Business Context and Reporting Period
Company: Idaho Strategic Resources, Inc. (IDR)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Quarter and six months ended June 30, 2026
Business Overview: IDR is a gold producer and critical minerals exploration company. Its primary producing asset is the Golden Chest Mine in Idaho, alongside the New Jersey Mill Joint Venture (65% owned). The company is also advancing exploration for Rare Earth Elements (REE) at three properties in Idaho. IDR is classified as a Non-Accelerated Filer and a Small Reporting Company.
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Total Revenue | $10,732,335 | $25,214,621 |
| Gross Profit | $6,031,728 | $15,596,626 |
| Operating Income | $3,662,904 | $11,245,064 |
| Net Income (Attributable to IDR) | $3,651,596 | $10,039,588 |
| Diluted EPS | $0.23 | $0.63 |
| Cash and Cash Equivalents | $8,234,662 (as of June 30, 2026) | |
| Total Debt (Notes Payable) | $2,124,827 (Current: $831,381; Long-term: $1,293,446) | |
| Working Capital | $41,772,550 |
Non-GAAP Metrics (Six Months 2026):
- Cash Cost per Ounce: $1,108.13
- All-In Sustaining Cost (AISC) per Ounce: $2,059.08
- Adjusted AISC per Ounce (excluding exploration): $1,667.55
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 13.3% for the quarter and 50.5% for the six-month period compared to 2025. This was driven by a higher average realized gold price ($4,558.78/oz for six months 2026 vs. $3,049.19/oz in 2025).
- Profitability: Net income attributable to IDR surged 130.8% for the six-month period to $10.04 million. Operating income increased 187% year-over-year for the same period.
- Tax Provision: The company recognized an income tax provision of $2.09 million for the six months ended June 30, 2026, compared to $0 in the prior year, as the company has worked through its cumulative loss position and net operating losses (NOLs). The effective tax rate is estimated at 17.48%.
- Investment Portfolio: The company sold all equity securities and mutual funds held at the beginning of the year, realizing a loss of $304,241. Proceeds were reinvested into US Treasury notes, which now total approximately $64.2 million.
- Capital Expenditures: Investing cash outflows increased significantly to $16.4 million (vs. $10.4 million in 2025), driven by purchases of property, plant, and equipment ($5.8 million) and deposits on equipment ($4.7 million).
Outlook, Management Commentary, and Risks
- Operational Highlights:
- Golden Chest Mine: Mined 12,835 tonnes of ore in Q2. Completed a record 384 meters of development. Established a new portal (No. 2) to access the high-grade Jumbo vein, with production expected to begin in Q3.
- Milling: Processed 11,094 tonnes at the New Jersey Mill with a 91.4% gold recovery rate. Operations were briefly impacted by an adjacent wildfire in June, but no equipment damage occurred.
- REE Exploration: IDR was included in the Sprott Rare Earths Ex-China ETF (REXC). Metallurgical work initiated on samples from two REE prospects.
- Capital Projects: Construction began on a new tailings storage facility at Golden Chest. The new mill construction is underway, including the installation of the fine ore bin and foundations for the ball mill.
- Liquidity: Management believes cash flows from operations, combined with working capital of $41.8 million and potential equity sales, are sufficient to meet obligations for the next 12 months.
- Risks:
- Commodity Prices: Revenue is heavily dependent on gold prices.
- Operational Disruptions: Wildfires and access issues can impact milling operations.
- Exploration Uncertainty: REE exploration is in early stages with no guaranteed commercial reserves.
Investor Verification Checklist
- Gold Price Sensitivity: Verify the impact of current spot gold prices on the company's realized price and future margins, given the 50% revenue increase was largely price-driven.
- Capital Expenditure Execution: Monitor the timeline and cost overruns for the new tailings facility and the new mill construction, which represent significant cash outflows.
- Tax Liability: Confirm the sustainability of the 17.48% effective tax rate as the company utilizes remaining NOLs and assesses future tax obligations.
- REE Progress: Review upcoming drill results and metallurgical reports for the Mineral Hill, Lemhi Pass, and Diamond Creek properties to validate the diversification strategy.
- Debt Servicing: Review the weighted average interest rates (6.88% - 8.07%) on notes payable and ensure operating cash flow remains sufficient to cover principal payments due within the next 12 months ($831,381).