Idaho Strategic Resources Inc.
08/13/2026 | Press release | Distributed by Public on 08/13/2026 04:37
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
Idaho Strategic is a gold producer and critical minerals exploration company focused on a diversified asset base and cash flows from operations. Its portfolio of mineral properties are located in the historic producing silver and gold districts of the Coeur d'Alene Mining region of north Idaho and the Elk City region of north-central Idaho, as well as the historic rare earth element ("REE")-thorium belt located near the city of Salmon in central Idaho.
The Company's plan of operation is to generate positive cash flow, increase its gold production and asset base over time while being mindful of corporate overhead. The Company's management is focused on utilizing its in-house technical and operating skills to build a portfolio of producing mines and milling operations with a focus on gold production and critical minerals exploration.
The Company's gold properties include: the Golden Chest (currently in production), and the New Jersey Mill (majority ownership interest), as well as the Little Baldy and Niagara exploration properties and other less advanced properties. The Company's primary focus as it relates to its gold properties is to continue to grow production at the Golden Chest Mine and look to reinvest the cash flow into both the Golden Chest, the New Jersey Mill, and furthering its exploration efforts near the Golden Chest, as well as at its REE properties.
In addition to its gold properties, Idaho Strategic has three REE exploration properties in Idaho known as Mineral Hill, Lemhi Pass, and Diamond Creek. The Company's expansion into REE's came about in an effort to diversify its holdings towards the anticipated demand for these elements in advanced robotics, low-carbon technologies, and a renewed focus on the United States' domestic critical minerals supply chain security for national defense. To date, Idaho Strategic has conducted numerous exploration programs on its REE properties which include mapping, sampling, trenching, and drilling of certain areas within the Company's 21,385-acre landholdings.
Idaho Strategic has been able to leverage its track record of operations and experience in mining, milling, and exploring at the Golden Chest to develop relationships with different state government agencies, universities, national labs, and other government and non-government entities to advance its REE exploration activities on multiple fronts. Idaho Strategic plans to continue to look for additional partnerships to find mutually beneficial solutions to advance the U.S.' domestic REE supply chain.
Highlights during the second quarter of 2026 include:
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REE Exploration |
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The Company was included in the inaugural list of companies that make up the Sprott Rare Earths Ex-China ETF (REXC) |
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IDR initiated metallurgical work at SGS Laboratory on representative samples from two of its REE prospects. |
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Golden Chest/Operations |
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At the Golden Chest, ore mined from underground stopes totaled approximately 12,835 tonnes with all of the tonnage coming from H-Vein stopes. |
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During the quarter, a record 384 meters of development was completed between three projects: the Paymaster, the MAR and the Jumbo. A new portal, the No. 2, was established in early May to develop the high-grade Jumbo vein. From the No. 2 portal, an up-ramp was driven and connected to the No. 1 portal providing a secondary escapeway and allowing for production from the Jumbo vein to begin in the third quarter. Another quarterly record of 4,860 cubic meters of cemented rockfill backfill was placed during the quarter. |
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For the quarter ended June 30, 2026, a total of 11,094 dry metric tonnes were processed at the Company's New Jersey Mill with a flotation feed head grade of 7.89 gpt gold and gold recovery of 91.4%. Milling operations were affected by a wildfire adjacent to the mill in June where access to the mill was blocked for one week. Luckily there was no damage to the mill or the Company's equipment, though some of its timberland did burn. |
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The Company received the permit to construct a new tailings storage facility from the Idaho Department of Water Resources at the Golden Chest. Construction began in the quarter with the relocation of a low-grade stockpile and continued with building of the embankments and diversion structures. |
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Construction continued on the new mill at the Golden Chest with the installation of the fine ore bin, placement of the screen, foundations for the ball mill, and electrical work throughout the mill building. Engineering, design and procurement activities continued for the new mill also, and conveyor fabrication is also underway. |
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An exploration program consisting of surface and underground core drilling was continued during the second quarter at the Golden Chest. Approximately 10,000 meters of drilling were completed targeting the Paymaster and the H-vein. |
