Gold Resource (NYSE: GORO) details 2025 loss, financing moves and Goldgroup merger plan
Rhea-AI Filing Summary
Gold Resource Corporation reported a net loss of $6.5 million for 2025 on revenue of $99.8 million and mine gross profit of $26.8 million. Production for the year totaled 5,300 gold ounces, 1,594,300 silver ounces, 264 copper tonnes, 1,192 lead tonnes, and 3,613 zinc tonnes.
The Don David Gold Mine in Mexico showed stronger fourth-quarter performance after bringing in a contract miner and upgrading aging equipment, and the company expects positive operating income in 2026. To strengthen liquidity, it completed two registered direct offerings, raised about $8.6 million through an ATM program, sold its interest in Green Light Metals for $0.9 million, and received a tax refund of 79.6 million pesos (approximately $4.0 million).
Gold Resource continues advancing exploration at its Three Sisters and Arista vein systems and the Back Forty Project in Michigan while managing permitting, environmental, political, and customer-concentration risks. In January 2026 it agreed to a stock-for-stock merger with Goldgroup Mining, under which its stockholders are expected to own about 40% of the combined company if the transaction closes.
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Insights
GORO posts 2025 loss but shores up liquidity and pursues a merger.
Gold Resource Corporation generated 2025 revenue of $99.8 million and mine gross profit of $26.8 million, yet recorded a net loss of $6.5 million. Operationally, fourth-quarter improvements at the Don David Gold Mine followed fleet upgrades and the use of a third-party mining contractor, supporting expectations for positive operating income in 2026.
Liquidity was a clear focus. The company raised $2.5 million in a January 2025 registered direct offering, closed a second such offering for $11.4 million in September 2025, issued shares worth about $6.4 million to settle a term loan, realized roughly $8.6 million via its ATM program, sold its Green Light Metals interest for $0.9 million, and received a tax refund of 79.6 million pesos (approximately $4.0 million).
Strategically, the announced stock-for-stock merger with Goldgroup Mining would leave current shareholders owning about 40% of the combined company, subject to approvals and closing conditions. At the same time, the filing highlights ongoing risks typical for a small single-asset producer, including metal price volatility, Mexican permitting and community issues, heavy reliance on two customers for 99% of DDGM revenue, and execution risk around the Back Forty Project and the merger.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to ___________
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(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer |
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(Registrant’s telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered |
|---|---|---|
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ◻ | Accelerated filer | ◻ |
⌧ | Smaller reporting company | ||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ◻
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ◻
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The aggregate market value of the common stock of Gold Resource Corporation held by non-affiliates as of June 30, 2025, the last business day of the registrant’s most recently completed second fiscal quarter, was $
As of March 16, 2026, there were
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Definitive Proxy Statement to be filed pursuant to Regulation 14A for the registrant’s 2026 annual meeting of shareholders will be filed no later than 120 days after the close of Registrant’s fiscal year ended December 31, 2025, and are incorporated by reference into Part III of this Form 10-K.
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TABLE OF CONTENTS
Page | |||
2025 Summary | 2 | ||
PART I | |||
ITEM 1: | Business | 6 | |
ITEM 1A: | Risk Factors | 12 | |
ITEM 1B: | Unresolved Staff Comments | 27 | |
ITEM 1C: | Cybersecurity | 27 | |
ITEM 2: | Properties | 29 | |
ITEM 3: | Legal Proceedings | 45 | |
ITEM 4: | Mine Safety Disclosures | 45 | |
PART II | |||
ITEM 5: | Market For Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities | 46 | |
ITEM 6: | Reserved | 46 | |
ITEM 7: | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 47 | |
ITEM 7A: | Quantitative and Qualitative Disclosures About Market Risk | 65 | |
ITEM 8: | Financial Statements | 67 | |
ITEM 9: | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 105 | |
ITEM 9A: | Controls and Procedures | 105 | |
ITEM 9B: | Other Information | 106 | |
ITEM 9C: | Disclosures Regarding Foreign Jurisdictions that Prevent Inspections | 106 | |
PART III | |||
ITEM 10: | Directors, Executive Officers, and Corporate Governance | 107 | |
ITEM 11: | Executive Compensation | 107 | |
ITEM 12: | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 107 | |
ITEM 13: | Certain Relationships and Related Transactions, and Director Independence | 107 | |
ITEM 14: | Principal Accounting Fees and Services | 107 | |
PART IV | |||
ITEM 15: | Exhibits and Financial Statement Schedules | 108 | |
ITEM 16: | Form 10-K Summary | 110 | |
Signatures | 111 |
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2025 SUMMARY
Milestones for the full-year ended December 31, 2025 are included below and discussed further under Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Don David Gold Mine:
| ● | Production substantially improved, as the Company began receiving newly acquired equipment at the end of the third quarter. The additional equipment, combined with the strategic use of third-party contractors, enabled an increase in available production headings and a subsequent improvement in production. |
| ● | DDGM produced and sold a total of 23,125 gold equivalent ounces, comprising of 4,944 gold ounces and 1,461,898 silver ounces, sold at an average price per ounce of $3,657 and $45.48, respectively. DDGM total cash costs after co-product credits per gold equivalent (“AuEq”)1 ounce sold and DDGM all-in sustaining cost per AuEq ounce sold for the year were $2,205 and $2,807, respectively. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures below for a reconciliation of non-GAAP measures to applicable GAAP measures. |
| ● | DDGM received the Mexican Empresa Socialmente Responsable (“ESR”) award in 2025 for the eleventh consecutive year. |
| ● | During 2025, the Company’s exploration program focused on underground grade-control and infill drilling in support of near-term production, primarily in the Three Sisters and Arista vein systems. At Three Sisters, drilling targeted the Sandy and Sadie vein sets to refine and validate the geologic model for production planning. Additional definition drilling was completed on multiple veins within the Arista system, including Splay 31, Candelaria, Marena, Santa Helena, Viridiana, and Marena North, as well as the Soledad South vein in the Switchback vein system. Exploration-related underground development advanced throughout the year, positioning the Company to continue expansion drilling in early 2026. In addition, limited surface infill drilling also commenced at the Alta Gracia mine in the fourth quarter, focusing on the Mirador vein system. |
Corporate and Financial:
| ● | The Company closed the year with a $25.0 million cash and cash equivalents balance at December 31, 2025. The increase of $23.4 million from December 31, 2024 is the result of the Company’s focus on improving its cash position, mostly through the issuance of debt and equity in 2025, as well as improved production and higher metal prices. |
| o | The Company raised $2.5 million through a registered direct offering in January 2025. In September 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company’s common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025, as a non-cash equity settlement. |
| o | The Company raised $8.6 million through its At-The-Market Offering Program (the “ATM Program”), after deducting the agent’s commissions and other expenses. |
| o | In February 2025, the Company sold its interest in Green Light Metals for $0.9 million in proceeds. |
| o | On May 7, 2025, the Company received a tax refund of 79.6 million pesos (approximately $4.0 million) related to DDGM taxes paid in 2023. |
| ● | Working capital at December 31, 2025, was $32.0 million, a 1,424% increase from the December 31, 2024 working capital of $2.1 million. The increase is primarily driven by the increase in cash and cash equivalents. |
1 Gold equivalent is determined by taking gold ounces produced and sold, plus silver ounces produced and sold, converted to gold equivalent ounces using the gold to silver average realized price ratio for the period.
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Liquidity Update
The Company has significantly improved its financial position in 2025. Although tonnes produced from the mining operations at DDGM in full year 2025 remained lower than in the previous year, production substantially improved in the fourth quarter of 2025. Due to the age and condition of some of the critical mining equipment used at the mine, the Company started to encounter significant issues with equipment availability in 2024. To overcome this issue, the Company engaged a third-party contract miner during the third quarter of 2025 and also started to upgrade its mining fleet. As a result, by the end of the third quarter, the Company was able to increase production from a number of production headings.
The Company believes that the mine has the potential to generate positive cash flow based on the information to date from the new Three Sisters area, as well as other zones that have been discovered near existing headings. The Company started developing access to and drill-defining these new areas. With the improvements mentioned above, the Company had an improved operating income in the fourth quarter of 2025 and expects 2026 to result in positive operating income.
In 2025, the Company focused on improving its cash position, mostly through the issuance of debt and equity. The Company raised $2.5 million through a registered direct offering in January 2025. In February 2025, the Company sold its interest in Green Light Metals for $0.9 million in proceeds. On May 7, 2025, the Company received a tax refund of 79.6 million pesos (approximately $4.0 million) related to DDGM taxes paid in 2023. In September 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company’s common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. During 2025, the Company raised approximately $8.6 million through its ATM Program, after deducting the agent’s commissions and other expenses.
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FORWARD-LOOKING STATEMENTS
This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company uses the words “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,” “could,” “will,” “project,” “should,” “believe,” and similar expressions (including negative and grammatical variations) to identify forward looking statements. Such forward-looking statements include, without limitation, statements regarding:
| ● | The Company’s ability to satisfy its financial and contractual obligations and other potential cash requirements over the next twelve months; |
| ● | The Company’s anticipated near-term capital requirements and potential sources of capital; |
| ● | Expectations regarding 2026 general and administrative costs; |
| ● | The Company’s expectations regarding whether dividends will be paid in the future; |
| ● | Compliance with existing legal and regulatory requirements, including future asset reclamation costs; |
| ● | The Company’s strategy for significant future investment in Oaxaca, Mexico, and in Michigan, USA, for development and exploration activities; |
| ● | Expectations regarding capital investment, exploration spending, and general and administrative costs, including the Company’s near-term estimates for the cost of additional mining equipment, mill upgrades, and working capital; |
| ● | The Company’s expectations regarding future grades and recoveries from mining at DDGM; and its expectations regarding its ability to generate positive cash flow from future production at DDGM; |
| ● | Future exploration plans at DDGM, including vein systems targeted for future exploration activity; |
| ● | Estimates of Mineral Resources and Mineral Reserves; |
| ● | The sufficiency of the Company’s water rights; |
| ● | The Company’s expectation for the outcome of the 2015 DDGM tax audit; |
| ● | Expectations regarding 2026 DDGM and Back Forty capital investments; |
| ● | The expected timetable for and completion of the potential Transaction (as defined in Item 1. Business—Recent Developments); and |
| ● | The expected timing and success of the Back Forty Project with respect to additional feasibility study work, engineering, permitting, and project financing. |
Forward-looking statements are neither historical facts nor assurances of future performance. Rather, they are based only on the Company’s current beliefs, expectations, and assumptions regarding the future of its business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, and many of which are outside of the Company’s control. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause the Company’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
| ● | Risks associated with the Company’s ability to complete the proposed Transaction on the terms anticipated or at all; |
| ● | Whether the Company is able to raise the necessary capital required to continue its business on terms acceptable to it or at all; |
| ● | The possibility of unforeseen production or processing challenges at DDGM, such as mechanical breakdowns, staffing shortages, weather events, unexpected decreases in grade, lower than anticipated production at existing mining faces, or inability or delays in the access and development of new mining faces; |
| ● | Commodity price fluctuations; |
| ● | Mine protests and work stoppages; |
| ● | Rock formations, faults and fractures, water flow and possible CO2 gas exhalation, or other unanticipated geological challenges; |
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| ● | Unexpected changes in business and economic conditions, including supply chain challenges, the rate of inflation, fuel price, and their impact on operating and capital costs; |
| ● | Changes in interest rates and currency exchange rates; |
| ● | Adverse technological changes and cybersecurity threats; |
| ● | Unanticipated increases in the Company’s operating costs and other costs of doing business; |
| ● | Access to land and availability of materials, equipment, supplies, labor and supervision, power, and water; |
| ● | Results of current and future feasibility studies; |
| ● | Interpretation of drill hole results and the geology, grade, and continuity of mineralization; |
| ● | Litigation by private parties or regulatory action by governmental entities; |
| ● | Acts of God, such as excessively wet weather, floods, earthquakes, and any other natural disasters; |
| ● | Changes in investor perception of the Company and/or the mining industry; |
| ● | The inherent uncertainty of Mineral Resources and Mineral Reserves estimates; |
| ● | The Company’s internal controls over financial reporting; and |
| ● | Such other factors are discussed below under Item 1A. Risk Factors. |
Many of these factors are beyond the Company’s ability to control or predict. Although the Company believes that the expectations reflected in its forward-looking statements are based on reasonable assumptions, such expectations may prove to be materially incorrect due to known and unknown risks and uncertainties. You should not unduly rely on any of the Company’s forward-looking statements. These statements speak only as of the date of this annual report on Form 10-K. Except as required by law, the Company is not obligated to publicly release any revisions to these forward-looking statements to reflect future events or developments. All subsequent written and oral forward-looking statements attributable to the Company and persons acting on its behalf are qualified in their entirety by the cautionary statements contained in this section and elsewhere in this annual report on Form 10-K.
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PART I
ITEM 1. | BUSINESS |
History and Organization
In this report, “Company” and “GRC” refer to Gold Resource Corporation together with its subsidiaries, unless the context otherwise requires. See Item 2. Properties—Glossary for additional definitions.
The Company was organized under the laws of Colorado, USA on August 24, 1998. Since 2010, the Company has produced gold and silver doré and copper, lead, and zinc concentrates in Oaxaca, Mexico at its subsidiary, Don David Gold Mexico S.A. de C.V. (“Don David Gold Mine” or “DDGM”). The Don David Gold Mine holds six properties located in what is known as the San Jose structural corridor. The Company’s properties span 55 continuous kilometers of this structural corridor, which include three historic mining districts in Oaxaca.
On December 10, 2021, the Company successfully completed the acquisition of all the issued and outstanding common shares of Aquila Resources Inc. (“Aquila”). Aquila’s principal asset is its 100% interest in the Back Forty Project located in Menominee County, Michigan, USA. The Back Forty Project has a polymetallic (gold, silver, copper, lead, and zinc) Volcanogenic Massive Sulfide deposit. The Back Forty Project controls surface and mineral rights through ownership and leases with the State of Michigan. Optimization work related to metallurgy and the economic model was completed during the third quarter of 2023, and the Company released the Back Forty Project Technical Report Summary, effective as of September 30, 2023, on October 26, 2023 (the “Back Forty Project Technical Report Summary”). Results of the work indicate a more robust economic project with no planned impacts to wetlands that is more protective of the environment, which should facilitate a successful mine permitting process. The Company is currently in discussions to complete a feasibility study and to move forward with the permitting process for the Back Forty Project.
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Mexico Production Stage Properties:
The primary production stage properties at DDGM commenced operations in 2010. Current operations include the Arista underground mine and the DDGM processing facility, which produces metal concentrates from ore mined at the Arista Mine. The Arista Mine was expanded in 2016 with the development of the Switchback vein system and again in 2025 with the development and initial production of the Three Sisters vein system. The Arista Mine portal is located approximately two kilometers from the processing facility. Additionally, underground mining was conducted from 2017 to 2019 at the Alta Gracia Mine, where limited surface drilling recommenced in the fourth quarter of 2025. Alta Gracia is approximately 32 kilometers from the DDGM processing facilities.
The Arista and Alta Gracia Mines include a total of approximately 30,000 hectares of mining concessions, access roads from a major highway, haul roads, a processing facility and adjoining buildings, an assay lab, a now depleted open pit, underground mines, tailings facilities, and other infrastructure. Please see Item 2. Properties for additional information.
Mexico Exploration Prospects:
The Company’s current land package sits within the highly prospective 55-kilometer-long San Jose structural corridor, in Oaxaca, Mexico. Multiple volcanic domes of various scales, and likely non-vented intrusive domes, dominate the district geology. These volcanogenic features are imposed on a pre-volcanic basement of sedimentary rocks. Gold and silver, as well as base metal mineralization in this district is related to the manifestations of this classic volcanogenic system and is considered epithermal in character. The Company intends to advance organic growth and to unlock the value of the mine, existing infrastructure, and its large property position by continuing to invest in exploration and development. Please see Item 2. Properties for additional information.
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Processing Plant at Night |
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Back Forty Project:
There is a long history of exploration at the Back Forty Project. After the acquisition of Aquila and the Back Forty Project by the Company in 2021, optimization work was initiated to address the mine’s footprint, potential for an underground mine, wetland mitigation, and other key construction and design decisions. This optimization work related to a change in mine design, tailings relocation, and metallurgy. The economic model was completed, and the Company released the Back Forty Project Technical Report Summary on October 26, 2023. Results of the work indicate a more robust economic project with no planned impacts to wetlands that are more protective of the environment, which should facilitate a successful mine permitting process expected to start in 2026. With much higher metal prices since the Back Forty Project Technical Report Summary was completed, the Board actively evaluates the options that could lead to the successful development of the project. Please see Item 2. Properties for additional information.
Before the Aquila acquisition, Aquila’s common shares were traded on the Toronto Stock Exchange (“TSX”) under the ticker symbol AQA. Effective December 10, 2021, Aquila ceased to be a reporting issuer in British Columbia, Alberta, Saskatchewan, Ontario, and Nova Scotia. At the same time, GRC became a reporting issuer in British Columbia, Alberta, Saskatchewan, Ontario, and Nova Scotia by virtue of the completion of the acquisition. As a Canadian reporting issuer, GRC is now required to file reports on the System for Electronic Document Analysis and Retrieval (“SEDAR”) in Canada. All financial statements filed on SEDAR conform to United States generally accepted accounting principles (“U.S. GAAP”).
Administrative Offices:
The Company’s principal executive offices are located at 7900 E. Union Ave, Suite 320, Denver, Colorado 80237, and its telephone number is (303) 320-7708. The Company maintains a website at www.goldresourcecorp.com. Information on its website is not incorporated into this annual report on Form 10-K and is not a part of this report. The U.S. Securities and Exchange Commission (“SEC”) maintains an internet site (www.sec.gov) on which the reports that the Company files with the SEC are available to review. The SEC filings can also be accessed through the Company’s website.
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2025 Development Highlights
For the year ended December 31, 2025, the Company reported a net loss of $6.5 million. Despite the net loss reported for the year, the Company’s operating mine is showing improvements and a turnaround in performance that is mainly attributable to higher metal prices and improved production as a result of acquired new equipment, as well as the use of a third-party mining contractor, allowing the development of higher-grade areas of the deposit. Financial results for 2025 include revenue of $99.8 million and mine gross profit of $26.8 million. The Company’s production results for the year totaled 5,300 gold ounces, 1,594,300 silver ounces, 264 copper tonnes, 1,192 lead tonnes, and 3,613 zinc tonnes.
For the eleventh consecutive year, DDGM received the prestigious ESR award from the Mexican Center for Philanthropy (“CEMEFI”). Awards are given to organizations that demonstrate a commitment to supporting social and environmental protection programs within their local communities.
The Company’s exploration activities focused on underground drilling within the Arista, Switchback, and Three Sisters vein systems of the Arista mine, along with limited surface drilling at the Alta Gracia deposit beginning in the fourth quarter. During the year, the Company completed a total of 111 diamond drill holes totaling 14,539 meters, consisting of 33 infill holes totaling 5,982 meters, and 78 grade-control holes totaling 8,557 meters. Of the infill drilling, six holes totaling 1,121 meters were completed from surface at Alta Gracia. The Company also completed more than 485 meters of underground drift development in 2025 to support ongoing infill and grade-control drilling and to facilitate planned expansion drilling in 2026.
