2024, the Company launched its 2024 exploration drill program (the “2024 Drill Program”), to follow up on the high-grade underground silver discovery announced in November 2023. The 2023 drilling reflected significant high-grade silver mineralization that has continuity with historical drilling along trends not previously identified. The objective of the 2024 Drill Program is to define the structural framework of these new trends and identify target areas that have not been drilled to establish continuity of the two high-grade silver trends. The 2024 Drill Program has been expanded to approximately 6,200 meters of core drilling, of which approximately 4,000 meters of drilling have been completed. The current program is targeted to define the structural framework of the two new high-grade silver trends and target those areas that have not been drilled to establish continuity of the two high-grade silver trends. Additionally, the Company completed Induced Polarity (“IP”) geophysical surveys with results expected in the third quarter of 2024. The 2024 Drill Program and geophysical surveys will help with the Company’s understanding of the structural controls observed in the two high-grade silver trends and potentially expand the Hycroft mineralization to the east in a previously unexplored area mostly within the current plan of operation.
Previous wording
The Company’s current plan is to operate safely as it continues exploration drilling and data analyses, completing technical studies, conducting trade-off studies and alternatives analyses for determining the optimal process flow sheet for processing sulfide ores and recovering gold and silver, and maintaining the Hycroft Mine. The Company continues to evaluate various process alternatives to economically improve gold and silver recoveries while developing potential additional by-product revenue streams. The trade-off studies and alternatives analyses include different grinding methods, various flotation cell configurations, sulfide conversion through pressure oxidation and roasting, and process flow sheet development. This additional work is expected to be completed over the coming months and as a result, the Company will provide updates on the anticipated timing of the process flow sheet and the associated technical report as information becomes available.
Current wording
The Company continues to evaluate various process alternatives to economically improve gold and silver recoveries while developing potential additional, meaningful by-product revenue streams. The trade-off studies and alternatives analyses include different grinding methods, various flotation cell configurations, sulfide conversion through pressure oxidation and roasting, and process flow sheet development. This additional work is expected to be completed over the coming months and as a result, the Company will provide updates on the anticipated timing of the process flow sheet and the associated technical report as information becomes available.
Previous wording
During the three months ended March 31, 2024, Projects, exploration, and development costs totaled $4.9 million compared to $3.5 million for the same period of 2023. Projects, exploration, and development costs were related to: (i) completing technical studies; (ii) conducting geological studies; (iii) oversight and project management; and (iv) exploration drilling, engineering, and metallurgical activities. The increase of $1.4 million during the three months ended March 31, 2024 was the result of ongoing assay results and analysis from Phase 2 of the Company’s 2022-2023 Exploration Program and initiating the 2024 Exploration Drilling program in February 2024.
Current wording
During the three and six months ended June 30, 2024, Projects, exploration, and development costs totaled $5.1 million and $10.0 million, respectively, compared to $5.3 million and $8.8 million, respectively, for the same periods of 2023. Projects, exploration, and development costs were related to: (i) completing technical studies; (ii) conducting geological studies; (iii) oversight and project management; and (iv) exploration drilling, engineering, and metallurgical activities. The increase of $1.2 million during the six months ended June 30, 2024 was the result of ongoing assay results and analysis from Phase 2 of the Company’s 2022-2023 Exploration Program and expanding the 2024 Drilling Program that was initiated in February 2024.
Previous wording
During the three months ended March 31, 2024, Mine site period costs totaled $2.6 million compared to $3.8 million for the same period of 2023, primarily due to reduced activities year over year associated with the mine site. Mine site period costs include costs related to maintaining the Hycroft Mine, including environmental, maintenance and administration costs. Effective January 1, 2023, the Company began reporting amounts for Mine site period costsas Operating Expensesas this presentation aligns with how the business will be viewed and managed until such time that the Company further develops the Hycroft Mine and recommences mining operations.
Current wording
During the three and six months ended June 30, 2024, Mine site period costs totaled $2.5 million and $5.1 million, respectively, compared to $2.8 million and $6.6 million, respectively, for the same periods of 2023. The decrease in spending was primarily due to reduced activities year over year associated with the mine site. Mine site period costs include costs related to maintaining the Hycroft Mine, including environmental, maintenance and administration costs. Effective January 1, 2023, the Company began reporting amounts for Mine site period costsas Operating expensesas this presentation aligns with how the business will be viewed and managed until such time that the Company further develops the Hycroft Mine and recommences mining operations.
