Paramount Gold Nevada Corp. — Form 10-Q Summary
Reporting period: The filing covers the quarter and nine months ended March 31, 2023, not 2022 Q3 as stated in the request metadata. Paramount is a Nevada- and Oregon-focused precious-metals exploration and development company; it reported no mining revenue.
Financial results and position
| Metric | Three months ended March 31, 2023 | Nine months ended March 31, 2023 |
|---|---|---|
| Revenue | $0 | $0 |
| Total expenses | $1.57 million | $4.69 million |
| Net loss | $1.65 million | $4.92 million |
| Basic and diluted loss per share | $0.03 | $0.10 |
| Cash used in operating activities | $3.29 million for nine months |
At March 31, 2023, cash was $590,505, down from $2.48 million at June 30, 2022. The company disclosed negative working capital of approximately $8.0 million. Total assets were $53.51 million, total liabilities $10.96 million, and stockholders’ equity $42.55 million. Mineral properties totaled $51.82 million. No operating margin is applicable because the company had no revenue.
Current liabilities included $3.61 million of convertible debt, $658,363 of related-party convertible debt, $1.03 million of related-party notes payable, and $3.12 million of current reclamation obligations. The 2019 secured convertible notes and Seabridge note mature in September 2023; management estimated approximately $5.3 million would be required to repay them. The notes bear 7.5% stated interest, and the Seabridge bridge note bears 12% interest.
Changes versus the prior comparable period
- Quarterly net loss increased 22% from $1.35 million; nine-month net loss decreased 17% from $5.96 million.
- Nine-month exploration expense fell 49% to $1.90 million, primarily reflecting differing project activity and less exploration spending than in the prior-year period. Quarterly exploration expense rose 9% to $597,315.
- Nine-month interest and service charges increased to $328,141 from $298,882. Accretion expense increased to $334,683 from $137,907.
- Cash used in operations improved to $3.29 million from $4.84 million, but financing cash provided fell to $1.47 million from $6.21 million. Nine-month ATM proceeds were $473,688 versus $6.21 million in the prior-year period.
Outlook, risks, and notable items
- Management stated that substantial doubt exists about the company’s ability to continue as a going concern for the twelve months after issuance of the financial statements. It expects continued losses and relies on equity or debt financings and possible royalty sales; additional funding may not be available on acceptable terms.
- Management projected approximately $3.2 million of corporate, land-maintenance, and general expenses over the next twelve months, plus planned spending of $3.0 million on Grassy Mountain permitting, $250,000 on Sleeper, and $3.0 million for Sleeper evaporation-cell conversions, subject to available cash.
- Approximately $3.0 million of the Sleeper reclamation obligation was reclassified as current because NDEP requires pond conversions within twelve months. Management expects insurance to cover the reclamation work and was discussing direct contractor payment with its insurer; an extension from NDEP may be sought if work cannot begin on time.
- Grassy Mountain permitting advanced: the BLM accepted the Plan of Operation as complete, and Oregon’s technical review team accepted specified baseline reports. The State of Oregon had not yet determined the consolidated permit application complete; federal environmental review remained to be initiated.
- After quarter-end, the company sold 5,536,790 shares through its ATM program for gross proceeds of $1.93 million and borrowed another $500,000 from Seabridge. Together with the $1.0 million borrowed during the nine-month period, this used the full $1.5 million facility limit.
- Seabridge holds a contingent right, following a positive production decision and secured construction financing for Grassy Mountain, to require the company to purchase its net profit interest for CDN$10 million. The company may need additional financing to meet that obligation.
Important facts for investors to verify
- Availability and terms of funding to address the September 2023 debt maturities and ongoing working-capital needs.
- Whether insurance will fund the Sleeper pond conversions, and whether NDEP’s deadline can be met or extended.
- Progress and timing of Oregon and federal permitting for Grassy Mountain, including the state’s completeness determination and initiation of the environmental review process.
- ATM share issuance, dilution, and the company’s cash position following the reported post-quarter financing.
- Potential funding implications of Seabridge’s contingent CDN$10 million net-profit-interest put option.