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Restatement of Financial Statements

9 Months Ended

Sep. 30, 2025

2. Restatement of Financial Statements

The interim unaudited condensed consolidated financial statements include corrections to the three and nine months periods ended September 30, 2024, which were presented in Note 24 to the consolidated financial statements for the year ended December 31, 2024, in the Company’s 2024 Form 10-K filed on April 8, 2025. During the preparation of the consolidated financial statements for the year ended December 31, 2024, management of the Company identified that liabilities related to the Company’s Back Forty Project with respect to the Gold and Silver Stream Agreements with Osisko (the “Osisko Stream Agreements”) were incorrectly presented in the Company’s financial statements due to errors in the application of U.S. GAAP. The errors related to the calculation of interest accretion over the liabilities associated with the Osisko Stream Agreements (the “streaming liabilities”). It was determined that the streaming liabilities should be accounted for under Financial Accounting Standards Board’s Accounting Standards Codification 606, Revenue from Contracts with Customers, and that a significant financing component is present that should be accreted using the effective interest method. The resulting errors understated the streaming liabilities and net loss for all the impacted periods noted below.

The correction to the Company’s consolidated statements of operations also impacts the Company’s consolidated balance sheets, consolidated statements of changes in shareholders’ equity, consolidated statements of cash flows, and certain notes to the consolidated financial statements.

In the restated presentation, the Company also recorded previously uncorrected misstatements that were determined to be immaterial to the financial statements in prior periods.

The following table presents the Company’s restatement impact in the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2024:


	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	For the three months ended September 30, 2024						For the nine months ended September 30, 2024
	As Previously Reported		Restatement Impacts		Restated		As Previously Reported		Restatement Impacts		Restated

	(U.S. dollars in thousands, except share and per share amounts)
Sales, net	$	13,272	$	-	$	13,272	$	52,756	$	-	$	52,756
Cost of sales:
Production costs		17,198		-		17,198		51,074		-		51,074
Depreciation and amortization		4,178		-		4,178		14,221		-		14,221
Reclamation and remediation		566		-		566		1,892		-		1,892
Total cost of sales		21,942		-		21,942		67,187		-		67,187
Mine gross loss		(8,670)		-		(8,670)		(14,431)		-		(14,431)
Costs and expenses:
General and administrative expenses		1,293		-		1,293		2,975		-		2,975
Mexico exploration expenses		767		-		767		1,850		-		1,850
Michigan Back Forty Project expenses		202		(25)		177		549		(25)		524
Stock-based compensation		203		-		203		647		-		647
Other expense, net		2,977		2,198		5,175		10,846		3,400		14,246
Total costs and expenses		5,442		2,173		7,615		16,867		3,375		20,242
Loss before income taxes		(14,112)		(2,173)		(16,285)		(31,298)		(3,375)		(34,673)
Income tax (benefit) provision		(3,617)		9		(3,608)		10,952		(266)		10,686
Net loss	$	(10,495)	$	(2,182)	$	(12,677)	$	(42,250)	$	(3,109)	$	(45,359)
Net loss per common share:
Basic and diluted net loss per common share	$	(0.11)	$	(0.03)	$	(0.14)	$	(0.46)	$	(0.04)	$	(0.50)

Weighted average shares outstanding:
Basic and diluted		93,279,750		-		93,279,750		91,005,507		-		91,005,507

The following table presents the Company’s restatement impact in the unaudited condensed consolidated statement of changes in shareholders’ equity for the three months ended September 30, 2024:


	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
	For the three months ended September 30, 2024
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity

As Previously Reported	(U.S. dollars in thousands, except share amounts)
Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(40,066)	$	(5,884)	$	(1,171)	$	67,021
Stock-based compensation	-		-		184		-		-		-		184
Issuance of common stock, net of issuance costs	1,230,180		1		598		-		-		-		599
Net loss	-		-		-		(10,495)		-		-		(10,495)
Balance, September 30, 2024	93,859,426	$	94	$	114,831	$	(50,561)	$	(5,884)	$	(1,171)	$	57,309

Restatement Impacts
Balance, June 30, 2024	-	$	-	$	-	$	(17,192)	$	-	$	-	$	(17,192)
Stock-based compensation	-		-		-		-		-		-		-
Issuance of common stock, net of issuance costs	-		-		-		-		-		-		-
Net loss	-		-		-		(2,182)		-		-		(2,182)
Balance, September 30, 2024	-	$	-	$	-	$	(19,374)	$	-	$	-	$	(19,374)

Restated
Balance, June 30, 2024	92,629,246	$	93	$	114,049	$	(57,258)	$	(5,884)	$	(1,171)	$	49,829
Stock-based compensation	-		-		184		-		-		-		184
Issuance of common stock, net of issuance costs	1,230,180		1		598		-		-		-		599
Net loss	-		-		-		(12,677)		-		-		(12,677)
Balance, September 30, 2024	93,859,426	$	94	$	114,831	$	(69,935)	$	(5,884)	$	(1,171)	$	37,935