Previous wording
During the three months ended March 31, 2024, the Company recognized a change in estimate to reflect both a revised Engineering Design Change required by the Nevada Department of Environmental Protection for impervious cover placement on the Crofoot Heap Leach Pad, and a change in timing to commence work in 2025 and complete it by the end of 2027. In accordance with the change in estimate, the Company recorded an expense of $2.0 million as the Company does not have mineral reserves, and accordingly, all costs are expensed until such time that it declares mineral reserves.
Current wording
During the three and six months ended June 30, 2024, the Company recognized a change in estimate to reflect updated reclamation regulations and a revised engineering design change for impervious cover placement on the Crofoot Heap Leach Pad, and a change in timing to begin and complete this stage of reclamation work at this facility. In accordance with the change in estimate, Asset retirement obligation increased $2.0 million and $4.0 million during the three and six months ended June 30, 2024, respectively, as the Company does not have mineral reserves, and accordingly, all costs are expensed until such time that it declares mineral reserves.
Previous wording
During the three months ended March 31, 2023, the Company did not incur additional reclamation obligations associated with additional disturbances, other regulatory requirements, or changes in estimates.
Current wording
During the three and six months ended June 30, 2024 and June 30, 2023, the Company did not incur additional reclamation obligations associated with additional disturbances, other regulatory requirements, or changes in estimates.
Previous wording
Depreciation and amortization were $0.6 million and $0.7 million for the three months ended March 31, 2024, and March 31, 2023, respectively.
Current wording
Depreciation and amortization was $0.6 million and $1.2 million, respectively, for the three and six months ended June 30, 2024, compared to $0.7 million and $1.4 million, respectively, during the same periods of 2023.
Previous wording
The Company recorded $0.2 million and $0.2 million of Accretion for the three months ended March 31, 2024 and March 31, 2023, respectively, which related to the Company’s Asset retirement obligation and future reclamation costs. See Note 12 – Asset Retirement Obligation to the Notes to the Financial Statements for further detail.
Current wording
The Company recorded $0.3 million and $0.5 million of Accretion for the three and six months ended June 30, 2024, respectively, and $0.2 million and $0.4 million for the same periods of 2023, respectively. These expenses are related to the Company’s Asset retirement obligation and future reclamation costs. See Note 12 – Asset Retirement Obligation (“ARO”) to the Notes to the Financial Statements for further detail.
Previous wording
As discussed in Note 9 – Debt, Net in the Notes to the Financial Statements, Interest expense totaled $10.1 million during the three months ended March 31, 2024, compared to $4.4 million during the same period in 2023. Included in Interest expense was $(6.9) million of accelerated amortization of original issue discount and issuance costs. On January 5, 2024, the Company voluntarily prepaid $38.0 million of its first lien debt. The original issue discount and issuance costs were expensed on a prorated basis in line with the prepaid amount of the debt.
Current wording
As detailed in Note 9 – Debt, Net in the Notes to the Financial Statements, Interest expense totaled $3.2 million and $13.3 million for the three and six months ended June 30, 2024, respectively, compared to $4.6 million and $9.0 million, for the same periods in 2023. Included in Interest expense for the first half of 2024 was $6.9 million of accelerated amortization of original issue discount and issuance costs. On January 5, 2024, the Company voluntarily prepaid $38.0 million of its first lien debt. The original issue discount and issuance costs were expensed on a prorated basis in line with the prepaid amount of the debt.
Previous wording
The decrease of $5.7 million for the three months ended March 31, 2024 compared to the same period in 2023 was primarily due to the January 2024 voluntary prepayments the Company made on the first lien debt.
Current wording
The decrease of $1.4 million for the three months ended June 30, 2024 compared to the same period in 2023 was primarily due to the January 2024 voluntary prepayments the Company made on the first lien debt. The increase of $4.3 million for the six months ended June 30, 2024 compared to the same period in 2023 was primarily due to the $6.9 million of accelerated amortization of original issue discount and issuance costs related to the voluntary prepayments.
Previous wording
Interest income totaled $1.3 million for thethree months ended March 31, 2024, compared to $1.9 million for the same period in 2023. In July 2022, the Company began investing the majority of its cash balances in AAAm rated U.S. Government Money Market Funds that are readily convertible to cash. These investments earned the Company $1.0 million and $1.5 million in interest during thethree months ended March 31, 2024 and March 31, 2023, respectively. In addition, the Company earned $0.3 million on its Restricted cash during thethree months ended March 31, 2024, as compared with $0.4 million for the same period in 2023.
