Business Context and Reporting Period
Company: Idaho Strategic Resources, Inc. (IDR)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: IDR is a gold producer and critical minerals exploration company based in Idaho. Its primary revenue source is the Golden Chest Mine, an underground gold operation in the Murray Gold Belt. The company also holds a majority interest in the New Jersey Mill, which processes ore from the Golden Chest. Additionally, IDR maintains a strategic portfolio of early-stage Rare Earth Element (REE) exploration properties (Mineral Hill, Lemhi Pass, and Diamond Creek) in central Idaho.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue (Gold Sales) | $42,406,253 | $25,765,373 |
| Gross Profit | $26,205,927 | $12,950,493 |
| Gross Margin | 61.8% | 50.3% |
| Net Income | $16,631,198 | $8,753,377 |
| Net Income Per Share (Diluted) | $1.14 | $0.67 |
| Operating Cash Flow | $19,101,691 | $10,840,886 |
| Cash and Cash Equivalents (End of Period) | $9,889,765 | $1,106,901 |
| Total Assets | $116,238,730 | $44,021,630 |
| Total Liabilities | $5,396,782 | $3,608,316 |
| Working Capital | $47,669,136 | $9,462,524 |
| Notes Payable (Total) | $2,331,384 | $1,732,739 |
Production Metrics (2025):
- Gold Produced: 12,538 ounces
- Gold Sold: 11,834 payable ounces
- Ore Processed: 41,840 tonnes (Average head grade: 10.14 gpt Au)
- Cash Cost per Ounce: $1,026.43
- All-In Sustaining Cost (AISC) per Ounce: $1,891.79
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 64.6% year-over-year, driven by a 5.2% increase in ounces sold and a significant rise in the realized gold price ($3,583.43/oz in 2025 vs. $2,306.86/oz in 2024).
- Profitability Expansion: Net income nearly doubled to $16.6 million, primarily due to higher gold prices and improved gross margins resulting from high-grade ore from the H-Vein.
- Balance Sheet Strengthening: Total assets more than doubled to $116.2 million, largely due to a strategic increase in investments in US Treasury notes (from $14.9M to $55.3M) and equity securities. Cash and cash equivalents increased significantly to $9.9 million.
- Cost Increases: Exploration expenses rose by $4.7 million to $7.6 million due to an expanded drilling program at the Golden Chest Mine. AISC per ounce increased by $417.74, largely attributed to increased exploration and sustaining capital.
- Reserve Growth: Proven and Probable mineral reserves increased to 338,521 tonnes (6.95 gpt Au) from 170,819 tonnes in 2024, following successful drilling and drifting activities.
Guidance, Outlook, and Risks
Management Outlook: Management expects positive cash flow from operations to continue for the next 18 months, supported by underground mining of the H-Vein and Jumbo Vein. The company plans to reinvest cash flow into the Golden Chest Mine, the New Jersey Mill, and exploration efforts. A new flotation mill with 360 tonnes per day capacity is under construction at the Golden Chest Mine, with permitting underway for a new Tailings Storage Facility (TSF).
Key Risks and Contingencies:
- Customer Concentration: 98% of gold sales in 2025 were to a single customer, H&H Metals Corporation.
- Commodity Price Volatility: Operations are highly sensitive to fluctuations in gold prices.
- Exploration Risk: The REE projects (Mineral Hill, Lemhi Pass, Diamond Creek) are in the exploration stage with no established reserves; success is not guaranteed.
- Regulatory and Permitting: Delays in obtaining permits from the USFS and BLM could hinder exploration and development. Environmental liabilities, including potential Superfund site involvement, remain a risk.
- Climate and Weather: Extreme weather events could disrupt operations, particularly regarding water management and road access.
Investor Verification Checklist
- Customer Dependency: Verify the stability of the relationship with H&H Metals Corporation, which accounts for nearly all gold sales.
- Reserve Estimates: Review the Technical Report Summary (Exhibit 96.1) to validate the significant increase in Proven and Probable reserves and the assumptions used (e.g., gold price of $2,040/oz for reserves).
- Capital Allocation: Assess the strategy behind holding over $55 million in US Treasury notes and equity securities while simultaneously investing in mine expansion.
- Cost Structure: Monitor the trend in All-In Sustaining Costs (AISC), which rose significantly in 2025 due to exploration spend, and determine if this is a temporary or structural increase.
- REE Project Progress: Track the permitting status and drilling results for the Mineral Hill, Lemhi Pass, and Diamond Creek projects to evaluate their potential contribution to future value.