Exploration efforts were primarily dedicated to underground drilling on multiple high-grade, polymetallic epithermal veins within the Three Sisters vein system, particularly the Sandy and Sadie vein sets, and within the Arista vein system, including the down-dip and northern extension of the Viridiana and Marena veins, as well as the northern extensions of the Splay 31 and Marena North veins. The 2025 drilling program was designed to support Mineral Reserve definition and to define additional Mineral Resources. The Three Sisters vein system lies between and north of the Arista and Switchback systems and is located near existing mine infrastructure. Following focused infill and grade-control drilling during the year, a total of 24 distinct veins and vein segments, including the Gloria vein, have now been delineated. Both the Three Sisters and northern Arista vein systems remain the primary targets for infill and expansion drilling in 2026. Updated 2025 resource models for all three vein systems incorporated tighter geologic and economic constraints, resulting in more selective and geologically constrained estimates. In particular, drilling within the Three Sisters and Arista systems resulted in an upgrade of a portion of the previously reported Inferred Mineral Resources to Measured and Indicated categories; increasing confidence in those areas. All vein systems remain open for further expansion drilling both up- and down-dip, as well as along strike to the northwest.
Surface exploration during 2025 included the initiation of a limited surface infill drilling program at Alta Gracia in mid-November. By year-end, six infill holes totaling 1,121 meters had been completed, targeting the upgrade of previously defined Inferred Mineral Resources in the upper southwestern portion of the Mirador vein. The Company also continued evaluating and prioritizing advanced-stage exploration targets within the approximately 551 square kilometer land package controlled by DDGM surrounding the Arista Mine. These activities included the reprocessing and integration of historical geologic information, including mapping, sampling, geophysical surveys, and drill data, from several projects, including Rey, Alta Gracia, Margaritas, El Fuego, Chamizo, and Jabali. Prospective areas proximal to the Arista Mine were also re-evaluated for near-term exploration potential with the objective of defining additional near-mine drill targets. These ongoing efforts support the Company’s long-term exploration strategy and continued operational presence in Oaxaca, Mexico.
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In connection with the Back Forty Project, the Company continues to monitor the U.S. Army Corps of Engineers’ (“USACE”) review of a petition by the Menominee Indian Tribe of Wisconsin (“MITW”) requesting that the Menominee River be designated as navigable under Section 10 of the Rivers and Harbor Act. The USACE has previously concluded, based on prior studies, that the relevant reach of the Menominee River in the project area does not meet the federal definition of navigability. The MITW has requested that the Environmental Protection Agency and the USACE evaluate whether federal agencies, rather than the State of Michigan, should exercise regulatory authority over certain activities potentially requiring federal permits. Based on the current project design and permitting framework, the Company does not presently anticipate the need for additional federal permits related to navigability of the river corridor, however any change in jurisdictional determinations could affect future permitting requirements. In response to the MITW petition, the USACE is updating its navigability study for the Menominee River, which was expected to be completed in 2023, but it’s still under final administrative review.
Recent Developments
On January 26, 2026, the Company announced that it has entered into a definitive arrangement agreement and plan of merger (the “Arrangement Agreement”) with Goldgroup Mining Inc. (“Goldgroup”), whereby Goldgroup has agreed to acquire all of the issued and outstanding shares of the Company’s common stock (the “Transaction”).
Pursuant to the Arrangement Agreement, the Company’s stockholders will receive 1.4476 common shares of Goldgroup for each share of the Company’s common stock (adjusted to 0.3619 common shares of Goldgroup for each share of the Company’s common stock as a result of a four-for-one share consolidation to be completed by Goldgroup prior to closing). The proposed Transaction will occur by way of a reverse triangular merger in which the Company will merge with a wholly owned subsidiary of Goldgroup under Colorado law and a plan of arrangement under the Business Corporations Act (British Columbia), with the Company surviving as a wholly owned subsidiary of Goldgroup. Upon completion of the Transaction, the Company’s stockholders are expected to own approximately 40% of the combined company on a fully diluted in-the-money basis.
The Transaction was unanimously approved by the boards of directors of the Company and Goldgroup. The Transaction is expected to close in the second quarter of 2026, subject to customary closing conditions (including approval by the stockholders of each of the Company and Goldgroup and approval by the Mexican National Antitrust Commission). Upon closing, the board of directors of Goldgroup will be comprised of three directors selected by Goldgroup and two directors selected by the Company. The parties anticipate that the executive management team of the Company will become the officers of the combined company.
Dividends
In February 2023, to conserve cash for development and equipment expenses, the Company announced the suspension of its quarterly dividend until such time that it may become practicable to reinstate such dividend. Please see Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities for additional information regarding the Company’s dividend policy.
Insurance
The Company’s business is capital intensive and requires ongoing investment for the replacement, modernization, or expansion of equipment and facilities. For more information, please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources below. The Company maintains insurance policies against property loss and business interruption and insure against most risks that are typical in the operation of its business in amounts that the Company believes to be reasonable. Such insurance, however, contains exclusions and limitations on coverage, particularly with respect to property loss, environmental liability, and political risk. There can be no assurance that claims would be paid under such insurance policies in connection with a particular event. Please see Item 1A. Risk Factors below for additional information.
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Competitive Business Conditions
The acquisition of gold and silver properties is subject to intense competition. Identifying and evaluating potential mining prospects is a costly and time-consuming endeavor. In 2021, the Company successfully acquired the Back Forty Project as discussed above. The Company expects to continue significant investment in exploration and growth activities in the future; however, competition for acquiring mineral prospects will continue to be intense.
Government Regulations and Permits
In connection with mining, milling, and exploration activities in Mexico, the Company is subject to Mexican federal, state, and local laws and regulations governing the protection of the environment, including laws and regulations relating to the protection of air and water quality, hazardous waste management, mine reclamation, as well as the protection of endangered or threatened species. The government department responsible for environmental protection in Mexico is Secretaria de Medio Ambiente y Recursos Naturales (“SEMARNAT”). SEMARNAT has broad authority over environmental regulations and standards. Potential areas of environmental consideration for mining companies include, but are not limited to, acid rock drainage, cyanide containment and handling, contamination of water sources, dust, and noise.
For operations at the Don David Gold Mine, the Company has secured and continues to maintain various regulatory permits from federal, state, and local agencies. These governmental and regulatory permits generally govern the processes being used to operate, the stipulations concerning air quality, water issues, hazardous materials and waste management, and the plans and obligations for reclamation of the properties at the conclusion of operations. These laws and regulations are continually changing and are generally becoming more restrictive.
The Company’s production stage mines in Mexico have reclamation plans in place that it believes meet all applicable legal and regulatory requirements. As of December 31, 2025, $10.2 million has been accrued on the Company’s Consolidated Balance Sheets for reclamation costs relating to its production and exploration stage properties in Mexico. In addition, the Company accrued $0.1 million for drill-hole plugging on the Company’s Consolidated Balance Sheets for reclamation costs relating to its exploration stage property in Michigan.
The State of Michigan has been delegated authority under federal environmental law to issue all necessary environmental permits required for the Back Forty Project. The State of Michigan’s “Natural Resource Environmental Protection Act” provides rules and regulations for the State Department of Environment, Great Lakes and Energy (EGLE) to issue permits for mining, treated wastewater discharge, air emissions, and related environmental permits necessary for the Back Forty Project.
Customers
During the year ended December 31, 2025, two customers accounted for 99% of the Company’s revenue from DDGM. In the event that the Company’s relationship with any of its customers is interrupted for any reason, the Company believes that it would be able to locate another entity to purchase its products in a timely manner on substantially similar terms. However, any interruption could temporarily disrupt the sale of the Company’s principal products and materially adversely affect its operating results. The Company periodically reviews its options for alternative sales outlets to mitigate the concentration of risk in case of any unforeseen disruptions.
Human Capital Resources
The Company values excellence and recognizes that embracing the diverse backgrounds, skills, and perspectives of the local workforce will lead to a competitive advantage. The Company is committed to leading by example and maintaining a fair and inclusive work environment built on mutual respect and integrity. Diversity means understanding, accepting, respecting, and valuing differences among people regardless of age, gender, race, ethnicity, culture, religion or spiritual practices, disabilities, sexual orientation, gender identity, family status, or veteran status.
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The Company believes it has good morale and a dedicated workforce. The Company’s human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating its existing employees and new hires. The principal purposes of the Company’s equity incentive plans are to attract, retain, and motivate selected employees and directors by granting stock-based compensation awards that align employee compensation with shareholder returns.
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DDGM Employee Housing |
As of December 31, 2025, the Company had 485 employees at DDGM. There were 12 full-time corporate employees, two of whom serve as executive officers, and three full-time employees in Michigan who are fully dedicated to progressing the Back Forty Project.
ITEM 1A.RISK FACTORS
The Company’s business, and the mining industry in general, is influenced by significant risks and uncertainties. These risks include those described below and may include additional risks and uncertainties not presently known or currently deemed immaterial. The Company’s business, financial condition, and results of operations could be materially adversely affected by any of these risks, and the trading price of the Company’s common stock could decline by virtue of these risks. These risks should be read in conjunction with the other information in this annual report on Form 10-K.
Financial Risks
The Company’s results of operations, cash flows, and the value of its properties are highly dependent on the market prices of gold, silver, and certain base metals, and these prices can be volatile.
The profitability of the Company’s mining operations and the value of its mining properties are directly related to the market price of gold, silver, copper, lead, and zinc. The price of gold and silver may also significantly influence the market price of the Company’s common stock. The market prices of these metals historically have fluctuated significantly and are affected by numerous factors beyond the Company’s control, including (i) global or regional consumption patterns; (ii) supply of and demand for gold, silver, and base metals on a worldwide basis; (iii) speculative and hedging activities;
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(iv) expectations for inflation; (v) political and economic conditions; (vi) supply of, and demand for, consumables required for extraction and processing of metals, and (vii) general economic conditions worldwide. Over the last five years (as reported on the London Bullion Market Association using the London PM Fix for gold and silver), gold prices have fluctuated from a low of $1,629 per ounce to a high of $4,449 per ounce, and silver prices have fluctuated from a low of $17.77 per ounce to a high of $74.84 per ounce. On December 31, 2025, the London PM Fix gold price was $4,368 per ounce, and the London PM silver price was $71.99 per ounce.
Currently, the Company does not use hedging transactions with respect to any of its metal production. Accordingly, the Company is fully exposed to price fluctuations in precious metals. In the event metal prices decline or remain low for prolonged periods of time, the Company might be unable to develop its exploration properties, which may materially adversely affect its results of operations, financial performance, and cash flows. An asset impairment charge may result from the occurrence of unexpected adverse events that impact the Company’s estimates of expected cash flows generated from its mining operations or the market value of its non-producing properties, including a material diminution in the price of metals.
The Company may not achieve profitability.
The Company’s only production-stage property that produces revenue is DDGM in Mexico, and it may not generate sufficient cash flow to cover the Company’s operating, development, exploration, general and administrative, and other costs due to certain risk factors. Unexpected interruptions in the mining business may cause the Company to incur losses, or the revenue that is generated from extraction may not be sufficient to fund continuing operations, including exploration and mine development costs. The Company’s failure to generate future profits may materially adversely affect the price of its common stock, and stockholders may lose all or part of their investment. Metal prices and foreign currency rates have a significant impact on the Company’s profit margin, and there is no assurance that the Company will be profitable in the future. Please see Item 1A. Risk Factors—Financial Risks—The Company’s results of operations, cash flows, and the value of its properties are highly dependent on the market prices of gold, silver, and certain base metals and these prices can be volatile.
The Company requires access to additional capital in order to finance its business plans, and there is no guarantee the Company will have access to that capital on favorable terms, or at all.
The Company requires significant funds to develop, access, and determine if Mineral Reserves exist at any of its non-producing properties, continue exploration, and if warranted, develop existing properties and identify and acquire additional properties to diversify its property portfolio.
The Company’s ability to obtain necessary funding for these purposes, in turn, depends upon several factors, including historical and prospective results of operations, the status of the national and worldwide economy, the price of gold, silver, and other metals, the condition of the debt and equity markets, the costs associated with extracting and acquiring minerals, and the market value for its common stock. The Company may not be successful in generating or obtaining the required financing, or if it can obtain such financing, such financing may not be on terms that are favorable to the Company and its shareholders. The Company also may be unable to obtain funding by monetizing additional non-core exploration or other assets at an acceptable price.
The Company cannot provide assurance it will be able to obtain financing to fund its general and administrative costs and other working capital needs to fund continuing business activities in the future on favorable terms, or at all. Failure to obtain funds could result in delay or indefinite postponement of further mining operations, exploration, and construction, as well as the possible partial or total loss of the Company’s interest in its properties.
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The Company’s ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income.
The Company recognizes deferred tax assets when the tax benefit is more likely than not to be realized; otherwise, a valuation allowance is applied against deferred tax assets. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the Company’s ability to realize the deferred tax assets could be impacted, if applicable. Additionally, future changes in tax laws could limit the Company’s ability to realize the future tax benefits represented by its deferred tax assets.
The Company’s accounting and other estimates may be imprecise.
Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosure of assets, liabilities, revenue, and expenses at the date of the consolidated financial statements and reporting periods. The more significant areas requiring the use of management assumptions and estimates relate to:
| ● | Mineral Resources that are the basis for future potential income and cash flow estimates; |
| ● | Mineral Reserves that are the basis for units-of-production depreciation, depletion, and amortization calculations; |
| ● | Future mine plans, ore grades, throughput, and recoveries; |
| ● | Future metals prices; |
| ● | Future capital and operating costs; |
| ● | Environmental, reclamation, and closure obligations; |
| ● | The Back Forty Project Gold and Silver Stream Agreements with Osisko Bermuda Limited (“Osisko”); |
| ● | Contingent Consideration Liabilities; |
| ● | Permitting and other regulatory considerations; |
| ● | Asset impairments; |
| ● | The valuation of the Company’s investments in equity securities; |
| ● | Asset acquisition accounting, including the valuation of the transaction and related instruments; |
| ● | Future foreign exchange rates, inflation rates, and applicable tax rates; and |
| ● | Deferred tax asset valuation allowance. |
Future estimates and actual results may differ materially from these estimates as a result of using different assumptions or conditions. For additional information, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The Company’s subsidiary, Aquila Resource Inc., may be required to repay a significant amount if it defaults under certain gold and silver stream agreements.
In connection with the Aquila acquisition, the Company acquired Aquila Resource Inc. which had substantial liabilities related to the Gold and Silver Stream Agreements with Osisko (now called OR Royalties Inc.) (the “Osisko Stream Agreements”). Under the Osisko Stream Agreements, Osisko deposited a total of $37.2 million upfront in exchange for a portion of the future gold and silver production from the Back Forty Project. The Osisko Stream Agreements contain customary provisions regarding default and security. In the event that the Company’s subsidiary, Aquila Resource Inc., defaults under the Osisko Stream Agreements, including by failing to acquire the required permits and achieve commercial production by the agreed upon dates, it may be required to repay the deposit plus accumulated interest at a rate agreed with Osisko. If the subsidiary fails to do so, Osisko may elect to enforce its remedies as a secured party and take possession of the assets that comprise the Back Forty Project.
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The Company’s revenues are concentrated among a select few customers. Any interruption in the Company’s relationship with such customers could materially affect the Company’s operating results.
During the year ended December 31, 2025, two customers accounted for 99% of the Company’s revenue from DDGM. In the event that the Company’s relationship with any of its customers is interrupted for any reason, the Company believes that it would be able to locate another entity to purchase its products in a timely manner on substantially similar terms. However, any interruption could temporarily disrupt the sale of the Company’s principal products and materially adversely affect its operating results.
Operational Risks
The Company’s production is derived from a single operating unit, and any interruptions or stoppages in its mining activities at that operating unit would materially adversely affect revenue.
The Company is dependent on revenues from a single operating unit to fund its operations. Any interruption in the Company’s ability to mine this location, such as a labor strike, natural disaster, or loss of permits would negatively impact its ability to generate revenue following such interruption. Additionally, if the Company is unable to develop additional mines economically, it will eventually deplete the body of mineralized material and will no longer generate cash flow sufficient to fund its operations. A decrease in, or cessation of, the Company’s mining operations at this operating unit would materially adversely affect its financial performance and may eventually cause the Company to cease operations.
Since the Company’s current property portfolio is limited to one operating unit, its ability to be profitable over the long-term will depend on the Company’s ability to (1) expand the known Arista, Switchback and Three Sisters vein systems and /or identify, explore, and develop additional properties in Mexico, (2) successfully develop the Back Forty Project in Michigan, USA, or (3) acquire and develop an alternative project.
Gold and silver producers must continually replace reserves depleted by production to maintain production levels over the long-term and provide a return on invested capital. Depleted reserves can be replaced in several ways, including expanding known ore bodies, locating new deposits, or acquiring interests in reserves from third parties. Exploration is highly speculative in nature, capital intensive, involves many risks, and frequently unproductive. The Company’s current or future exploration programs may not result in new mineralization. Even if significant mineralization is discovered, it will likely take many years from the initial phases of exploration until commencement of production, during which time the economic feasibility of production may change.
From time to time, the Company may acquire mineral interests from other parties. Such acquisitions are based on an analysis of a variety of factors, including historical exploration results, estimates and assumptions regarding the extent of mineralized material and/or reserves, the timing of production from such reserves, and cash and other operating costs. In addition, the Company may rely on data and reports prepared by third parties, which may contain information or data that the Company would be unable to independently verify or confirm. All of these factors are uncertain and may impact the Company’s ability to develop the mineral interests.
As a result of these uncertainties, the Company’s exploration programs and any acquisitions which it may pursue may not result in the expansion or replacement of its current production with new ore reserves or operations, which could have a material adverse effect on the Company’s business, prospects, results of operations, and financial position.
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Increasing operating and capital costs may materially adversely impact the Company’s results of operations.
Costs at the Company’s mining properties are subject to fluctuation due to a number of factors, such as variable ore grade, changing metallurgy, and revisions to mine plans in response to the physical shape and location of the ore body, as well as the age and utilization rates for the mining and processing-related facilities and equipment. In addition, costs are affected by the price and availability of input commodities, such as fuel, electricity, labor, chemical reagents, explosives, steel, concrete, and mining and processing related equipment and facilities. Commodity costs are often subject to volatile price movements, including increases that could make mineral extraction less profitable. Further, changes in laws and regulations can affect commodity prices, uses, and transport. Reported costs may also be affected by changes in accounting standards. Increases in costs materially adversely impacted the Company’s results of operations and operating cash flow in the past and may continue to do so in the future.
The Company could have significant increases in capital and operating costs over the next several years in connection with developing new projects in challenging jurisdictions and sustaining and/or expanding existing mining and processing operations. Costs associated with capital expenditures may increase in the future as a result of factors beyond the Company’s control, such as inflation. Increased capital expenditures may have an adverse effect on the results of operations and cash flow generated from existing operations, as well as the economic returns anticipated from new projects, or may make the development of future projects uneconomic.