Current wording
Interest income totaled $1.1 million and $2.4 million for the three and six months ended June 30, 2024, respectively, compared to $2.1 million and $4.1 million, respectively, for the same periods in 2023. In July 2022, the Company began investing the majority of its cash balances in AAAm rated U.S. Government Money Market Funds that are readily convertible to cash. These investments earned the Company $0.8 million and $1.8 million in interest during the three and six months ended June 30, 2024, respectively, and $1.7 million and $3.4 million, respectively, for the same periods in 2023. In addition, the Company earned $0.3 million and $0.6 million on its Restricted cash during the three and six months ended June 30, 2024, respectively, as compared with $0.4 million and $0.7 million, respectively, for the same periods in 2023.
Previous wording
For the three months ended March 31, 2024, the Company recognized Other income of $1.3 million, compared to Nil for the three months ended March 31, 2023. The increase of $1.3 million included a $1.4 million gain on a non-refundable deposit (see Note 7 – Assets Held For Sale for more detail), partially offset by a loss of $(0.1) million on the sale of equipment.
Current wording
For the three and six months ended June 30, 2024, the Company recognized Other income of $3.3 million and $4.6 million, respectively, compared to $0.1 million and $0.3 million, respectively, for the same periods in 2023. The increase of $4.3 million for the six months ended June 30, 2024 included a $3.6 million gain on the sale of patents and a $1.6 million gain on a non-refundable deposit, partially offset by an unrealized loss on securities of $0.5 million and a loss of $0.1 million on the sale of equipment.
Previous wording
The Company incurred Nil net income tax expense or benefit for three months ended March 31, 2024 and March 31, 2023.
Current wording
The Company incurred Nil net income tax expense or benefit for both the six months ended June 30, 2024 and June 30, 2023. See Note 16 – Income Taxes.
Previous wording
The Company’s Cash and cash equivalents at March 31, 2024, were $57.6 million, as compared with $106.2 million at December 31, 2023. As discussed in Note 14 – Stockholders’ Equity in the Notes to the Financial Statements, the Company raised cash through its at-the-market public offering program (“ATM Program”) as follows:
Current wording
The Company’s Cash and cash equivalents at June 30, 2024, were $58.5 million, as compared with $106.2 million at December 31, 2023. As discussed in Note 14 – Stockholders’ Equity in the Notes to the Financial Statements, the Company raised cash through its ATM Program as follows:
Previous wording
•On March 19, 2024, the Company filed a prospectus supplement subject to Instruction I.B.6. to Form S-3, which is referred to as the baby shelf rule. For so long as the Company’s public float is less than $75.0 million, it may not sell more than the equivalent of one-third of its public float during any 12 consecutive months pursuant to the baby shelf rules. The prospectus supplement updated the remaining amount of shares that the Company may sell through the ATM Program to an aggregate offering price of up to $15.3 million.
Current wording
•On June 2, 2023, the Company filed a prospectus supplement reactivating the ATM Program and as of December 31, 2023, there was common stock available for issuance under the ATM Program with an aggregate offering sales price of up to $360.3 million. On March 19, 2024, the Company filed a prospectus supplement subject to Instruction I.B.6. to Form S-3, which is referred to as the baby shelf rule. For so long as the Company’s public float is less than $75.0 million, it may not sell more than the equivalent of one-third of its public float during any 12 consecutive months pursuant to the baby shelf rules. The prospectus supplement updated the remaining number of shares that the Company may sell through the ATM Program to an aggregate offering price of up to $15.3 million. On April 11, 2024, the Company’s public float exceeded the $75.0 million baby shelf threshold and on May 15, 2024, the Company filed a prospectus supplement subject to Instruction I.B.6 to Form S-3 updating the remaining number of shares that the Company may sell through the ATM Program to an aggregate offering price of up to $100.0 million.
Previous wording
•In the first quarter of 2024, the Company continued to access the ATM Program, and as of March 31, 2024, sold an additional 517,688 shares of common stock for aggregate gross proceeds, before commissions and offering expenses of $1.2 million. As of March 31, 2024, there was common stock available for issuance under the ATM Program with an aggregate offering sales price of up to $14.8 million. On April 11, 2024, the Company’s public float exceeded the $75.0 million baby shelf threshold.
Current wording
•For the six months ended June 30, 2024, the Company sold 2,992,547 shares of common stock for aggregate gross proceeds, before commissions and offering expenses, of $10.4 million. The Company sold 2,474,859 shares of common stock for aggregate gross proceeds, before commissions and offering expenses, of $9.2 million during the second quarter of 2024 and the Company sold 517,688 shares of common stock for aggregate gross proceeds, before commissions and offering expenses, of $1.2 million in the first quarter of 2024.