The following table presents the Company’s restatement impact in the unaudited condensed consolidated statement of changes in shareholders’ equity for the nine months ended September 30, 2024:


	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
	For the nine months ended September 30, 2024
	Number of Common Shares	Par Value of Common Shares		Additional Paid- in Capital		Retained Earnings (Accumulated Deficit)		Treasury Stock		Accumulated Other Comprehensive Loss		Total Shareholders' Equity

As Previously Reported	(U.S. dollars in thousands, except share amounts)
Balance, December 31, 2023	89,030,436	$	89	$	111,970	$	(8,311)	$	(5,884)	$	(1,171)	$	96,693
Stock-based compensation	-		-		463		-		-		-		463
Common stock issued for vested restricted stock units	196,991		-		-		-		-		-		-
Issuance of common stock, net of issuance costs	4,708,993		5		2,429		-		-		-		2,434
Surrender of common stock for taxes due on vesting	(76,994)		-		(31)		-		-		-		(31)
Net loss	-		-		-		(42,250)		-		-		(42,250)
Balance, September 30, 2024	93,859,426	$	94	$	114,831	$	(50,561)	$	(5,884)	$	(1,171)	$	57,309

Restatement Impacts
Balance, December 31, 2023	-	$	-	$	-	$	(16,265)	$	-	$	-	$	(16,265)
Stock-based compensation	-		-		-		-		-		-		-
Common stock issued for vested restricted stock units	-		-		-		-		-		-		-
Issuance of common stock, net of issuance costs	-		-		-		-		-		-		-
Surrender of common stock for taxes due on vesting	-		-		-		-		-		-		-
Net loss	-		-		-		(3,109)		-		-		(3,109)
Balance, September 30, 2024	-	$	-	$	-	$	(19,374)	$	-	$	-	$	(19,374)

Restated
Balance, December 31, 2023	89,030,436	$	89	$	111,970	$	(24,576)	$	(5,884)	$	(1,171)	$	80,428
Stock-based compensation	-		-		463		-		-		-		463
Common stock issued for vested restricted stock units	196,991		-		-		-		-		-		-
Issuance of common stock, net of issuance costs	4,708,993		5		2,429		-		-		-		2,434
Surrender of common stock for taxes due on vesting	(76,994)		-		(31)		-		-		-		(31)
Net loss	-		-		-		(45,359)		-		-		(45,359)
Balance, September 30, 2024	93,859,426	$	94	$	114,831	$	(69,935)	$	(5,884)	$	(1,171)	$	37,935

The following table presents the Company’s restatement impact in the unaudited condensed consolidated statement of cash flows for the nine months ended September 30, 2024:


	UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the nine months ended September 30, 2024
	As Previously Reported		Restatement Impacts		Restated

	(U.S. dollars in thousands)
Cash flows from operating activities:
Net loss	$	(42,250)	$	(3,109)	$	(45,359)
Adjustments to reconcile net loss to net cash used in operating activities:
Deferred income tax expense (benefit)		10,775		(266)		10,509
Depreciation and amortization		15,589		-		15,589
Stock-based compensation		647		-		647
Interest on streaming liabilities		6,356		3,256		9,612
Other operating adjustments, net		4,446		-		4,446
Changes in operating assets and liabilities:
Accounts receivable		(1,078)		-		(1,078)
Inventories		1,185		-		1,185
Prepaid expenses and other current assets		(1,291)		1,045		(246)
Other non-current assets		(154)		-		(154)
Accounts payable and other accrued liabilities		4,937		(926)		4,011
Cash settled liability awards		(67)		-		(67)
Mining royalty and income taxes payable, net		(1,048)		-		(1,048)
Net cash used in operating activities		(1,953)		-		(1,953)

Cash flows from investing activities:
Capital expenditures		(6,353)		-		(6,353)
Proceeds from the sale of investment in Maritime		1,178		-		1,178
Net cash used in investing activities		(5,175)		-		(5,175)

Cash flows from financing activities:
Proceeds from the ATM sales, net of issuance costs		2,434		-		2,434
Other financing activities		(33)		-		(33)
Net cash provided by financing activities		2,401		-		2,401
Effect of exchange rate changes on cash and cash equivalents		(175)		-		(175)

Net decrease in cash and cash equivalents		(4,902)		-		(4,902)
Cash and cash equivalents at beginning of period		6,254		-		6,254
Cash and cash equivalents at end of period	$	1,352	$	-	$	1,352

Supplemental Cash Flow Information
Income and mining taxes paid	$	1,088	$	-	$	1,088
Non-cash investing or financing activities:
Value of common shares issued for RSU redemption	$	49	$	-	$	49
Balance of capital expenditures in accounts payable	$	385	$	1	$	386
Balance of equipment financing	$	1,041	$	-	$	1,041