Competition in the mining industry is intense, and the Company has limited financial and personnel resources with which to compete.
In the mining industry, competition for desirable properties, investment capital, and human capital is intense. Numerous companies headquartered in the United States, Canada, and worldwide compete for properties and human capital on a global basis. The Company is a small participant in the mining industry due to its limited financial and human capital resources. The Company presently operates with a limited number of people, and it anticipates operating in the same manner going forward. The Company competes with other companies in its industry to hire qualified employees and consultants when needed to operate its mines successfully and to advance its exploration properties. The Company may be unable to attract the necessary human capital to fully explore, and if warranted, develop its properties and be unable to acquire other desirable properties. The Company believes that competition for acquiring mineral properties, as well as the competition to attract and retain qualified human capital, will continue to be intense in the future.
Estimates of Proven and Probable Mineral Reserves and Measured and Indicated Mineral Resources include some uncertainty, such that the volume and grade of ore actually recovered may vary from the Company’s estimates.
The Proven and Probable Mineral Reserves stated in this report represent the amount of gold, silver, copper, lead, and zinc that the Company estimated at December 31, 2025 that could be economically and legally extracted or produced at the time of the reserve determination. Estimates of Proven and Probable Mineral Reserves and Measured and Indicated Mineral Resources are subject to considerable uncertainty. Such estimates are largely based on the prices of gold, silver, copper, lead, and zinc, as well as interpretations of geologic data obtained from drill holes and other exploration techniques. These prices and interpretations are subject to change. If the Company determines that certain estimated Mineral Reserves or Mineral Resources have become uneconomic, it may be forced to reduce its estimates. Actual production from Proven and Probable Mineral Reserves may be significantly less than the Company expects. There can be no assurance that estimates of Mineral Resources will be upgraded to Mineral Reserves or may ultimately be extracted.
Any material changes in Mineral Resources and Mineral Reserves estimates and grades of mineralization may affect the economic viability of the Company’s current operations, a decision to place a new property into production, and/or such property’s return on capital. There can be no assurance that mineral recoveries in small-scale laboratory tests will be duplicated in a large-scale on-site operation in a production environment. Declines in market prices for contained metals may render portions of the Company’s Mineral Resources and Mineral Reserves estimates uneconomic and result in reduced reported mineralization or materially adversely affect the commercial viability of one or more of the Company’s
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properties. Any material reductions in estimates of mineralization, or of the Company’s ability to extract this mineralization, could have a material adverse effect on its results of operations or financial condition.
Products processed from the Company’s operating mines or other mines in the future could contain higher than expected contaminants, thereby negatively impacting the Company’s financial condition.
Contracts for treatment charges paid to smelters and refineries include penalties for certain deleterious elements that exceed contract limits. If the material mined from the Company’s operating mines includes higher than expected contaminants, the Company would incur higher treatment expenses and penalty charges that could increase costs and negatively impact the business, financial condition, and results of operations. This could occur due to unexpected variations in the occurrence of these elements in the material mined, problems occurring during blending of material from various locations in the mine prior to processing, and other unanticipated events.
Continuation of the Company’s mining and processing activities is dependent on the availability of sufficient water supplies to support its mining activities.
Water is critical to the Company’s business, and the increasing pressure on water resources requires the Company to consider both current and future conditions in its management approach. Across the globe, water is a shared and regulated resource. Mining operations require significant quantities of water for mining, ore processing, and related support facilities. Many of the Company’s properties in Mexico are in areas where water is scarce, and competition among users for continuing access to water is significant. Continuous production and mine development depend on the Company’s ability to acquire and maintain water rights and defeat claims adverse to current water use in legal proceedings. Although the Company believes that its operations currently have sufficient water rights and claims to cover operating demands, it cannot predict the potential outcome of future legal proceedings relating to water rights, claims, and uses. Water shortages may also result from weather or environmental and climate impacts beyond the Company’s control. Shortages in water supply could result in production and processing interruptions. In addition, the scarcity of water in certain regions could result in increased costs to obtain sufficient quantities of water to conduct the Company’s operations. The loss of some or all water rights, in whole or in part, ongoing shortages of water to which the Company has rights, or significantly higher costs to obtain sufficient quantities of water (or the failure to procure sufficient quantities of water) could result in the Company’s inability to maintain mineral extraction at current or expected levels, require the Company to curtail or shut down mining operations, and prevent it from pursuing expansion or any development opportunities. Laws and regulations may be introduced in some jurisdictions where the Company operates, which could also limit access to sufficient water resources, thus materially adversely affecting its operations.
The nature of mineral exploration, mining, and processing activities involves significant hazards, a high degree of risk, and the possibility of uninsured losses.
Exploration for and the production of minerals is highly speculative and involves greater risk than many other businesses. Many exploration programs do not result in the discovery of mineralization, and any mineralization discovered may not be of sufficient quantity or quality to be profitably mined. The Company’s operations are, and any future mining operations or construction that may be conducted will be, subject to all of the operating hazards and risks normally incident to exploring for and mining of mineral properties, such as, but not limited to:
| ● | Fluctuation in production costs that make mining uneconomic; |
| ● | Fluctuation in commodity prices; |
| ● | Social, community, or labor force disputes resulting in work stoppages or delays, or related loss of social acceptance of community support; |
| ● | Changes to legal and regulatory requirements; |
| ● | Unanticipated variations in grade and other geologic problems; |
| ● | Environmental hazards, noxious fumes, and gases; |
| ● | Ground and water conditions; |
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| ● | Difficult surface or underground conditions; |
| ● | Industrial accidents; |
| ● | Security incidents; |
| ● | Failure of unproven or evolving technologies or loss of information integrity or data; |
| ● | Metallurgical and other processing problems; |
| ● | Mechanical and equipment performance problems; |
| ● | Failure of pit walls, dams, declines, drifts, and shafts; |
| ● | Unusual or unexpected rock formations; |
| ● | Personal injury; |
| ● | Pandemics, tariffs, and wars that could affect input costs and revenues; |
| ● | Fire, flooding, cave-ins, seismic activity, landslides, or other inclement weather conditions, including those impacting operations or the ability to access and supply sites; and |
| ● | Decrease in the value of mineralized material due to lower gold, silver, and metal prices. |
These occurrences could result in damage to—or destruction of—mineral properties, processing facilities, and equipment; personal injury or death; environmental damage; reduced extraction and processing; delays in mining; asset write-downs; monetary losses; and possible legal liability. Although the Company maintains insurance in amounts that it considers reasonable for general commercial liability claims, physical assets at its Arista and Alta Gracia Mines, and risks inherent in the conduct of its business, this insurance contains exclusions and limitations on coverage and will not cover all potential risks associated with mining and exploration activities. As such, the related liabilities might exceed policy limits. As a result of any or all of the foregoing, the Company could incur significant liabilities and costs that may exceed the limits of its insurance coverage or that it may elect not to insure against because of unreasonable premium costs or other reasons, which could materially adversely affect its results of operations and financial condition. The Company may also not be insured against all interruptions to its operations. Losses from these or other events may cause the Company to incur significant costs which could materially adversely affect its financial condition and its ability to fund activities on its properties. A significant loss could force the Company to reduce or suspend its operations and development.
Revenue from the sale of metal concentrate may be materially adversely affected by loss or damage during shipment and storage at the Company’s buyer’s facilities.
The Company relies on third-party transportation companies to transport its metal concentrate to each buyer’s facilities for processing and further refining. The terms of the Company’s sales contracts with the buyers require the Company to rely, in part, on assay results from samples of its metal concentrate that are obtained at the buyer’s warehouse to determine the final sales value for metals. Once the metal concentrate leaves the processing facility, the Company no longer have direct custody and control of these products. Theft, loss, road accidents, improper storage, fire, natural disasters, tampering, or other unexpected events while in transit or at the buyer’s location may lead to the loss of all or a portion of the Company’s metal concentrate products. Such losses may not be covered by insurance and may lead to a delay or interruption in revenue, and as a result, the Company’s operating results may be materially adversely affected.
A significant delay or disruption in sales of doré or concentrates as a result of the unexpected disruption in services provided by smelters or refiners could have a material adverse effect on results of operations.
The Company relies on third-party smelters and refiners to refine and process and, in some cases, purchase, the gold and silver doré and copper, lead, and zinc concentrate produced from its mines. Access to smelters and refiners on economic terms is critical to the Company’s ability to sell its products to buyers and generate revenues. The Company periodically enters into agreements with smelters and refiners, some of which operate their smelting or refining facilities outside the United States, and it believes it currently has contractual arrangements with a sufficient number of smelters and refiners so that the loss of any one refiner or smelter would not significantly or materially impact the Company’s operations or its ability to generate revenues. Nevertheless, services provided by a refiner or smelter may be disrupted by operational issues; new or increased tariffs, duties, or other cross-border trade barriers; the bankruptcy or insolvency of one or more smelters or refiners; or the inability to agree on acceptable commercial or legal terms with a refiner or smelter.
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Such an event or events may disrupt an existing relationship with a refiner or smelter or result in the inability to create a contractual relationship with a refiner or smelter, which may leave the Company with limited, uneconomical, or no access to smelting or refining services for short or long periods of time. Any such delay or loss of access may significantly impact the Company’s ability to sell doré and concentrate products. The Company cannot ensure that alternative smelters or refiners would be available or offer comparable terms if the need for them arose or that it would not experience delays or disruptions in sales that would materially adversely affect the results of operations.
The Company relies on contractors to conduct a significant portion of the Company’s exploration, development, and construction projects.
A significant portion of the Company’s development and construction projects are currently conducted in whole or in part by contractors. As a result, the Company’s operations are subject to a number of risks, some of which are outside of its control, including:
| ● | Negotiating agreements with contractors on acceptable terms; |
| ● | New foreign or domestic legislation limiting or altering the ability to utilize contractors or outsourced resources; |
| ● | The difficulty and inherent delay in replacing a contractor and its equipment in the event that either party terminates the agreement; |
| ● | Reduced control and oversight over those aspects of the work which are the responsibility of the contractor; |
| ● | Failure of a contractor to perform under its agreement; |
| ● | Interruption of development and construction or increased costs in the event that a contractor ceases its business due to insolvency or other unforeseen events; |
| ● | Injuries or fatalities on the job as a result of the failure to implement or follow adequate safety measures; |
| ● | Failure of a contractor to comply with applicable legal and regulatory requirements, to the extent it is responsible for such compliance; and |
| ● | Problems of a contractor managing its workforce, labor unrest, or other related employment issues. |
In addition, the Company may incur liability to third parties as a result of the actions of its contractors. The occurrence of one or more of these risks could materially adversely affect the Company’s results of operations and financial position.
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Risks Related to the Company’s Exploration Activities
The exploration of the Company’s mineral properties is highly speculative in nature, involves substantial expenditures, and is frequently non-productive.
| ● | Identifying suitable candidates for acquisition and negotiating acceptable terms; |
| ● | Obtaining approval from regulatory authorities and potentially the Company’s shareholders; |
| ● | Implementing the Company’s standards, controls, procedures, and policies at the acquired business and addressing any pre-existing liabilities or claims involving the acquired business; and |
| ● | To the extent the acquired operations are in a country where the Company has not operated historically, understanding the regulations and challenges of operating in that new jurisdiction. |
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Regulatory and Geopolitical Risks
The Company’s operations are subject to ongoing permitting requirements, which could result in the delay, suspension, or termination of its operations.
The Company’s operations, including ongoing exploration drilling programs and mining, require ongoing permits from governmental and local authorities. The Company may also be required to obtain certain property rights to access or use its properties. Obtaining or renewing licenses and permits and acquiring property rights can be complex and time-consuming processes. There can be no assurance that the Company will be able to acquire all required licenses, permits, or property rights on reasonable terms or in a timely manner, or at all, and that such terms will not be adversely changed; that required extensions will be granted; or that the issuance of such licenses, permits or property rights will not be challenged by third parties. If the Company cannot obtain or maintain the necessary permits, or if there is a delay in receiving future permits, its timetable and business plan will be materially adversely affected.
The Company’s operating properties located in Mexico are subject to changes in political or economic conditions and regulations in that country.
The risks with respect to operating in Mexico or other developing countries include, but are not limited to, nationalization of properties, military repression, extreme fluctuations in currency exchange rates, increased security risks, labor instability or militancy, mineral title irregularities, and high rates of inflation. Furthermore, the Company’s operations in Mexico may be subject to increased political and security risks stemming from civic unrest. Incidents of high-profile civic unrest—including cartel-related violence, extortion, and threats to personnel and infrastructure—could disrupt operations, increase security-related expenditures, and pose risks to the safety of employees and contractors.
Changes in mining or investment policies or shifts in political attitudes in Mexico may also materially adversely affect the Company’s business. The Company may be affected in varying degrees by government regulation concerning restrictions on production, price controls, export controls, income taxes, expropriation of property, maintenance of claims, environmental legislation, land use, land claims of local people, opposition from non-governmental organizations, labor legislation, water use, and mine safety. The effect of these factors cannot be accurately predicted and may adversely impact the Company’s operations.
Most of the Company’s properties are subject to extensive environmental laws and regulations, which could materially adversely affect its business.
The Company’s exploration and mining operations are subject to extensive laws and regulations governing land use and the protection of the environment, which control the exploration and mining of mineral properties and their effects on the environment, including air and water quality, mine reclamation, waste generation, handling and disposal, the protection of different species of flora and fauna, and the preservation of lands. These laws and regulations require the Company to acquire permits and other authorizations for conducting certain activities. In many countries, there is relatively new comprehensive environmental legislation, and the permitting and the authorization process may not be established or predictable. The Company may not be able to acquire necessary permits or authorizations on a timely basis, if at all. Delays in acquiring any permit or authorization could increase the cost of the Company’s projects and could suspend or delay the commencement of extraction and processing of mineralized material.
Environmental legislation in Mexico and in many other countries is evolving in a manner that will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors, and employees. Future changes in environmental regulation in the jurisdictions where the Company’s properties are located may materially adversely affect its business, make the business prohibitively expensive, or prohibit it altogether. The Company cannot predict what environmental legislation or regulations will be enacted or adopted in the future or how future laws and
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regulations will be administered or interpreted. Compliance with more stringent laws and regulations, as well as potentially more vigorous enforcement policies, stronger regulatory agencies, or stricter interpretation of existing laws, may (i) necessitate significant capital outlays, (ii) cause the Company to delay, terminate, or otherwise change its intended activities with respect to one or more projects, or (iii) materially adversely affect future exploration activities.
Climate change and climate change legislation or regulations could impact the Company’s business.
The Company is subject to physical risks associated with climate change, which could seriously harm its results of operations and increase costs and expenses. The occurrence of severe adverse weather conditions, including increased temperatures and droughts, fires, longer wet or dry seasons, increased precipitation, floods, hail, snow, or more severe storms may have a potentially devastating impact on the Company’s operations. Adverse weather may result in physical damage to operations, instability of the Company’s infrastructure and equipment, washed-out roads to its properties, and altered water and electricity supply to projects. Increased temperatures may also decrease worker productivity at the Company’s projects and raise ventilation and cooling costs. Changes in the quantity of water, whether in excess or deficient amounts, may impact exploration and development activities, mining and processing operations, water storage and treatment facilities, tailings storage facilities, closure and reclamation efforts, and may increase levels of dust in dry conditions, and land erosion and slope stability in case of prolonged wet conditions. Should the impacts of climate change be material in nature or occur for lengthy periods of time in the areas in which the Company operates, financial condition or results of operations could be materially adversely affected.
The Company’s continuing reclamation obligations at its operations could require significant additional expenditure.
The Company is responsible for the reclamation obligations related to disturbances located on all of its properties and have recorded a liability on its Consolidated Balance Sheets to cover the estimated reclamation obligation. However, there is a risk that any reserve could be inadequate to cover the actual costs of reclamation when carried out. Continuing reclamation obligations will require a significant amount of capital. There is a risk that the Company will be unable to fund these obligations and that the regulatory authorities may increase reclamation requirements to such a degree that it would not be commercially reasonable to continue mining and exploration activities, which may materially adversely affect results of operations, financial performance, and cash flows.
The Company’s ability to develop its Mexican properties is subject to the rights of the Ejido (agrarian cooperatives), and violations of such rights could result in the Company’s loss of title in the subject properties, which would have a materially adverse effect on the Company’s business and financials.
Mining concessions in Mexico give exclusive exploration and exploitation rights to the minerals located in the concessions but do not include surface rights to the real property, which requires that the Company negotiates the necessary agreements with surface landowners. Many of the mining properties are subject to the Mexican Ejido system, which are groups of local inhabitants who were granted rights to conduct agricultural activities on the property, for access and surface disturbances, requiring the Company to contract with the local communities surrounding the properties in order to obtain surface rights to land needed in connection with mining exploration activities. The Company’s ability to mine minerals is subject to maintaining satisfactory arrangements and relationships with the Ejido.
The Company must negotiate and maintain a satisfactory arrangement with these residents in order to disturb or discontinue their rights to farm. While the Company has successfully negotiated and signed such agreements related to the DDGM operations, its inability to maintain these agreements or consummate similar agreements for new projects could impair or impede the ability to successfully explore, develop, and mine the properties, which in turn could materially adversely affect the Company’s future cash flow.
In February 2020, a local Ejido community (who claim to be an indigenous community) filed an injunction against the Mexican federal government alleging failure to conduct a prior consultation before granting mining concessions and seeking cancellation of several concessions, including certain concessions granted to DDGM. A federal suspension was issued in February 2020 prohibiting certain mining activities on the named concessions. DDGM’s operations are conducted
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on a concession that was not part of the original lawsuit, and DDGM does not presently perform such works in the concessions in lands of the indigenous community named in the injunction. The lawsuit is filed with the First District Courthouse in the state of Oaxaca and the case remains pending. If the lawsuit is successful, affected concessions, including the concession where DDGM currently operates, could be cancelled, and the Company would need to complete a consultation process and reapply for the concessions, which would have a materially adverse effect on its operations and financial condition. Please see Item 1A. Risk Factors—Regulatory Risks—Title to mineral properties can be uncertain and disputes regarding the title to the Company’s Mexican properties require the Company to litigate such disputes in Mexico, where it faces unfamiliar laws and procedures.
Title to mineral properties can be uncertain and disputes regarding the title to the Company’s Mexican properties require the Company to litigate such disputes in Mexico, where it faces unfamiliar laws and procedures.
The Company’s ability to explore and operate its properties depends on the validity of its title to that property. Uncertainties inherent in mineral properties relate to such things as the sufficiency of mineral discovery, proper posting and marking of boundaries, assessment work and possible conflicts with other claims not determinable from public record. There may be valid challenges to the title to the Company’s properties which, if successful, could impair development and/or operations. The resolution of disputes in foreign countries can be costly and time consuming. In a foreign country, the Company faces the additional burden of understanding unfamiliar laws and procedures. Not like in the U.S., the Company may not be entitled to a jury trial. Further, to litigate in Mexico, the Company is faced with the necessity of hiring lawyers and other professionals who are familiar with the Mexican laws. For these reasons, the Company may incur additional unforeseen costs to resolve its disputes in Mexico.