Previous wording
(1)In August 2022, the Company entered into an Equipment Purchase Agreement to sell one ball mill and one SAG mill for consideration of $12.0 million. The agreement was amended in December 2022 to include a sub-station transformer for an additional amount of $1.6 million for a total amended equipment purchase price of $13.6 million, of which the company has received payments totaling $1.6 million. Effective March 1, 2024, the buyer terminated a portion of the Equipment Purchase Agreement and effective April 5, 2024, the entire Equipment Purchase Agreement was terminated. Because the sale did not materialize, $1.4 million of the nonrefundable deposit payments was recognized as Other income in the first quarter of 2024, $0.1 million of the nonrefundable deposit payments will be recognized as Other income in the second quarter of 2024, and the remaining $0.1 million in nonrefundable deposit payments have been included in Contract liabilities.
Current wording
(2)In August 2022, the Company entered into an Equipment Purchase Agreement to sell one ball mill and one SAG mill for consideration of $12.0 million. The agreement was amended in December 2022 to include two substation transformers for an additional amount of $1.6 million for a total amended equipment purchase price of $13.6 million, of which the Company had received payments totaling $1.6 million. As of December 31, 2023, the total deposit payments received was $1.6 million. Effective March 1, 2024, the buyer terminated a portion of the Equipment Purchase Agreement and effective April 5, 2024, the entire Equipment Purchase Agreement was terminated. Because the sale did not materialize, $1.5 million of the nonrefundable deposit payments was recognized as Other income in the first quarter of 2024, and $0.1 million of the nonrefundable deposit payments recognized as Other income in the second quarter of 2024.
Previous wording
During the three months ended March 31, 2024, the Company used $11.7 million of cash in operating activities primarily attributable to a net loss of $20.7 million, the cash impact of which was $8.9 million. There was a $2.8 million deficit to working capital and other, including cash used for Other liabilitiesof $2.6 million. The largest non-cash items included in net loss during the three months ended March 31, 2024, were Accelerated amortization of original issue discount and issuance costs of $6.9 million, non-cash interest expense of $2.7 million and non-cash ARO adjustments and accretion of $2.2 million.
Current wording
During the six months ended June 30, 2024, the Company used $20.3 million of cash in operating activities primarily attributable to a net loss of $33.9 million, the cash impact of which was $18.9 million. There was a $1.4 million deficit to working capital, including cash used for Other liabilitiesof $1.8 million. The largest non-cash items included in Net loss for the six months ended June 30, 2024, were Non-cash interest expense of $12.4 million and non-cash Asset retirement obligation adjustments of $4.0 million.
Previous wording
Cash used in investing activities
Current wording
Cash provided by (used in) investing activities
Previous wording
During the three months ended March 31, 2024, investing activities generated cash of $0.2 million, comprised of Proceeds from sale of equipment of $0.3 million, partly offset by Additions to property, plant, and equipmentof $0.1 million.
Current wording
For the six months ended June 30, 2023, investing activities used cash of $0.6 million primarily attributable to Additions to property, plant, and equipmentof $0.7 million, partially offset by Proceeds from the sale of equipment of $0.1 million.
Previous wording
During the three months ended March 31, 2024, financing activities used cash of $36.9 million that was primarily related to principal payments on debt and notes payable including the $38.0 million voluntary prepayment of the first lien debt..
Current wording
For the six months ended June 30, 2024, financing activities used cash of $28.0 million that was primarily related to principal payments on debt and notes payable including the $38.0 million voluntary prepayment of the first lien debt and$10.1 million from the Issuance of common stock.
Previous wording
During the three months ended March 31, 2023, financing activities used cash of $0.6 million that was primarily related to Principal payments on debtand Principal payments on notes payable of $0.6 million
Current wording
For the six months ended June 30, 2023, financing activities used cash of $1.2 million that was primarily related to Principal payments on debtof $1.1 million and Principal payments on notes payable of $0.1 million.
Previous wording
(2)Mining operations are subject to extensive environmental regulations in the jurisdictions in which they are conducted, and we are required, upon cessation of operations, to reclaim and remediate the lands that our operations have disturbed. The estimated undiscounted inflated cash outflows of these remediation and reclamation obligations are reflected here. In the above presentation, no offset has been applied for the $58.3 million of our reclamation bonds or for the $26.6 million of cash collateral for those bonds included in Restricted Cash.
Current wording
(2)Mining operations are subject to extensive environmental regulations in the jurisdictions in which they are conducted, and we are required, upon cessation of operations, to reclaim and remediate the lands that our operations have disturbed. The estimated undiscounted inflated cash outflows of these remediation and reclamation obligations are reflected here. In the above presentation, no offset has been applied for the $58.3 million of our reclamation bonds or for the $26.9 million of cash collateral for those bonds included in Restricted Cash.