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Results of Operations |
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Idaho Strategic's financial performance during the quarter is summarized below: |
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Revenue increased 13.3% for the three-month period ended June 30, 2026 when compared to the same period in the prior year. For the six-month period ended June 30, 2026, revenue increased 50.5% when compared to the same period in the prior year. The increase in revenue for both the three and six-month periods was due to the increased average gold price realized on ounces sold which was $4,277.53 for the three-month period and $4,558.78 for the six-month period ended June 30, 2026. For the three and six-month periods ended June 30, 2025 it was $3,223.38 and $3,049.19, respectively. |
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Gross profit as a percentage of sales decreased slightly from 57.8% in the three-month period ended June 30, 2025 to 56.2% in the three-month period ended June 30, 2026 due to lower grade processed. When comparing the six-month periods ended June 30, 2026 and 2025 gross profit as a percentage of sales increased from 54.8% to 61.9%. |
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Exploration expense decreased $513,882 and $495,966 when comparing the three and six-month periods ended June 30, 2026 and 2025, respectively. The Company capitalized $1,046,700 and $2,007,413 of core drilling costs at the Golden Chest in the three and six-month periods ended June 30, 2026, compared to $0 in the three and six-month periods ended June 30, 2025. |
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Operating income for the three-month period ended June 30, 2026 was $3,662,904 which is an increase of 45.5% from the same period in 2025. Operating income for the six-month period ended June 30, 2026 was $11,245,064 which is an increase of 187% over 2025. The increase is due to higher average realized gold price on ounces sold. |
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Other income increased $468,752 and $424,505 for the three and six-month periods ended June 30, 2026, respectively, when compared to the same periods in the prior year. The increase was from increased interest income and gains on US treasuries from the company's short term investment account. |
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Net income for the three-month period ended June 30, 2026 was $3,627,840 which is a 32.4% increase compared to the same period in 2025. Net income for the six-month period ended June 30, 2026 was $9,997,030 which is a 130.8% increase compared to the same period in 2025. The increase was due to higher average realized gold price on ounces sold in both periods. |
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The consolidated net income for the six-month periods ended June 30, 2026 and 2025 included non-cash charges as follows: depreciation and amortization of $1,559,425 ($1,091,359 in 2025), gain on sale of equipment of $632 (loss of $308,840 in 2025), accretion of asset retirement obligation of $10,530 ($9,855 in 2025), loss on investment in equity securities of $304,241 ($0 in 2025), equity income on investment in Buckskin of $1,077 ($1,187 in 2025), stock-based compensation expense of $277,292 ($990,292 in 2025), amortization of premium on US treasury notes of $253,852 (discount of $14,068 in 2025), and deferred tax provision of $1,395,177 ($0 in 2025). |
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Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures
Cash Costs and All In Sustaining Costs ("AISC") Reconciliation to Generally Accepted Accounting Principles ("GAAP")
Reconciliation of cost of sales and other direct production costs and depreciation, depletion, and amortization (GAAP) to cash cost per ounce and All-In Sustaining Costs ("AISC") per ounce (non-GAAP).
The table below presents reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion, and amortization to the non-GAAP measures of cash cost per ounce produced and AISC per ounce produced for the Company's gold production for the three and six-month periods ended June 30, 2026, and 2025. The cost per ounce calculations are based on ounces produced. Upon sale, the Company typically receives payment at an average rate of 94% of ounces produced after smelting and refining charges are deducted.
Cash cost per ounce is an important operating measure that is utilized to measure operating performance. AISC per ounce is an important measure that is utilized to assess net cash flow after costs for pre-development, exploration, reclamation, and sustaining capital. Current GAAP measures used in the mining industry, such as cost of goods sold do not capture all the expenditures incurred to discover, develop, and sustain gold production. Idaho Strategic calculates sustaining capital by including depreciation and amortization as an estimate of property, plant, and equipment wear and tear necessary to maintain production capacity, plus Golden Chest capitalized development costs, net of current period amortization, to reflect expenses for sustaining mine access and gold production.