Under the laws of Mexico, Mineral Resources belong to the United States of Mexico, and government concessions are required to explore for or exploit Mineral Reserves. Mineral rights derive from concessions granted—on a discretionary basis—by the Ministry of Economy, pursuant to the Mexican mining law and regulations thereunder. Additionally, in 2014, new mining concessions became subject to additional review and approval by the Mexico Ministry of Energy, and in recent years, the federal government has been reluctant to issue new mining concessions.
The Company’s concessions in Mexico are subject to continuing government regulation, and failure to adhere to such regulations will result in the termination of such concessions. A title defect could result in losing all or a portion of the Company’s right, title, and interest in and to the properties to which the title defect relates. Furthermore, failure to comply with applicable laws and regulations relating to mineral right applications and tenure could result in loss, reduction or expropriation of entitlements, or the imposition of additional local or foreign parties as joint venture partners. Any such loss, reduction, or imposition of partners could have a material adverse effect on the Company’s financial condition, results of operations, and prospects.
A significant amount of the Company’s mining properties are subject to exchange control policies, the effects of inflation, and currency fluctuations between the U.S. dollar and the Mexican peso.
The Company’s revenue and external funding are primarily denominated in U.S. dollars. However, certain mining, processing, maintenance, and exploration costs are denominated in Mexican pesos. These costs principally include electricity, labor, water, maintenance, local contractors, and fuel. The appreciation of the peso against the U.S. dollar increases expenses and the cost of purchasing capital assets in U.S. dollar terms in Mexico, which can adversely impact the Company’s operating results and cash flows. Conversely, the depreciation of the Mexican peso decreases operating costs and capital asset purchases in U.S. dollar terms. When inflation in Mexico increases without a corresponding devaluation of the Mexican peso, the Company’s financial position, results of operations, and cash flows could be materially adversely affected. The annual average inflation rate in Mexico was approximately 3.82% in 2025 and 4.72% in 2024. Current and future inflationary effects may be driven by, among other things, supply chain disruptions, governmental stimulus or fiscal policies, and geopolitical instability. For additional information, please see Item 1A. Risk Factors—General Risks— Global and regional political and economic conditions could adversely impact the Company’s business. Continuing increases in inflation could increase the costs of labor and other costs related to the business, which could have an adverse impact on the Company’s business, financial position, results of operations, and cash flows.
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At the same time, the peso has been subject to fluctuation, which may not have been proportionate to the inflation rate and may not be proportional to the inflation rate in the future. The value of the peso increased by 12.8% in 2025 and decreased by 16.7% in 2024. In addition, fluctuations in currency exchange rates may have a significant impact on the Company’s financial results. There can be no assurance that the Mexican government will maintain its current policies with regard to the peso or that the peso’s value will not fluctuate significantly in the future. The Company cannot assure you that currency fluctuations, inflation, and exchange control policies will not have an adverse impact on its financial condition, results of operations, earnings, and cash flows.
Lack of infrastructure could forestall or prevent further exploration and advancement.
Exploration activities, as well as any advancement activities, depend on adequate infrastructure. Reliable roads, bridges, power sources, and water supply are important factors that affect capital and operating costs and the feasibility and economic viability of a project. Unanticipated or higher than expected costs and unusual or infrequent weather phenomena, or government or other interference in the maintenance or provision of such infrastructure, could materially adversely affect the Company’s business, financial condition, and results of operations.
Risks Related to the Company’s Common Stock
Volatility in the Company’s stock price could result in shareholders losing part or all of their investment.
In addition to other risk factors identified in this annual report on Form 10-K, and due to volatility associated with equity securities in general, the value of a shareholder’s investment could decline due to the impact of numerous factors upon the market price of the Company’s common stock, including divergence between its actual or anticipated financial results and published expectations of analysts or the expectations of the market, the gain or loss of customers, announcements that the Company, its competitors or its customers may make regarding their operating results and other factors that are beyond the Company’s control, such as market conditions in the Company’s or its customers’ industry, new market entrants, technological innovations, and economic and political conditions or events.
Stock markets in general have experienced extreme price and volume fluctuations, and the market prices of individual securities have been highly volatile. These fluctuations are often unrelated to operating performance and may materially adversely affect the market price of the Company’s common stock. As a result, shareholders may be unable to sell their shares at a desired price.
Past payments of dividends on the Company’s common stock are not a guaranty of future payments of dividends.
In 2010, the Company began paying cash dividends to the holders of its common stock, but in February 2023, in order to conserve cash for future development and exploration, the Company announced the suspension of quarterly dividends. The Company’s ability to pay dividends in the future will depend on a number of factors, including free cash flow, expected operational performance, mine construction requirements and strategies, other acquisition and/or construction projects, spot metal prices, taxation, government-imposed royalties, and general market conditions. Further, a portion of the Company’s cash flow is expected to be retained to finance operations, explorations, and development of mineral properties. There is no assurance that the Board will elect to re-institute a dividend payment in the near-term or at all.
Issuances of the Company’s stock in the future could dilute existing shareholders and materially adversely affect the market price of its common stock.
The Company has the authority to issue up to 200,000,000 shares of common stock, 5,000,000 shares of preferred stock, and to issue options and warrants to purchase shares of its common stock, in some cases without shareholder approval. As of March 16, 2026, there were 161,858,849 shares of common stock outstanding. Future issuances of the Company’s securities could be at prices substantially below the price paid for its common stock by current shareholders. The Company can issue significant blocks of its common stock without further shareholder approval. Because the
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Company has issued less common stock than many of its larger peers, the issuance of a significant amount of common stock may have a disproportionately large impact on share price compared to larger companies.
General Risks
The failure to complete our announced Transaction with Goldgroup could have a material adverse effect on our business, results of operations, financial condition, cash flows and stock price.
On January 26, 2026, the Company announced that it entered into the Arrangement Agreement with Goldgroup, whereby Goldgroup has agreed to acquire all of the issued and outstanding shares of the Company’s common stock. The proposed Transaction will occur by way of a reverse triangular merger in which the Company will merge with a wholly owned subsidiary of Goldgroup under Colorado law and a plan of arrangement under the Business Corporations Act (British Columbia), with the Company surviving as a wholly owned subsidiary of Goldgroup. The Transaction is expected to close in the second quarter of 2026, subject to customary closing conditions (including approval by the stockholders of each of the Company and Goldgroup and approval by the Mexican National Antitrust Commission). There is no assurance that all of the conditions of the Arrangement Agreement will be satisfied, or that the Transaction will be completed on the announced terms, within the expected timeframe or at all. The closing of the Transaction may be delayed, or the Transaction may not be completed, due to a number of factors, including as a result of the failure to obtain regulatory approval or to satisfy any other requisite closing conditions.
If the Transaction does not close, the Company could suffer consequences that may have an adverse effect on its business, financial condition, operating results, cash flows and stock price. To the extent that the market price of the Company’s common stock reflects the assumption that the Transaction will be completed in the second quarter of 2026 or at all, the price of our stock could decline. The Company may experience adverse effects or changes to relationships with customers, employees, suppliers or other parties resulting from the failure to complete the Transaction. Additionally, there may be potential litigation relating to the Merger that could be instituted against the Company.
The Company’s operations may be disrupted, and its financial results may be materially adversely affected by any future pandemic.
Any pandemic may pose a risk to the business and operations. If a significant portion of the Company’s workforce becomes unable to work or travel to the operations due to illness or state or federal government restrictions (including travel restrictions and “shelter-in-place” and similar orders restricting certain activities that may be issued or extended by authorities), the Company may be forced to reduce or suspend operations, exploration activities, and/or development projects, which may impact liquidity and financial results. These restrictions have significantly disrupted economic activity in both the world, national, and local economies and have caused volatility in capital markets.
To the extent any pandemic materially adversely affects the Company’s business and financial results, as discussed above, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those relating to operation, indebtedness, and financing. The Company is unable to predict the ultimate adverse impact of any pandemic on the business, which will depend on numerous evolving factors and future developments, including the pandemic’s ongoing effect on the demand for silver and gold, as well as the response of the overall economy and the financial markets after the pandemic and response measures come to an end, the timing of which remains highly unpredictable.
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Global and regional political and economic conditions could adversely impact the Company’s business.
Political and economic shifts, both domestic and international, may create uncertainty and pose risks to the Company’s operations. Policies related to populism, protectionism, economic nationalism, and attitudes toward multinational corporations could result in regulatory changes, trade barriers, or investment restrictions. Additionally, international trade disputes—including tariffs, counter-tariffs, export controls, sanctions, and currency regulations—may increase costs and disrupt supply chain, operating model, and customer relationships.
Further, market volatility, driven by shifts in U.S. and foreign trade policies, fluctuating interest rates, or currency controls may affect gold prices, capital availability, and investor confidence. Even the perception of these risks could lead to reduced investment, higher production costs, and operational challenges. If such trends continue, they may have a material adverse effect on the business and financial performance.
The Company may not be able to operate successfully if it is unable to recruit, hire, retain, and develop key personnel and maintain a qualified and diverse workforce. In addition, the Company is dependent upon its employees being able to safely perform their jobs, but there is risk of physical injuries or illness.
The Company depends upon the services of a number of key executives and management personnel. These individuals include executive officers and other key employees. If any of these individuals were to die, become disabled, or leave the Company, the Company would be forced to identify and retain individuals to replace them but may be unable to hire a suitable replacement on favorable terms should that become necessary.
The Company’s success is also dependent on the contributions of its highly skilled and experienced workforce. The Company’s ability to achieve its operating goals depend upon the ability to recruit, hire, retain, and develop qualified and diverse personnel to execute on its strategy. There continues to be competition over highly skilled personnel in the industry. If the Company loses key personnel or one or more members of senior management team; or if it fails to develop adequate succession plans; or if it fails to hire, retain, and develop qualified and diverse employees; the business, financial condition, results of operations, and cash flows could be harmed.
The Company is dependent on information technology systems, which are subject to certain risks, including cybersecurity risks, data leakage risks, and risks associated with implementation and integration.
The Company is dependent upon information technology systems in the conduct of its business. Any significant breakdown, invasion, virus, cyberattack, security breach, destruction, or interruption of these systems by employees, others with authorized access to its systems, or unauthorized persons could negatively impact the business. To the extent any invasion, cyberattack, or security breach results in disruption to the business, such as loss or disclosure of, or damage to data or confidential information; business reputation, results of operations, and financial condition could be materially adversely affected. The Company has implemented various measures to manage the risks related to information technology systems and network disruptions. However, given the unpredictability of the timing, nature, and scope of information technology disruptions, the Company could potentially be subject to production downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of its systems, and networks or financial losses from remedial actions, any of which could have a material adverse effect on cash flows, competitive position, financial condition, or results of operations. The Company’s systems and insurance coverage for protecting against cyber security risks may not be sufficient. Although to date the Company has not experienced any material losses relating to cyberattacks, it may suffer such losses in the future. The Company may be required to expend significant additional resources to continue to modify or enhance protective measures. The Company also may be subject to significant litigation, regulatory investigation, and remediation costs associated with any information security vulnerabilities, cyberattacks, or security breaches.
The Company may also be materially adversely affected by system or network disruptions if new or upgraded information technology systems are defective, not installed properly, or not properly integrated into its operations. If the
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Company is unable to successfully implement system upgrades or modifications, it may have to rely on manual reporting processes and controls over financial reporting that have not been planned, designed, or tested. Various measures have been implemented to manage the risks related to the system upgrades and modifications, but system upgrades and modification failures could have a material adverse effect on the business, financial condition, and results of operations and could, if not successfully implemented, adversely impact the effectiveness of internal controls over financial reporting.
The Company’s business is subject to the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws, a breach or violation of which could lead to civil and criminal fines and penalties, loss of licenses or permits, and reputational harm.
The Company operates in certain jurisdictions that have experienced some degree of governmental and private sector corruption, and in certain circumstances, strict compliance with anti-bribery laws may conflict with certain local customs and practices. The U.S. Foreign Corrupt Practices Act and anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business or other commercial advantages. The Company’s Code of Ethics and other corporate governance mandate compliance with these anti-bribery laws, which often carry substantial penalties. However, there can be no assurance that internal control policies and procedures will always protect the Company from recklessness, fraudulent behavior, dishonesty, or other inappropriate acts committed by affiliates, employees, contractors, or agents. As such, the corporate policies and processes may not prevent all potential breaches of law or other governance practices. Violations of these laws, or allegations of such violations, could lead to civil and criminal fines and penalties, litigation, loss of operating licenses or permits, and may damage the Company’s reputation, which could have a material adverse effect on the business, financial position, and results of operations, or cause the market value of common stock to decline.
ITEM 1B.UNRESOLVED STAFF COMMENTS
None.
ITEM 1C.CYBERSECURITY
Risk Management and Strategy
The Company has established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats and have
The Company conducts periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in business practices that may affect information systems that are vulnerable to such cybersecurity threats. These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
Governance
One of the key functions of the Board is informed oversight of the risk management process, including risks from cybersecurity threats. The
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entitled “Governance” in the Company’s definitive proxy statement relating to the 2025 Annual Meeting of Stockholders filed with the SEC on April 25, 2025.
Cybersecurity Threats
As of December 31, 2025,
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ITEM 2. PROPERTIES
Glossary.
The following terms used in this report shall have the following meanings:
Andesite: | An extrusive igneous, volcanic rock, of intermediate composition, with aphanitic to porphyritic texture characteristic of subduction zones, such as the western margin of South America. |
Concentrate: | A product from a mineral processing facility, such as gravity separation or flotation, in which the valuable constituents have been upgraded and unwanted gangue materials rejected as waste. |
Cut and Fill: | A mining method where ore is removed in horizontal slices, and each mined-out area is backfilled before mining the next level. The fill provides support and a working platform. This method is highly selective and works well in narrow, steep, or irregular ore bodies. Ore is typically loaded and hauled using load, haul, dump machine (“LHD”) equipment. |
Doré: | Composite gold and silver bullion, usually consisting of approximately 90% precious metals that will be further refined to separate pure metals. |
Drift: | A horizontal tunnel generally driven within or alongside an ore body and aligned parallel to the long dimension of the ore. |
Epithermal: | Used to describe gold deposits found on or just below the surface close to vents or volcanoes, formed at low temperature and pressure. |
Exploration: | Prospecting, sampling, mapping, diamond-drilling, and other work involved in locating the presence of economic deposits and establishing their nature, shape, and grade. |
Grade: | The concentration of an element of interest expressed as relative mass units (percentage, ounces per ton, grams per tonne (“g/t”), etc.). |
Hectare: | A metric unit of measurement, for surface area. One hectare equals 1/200th of a square kilometer, 10,000 square meters, or 2.47 acres. A hectare is approximately the size of a soccer field. |
Long-hole Stoping: | Mining method which uses holes drilled by a production drill to a predetermined pattern by a mining engineer. Long-hole stoping is a highly selective and productive method of mining and can cater for varying ore thicknesses and dips (0 - 90 degree). Blasted rock is designed to fall into a supported drawpoint or be removed with remote control LHD. |
Net Smelter Return (“NSR”): | The net revenue that the owner of a mining property receives from the sale of the mine’s metal products, less transportation and refining costs. As a royalty, it refers to the fraction of net smelter return that a mine operator is obligated to pay the owner of the royalty agreement. |
Mineral Deposit: | Rocks that contain economic amounts of minerals in them and that are expected to be profitably mined. |
Tonne: | A metric ton. One tonne equals 1000 kg. It is equal to approximately 2,204.62 pounds. |
Volcanogenic: | Of volcanic origin. |
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Volcanic domes: | These are mounds that form when viscous lava erupts slowly and piles up over the vent, rather than moving away as lava flow. The sides of most domes are very steep and typically are mantled with unstable rock debris formed during or shortly after dome emplacement. Most domes are composed of silica-rich lava, which may contain enough pressurized gas to cause explosions during dome extrusion. |
Overview
The Company classifies its mineral properties into three categories: “Production Stage Properties,” “Development Stage Properties,” and “Exploration Stage Properties.” Production Stage Properties are properties for which the Company operates a producing mine.
At the Don David Gold Mine, the Company currently has 100% interest in six properties, including two Production Stage Properties and four Exploration Stage Properties, located in Oaxaca, Mexico, along the San Jose structural corridor. Because of their proximity and relatively integrated operations, the Company collectively refers to the six properties as the Don David Gold Mine. The two Production Stage Properties are the only two of the six properties that make up the Don David Gold Mine that the Company considers to be independently material at this time. Please see Item 2. Properties —Don David Gold Mine for further discussion of the properties.
The Company also has 100% interest in the Back Forty Project, an advanced Exploration Stage Property, located in Menominee County, Michigan, USA. The Company does not consider the Back Forty Project to be independently material to the Company at this time. Please see Item 2. Properties— Back Forty Project for further discussion of the property.
Mineral Resources
Under Regulation S-K 1300, a “Mineral Resource” is defined as a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A Mineral Resource is estimated based on geological evidence and sampling and considers relevant factors such as cut-off grade, mining method, mining dimensions, metallurgical recovery, location, and continuity, under assumed and justifiable technical and economic conditions. Mineral Resources do not have demonstrated economic viability.
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The following tables summarize the estimated Mineral Resources at DDGM and at Back Forty:
Don David Gold Mine – Summary of Gold, Silver, and Base Metal Mineral Resources
at December 31, 2025(1)(2)(3)(4)(5)(6)
Description |
| Tonnes (k/t) |
| Gold (g/t) |
| Silver (g/t) |
| Copper (%) |
| Lead (%) |
| Zinc (%) | Cut-off grade | Metallurgical Recovery (%) | ||||||||||
Arista | $/Tonne | Au | Ag | Cu | Pb | Zn | ||||||||||||||||||
Measured Mineral Resources | 3 | 1.40 | 192.3 | 0.32 | 1.04 | 4.22 | 150 | 71.3 | 85.0 | 58.9 | 65.8 | 76.3 | ||||||||||||
Indicated Mineral Resources | 60 | 1.66 | 248.6 | 0.27 | 1.78 | 5.41 | 150 | 71.3 | 85.0 | 58.9 | 65.8 | 76.3 | ||||||||||||
Measured + Indicated | 63 | 1.65 | 245.7 | 0.28 | 1.74 | 5.35 | 150 | 71.3 | 85.0 | 58.9 | 65.8 | 76.3 | ||||||||||||
Inferred Mineral Resources | 1,366 | 0.84 | 128.0 | 0.23 | 1.25 | 3.69 | 150 | 71.3 | 85.0 | 58.9 | 65.8 | 76.3 | ||||||||||||
Alta Gracia | AuEq (g/t) | |||||||||||||||||||||||
Measured Mineral Resources | 27 | 0.81 | 370.6 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Indicated Mineral Resources | 141 | 0.49 | 270.0 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Measured + Indicated | 168 | 0.54 | 286.1 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Inferred Mineral Resources | 148 | 0.62 | 295.6 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Notes on Mineral Resources:
| 1. | Mineral Resources estimated at December 31, 2025 are based on $3,000/oz for gold, $38.00/oz for silver, $4.54/pound for copper, $0.95/pound for lead and $1.25/pound for zinc. The metal prices used are based on conservative estimates of the average median consensus prices for each of the three years starting in 2026 through 2028 as provided by Bloomberg’s consensus commodity price forecast as at November 21, 2025. The 2028 consensus was used for the remaining life of mine. |
| 2. | The definitions for Mineral Resources in S-K 1300 were followed, which are consistent with definitions outlined by the Canadian Institute of Mining’s Definition Standards for Mineral Resources & Mineral Reserves (“CIM (2014)”) and are exclusive of Mineral Reserves. |
| 3. | The Arista Mine cut-off grade applied to Mineral Resources estimated at December 31, 2025 is $150/tonne NSR. |
| 4. | No appreciable amounts of base metals are present in the Alta Gracia veins identified to date. A breakeven cut-off grade of 2.35 g/t AuEq was |
used for Mineral Resources using gold and silver only to calculate gold equivalencies.
| 5. | Mineral Resources that are not Mineral Reserves are materials of economic interest with reasonable prospects for economic extraction. |
| 6. | Rounding of tonnes, average grades, and contained ounces may result in apparent discrepancies with total rounded tonnes, average grades, and total contained ounces. |
For comparison, as at December 31, 2024, DDGM’s estimates of Mineral Resources, exclusive of Mineral Reserves, are provided in the table below.