Previous wording
(4)The Company is required to pay a 4% net profit royalty (“Crofoot Royalty”), including advance royalty payments of $120,000 in any year where mining occurs on the Crofoot claims and an additional $120,000 if tons mined from the Crofoot claim blocks exceed 5.0 million tons. See Note 22 – Commitments and Contingencies in the Notes to the Financial Statements for additional information. Amounts shown represent the current estimates of cash payment timing using consensus pricing for gold and silver.
Current wording
(4)The Company is required to pay a 4% net profit royalty (Crofoot Royalty), including advance royalty payments of $0.1 million in any year where mining occurs on the Crofoot claims and an additional $0.1 million if tons mined from the Crofoot claim blocks exceed 5.0 million tons. See Note 22 – Commitments and Contingencies in the Notes to the Financial Statements for additional information. Amounts shown represent the current estimates of cash payment timing using consensus pricing for gold and silver.
Previous wording
On May 24, 2023, the Company’s stockholders approved a proposed amendment of the Company’s second amended and restated certificate of incorporation (the “Certificate of Incorporation”) to effectuate a reverse stock split of the Company’s outstanding shares of Class A common stock, par value $0.0001 per share, at a ratio of no less than 1-for-10 and no more than 1-for-25, with such ratio to be determined at the sole discretion of the Board (the “Reverse Stock Split”). Pursuant to the terms of the Waiver and Amendment, Lender agreed to waive certain provisions of the Sprott Credit Agreement so that the Company may effectuate the proposed Reverse Stock Split of the Company’s common stock, including amendment of the Certificate of Incorporation necessary to effectuate the Reverse Stock Split. The Company notified the Nasdaq Stock Market LLC (“Nasdaq”) on October 26, 2023, that the Board of Directors approved filing the amendment to the Certificate of Incorporation in order that the Reverse Stock Split will be effective on November 14, 2023, at a ratio of 1-for-10. Except as set forth in the Waiver and Amendment, the Sprott Credit Agreement remains in full force and effect.
Current wording
On May 24, 2023, the Company’s stockholders approved a proposed amendment of the Company’s second amended and restated certificate of incorporation (the “Certificate of Incorporation”) to effectuate a reverse stock split of the Company’s outstanding shares of Class A common stock, par value $0.0001 per share, at a ratio of no less than 1-for-10 and no more than 1-for-25, with such ratio to be determined at the sole discretion of the Board (the “Reverse Stock Split”). Pursuant to the terms of the Waiver and Amendment, Lender agreed to waive certain provisions of the Sprott Credit Agreement so that the Company may effectuate the proposed Reverse Stock Split of the Company’s common stock, including amendment of the Certificate of Incorporation necessary to effectuate the Reverse Stock Split. The Company notified the Nasdaq Stock Market LLC on October 26, 2023, that the Board of Directors approved filing the amendment to the Certificate of Incorporation in order that the Reverse Stock Split will be effective on November 14, 2023, at a ratio of 1-for-10. Except as set forth in the Waiver and Amendment, the Sprott Credit Agreement remains in full force and effect.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The Company’s current plan is to operate safely as it continues exploration drilling and data analyses, completing technical studies, conducting trade-off studies and alternatives analyses for determining the optimal process flow sheet for processing sulfide ores and recovering gold and silver, maintaining the Hycroft Mine and strengthening its balance sheet.
Current report — wording carried from elsewhere
During the six months ended June 30, 2023, the Company used $22.4 million of cash in operating activities primarily attributable to a net loss of $27.8 million, the cash impact of which was $19.9 million. There was a $2.6 million deficit to working capital with the largest non-cash item included in Net loss for the six months ended June 30, 2023 being Non-cash interest expense of $6.0 million.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, investing activities generated cash of $1.3 million, comprised of Proceeds from the sale of patents of $1.4 million and Proceeds from the sale of equipment of $0.3 million, partially offset by Additions to property, plant, and equipmentof $0.4 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•On June 2, 2023, the Company filed a prospectus supplement reactivating the ATM Program and updating the amount of shares that the Company may sell through the ATM Program to an aggregate offering price of up to $361.4 million. On November 17, 2023, the Company again began accessing the ATM Program, and as of December 31, 2023, sold an additional 523,328 shares of common stock for aggregate gross proceeds, before commissions and offering expenses, of $1.1 million. As of December 31, 2023, there was common stock available for issuance under the ATM Program with an aggregate offering sales price of up to $360.3 million.