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June 30, 2026 |
June 30, 2025 |
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Three Months |
Six Months |
Three Months |
Six Months |
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Cost of sales and other direct production costs and depreciation, depletion, and amortization |
$ | 4,700,607 | $ | 9,617,995 | $ | 4,000,953 | $ | 7,581,403 | ||||||||
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Less depreciation, depletion, amortization, and stock-based compensation |
(931,077 | ) | (1,730,299 | ) | (846,872 | ) | (1,701,627 | ) | ||||||||
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Change in inventory |
(658,919 | ) | (927,558 | ) | 50,601 | (221,069 | ) | |||||||||
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Cash cost |
$ | 3,110,611 | $ | 6,960,138 | $ | 3,204,682 | $ | 5,658,707 | ||||||||
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Exploration |
1,730,879 | 3,120,228 | 2,244,761 | 3,616,194 | ||||||||||||
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Less non-gold exploration and stock-based compensation |
(392,755 | ) | (679,070 | ) | (363,138 | ) | (527,818 | ) | ||||||||
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Sustaining capital |
2,488,755 | 4,556,242 | 788,722 | 1,412,966 | ||||||||||||
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General and administrative |
295,640 | 518,667 | 223,735 | 460,753 | ||||||||||||
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Less stock-based compensation and other non-cash items |
(341,395 | ) | (1,543,117 | ) | (233,681 | ) | (913,708 | ) | ||||||||
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AISC |
$ | 6,891,735 | $ | 12,933,088 | $ | 5,865,082 | $ | 9,707,094 | ||||||||
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Divided by ounces produced |
3,047 | 6,281 | 3,010 | 5,910 | ||||||||||||
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Cash cost per ounce |
$ | 1,020.88 | $ | 1,108.13 | $ | 1,064.68 | $ | 957.48 | ||||||||
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AISC per ounce |
$ | 2,261.81 | $ | 2,059.08 | $ | 1,948.53 | $ | 1,642.49 | ||||||||
Cash cost per ounce for the three and six-month periods ended June 30, 2026 decreased $43.80 and increased $150.65 per ounce, respectively, compared to the same periods in 2025.
All in sustaining cost per ounce increased during the three and six-month periods ended June 30, 2026 compared to the same periods in 2025 due to an increase in sustaining capital related to core drilling at the Golden Chest Mine. Adjusted AISC per ounce without exploration expenses were as follows:
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June 30, 2026 |
June 30, 2025 |
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Three Months |
Six Months |
Three Months |
Six Months |
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AISC |
$ | 6,891,735 | $ | 12,933,088 | $ | 5,865,082 | $ | 9,707,094 | ||||||||
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Less gold exploration costs |
(1,346,963 | ) | (2,459,235 | ) | (1,913,189 | ) | (3,152,257 | ) | ||||||||
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Adjusted AISC |
5,544,772 | 10,473,853 | 3,951,894 | 6,554,837 | ||||||||||||
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Divided by ounces produced |
3,047 | 6,281 | 3,010 | 5,910 | ||||||||||||
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Adjusted AISC per ounce |
$ | 1,819.75 | $ | 1,667.55 | $ | 1,312.92 | $ | 1,109.11 | ||||||||
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Financial Liquidity and Capital Resources
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For the Six-Months Ended June 30, |
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Net cash provided (used) by: |
2026 |
2025 |
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Operating activities |
$ | 13,731,528 | $ | 6,011,568 | ||||
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Investing activities |
(16,415,565 | ) | (10,371,422 | ) | ||||
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Financing activities |
1,028,934 | 5,697,429 | ||||||
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Net change in cash and cash equivalents |
(1,655,103 | ) | 1,337,575 | |||||
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Cash and cash equivalents, beginning of period |
9,889,765 | 1,106,901 | ||||||
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Cash and cash equivalents, end of period |
$ | 8,234,662 | $ | 2,444,476 | ||||
The Company is producing profitably from underground at the Golden Chest Mine. Cash flows provided by operations have been sufficient to fund capital projects necessary to sustain production capacity, as well as invest in future growth initiatives. In the past, when cash flows from operations were not sufficient, the Company was successful in raising required capital from the sale of common stock. With working capital of $41,772,550 at June 30, 2026, sufficient cash flows provided by operations, profitability, and potential equity sales and debt borrowings, management believes contractual obligations and capital requirements will be able to be met for the next 12 months.
Idaho Strategic Resources Inc. published this content on August 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 13, 2026 at 10:38 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]