Don David Gold Mine – Summary of Gold, Silver, and Base Metal Mineral Resources
at December 31, 2024(1)(2)(3)(4)(5)(6)
Description |
| Tonnes (k/t) |
| Gold (g/t) |
| Silver (g/t) |
| Copper (%) |
| Lead (%) |
| Zinc (%) | Cut-off grade | Metallurgical Recovery (%) | ||||||||||
Arista | $/Tonne | Au | Ag | Cu | Pb | Zn | ||||||||||||||||||
Measured Mineral Resources | 4 | 0.54 | 79.4 | 0.31 | 1.35 | 5.14 | 120 | 79.5 | 91.4 | 73.9 | 71.8 | 83.2 | ||||||||||||
Indicated Mineral Resources | 201 | 1.02 | 164.5 | 0.29 | 0.94 | 2.54 | 120 | 79.5 | 91.4 | 73.9 | 71.8 | 83.2 | ||||||||||||
Measured + Indicated | 205 | 1.01 | 163.0 | 0.29 | 0.95 | 2.59 | 120 | 79.5 | 91.4 | 73.9 | 71.8 | 83.2 | ||||||||||||
Inferred Mineral Resources | 1,838 | 1.03 | 100.3 | 0.23 | 1.29 | 3.62 | 120 | 79.5 | 91.4 | 73.9 | 71.8 | 83.2 | ||||||||||||
Alta Gracia | AuEq (g/t) | |||||||||||||||||||||||
Measured Mineral Resources | 27 | 0.81 | 370.6 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Indicated Mineral Resources | 141 | 0.49 | 270.0 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Measured + Indicated | 168 | 0.54 | 286.1 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Inferred Mineral Resources | 148 | 0.62 | 295.6 | - | - | - | 2.35 | 85.0 | 72.0 | - | - | - | ||||||||||||
Notes on Mineral Resources:
| 1. | Mineral Resources estimated at December 31, 2024 are based on $2,200/oz for gold, $28.00/oz for silver, $4.52/pound for copper, $1.00/pound for lead and $1.22/pound for zinc. The metal prices used are based on conservative estimates of the average median consensus prices for each of the three years starting in 2025 through 2027 as provided by Bloomberg’s consensus commodity price forecast as at January 7, 2025. The 2027 consensus was used for the remaining life of mine. |
| 2. | The definitions for Mineral Resources in S-K 1300 were followed, which are consistent with definitions outlined by the CIM (2014) and are exclusive of Mineral Reserves. |
| 3. | The Arista Mine cut-off grade applied to Mineral Resources estimated at December 31, 2024 is $120/tonne NSR. |
| 4. | No appreciable amounts of base metals are present in the Alta Gracia veins identified to date. A breakeven cut-off grade of 2.35 g/t AuEq was |
used for Mineral Resources using gold and silver only to calculate gold equivalencies.
| 5. | Mineral Resources that are not Mineral Reserves are materials of economic interest with reasonable prospects for economic extraction. |
| 6. | Rounding of tonnes, average grades, and contained ounces may result in apparent discrepancies with total rounded tonnes, average grades, and total contained ounces. |
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During 2025, the Company completed an updated evaluation of its geological interpretations, block models, metallurgical recoveries, and economic assumptions supporting the Mineral Resource estimate at DDGM to enhance the reliability of mine planning and forecasting. Mining methods, ground control, and other parameters were also reviewed. As a result of this review, measured and indicated Mineral Resources decreased from approximately 0.37 million tonnes at December 31, 2024 to approximately 0.23 million tonnes at December 31, 2025. The primary factor for this decrease was the increase in the NSR cutoff grade from $120/tonne to $150/tonne, reflecting updated cost and economic assumptions. In addition, 2025 plant metallurgical recoveries were incorporated in the NSR calculations and more restrictive resource modelling parameters were applied. The total inferred Mineral Resources decreased from approximately 1.99 million tonnes at December 31, 2024 to approximately 1.51 million tonnes at December 31, 2025. The decrease in inferred Mineral Resources primarily reflects the updated geologic interpretation, the higher NSR cut-off grade, and the absence of step-out or expansion drilling during 2025.
More information regarding the assumptions, methodologies, and procedures utilized in the estimation of Mineral Resources at DDGM can be found in the updated Don David Gold Mine Technical Report Summary, effective as of December 31, 2025, which is incorporated by reference as Exhibit 96.2 to this Form 10-K (the “DDGM Technical Report Summary”).
Back Forty Project – Summary of Gold, Silver, and Base Metal Mineral Resources
at December 31, 2024 and 2025(1) (2) (3) (4)
Description | | Tonnes | | Gold | | Silver | | Copper | | Lead | | Zinc | Cut-off grade | |
Back Forty - Open Pit | $/Tonne | |||||||||||||
Measured Mineral Resources | - | - | - | - | - | - | - | |||||||
Indicated Mineral Resources | 9,360 | 2.41 | 28.1 | 0.36 | - | 3.74 | 33 | |||||||
Measured + Indicated | 9,360 | 2.41 | 28.1 | 0.36 | - | 3.74 | 33 | |||||||
Inferred Mineral Resources | 566 | 2.70 | 48.8 | 0.35 | - | 1.31 | 33 | |||||||
Back Forty - Underground | AuEq (g/t) | |||||||||||||
Measured Mineral Resources | - | - | - | - | - | - | - | |||||||
Indicated Mineral Resources | 5,137 | 1.86 | 24.1 | 0.41 | - | 2.65 | 73 | |||||||
Measured + Indicated | 5,137 | 1.86 | 24.1 | 0.41 | - | 2.65 | 73 | |||||||
Inferred Mineral Resources | 627 | 2.00 | 26.1 | 0.37 | - | 2.89 | 73 |
Notes on Mineral Resources:
1. | Mineral Resources estimated at December 31, 2024 and 2025 are based on metal price assumptions of $1,800/oz for gold, $23.30/oz for silver, $3.90/pound for copper, $0.95/pound for lead and $1.25/pound for zinc. These prices are derived from the average median consensus price forecasts for the period 2024 through 2028, as provided by the Bank of Montreal in June 2023, and have not been updated to reflect economic changes. The median price was based on the price estimates contributed by 38 participating financial institutions. These prices are also very similar to the three-year average. |
2. | The definitions for Mineral Resources in S-K 1300 were followed, which are consistent with definitions outlined by CIM (2014) and are exclusive of Mineral Reserves. |
3. | Mineral Resources that are not Mineral Reserves are materials of economic interest with reasonable prospects for economic extraction. |
4. | Rounding of tonnes, average grades, and contained ounces may result in apparent discrepancies with total rounded tonnes, average grades, and total contained ounces. |
Following the completion of the optimization work for the Back Forty Project, the Company published an update on indicated and inferred Mineral Resources in the Back Forty Project Technical Report Summary released in October 2023. A measured Mineral Resource estimate or a Mineral Reserve estimate have yet to be established for the Back Forty Project.
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More information regarding the assumptions, methodologies, and procedures utilized in the estimation of Mineral Resources at Back Forty can be found in the Back Forty Project Technical Report Summary, which is incorporated by reference as Exhibit 96.1 to this Form 10-K.
Mineral Reserves
Under Regulation S-K 1300, a “Mineral Reserve” is defined as “an estimate of tonnage and grade or quality of measured and indicated Mineral Resources that, in the opinion of the qualified person, can be the basis of an economically viable project.”
The following tables summarize the estimated Mineral Reserves at DDGM:
Don David Gold Mine – Summary of Gold, Silver and Base Metal Mineral Reserves
at December 31, 2025 (1) (2) (3) (4)
| Recovery (%) | |||||||||||||||||||||||
Description | Tonnes | | Gold | | Silver | | Cu (%) | Pb (%) | Zn (%) | | Cut-off Grade (2) | Au (%) | Ag (%) | Cu (%) | Pb (%) | Zn (%) | ||||||||
Don David Gold Mine | ||||||||||||||||||||||||
Arista Mine (2) | $/Tonne | |||||||||||||||||||||||
Proven Mineral Reserves | 26 | 1.91 | 475.7 | 0.22 | 0.81 | 1.90 | 150 | 71.3 | 85.0 | 58.9 | 65.8 | 76.3 | ||||||||||||
Probable Mineral Reserves | 626 | 1.16 | 183.9 | 0.18 | 0.82 | 2.52 | 150 | 71.3 | 85.0 | 58.9 | 65.8 | 76.3 | ||||||||||||
Arista Mine Total | 652 | 1.19 | 195.7 | 0.18 | 0.82 | 2.49 | ||||||||||||||||||
Alta Gracia Mine (3) | AuEq (g/t) | |||||||||||||||||||||||
Proven Mineral Reserves | - | - | - | - | - | - | - | - | - | |||||||||||||||
Probable Mineral Reserves | - | - | - | - | - | - | - | - | - | |||||||||||||||
Alta Gracia Mine Total | - | - | - | |||||||||||||||||||||
Don David Gold Mine Total | 652 | 1.19 | 195.7 | |||||||||||||||||||||
Notes on Mineral Reserves:
| 1. | Mineral Reserves estimated at December 31, 2025 are based on metal price assumptions of $3,000/oz for gold, $38.00/oz for silver, $4.54/pound for copper, $0.95/pound for lead and $1.25/pound for zinc. The metal prices used are based on conservative estimates of the average median consensus prices for each of the three years starting in 2026 through 2028 as provided by Bloomberg’s consensus commodity price forecast as at November 21, 2025. The 2028 consensus was used for the remaining life of mine. |
| 2. | The Arista Mine NSR cut-off grades for Mineral Reserves are $150/tonne. |
| 3. | Alta Gracia Mineral Reserves reported as of December 31, 2022 were reclassified as Mineral Resources as of December 31, 2023 and remain classified as Mineral Resources as of December 31, 2025. |
| 4. | Rounding of tonnes, average grades, and contained ounces may result in apparent discrepancies with total rounded tonnes, average grades, and total contained ounces. |
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For comparison, as at December 31, 2024, DDGM’s estimates of Mineral Reserves are presented in the table below.
Don David Gold Mine – Summary of Gold, Silver and Base Metal Mineral Reserves
at December 31, 2024 (1) (2) (3) (4)
| Recovery (%) | |||||||||||||||||||||||
Description | Tonnes | | Gold | | Silver | | Cu (%) | Pb (%) | Zn (%) | | Cut-off Grade (2) | Au (%) | Ag (%) | Cu (%) | Pb (%) | Zn (%) | ||||||||
Don David Gold Mine | ||||||||||||||||||||||||
Arista Mine (2) | $/Tonne | |||||||||||||||||||||||
Proven Mineral Reserves | 60 | 2.25 | 276.2 | 0.24 | 1.20 | 3.14 | 120 | 79.5 | 91.4 | 73.9 | 71.8 | 83.2 | ||||||||||||
Probable Mineral Reserves | 1,057 | 1.21 | 135.6 | 0.17 | 0.70 | 2.19 | 120 | 79.5 | 91.4 | 73.9 | 71.8 | 83.2 | ||||||||||||
Arista Mine Total | 1,117 | 1.26 | 143.1 | 0.18 | 0.73 | 2.24 | ||||||||||||||||||
Alta Gracia Mine (3) | AuEq (g/t) | |||||||||||||||||||||||
Proven Mineral Reserves | - | - | - | - | - | - | - | - | - | |||||||||||||||
Probable Mineral Reserves | - | - | - | - | - | - | - | - | - | |||||||||||||||
Alta Gracia Mine Total | - | |||||||||||||||||||||||
Don David Gold Mine Total | 1,117 | 1.26 | 143.1 | |||||||||||||||||||||
Notes on Mineral Reserves:
| 1. | Mineral Resources estimated at December 31, 2024 are based on $2,200/oz for gold, $28.00/oz for silver, $4.52/pound for copper, $1.00/pound for lead and $1.22/pound for zinc. The metal prices used are based on conservative estimates of the average median consensus prices for each of the three years starting in 2025 through 2027 as provided by Bloomberg’s consensus commodity price forecast as at January 7, 2025. The 2027 consensus was used for the remaining life of mine. |
| 2. | The Arista Mine NSR cut-off grades for Mineral Reserves are $120/tonne. |
| 3. | Alta Gracia Mineral Reserves reported at December 31, 2022 have been downgraded to Mineral Resources as of December 31, 2023 and remained classified as Mineral Resources as of December 31, 2024. |
| 4. | Rounding of tonnes, average grades, and contained ounces may result in apparent discrepancies with total rounded tonnes, average grades, and total contained ounces. |
Proven and probable Mineral Reserves decreased from 1.12 million tonnes at December 31, 2024 to 0.65 million tonnes at December 31, 2025. This decrease was primarily due to depletion of 0.27 million tonnes from 2025 mining activities and an additional reduction of 0.49 million tonnes resulting from engineering deductions, including an increase in the cut-off grade from $120/t to $150/t NSR, removal of orphaned ore blocks, and tightening of the geologic model at the Arista mine. These reductions were partially offset by the reclassification of 0.30 million tonnes of Mineral Resources to Proven and Probable Mineral Reserves, driven by the results from the 2025 infill and grade-control drilling program at the Three Sisters and Arista vein systems and detailed engineering.
More information regarding the assumptions, methodologies, and procedures utilized in the estimation of Mineral Reserves can be found in the DDGM Technical Report Summary incorporated by reference as Exhibit 96.2 to this Form 10-K.
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Don David Gold Mine
The Company’s portfolio of properties comprising DDGM is located along a 55-kilometer, north-west trending stretch of the San Jose structural corridor within the Sierra Madre del Sur mountain range in the state of Oaxaca, Mexico. The property package covers approximately 551 square kilometers of contiguous mineral concessions and encompasses three historic mining centers. Within this land package, the Company continues to conduct strategic planning and prioritization of regional surface exploration activities across multiple properties, including Alta Gracia, Margaritas, Chamizo, Rey, Jabali and Fuego. The map below shows the general location of the DDGM property areas.
The Company was granted concessions from the Mexican federal government to explore and mine the properties in Mexico. Please see below Item 2. Properties—Mining Concessions and Regulations in Mexico for additional information. The Company holds certain properties as the concession holder and lease other properties from third parties. The Company is required to pay concession fees to the Mexican government to maintain its interest in these concessions, and it pays concession fees for all the mineral properties, including those which are subject to the third-party lease.
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The table below details information related to the mining concessions that comprise the properties in Oaxaca, Mexico:
| Total Number of Concessions | | Total Size | | Acquisition Date Range | | 2025 Maintenance Fees Paid |
| ||
(in hectares) | (in thousands) | |||||||||
Production Stage Properties: | ||||||||||
Arista | 18 | 24,372 | 2002 to 2016 | $ | 565 | |||||
Alta Gracia | 3 | 5,175 | 2008 | 119 | ||||||
Total Production Stage Properties: | 29,547 | $ | 684 | |||||||
Exploration Stage Properties: | ||||||||||
Rey | 4 | 2,335 | 2002 to 2009 | $ | 54 | |||||
Chamizo | 2 | 19,758 | 2011 to 2013 | 462 | ||||||
Margaritas | 1 | 925 | 2002 | 21 | ||||||
Fuego | 1 | 2,554 | 2013 | 60 | ||||||
Total Exploration Stage Properties: | 25,572 | $ | 597 | |||||||
Total: | 29 | 55,119 | $ | 1,281 | ||||||
Production Stage Properties
Arista & Alta Gracia Mines
History: The Arista and Alta Gracia Mines are located within the regional Tlacolula mining district in the state of Oaxaca, in southern Mexico. According to the Mexican Geological Survey, the Servicio Geologico Mexicano (“SGM”), mining activity in the Tlacolula district began in the early 1880s and resulted in the production of approximately 300,000 ounces of gold and silver from an ore shoot in the La Leona mine. However, no separate production amounts were reported for each metal. According to the SGM, in 1892, two smelters were built and operated (Magdalena Teitipac and O’Kelly) near the village of Tlacolula to process ores from the Alta Gracia La Soledad, San Ignacio y Anexas, La Leona, La Victoria, and San Rafael silver mines. Subsequently, in 1911, Mr. Sken Sanders investigated the Totolapam mining region with particular interest in the Margaritas mine. Many of these historical mines are located within mining concessions currently controlled by the Company.
Although the DDGM Arista Mine and Alta Gracia Mine are situated within the smaller mining subdistricts of San Jose de Gracia and Alta Gracia, respectively, only small-scale artisanal mining was historically conducted in these areas. No reliable production records exist for the historic production from within the Arista and Alta Gracia Project areas.
Arista Mine
Background: The Arista Mine consists of 18 mining concessions totaling 24,372 hectares.
In 2002, the Company entered into lease agreements for three initial concessions from a third-party. Two of these concessions form part of the Arista Mine, while the third concession comprises the Margaritas property. In November 2023, the royalty terms associated with the lease agreement were renegotiated, reducing the net smelter return (“NSR”) royalty from 4% to 3% for production sold in the form of gold/silver doré, and from 5% to 3% for production sold in concentrate form. Subject to meeting minimum exploration requirements, there is no expiration term for the lease. The Company may terminate the lease at any time upon written notice to the lessor, and the lessor may terminate the lease if the subsidiary fails to fulfill any of its obligations, which primarily consist of paying the appropriate royalty to the lessor.
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Initial drilling and exploration activities commenced at the Arista Mine in August 2003. As of December 31, 2025, the Company has completed 1,992 diamond drill holes (including both surface and underground programs) totaling 509,570 meters. In addition, 166 reverse circulation drill holes have been completed for a total of 14,367 meters. Cumulatively, the Company has drilled 2,158 holes totaling 523,937 meters across the Arista Mine, Alta Gracia, Rey, and Margaritas properties.
|
DDGM Ore Terminal |
In 2010, the Company acquired additional concessions from a third-party at no additional cost, which are subject to a 2% royalty. The Company also filed for and received additional concessions from the Mexican government that are not part of the concessions leased or acquired from the third-party. Of these, two concessions are considered part of the Arista Mine.
Location and Access: The Arista Mine is located in the Sierra Madre del Sur Mountains of southern Mexico, in the central part of the state of Oaxaca. The property lies along a major paved highway approximately 120 kilometers southeast of Oaxaca City, the state capital, and approximately four kilometers northwest of the village of San Jose de Gracia. The Company has constructed gravel and paved access roads from the village to the mine and processing facility, providing adequate access to the property.
The climate in the Arista Mine area is dry and warm to very warm, with most rainfall occurring between June and September and average annual precipitation of 432 millimeters. The average annual temperature is 26.6 degrees Celsius. The terrain is rocky and characterized by arid vegetation. Subsistence farming is practiced locally, with agave cactus cultivated as the primary agricultural crop for the production of mezcal.
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Geology and Mineralization: The Arista Mine is located within the San Jose de Gracia mining district in the state of Oaxaca, Mexico. District-scale geology is dominated by multiple volcanic domes of varying scales, including likely non-vented intrusive domes, which overlie a pre-volcanic sedimentary rock basement. Gold and silver mineralization within the district is related to the manifestations of this classic volcanogenic system and is classified as epithermal in character.
Historically, the Company produced ore from two locations at the Arista Mine: an open pit operation and an underground mine. Mineralization mined from the open pit is interpreted as low-sulfidation epithermal in style, consisting predominantly of gold with some silver and no significant base metal content. In 2011, mining activities were completed in the open pit, and the pit is currently being backfilled and reclaimed using filtered dry-stack tailings deposition. Mineralization at the Arista underground mine is interpreted as intermediate-sulphidation epithermal in style and contains gold, silver, copper, lead, and zinc. The principal host rock for the three vein systems (Arista, Switchback and Three Sisters) that comprise the Arista mine is primarily andesite.
Facilities: The processing facility and other infrastructure at the Arista Mine was constructed for approximately $35.0 million in 2009, and the processing facility was expanded in 2012 and 2013 for an additional $23.0 million. The flotation mill expansion, completed at the end of 2013, increased the number of flotation cells, added a second ball mill to allow for additional processing capacity, and added a Knelson gravity concentrator. In 2014, a doré processing facility was completed. In 2019, an increase in pumping capacity to the cyclones in the plant resulted in plant capacity increasing to nominal 2,000 tonnes per day. The DDGM processing facility is flexible in its ability to process several types of mineralization. It has a differential flotation section capable of processing polymetallic ore and producing up to three separate concentrate products. The facility also has an agitated leach circuit capable of producing gold and silver doré.
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The Company obtained water rights from the Mexican government for an amount of water that it believes is sufficient to meet its operating requirements and pump it approximately five kilometers to the site from a permitted well located near the Totolapam River.
Additional improvements at the site include electrical power lines connecting to the Mexican national power grid, installation of backup diesel generation power plants and switch gear, paving a three-kilometer section of the road from the mine to the processing facility, construction of a surface maintenance garage and fuel station, construction of haul roads from the mine site to the processing facility, office space at the processing facility, an assay lab, an exploration office, tailings impoundment facilities and lift, a paste fill plant, mine camp facilities, the filtration plant, the dry stack facility, and other infrastructure.
Exploration Activities: In 2025, the Company successfully completed an underground diamond drilling program at the Arista Mine, consisting of 105 diamond drill holes totaling 13,418 meters. The program included 78 underground grade-control drill holes totaling 8,557 meters, which were focused on upgrading Mineral Resources to Mineral Reserves within multiple veins of the Arista, Three Sisters and Switchback vein systems. In addition, 27 underground infill drill holes totaling 4,861 meters were completed to upgrade previously defined Inferred Mineral Resources to Measured and Indicated Mineral Resource categories. This drilling further delineated and refined multiple sub-parallel veins within the Three Sisters and Arista vein systems and upgraded several high-grade zones up- and down-dip and along strike from existing workings, within and adjacent to existing Mineral Resources.
Underground expansion drilling activities at the Arista Mine remained suspended during 2025 in order to prioritize drilling in support of near-term production, primarily within the Arista and Three Sisters vein systems. During the year, the Company completed more than 485 meters of underground drift development at the Arista Mine to support infill and grade-control drilling and to prepare for planned expansion drilling in 2026. Expansion drilling is expected to focus on the Three Sisters vein system, including the Gloria vein, along strike to the northwest and down-dip, as well as on the northern and down-dip extensions of the Marena North and Splay 31 veins within the Arista vein system.
The Arista and Switchback vein systems each extend for more than 1.5 kilometers along strike and remain open along strike, and both up- and down-dip. The Three Sisters vein system, which currently comprises 24 veins and vein segments, including the Gloria vein, is located at the northern extent of the Arista Mine underground workings, between the Switchback and Arista systems. The Three Sisters system has a defined strike length of more than 750 meters and remains open along strike and both up- and down-dip. Infill and expansion drilling planned for 2026 will continue to prioritize resource expansion within the Three Sisters system, as well as the northern extensions of veins within the Arista system.
Surface exploration activities during 2025 in the Arista project area focused on the evaluation and prioritization of advanced-stage exploration targets within the approximately 551 square kilometer land package controlled by DDGM surrounding the Arista Mine. These activities included the re-processing and integration of historical geologic information, including mapping, sampling, geophysical surveys, and drill data, from several projects, including Rey, Margaritas, Chamizo, Jabali and Alta Gracia. Prospective areas proximal to the Arista Mine are in the process of being re-evaluated for near-term exploration potential, with the objective of defining additional near-mine drill targets.
Please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information concerning mining operations at the Alta Gracia project.
Alta Gracia Mine
Background: In 2008, the Company was granted mineral claims adjacent to the Margaritas property in the Alta Gracia mining district through the filing of three mining concessions known as David Fracción I, David Fracción II, and La Herradura, totaling 5,175 hectares.
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As of December 31, 2016, Proven and Probable Mineral Reserves had been established for the Mirador vein at the Alta Gracia Mine. In July 2017, mine development reached the economic ore zone of the Mirador vein, and underground mining commenced. Mining activities were suspended in 2019, and no Mineral Reserves are currently reported for the Alta Gracia Mine.
Location and Access: The Alta Gracia project is approximately 20 kilometers northeast of the village of San Pedro Totolapam, in the Municipality of San Pedro Totolapam, Oaxaca. Access to the project is by a gravel road that departs the paved highway approximately 13 kilometers east of the village of San Pedro Totolapam. The haulage distance by road from Alta Gracia to the DDGM processing facility is approximately 32 kilometers.
Geology and Mineralization: The sedimentary and volcanic units mapped at Alta Gracia closely resemble those at the Arista Mine. The district is characterized by Tertiary-age rhyolite flows and tuffs, underlain by andesite flows and tuffs. Granodiorite and other felsic intrusive rocks crop out north and east of the Mirador vein. Known vein occurrences at Alta Gracia are primarily hosted within andesite and rhyolite units. Mineralization is interpreted as low sulfidation epithermal, with economic metals currently limited to gold and silver.
Facilities: In 2016, the Company received an operating permit authorizing production from the Mirador vein at Alta Gracia. During 2017, two mine portals were developed to provide access to the Mirador vein and supporting infrastructure, including mine site offices and a mobile equipment maintenance shop, was established. A diesel power generation plant, a compressed air system, and a mine water pumping station were also constructed and commissioned. In 2018, historic workings were rehabilitated to create a second access portal to the Independecia vein system, located approximately 500 meters southwest of the Mirador portal. Underground development was advanced to access the mineralization delineated by drilling completed in 2018 and 2019 on the Independencia vein.
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Ore from the Alta Gracia Mine, primarily silver-bearing material, was transported by contracted haul trucks to the DDGM processing facility, where it was processed through the agitated leach plant to produce doré as a final product.
Exploration Activities: In 2025, surface exploration activities at the Alta Gracia project focused on advancing drill-ready targets and initiating a limited surface diamond drilling program in mid-November. This program targeted the southwest extension of the Mirador vein, where six holes totaling 1,121 meters were completed by year’s end. Early year work included the review and reinterpretation of historical surface mapping and rock and soil geochemical datasets, with particular emphasis on the Aguacatillo prospect area, located southwest, west, and northwest of the Independencia and Mirador vein systems, and the La Fundación prospect, situated immediately south-southeast of these vein systems. This analysis identified multiple gold- and silver-in-soil anomalous zones that will guide follow-up detailed mapping and expanded geochemical sampling to refine near-mine drill targets.
To support drill planning and resource evaluation, historical Vulcan-modeled solids were reconstructed in Leapfrog Geo and integrated with existing geological and resource block models. This work improved drill targeting within the Mirador, Independencia and Victoria vein systems and supported the selection of priority infill drill sites in the upper southwestern portion of the Mirador vein. Surface drilling in this area commenced in mid-November 2025, with the objective of upgrading previously defined inferred Mineral Resources. Additional detailed mapping, geochemical sampling, and target refinement activities are planned to support future surface and underground drilling campaigns.
Exploration Properties
Margaritas Property
The Margaritas property is made up of the La Tehuana concession, which is approximately 925 hectares and is located within the 55-kilometer San Jose structural corridor, adjacent to the Arista Mine.
During 2025, the Company continued to review and interpret results from previous surface drilling, surveying, detailed geological mapping, soil sampling, and rock chip channel sampling conducted on the Margaritas property. Activities during the year focused on maintaining the mineral concessions and analyzing the spectral and geophysical datasets to identify and prioritize additional exploration targets. The Company anticipates conducting a similar level of exploration and concession-maintenance work in 2026, subject to budgetary and operational considerations.
Chamizo Property
In June 2011, the Company acquired the Chamizo exploration concession from the Mexican government, covering approximately 17,898 hectares. In March 2013, the Company acquired the San Pedro Fraccion 2 concession from Almaden Minerals, Ltd. (“Almaden”), consisting of approximately 1,860 hectares and including the Cerro Colorado (also known as Jabali) prospect. The Cerro Colorado (Jabali) prospect is surrounded by the Chamizo concession and is considered part of the broader Chamizo property. The Chamizo Property is adjacent to the Alta Gracia project. Any future production from the San Pedro Fraccion 2 concession would be subject to a 2% net smelter return royalty payable to Almaden.
In 2022, limited surface geologic mapping and geochemical rock and soil sampling were completed within the Jabali prospect area of the San Pedro Fraccion 2 concession. The results of this work were reviewed and analyzed during 2023 to support geological interpretation and preliminary target evaluation. The Company continues to evaluate exploration targets within the Chamizo property using available historical and compiled datasets while also focusing on identifying opportunities to strengthen relationships in the local communities.
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Fuego Property
In March 2013, the Company acquired the San Pedro Fraccion 1 concession from Almaden, consisting of approximately 2,554 hectares including the Fuego property. Any future production from this concession would be subject to a 2% net smelter return royalty payable to Almaden. The Fuego property, which is located south of the Alta Gracia and Chamizo properties, was included in a property-wide airborne geophysical survey conducted in 2013.
Prior to the Company’s acquisition of the Fuego property, Almaden completed limited historical diamond drilling on the property during 2005 and 2006, consisting of 15 diamond drill holes totaling 2,262 meters. This work contributed to the geological understanding of the property and confirmed subsurface continuity of the vein system. Geologic mapping and surface sampling have also been completed historically on the Fuego property to satisfy the minimum work requirements necessary to maintain the concession. No field-based exploration activities were conducted on the Fuego property during 2025. The Company does not anticipate significant exploration activities at the Fuego property during 2026 and expects to limit work to concession maintenance and ongoing evaluation of historical surface and drill data.
Rey Property
The Rey property consists of a group of mineral concessions located at the northwestern end of the 55-kilometer San Jose structural corridor in the State of Oaxaca. The concessions include El Rey, El Virrey, La Reyna, and El Marquez, and collectively cover approximately 2,335 hectares. The Company acquired the El Virrey concession from a third party, which is subject to a 2% net smelter return royalty, and obtained the remaining concessions through staking and filings with the Mexican government.
The Rey property is located approximately 64 kilometers by road from the Arista Mine. There are no processing facilities or permanent mining infrastructure on the Rey property. If future exploration activities were to advance to development, any mineralized material would likely be extracted using underground mining methods and transported by truck to the DDGM processing facility.
Between 2007 and 2008, the Company completed surface diamond drilling at the Rey property consisting of 48 drill holes totaling approximately 5,273 meters. In early 2012, the Company refurbished and extended an existing shaft on the property in preparation for potential underground exploratory drilling, however no underground drilling was conducted. Exploration activities were subsequently suspended following requests to obtain additional approvals from local community agencies and advancement of further exploration work has remained constrained due to the absence of community permissions required to conduct additional field activities.
The Company continues to hold the Rey property and to maintain the mineral concessions in good standing. Evaluation of historical surface and drill data continues, and the Company will reassess opportunities for additional exploration activities if access conditions and community approvals permit.
Mining Concessions and Regulations in Mexico
Mineral rights in Mexico belong to the Mexican federal government and are administered pursuant to Article 27 of the Mexican Constitution. All of the mining concessions are exploitation concessions, which may be granted or transferred to Mexican citizens and corporations. The Company’s leases or concessions are held by the Mexican subsidiary DDGM. Exploitation concessions have a term of 50 years and can be renewed for another 50 years. Concessions grant the Company the right to explore and exploit all minerals found in the ground. Maintenance of concessions requires the semi-annual payment of mining duties (due in January and July) and the performance of assessment work, on a calendar year basis, with assessment work reports required to be filed in the month of May for the preceding calendar year. The amount of mining duties and annual assessments are set by regulation, may increase over the life of the concession, and include periodic adjustments for inflation. Failure to pay the mining duties can lead to the cancelation of the relevant concession.
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Mexican mining law does not require payment of finder’s fees to the government, except for a discovery premium in connection with national Mineral Reserves, concessions and claims, or allotments contracted directly from the Mexican Geological Survey. None of the claims held by DDGM are under such a discovery premium regime.
Ejido Lands and Surface Right Acquisitions in Mexico
Surface lands within DDGM are Ejido lands (agrarian cooperative lands granted by the federal government to groups of Campesinos pursuant to Article 27 of the Mexican Constitution of 1917). Prior to January 1, 1994, Ejidos could not transfer Ejido lands into private ownership. Amendments to Article 27 of the Mexican Constitution in 1994 now allow individual property ownership within Ejidos and allow Ejidos to enter into commercial ventures with individuals or entities, including foreign corporations. The Company has an agreement with the local San Pedro Totolapam Ejido, allowing exploration and exploitation of mineralization at the Arista Mine and some of the surrounding properties.
Mexican law recognizes mining as a land use generally superior to agriculture. However, the law also recognizes the rights of the Ejidos to compensation in the event mining activity interrupts or discontinues their use of the agricultural lands. Compensation is typically made in the form of a cash payment to the holder of the agricultural rights. The amount of such compensation is generally related to the perceived value of the agricultural rights as negotiated in the first instance between the Ejidos and the owner of the mineral rights. If the parties are unable to reach an agreement on the amount of the compensation, the decision can be referred to the government.
The Company has established surface rights agreements with the San Pedro Totolapam Ejido and the individuals impacted by the proposed operations which allow disturbance of the surface where necessary for the exploration activities and mining operations.
Office Facilities
The Company constructed an administrative office building adjacent to the DDGM processing facility and a mine office adjacent to the Arista Mine portal. The Company also leases approximately 3,000 square feet of office space in Oaxaca City, Oaxaca. The lease commenced in 2012 and was renewed in December 2024 through the end of 2027.
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Back Forty Project
The Back Forty Project is an advanced Exploration Stage Property located in Menominee County, Michigan, USA in the mineral rich Penokean Volcanic Belt. The property comprises approximately 1,304 hectares (3,222 acres) of private and public (State of Michigan) mineral lands and is centered at 46°27’ North and longitude 87°51’ West. As an exploration-stage property, the Company does not currently consider the Back Forty Project to be independently material to its operations.
Background: On December 10, 2021, the Company successfully completed the acquisition of all issued and outstanding common shares of Aquila. Aquila’s principal asset is its 100% interest in the Back Forty Project located in Menominee County, Michigan, USA. The Back Forty Project hosts a volcanogenic massive sulfide (“VMS”) deposit containing gold, silver, copper, lead, and zinc. The Company controls surface and mineral rights through a combination of ownership, leases with the State of Michigan, and royalty agreements with private parties.
Optimization work related to metallurgy and the economic model for the Back Forty Project was completed in 2023, and the Company issued an updated Back Forty Project Technical Report Summary in October 2023. The updated study demonstrated improved project economics relative to prior assessments, as reflected in the Back Forty Project Technical Report Summary, resulting from both metallurgical improvements and project design modifications. Certain design modifications also reduced potential environmental impacts, including the avoidance of direct impacts to wetlands. Since completion of the 2023 Back Forty Project Technical Report Summary, no additional technical studies or material project advancements have been completed. The Company is currently in discussions to complete a feasibility study and to move forward with the permitting process for the Back Forty Project in 2026. Please see Item 2. Properties for additional information.
Permitting: Permitting for the Back Forty Project is governed and regulated by the State of Michigan.
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Community: Engagement with Tribal governments and local stakeholders has been an ongoing component of the Back Forty Project, particularly in relation to cultural resources in the project area. Outreach to local Tribes, including the Menominee Indian Tribe of Wisconsin, began in 2010. Aquila completed extensive archeological studies across areas potentially affected by the project as well as adjacent areas. In coordination with regulatory authorities, areas for permanent protection were identified and appropriate buffer zones established.
Office Facilities: In Michigan, the Company owns and operates an administrative office building in Stephenson, Michigan, and maintains a field office near the location of the potential future mine facilities. The Company also maintains an industrial-grade core storage, logging, and sampling facility near the Back Forty Project site.
ITEM 3.LEGAL PROCEEDINGS
In February 2020, a local Ejido community (who claim to be an indigenous community) filed an injunction against the Mexican federal government alleging failure to conduct a prior consultation before granting mining concessions and seeking cancellation of several concessions, including certain concessions granted to DDGM. A federal suspension was issued in February 2020 prohibiting certain mining activities on the named concessions. DDGM’s operations are conducted on a concession that was not part of the original lawsuit, and DDGM does not presently perform such works in the concessions in lands of the indigenous community named in the injunction. The lawsuit is filed with the First District Courthouse in the state of Oaxaca and the case remains pending. If the lawsuit is successful, affected concessions, including the concession where DDGM currently operates, could be cancelled, and the Company would need to complete a consultation process and reapply for those concessions.
ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
Market Information
The Company’s common stock trades on the NYSE American under the symbol “GORO”.
On March 16, 2026, there were 161,858,849 outstanding shares of Gold Resource Corporation, which were held by approximately 200 holders of record.
Transfer Agent
Computershare Trust Company, N.A. is the transfer agent for the common stock. The principal office of Computershare is located at 6200 S. Quebec St., Greenwood Village, CO 80111, and its telephone number is (303) 262-0600. Correspondence should be mailed to P.O. Box 43078, Providence, RI 02940-3078 or couriered to 150 Royall St., Suite 101, Canton, MA 02021.
Dividend Policy
Approximately $123.0 million in dividends have been returned to shareholders since commercial production began at DDGM in July 2010. As of February 13, 2023, to conserve cash for future project development, capital expenditures, and exploration, the Company suspended the quarterly dividend payments until such time that it may become practicable to reinstate them.
ITEM 6.
RESERVED.
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ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Except for the historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. The Company cautions you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report. See “Forward-Looking Statements” above. The Company’s actual future results or actions may differ materially from these forward-looking statements for many reasons, including but not limited to the risks described in “Item 1A. Risk Factors” and elsewhere in this annual report and other reports filed by the Company with the SEC. This discussion and analysis of the financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and related notes included in this report and with the understanding that the actual future results may be materially different from what the Company currently expects.
Introduction
Gold Resource Corporation is a mining company that pursues gold and silver projects that are expected to achieve both low operating costs and high returns on capital. Through its wholly owned subsidiary, DDGM, the Company holds six properties and does mineral production primarily from the Arista underground mine. The Company produces gold and silver doré and metal concentrates which contain precious metals of gold and silver and base metals of copper, lead, and zinc.
The following discussion summarizes the results of operations for the two fiscal years ended December 31, 2025 and 2024 and the financial condition as of December 31, 2025 and 2024, with a particular emphasis on the year ended December 31, 2025.
The discussion also presents certain non-GAAP financial measures that are important to management in its evaluation of the operating results and which are used by management to compare the performance with what the Company perceives to be peer group mining companies and is relied on as part of management’s decision-making process. Management believes these measures may also be important to investors in evaluating the Company’s performance. For a detailed description of each of the non-GAAP financial measures, please see the discussion under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations below.
In the financial statements, the Company reports the sale of all precious and base metals as revenue, and it periodically reviews revenue streams to ensure that this treatment remains appropriate. The Company considers precious metals to be the long-term primary driver of its economic decisions and believes that base metals are secondary products for non-GAAP financial measures.
Gold equivalent is determined by taking gold ounces produced and sold, plus silver ounces produced and sold, converted to gold equivalent ounces using the gold to silver average realized price ratio for the period.
Recent Developments
On January 26, 2026, the Company announced that it has entered into a definitive arrangement agreement and plan of merger with Goldgroup Mining Inc., whereby Goldgroup has agreed to acquire all of the issued and outstanding shares of the Company’s common stock. For additional information, please see Item 1. Business—Recent Developments and Item 8. Financial Statements—Note 24. Subsequent Events.
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Results of Operations
Don David Gold Mine
Production Statistics
Mine activities during 2025 included development and ore extraction from the Arista Mine. The following table summarizes certain production statistics about the Don David Gold Mine for the periods indicated:
For the year ended December 31, | ||||||
| 2025 | | 2024 | |||
Arista Mine | ||||||
Milled | ||||||
Tonnes Milled | 271,404 | 356,633 | ||||
Tonnes Milled per Day (1) | 1,191 | 1,277 | ||||
Grade | ||||||
Average Gold Grade (g/t) | 0.85 | 1.13 | ||||
Average Silver Grade (g/t) | 217 | 92 | ||||
Average Copper Grade (%) | 0.16 | 0.26 | ||||
Average Lead Grade (%) | 0.69 | 1.10 | ||||
Average Zinc Grade (%) | 1.75 | 2.70 | ||||
Recoveries | ||||||
Average Gold Recovery (%) | 71.5 | 76.6 | ||||
Average Silver Recovery (%) | 84.4 | 87.5 | ||||
Average Copper Recovery (%) | 62.0 | 68.5 | ||||
Average Lead Recovery (%) | 63.5 | 68.4 | ||||
Average Zinc Recovery (%) | 76.1 | 81.1 | ||||
Metal production | ||||||
Gold (ozs.) | 5,300 | 9,906 | ||||
Silver (ozs.) | 1,594,300 | 919,836 | ||||
Copper (tonnes) | 264 | 642 | ||||
Lead (tonnes) | 1,192 | 2,682 | ||||
Zinc (tonnes) | 3,613 | 7,805 | ||||
Metal produced and sold | ||||||
Gold (ozs.) | 4,944 | 8,598 | ||||
Silver (ozs.) | 1,461,898 | 817,333 | ||||
Copper (tonnes) | 240 | 641 | ||||
Lead (tonnes) | 1,014 | 2,173 | ||||
Zinc (tonnes) | 2,940 | 6,286 | ||||
Percentage payable metal (2) | ||||||
Gold (%) | 93 | 87 | ||||
Silver (%) | 92 | 89 | ||||
Copper (%) | 91 | 100 | ||||
Lead (%) | 85 | 81 | ||||
Zinc (%) | 81 | 81 | ||||
| (1) | Based on actual days the mill operated during the period. |
| (2) | The difference between what the Company reports as “ounces/tonnes produced” and “payable ounces/tonnes sold” is attributable to the difference between the quantities of metals contained in the concentrates it produces versus the portion of those metals actually paid for according to the terms of the sales contracts. Differences can also arise from inventory changes incidental to shipping schedules, or variances in ore grades and recoveries, which impacts the amount of metals contained in concentrates produced and sold. |
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Full-year 2025 compared to full-year 2024
Key drivers in the production and financial results for the year ended December 31, 2025, as compared to 2024, relate to the lower tonnes mined, lower metal grades (with the exception of silver), lower recoveries, and higher metal prices. Although lower production results were expected in accordance with the 2025 mine plan, additional offsetting factors were the higher metal prices, especially for gold and silver.
Grades & Recoveries
During the year ended December 31, 2025, the Company processed ore with an average gold grade of 0.85 g/t, as compared to 1.13 g/t for 2024. The lower full-year average gold grade in 2025 was approximately 25% lower than in the prior year and primarily reflects mine sequencing into zones characterized by lower gold grades and higher silver grades, following an increased level of infill and grade-control drilling completed during the year that more fully defined silver-rich portions of the Three Sisters vein system. Recovery for gold declined 7% in 2025, primarily due to lower grades processed.
The average silver grade for the year ending 2025 increased 136% to 217 g/t. While silver grades increased, silver recovery was lower by 4% than in the prior year, reflecting the processing of mineralization with locally variable and previously uncharacterized mineralogical characteristics, including increased silica and carbonate components. As shown in the DDGM Technical Report Summary, gold and silver grades are projected, based on current life-of-mine planning assumptions, to trend toward the average grades outlined in the Mineral Resources and Mineral Reserves estimates. As grades decline, recoveries are also expected to decline; however, recoveries may also be influenced by mineralogical characteristics, ore blending strategies, and processing conditions.
The base metal average grades for the year ended December 31, 2025 were 0.16% for copper, 0.69% for lead, and 1.75% for zinc, compared to 0.26% for copper, 1.10% for lead, and 2.70% for zinc in 2024. Copper, lead, and zinc grades for the year ended December 31, 2025 declined by 38%, 37%, and 35%, respectively. These lower base metal grades in 2025 primarily reflect mine sequencing into portions of the mineralized system containing proportionally higher precious metal content relative to base metals, compared to the prior year. Recoveries for all base metals also decreased during 2025, largely due to the lower grades processed. As shown in the DDGM Technical Report Summary, future base metal grades and recoveries are projected, based on current life-of-mine planning assumptions, to be in line with the life of mine averages presented in the Mineral Resources and Mineral Reserves tables.
Production
For the year ended December 31, 2025, the Oaxaca operations processed 271,404 tonnes of ore at an average rate of 1,191 tonnes per day, representing a decrease of 24% in total material processed and a decrease of 7% in average daily throughput compared to the prior year. Production for the year totaled 5,300 gold ounces and 1,594,300 silver ounces, reflecting a decrease of 46% in gold production and an increase of 73% in silver production compared to 2024.
The decrease in gold production during 2025 primarily reflects lower gold grades and recoveries relative to the prior year. The increase in silver production reflects mine sequencing into silver-rich zones mainly within the Three Sisters vein system that were more fully defined through an increased level of infill and grade-control drilling completed during the year, resulting in higher silver grades processed. Production of copper, lead, and zinc decreased by 59%, 56%, and 54%, respectively, for the year ended December 31, 2025 compared to 2024. These decreases primarily reflect mine sequencing into portions of the mineralized system characterized by proportionally higher precious metal content and lower base metal content relative to the prior year.
Metals produced and sold are lower than total metals produced because a portion of the metal content contained in shipped concentrates is withheld by the purchaser under the terms of the Company’s sales contracts. The percentage payable metal—the amount of metal sold as a percent of the metal produced—were higher for all metals with the exception of copper for the year ended December 31, 2025 compared to 2024, primarily reflecting mineralogical characteristics and concentrate quality of the material processed.
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Sales Statistics
The following table summarizes certain sales statistics about the Don David Gold Mine operations for the periods indicated:
For the year ended December 31, | ||||||
| 2025 |
| 2024 | |||
Net sales (in thousands) | ||||||
Gold | $ | 17,813 | $ | 19,774 | ||
Silver | 66,062 | 23,146 | ||||
Copper | 2,436 | 5,827 | ||||
Lead | 1,977 | 4,402 | ||||
Zinc | 8,360 | 17,313 | ||||
Less: Treatment and refining charges | (3,392) | (5,706) | ||||
Realized and unrealized gain - embedded derivative, net | 6,503 | 970 | ||||
Total sales, net | $ | 99,759 | $ | 65,726 | ||
Metal produced and sold | ||||||
Gold (ozs.) | 4,944 | 8,598 | ||||
Silver (ozs.) | 1,461,898 | 817,333 | ||||
Copper (tonnes) | 240 | 641 | ||||
Lead (tonnes) | 1,014 | 2,173 | ||||
Zinc (tonnes) | 2,940 | 6,286 | ||||
Average metal prices realized (1) | ||||||
Gold ($ per oz.) | $ | 3,657 | $ | 2,354 | ||
Silver ($ per oz.) | $ | 45.48 | $ | 28.75 | ||
Copper ($ per tonne) | $ | 10,181 | $ | 9,223 | ||
Lead ($ per tonne) | $ | 1,938 | $ | 2,034 | ||
Zinc ($ per tonne) | $ | 2,817 | $ | 2,804 | ||
Gold equivalent ounces sold | ||||||
Gold Ounces | 4,944 | 8,598 | ||||
Gold Equivalent Ounces from Silver | 18,181 | 9,982 | ||||
Total AuEq oz | 23,125 | 18,580 | ||||
| (1) | Average metal prices realized vary from the market metal prices due to final settlement adjustments from provisional invoices when they are settled. The average metal prices realized will therefore differ from the market average metal prices in most cases. |
Full-year 2025 compared to full-year 2024
Metal produced and sold
During the year ended December 31, 2025, the Company had gold sales of 4,944 ounces, silver sales of 1,461,898 ounces, copper sales of 240 tonnes, lead sales of 1,014 tonnes, and zinc sales of 2,940 tonnes. While metals produced and sold for gold, copper, lead, and zinc decreased by 42%, 63%, 53%, and 53%, respectively, silver produced and sold increased by 79%, as compared to 2024. Most of these decreases were expected due to mine sequencing, but the issues the Company experienced at the first half of 2025 with equipment availability due to the age and condition of some of the critical mining equipment, also resulted in lower amount of metals produced and available for sale.
Average metal prices realized
During the year ended December 31, 2025, the average metal prices were $3,657 per ounce for gold, $45.48 per ounce for silver, $10,181 per tonne for copper, $1,938 per tonne for lead, and $2,817 per tonne for zinc. Compared to 2024, the average metal price for gold, silver, copper, and zinc increased by 55%, 58%, 10%, and less than 1%, respectively, due to strong demand for these metals in the international markets. The average metal price for lead decreased by 5%.
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Financial Measures
The following table summarizes certain financial data of the Company for the periods indicated:
For the year ended December 31, | ||||||
2025 | | 2024 | ||||
(in thousands) | ||||||
Doré and concentrate sales | $ | 96,648 | $ | 70,462 | ||
Less: Treatment and refining charges | (3,392) | (5,706) | ||||
Realized/unrealized derivatives, net | 6,503 | 970 | ||||
Sales, net | 99,759 | 65,726 | ||||
Total cost of sales | 72,979 | 86,217 | ||||
Mine gross profit (loss) | 26,780 | (20,491) | ||||
Other costs and expenses, including taxes | 33,239 | 36,010 | ||||
Net loss | $ | (6,459) | $ | (56,501) | ||
Full-year 2025 compared to full-year 2024
Sales, net
DDGM net sales of $99.8 million for the year ended December 31, 2025 increased by $34.0 million, or 52%, when compared to 2024. The increase in the 2025 net sales is the result of higher gold, silver, copper, and zinc average realized prices.
Treatment and refining charges
Treatment charges for the year ended December 31, 2025, were $3.4 million, or $809 per tonne of base metal produced and sold, as compared to $5.7 million, or $627 per tonne of base metal produced and sold for the same period in 2024. The 41% decrease in treatment and refining charges is due to fewer base metals produced and sold in 2025 as compared to the same period in 2024, partially offset by higher refining charges. The 29% cost increase in the per tonne of base metal produced and sold is due to the higher refining charges realized in 2025 across all concentrate material due to the application of higher metal prices to contracted refining rates.
Total cost of sales
Total cost of sales of $73.0 million for the year ended December 31, 2025 decreased by $13.2 million, or 15%, compared to 2024. The primary driver is the $5.3 million, or 8%, decrease in production costs from $65.6 million in 2024 to $60.3 million in 2025, and a $6.9 million, or 38%, decrease in depreciation expense. The decrease in production costs is related to lower production in 2025.
Mine gross profit (loss)
For the year ended December 31, 2025, mine gross profit and mine gross profit percent totaled $26.8 million and 27%, respectively, as compared to a mine gross loss and mine gross loss percent of $20.5 million and 31% for 2024. This is an increase in mine gross profit and mine gross profit percent of $47.3 million and 58%, respectively, when compared to 2024.
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The mine gross profit or loss maintains a limited correlation to tonnes of ore processed; however, multiple factors will impact the net sales and operating costs figures contained within the mine gross profit or loss in comparison to the tonnes of ore processed. For example, concerning net sales, attributes of the tonnes of ore processed (including ore grade and processing recoveries) along with metal commodity prices can result in lower or higher sales. Mine operating costs include variable costs that maintain a correlation to the tonnes both mined and processed (i.e., equipment usage, reagents, inventory consumables, royalties etc.) and further include fixed costs which maintain a lower correlation to the tonnes of ore processed (i.e. payroll, utilities, insurance, mining concessions, etc.).
The increase in the mine gross profit between 2025 and 2024 as shown in the table above is primarily explained by the higher net sales as a result of higher metals prices in 2025 compared to 2024 and lower production cost and depreciation due to lower production in 2025.
The Company expects grades to vary from period to period based on the annual mine plan. The gold grades are expected to trend upwards over time, toward the average grade of 1.26 g/t (exclusive of silver, copper, lead, and zinc contained grades), reflected in the Mineral Reserves estimate. However, as capital intensive mine development progresses and infill drilling occurs, opportunities to refine mining methods and eliminate dilution may have a favorable impact on future mined grades.
One component of gross profit or loss is the concentrate treatment charges, which are netted against concentrate sales. During 2025, the Company negotiated treatment and refining charge agreements with buyers on both annual and spot terms. The 41% decrease in treatment and refining charges is due to the lower base metals produced and sold in 2025 as compared to the same period in 2024, partially offset by higher refining charges. The 29% cost increase in the per tonne of base metal produced and sold is due to the higher refining charges realized in 2025 across all concentrate material due to the application of higher metal prices to contracted refining rates.
Net loss
For the year ended December 31, 2025, the Company recorded a net loss of $6.5 million, as compared to $56.5 million net loss during 2024. The change was attributable to the factors noted above.
Other Costs and Expenses, Including Taxes
For the year ended December 31, | ||||||
2025 | | 2024 | ||||
(in thousands) | ||||||
Other costs and expenses: | ||||||
General and administrative expenses | $ | 4,258 | $ | 4,283 | ||
Mexico exploration expenses | 1,857 | 1,959 | ||||
Michigan Back Forty Project expenses | 793 | 378 | ||||
Stock-based compensation | 1,147 | 677 | ||||
Other expense, net | 21,775 | 19,452 | ||||
Total other costs and expenses | 29,830 | 26,749 | ||||
Income tax provision | 3,409 | 9,261 | ||||
Total other costs and expenses, including taxes | $ | 33,239 | $ | 36,010 | ||
Full-year 2025 compared to full-year 2024
General and administrative expenses: For the year ended December 31, 2025, general and administrative expenses totaled $4.3 million, in line with expenses for 2024.
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Mexico exploration expenses: For the year ended December 31, 2025, the DDGM exploration expenses totaled $1.9 million as compared to $2.0 million for the year ended December 31, 2024. In both years, exploration expenses were limited due to the availability of cash and the focus on upgrading some mining equipment.
Michigan Back Forty Project expenses: For the year ended December 31, 2025, the Back Forty Project expenses totaled $0.8 million, as compared to $0.4 million for the year ended December 31, 2024. Costs were higher in 2025 due to increases in property taxes and increases in liability estimates related to Back Forty drillhole plugging accrued as consulting expense.
Stock-based compensation: For the year ended December 31, 2025, stock-based compensation expense totaled $1.1 million as compared to $0.7 million for the year ended December 31, 2024. The increase in stock-based compensation is mainly due to the higher share price used in 2025 for mark-to-market adjustment for the cash-settled instruments.
Other expense, net: For the year ended December 31, 2025, the Company recorded other expense, net, of $21.8 million compared to $19.5 million during the year ended December 31, 2024. The $2.3 million increase from 2024 was mainly due to the $3.3 million higher interest expense on the streaming liabilities, the $1.7 million higher other expenses, and the $0.5 million loss on the loan payoff in 2025, partially offset by the $3.0 million lower net realized and unrealized investment loss in 2025. Please see Item 8. Financial Statements—Note 19. Other Expense, Net for additional information.
Income tax provision: For the year ended December 31, 2025, income tax expense was $3.4 million, a decrease of $5.9 million from a $9.3 million income tax expense for 2024. This decrease is primarily driven by the valuation allowance recorded during 2024 on the deferred tax assets of DDGM. Please see Item 8. Financial Statements—Note 6. Income Taxes for additional information.
Other Non-GAAP Financial Measures
Certain non-GAAP financial measures are discussed below. For a detailed description of each of these measures and a reconciliation to GAAP financial measures, please see the discussion under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures below.
The following table summarizes certain non-GAAP financial data of the Company for the periods indicated:
For the year ended December 31, | ||||||
2025 | | 2024 | ||||
Other Non-GAAP Financial Measures: | (in thousands) | |||||
Total cash cost after co-product credits per AuEq oz sold (1) | $ | 2,205 | $ | 2,330 | ||
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold (1) | $ | 3,041 | $ | 3,200 | ||
Total all-in cost after co-product credits per AuEq oz sold (1) | $ | 3,540 | $ | 3,325 | ||
| (1) | For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures below. |
Full-year 2025 compared to full-year 2024
Total cash cost after co-product credits per AuEq oz sold: For the year ended December 31, 2025, the total cash cost after co-product credits per AuEq oz sold was $2,205 compared to $2,330 for 2024. This 5% decrease is because although there was an 18% higher total cash cost after co-product credits in 2025, the total number of AuEq ounces sold increased by 24%. The higher total cash cost after co-product credits is the result of the 55% lower amount of co-product credits the Company received during the year ended December 31, 2025. Although production costs were lower for the year ended December 31, 2025, compared to the same period last year, the increased energy costs negatively impacted production costs and, therefore, the cost per tonne processed and the total cash cost after co-product credits per AuEq oz sold.
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Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold: For the year ended December 31, 2025, the total consolidated all-in sustaining cost after co-product credits per AuEq oz sold was $3,041 compared to $3,200 for 2024. The 5% decrease is because although there was an 18% higher total cash cost after co-product credits combined with a 44% increase in sustaining capital expenditures in 2025, the total number of AuEq ounces sold increased by 24%.
Total all-in cost after co-product credits per AuEq oz sold: For the year ended December 31, 2025, the total all-in cost after co-product credits per AuEq oz sold was $3,540 compared to $3,325 for 2024. The 6% increase is due to the higher non-sustaining exploration expenditures in 2025.
For a detailed description of each of the non-GAAP financial measures and a reconciliation to GAAP financial measures, please see the discussion below under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures.
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2025 Capital and Exploration Investment Summary
For the year ended December 31, 2025 | ||||||
2025 | 2024 | |||||
Sustaining Investments: | ||||||
Underground Development | $ | 3,243 | $ | 4,634 | ||
Other Sustaining Capital | 6,149 | 2,970 | ||||
Infill Drilling | 1,289 | 977 | ||||
Surface and Underground Exploration Development & Other | 1,746 | 65 | ||||
Subtotal of Sustaining Investments: | 12,427 | 8,646 | ||||
Growth Investments: | ||||||
DDGM growth: | ||||||
Surface Exploration / Other | 1,857 | 1,921 | ||||
Underground Exploration Drilling | - | 38 | ||||
Underground Exploration Development | 8,906 | - | ||||
Back Forty growth: | ||||||
Back Forty Project Optimization & Permitting | 793 | 378 | ||||
Subtotal of Growth Investments: | 11,556 | 2,337 | ||||
Total Capital and Exploration: | $ | 23,983 | $ | 10,983 | ||
The Company’s capital investment in Mexico totaled $21.3 million in 2025. The investment in Mexico is focused on favorably impacting the Company’s environmental, social, and governance programs while creating operational efficiencies and longevity. At the Back Forty Project, $0.4 million was spent in 2024 to wrap up the optimization work and to release the Back Forty Project Technical Report Summary, which is incorporated by reference as Exhibit 96.1 to this Form 10-K. Since completion of the 2023 Back Forty Project Technical Report Summary, no additional technical studies or material project advancements have been completed.
Underground and Exploration Development: Mine development during 2025 included ramps and accesses to different areas of the deposit, vertical shafts, and exploration development drifts. A total of 4,178 meters of underground development and exploration development, at a cost of $13.9 million, was completed during the year, including access to new exploration drill stations for grade-control, infill and expansion programs.
Back Forty Feasibility and Permitting: Optimizing work related to metallurgy and the economic model for the Back Forty Project was completed during the third quarter of 2023, and the Company issued an updated Back Forty Project Technical Report Summary in October 2023. The updated study demonstrated improved project economics relative to prior assessments and incorporated project design modifications intended to reduce potential environmental impacts, including the avoidance of direct impacts to wetlands.
During 2024 and 2025, work was focused on maintaining the project in good standing. The Company is currently in discussions to complete a feasibility study and to move forward with the permitting process for the Back Forty Project. The Board of Directors actively evaluates the options that could lead to the successful development of the project.
Non-GAAP Measures
Throughout this report, the Company has provided information prepared or calculated according to U.S. GAAP and has referenced some non-GAAP performance measures which the Company believes will assist with understanding the performance of the business. These measures are based on precious metal gold equivalent ounces sold and include cash cost before co-product credits per ounce, total cash cost after co-product credits per ounce, and total all-in sustaining cost per ounce (“AISC”). Because the non-GAAP performance measures do not have any standardized meaning prescribed by U.S. GAAP, they may not be comparable to similar measures presented by other companies. Accordingly, these measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S.
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GAAP. These non-GAAP measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP.
For financial reporting purposes, the Company reports the sale of base metals as part of its revenue. Revenue generated from the sale of base metals in concentrates is considered a co-product of gold and silver production for the purpose of the total cash cost after co-product credits for the Don David Gold Mine. The Company periodically reviews its revenues to ensure that the reporting of primary products and co-products remains appropriate. Because the Company considers copper, lead, and zinc to be co-products of its precious metal production, the value of these metals continues to be applied as a reduction to total cash costs in the calculation of total cash cost after co-product credits per gold equivalent ounce sold. Gold equivalent is determined by taking gold ounces produced and sold, plus silver ounces produced and sold, converted to gold equivalent ounces using the gold to silver average realized price ratio for the period. The Company believes the identification of copper, lead, and zinc as co-product credits is appropriate because of their lower individual economic value compared to gold and silver and due to the fact that gold and silver are the primary products the Company intends to produce.
Total cash cost, after co-product credits, is a measure developed by the Gold Institute in an effort to provide a uniform standard for comparison purposes. AISC is calculated based on the current guidance from the World Gold Council.
Total cash cost before co-product credits includes all direct and indirect production costs related to the production of metals (including mining, milling, and other plant facility costs, royalties, and site general and administrative costs) less stock-based compensation allocated to production costs plus treatment and refining costs.
Total cash cost after co-product credits includes total cash cost before co-product credits, less co-product credits (revenues earned from base metals).
AISC includes total cash cost after co-product credits plus other costs related to sustaining production, including sustaining allocated general and administrative expenses and sustaining capital expenditures. The Company determined sustaining capital expenditures as those capital expenditures that are necessary to maintain current production and execute the current mine plan.
Cash cost before co-product credits per ounce, total cash cost after co-product credits per ounce, and AISC are calculated by dividing the relevant costs, as determined using the cost elements noted above, by precious metal gold equivalent ounces sold for the periods presented.
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Reconciliations to U.S. GAAP
The table below present reconciliations between the most comparable GAAP measure of Total cost of sales to the non-GAAP measures of Cash cost after co-product credits, All-in sustaining cost after co-product credits for DDGM and for the Company, and All-in Cost after co-product credits for the years ended December 31, 2025 and 2024:
Item 8. Financial Statements Note # | For the year ended December 31, | ||||||
2025 | | 2024 | |||||
Total cost of sales (1) | $ | 72,979 | $ | 86,217 | |||
Less: Depreciation and amortization (1) | (11,197) | (18,120) | |||||
Less: Reclamation and remediation (1) | (1,499) | (2,545) | |||||
Refining charges for Doré sales | 4 | 10 | 6 | ||||
Treatment and refining charges for Concentrate sales | 4 | 3,382 | 5,700 | ||||
Co-product credits: | |||||||
Concentrate sales - Copper | 4 | (2,436) | (5,827) | ||||
Concentrate sales - Lead | 4 | (1,977) | (4,402) | ||||
Concentrate sales - Zinc | 4 | (8,360) | (17,313) | ||||
Realized gain for embedded derivatives - Copper | 21 | (4) | (83) | ||||
Realized loss (gain) for embedded derivatives - Lead | 21 | 10 | (18) | ||||
Realized loss (gain) for embedded derivatives - Zinc | 21 | 79 | (316) | ||||
Total cash cost after co-product credits | $ | 50,987 | $ | 43,299 | |||
Gold equivalent (AuEq) ounces sold (oz) | | 23,125 | 18,580 | ||||
Total cash cost after co-product credits per AuEq oz sold | $ | 2,205 | $ | 2,330 | |||
Total cash cost after co-product credits from above | $ | 50,987 | $ | 43,299 | |||
Sustaining Investments - Capital: | |||||||
Underground Development (2) | 3,243 | 4,634 | |||||
Other Sustaining Capital (2) | 6,149 | 2,970 | |||||
Sustaining Investments - Capitalized Exploration: | |||||||
Infill Drilling (2) | 1,289 | 977 | |||||
Surface and Underground Exploration Development & Other (2) | 1,746 | 65 | |||||
Reclamation and remediation (1) | 1,499 | 2,545 | |||||
DDGM all-in sustaining cost after co-product credits | $ | 64,913 | $ | 54,490 | |||
AuEq ounces sold (oz) | 23,125 | 18,580 | |||||
DDGM all-in sustaining cost after co-product credits per AuEq oz sold | $ | 2,807 | $ | 2,933 | |||
DDGM all-in sustaining cost after co-product credits from above | $ | 64,913 | $ | 54,490 | |||
Corporate Sustaining Expenses: | |||||||
General and administrative expenses (1) | 4,258 | 4,283 | |||||
Stock-based compensation (1) | 1,147 | 677 | |||||
Consolidated all-in sustaining cost after co-product credits | $ | 70,318 | $ | 59,450 | |||
AuEq ounces sold (oz) | 23,125 | 18,580 | |||||
Total consolidated all-in sustaining cost after co-product credits per AuEq oz sold | $ | 3,041 | $ | 3,200 | |||
Consolidated all-in sustaining cost after co-product credits from above | $ | 70,318 | $ | 59,450 | |||
Underground Exploration Development (2) | 8,906 | - | |||||
Growth Investments - Exploration: | |||||||
Mexico exploration expenses (1) | 1,857 | 1,959 | |||||
Michigan Back Forty Project expenses (1) | 793 | 378 | |||||
Total all-in cost after co-product credits | $ | 81,874 | $ | 61,787 | |||
AuEq ounces sold (oz) | 23,125 | 18,580 | |||||
Total all-in cost after co-product credits per AuEq oz sold | $ | 3,540 | $ | 3,325 | |||
| (1) | Refer to Item 8—Financial Statements: Consolidated Statements of Operations. |
| (2) | Refer to Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—2025 Capital and Exploration Investment Summary. |
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Trending Highlights
2024 | 2025 | ||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | ||
Operating Data | |||||||||
Total tonnes milled | 98,889 | 93,687 | 83,690 | 80,367 | 56,906 | 63,479 | 65,131 | 85,888 | |
Average Grade | |||||||||
Gold (g/t) | 1.89 | 1.27 | 0.54 | 0.64 | 0.70 | 0.56 | 1.11 | 0.96 | |
Silver (g/t) | 88 | 102 | 83 | 94 | 169 | 115 | 250 | 298 | |
Copper (%) | 0.37 | 0.26 | 0.19 | 0.20 | 0.18 | 0.13 | 0.16 | 0.16 | |
Lead (%) | 1.25 | 1.00 | 1.01 | 1.12 | 0.72 | 0.88 | 0.63 | 0.58 | |
Zinc (%) | 2.82 | 2.59 | 2.63 | 2.73 | 1.68 | 2.72 | 1.57 | 1.22 | |
Metal production (before payable metal deductions) | |||||||||
Gold (ozs.) | 4,757 | 2,947 | 944 | 1,258 | 903 | 758 | 1,646 | 1,993 | |
Silver (ozs.) | 251,707 | 263,023 | 194,525 | 210,581 | 257,285 | 196,435 | 453,057 | 687,523 | |
Copper (tonnes) | 280 | 181 | 93 | 88 | 54 | 50 | 73 | 87 | |
Lead (tonnes) | 812 | 616 | 576 | 678 | 272 | 373 | 241 | 306 | |
Zinc (tonnes) | 2,310 | 2,020 | 1,741 | 1,734 | 699 | 1,380 | 784 | 750 | |
Metal produced and sold | |||||||||
Gold (ozs.) | 3,557 | 2,724 | 1,357 | 960 | 859 | 878 | 1,422 | 1,785 | |
Silver (ozs.) | 216,535 | 234,560 | 181,434 | 184,804 | 230,320 | 150,365 | 417,710 | 663,503 | |
Copper (tonnes) | 264 | 197 | 98 | 82 | 50 | 43 | 67 | 80 | |
Lead (tonnes) | 667 | 491 | 467 | 548 | 277 | 272 | 212 | 253 | |
Zinc (tonnes) | 1,682 | 1,771 | 1,473 | 1,360 | 617 | 1,060 | 645 | 618 | |
Average metal prices realized | |||||||||
Gold ($ per oz.) | $ 2,094 | $ 2,465 | $ 2,561 | $ 2,706 | $ 2,956 | $ 3,350 | $ 3,546 | $ 4,234 | |
Silver ($ per oz.) | $ 23.29 | $ 30.49 | $ 30.61 | $ 31.11 | $ 32.54 | $ 34.35 | $ 41.39 | $ 55.06 | |
Copper ($ per tonne) | $ 8,546 | $ 10,428 | $ 8,832 | $ 8,969 | $ 9,656 | $ 9,619 | $ 9,690 | $ 11,224 | |
Lead ($ per tonne) | $ 1,977 | $ 2,235 | $ 2,065 | $ 1,897 | $ 1,950 | $ 1,887 | $ 1,937 | $ 1,981 | |
Zinc ($ per tonne) | $ 2,483 | $ 2,871 | $ 2,854 | $ 3,062 | $ 2,710 | $ 2,607 | $ 2,841 | $ 3,258 | |
Gold equivalent ounces sold | |||||||||
Gold Ounces | 3,557 | 2,724 | 1,357 | 960 | 859 | 878 | 1,422 | 1,785 | |
Gold Equivalent Ounces from Silver | 2,408 | 2,901 | 2,169 | 2,125 | 2,535 | 1,542 | 4,876 | 8,628 | |
Total AuEq oz | 5,965 | 5,625 | 3,526 | 3,085 | 3,394 | 2,420 | 6,298 | 10,413 | |
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Liquidity and Capital Resources
As of December 31, 2025, working capital was $32.0 million, an increase of $29.9 million from $2.1 million at December 31, 2024. The increase in the Company’s working capital balance at December 31, 2025 is mainly attributable to the $23.4 million increase in cash and cash equivalents, the $11.1 million higher accounts receivable, the $1.3 million higher inventory balance, and the $3.9 million lower accounts payable. The increase of $23.4 million of cash and cash equivalents from December 31, 2024 is attributable to a cash inflow of $21.7 million from operating activities in 2025 and a $22.1 million cash inflow from financing activities due to the sales of common stock through registered direct offerings and through the ATM Program, partially offset by a cash outflow of $20.2 million for capital investments, as reported in the Consolidated Statements of Cash Flows. The cash inflow from operating activities is mainly attributable to the higher net sales as a result of higher metal prices. The working capital balance fluctuates as the Company uses cash to fund operations, financing, and investing activities, including exploration and mine development. Please see Item 8. Financial Statements—Note 15. Shareholders’ Equity in for additional information about the ATM Program.
The actual amount of cash receipts that the Company receives during the period from operations may vary significantly from the planned amounts due to, among other things: (i) unanticipated variations in grade, (ii) unexpected challenges associated with the proposed mining plan, (iii) decreases in commodity prices below those used in calculating the estimates shown above, (iv) variations in expected recoveries, or (v) interruptions in mining at DDGM. The actual amount of cash expenditures that the Company incurs during the twelve-month period ending December 31, 2026 may vary significantly from the planned amounts and will depend on a number of factors, including, among other things: (i) unexpected challenges in operations, including exploration and development, (ii) increases in operating costs above those used in calculating the estimates shown above, (iii) possible strategic transactions, and (iv) continued inflationary pressure. Likewise, if cash expenditures are greater than anticipated or if cash receipts are less than anticipated, the Company may need to take certain actions to adjust spending over the next twelve months.
Long-term liabilities assumed with the Aquila acquisition, capital requirements to develop the Back Forty Project, and potential project financing may have an impact on liquidity in the long term. These long-term liabilities are contingent upon the Back Forty Project securing project financing and achieving commercial production. Project financing requirements will not be determined until the Company’s Board of Directors approve a decision to proceed with the Back Forty Project. The Company is currently in discussions to complete a feasibility study and to move forward with the permitting process for the Back Forty Project. The Board of Directors actively evaluates the options that could lead to the successful development of the project.
Cash and cash equivalents as of December 31, 2025 increased to $25.0 million from $1.6 million as of December 31, 2024, a net increase in cash of $23.4 million. The increase is primarily due to the $22.1 million cash inflow from financing activities.
Net cash provided by operating activities for the year ended December 31, 2025 was $21.7 million, compared to net cash used in operating activities of $0.6 million in 2024. The increase in the net cash provided by operating activities is mainly attributable to the higher net sales as a result of higher metal prices, resulting in a lower net loss.
Net cash used in investing activities for the year ended December 31, 2025 was $20.2 million compared to $6.4 million during 2024. The increase in investing activities is mainly attributed to the increased capital expenditure to replace some of the old mining equipment and an increased mine development in 2025.
Net cash provided in financing activities for the year ended December 31, 2025 was $22.1 million compared to $2.7 million in 2024. The increase in cash inflows from financing activities is attributable to the registered direct offerings and the increased ATM Program sales compared to 2024.
While current macro risk factors, such as economic uncertainties and supply chain interruptions have not had a significant adverse impact on exploration plans, results of operations, financial position, and cash flows during the current fiscal year, future impacts are unknown.
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Although tonnes produced from the mining operations at DDGM for 2025 remained lower than in the previous year, production substantially improved in the fourth quarter of 2025. Due to the age and condition of some of the critical mining equipment used at the mine, the Company started to encounter significant issues with equipment availability in 2024. To overcome this issue, the Company engaged a third-party contract miner during the third quarter of 2025 and also started to upgrade its mining fleet. As a result, by the end of the third quarter, the Company was able to increase production from a number of production headings that also included higher grade ore.
The Company believes that the mine has the potential to generate positive cash flow based on the information to date from the new Three Sisters area, as well as other zones that have been discovered near existing headings. The Company started developing access to and drill-defining these new areas. With the improvements mentioned above, the Company had an improved operating income in the fourth quarter in 2025 and expects 2026 to result in positive operating income.
In 2025, the Company has been focused on improving its cash position through the issuance of debt and equity. The Company raised $2.5 million through a registered direct offering in January 2025. In February 2025, the Company sold its interest in Green Light Metals for $0.9 million in proceeds. On May 7, 2025, the Company received a tax refund of 79.6 million pesos (approximately $4.0 million) related to DDGM taxes paid in 2023. In September 2025, the Company closed on a second registered direct offering of $11.4 million for the sale of 25,315,954 shares of the Company’s common stock at a price of $0.45 per share. The Company issued 14,204,846 of these shares, for the fair value of approximately $6.4 million, to fully pay off the term loan received in June 2025 as a non-cash equity settlement. During 2025, the Company raised approximately $8.6 million through its ATM Program, after deducting the agent’s commissions and other expenses.
Although the Company believes that it has adequate cash in place to cover the planned underground development and equipment improvements in DDGM and to make some progress on the Back Forty Project in 2026, there can be no assurances that the Company will achieve its plans, including preparing a definitive feasibility study and obtaining the necessary permits for the Back Forty Project.
Off-Balance Sheet Arrangements
As of December 31, 2025, the Company has off-balance sheet arrangements related to equipment purchase obligations of $4.3 million.
Accounting Developments
For a discussion of recently adopted and recently issued accounting pronouncements, please see Item 8. Financial Statements —Note 2. New Accounting Pronouncements below.
Critical Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, and contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. As a result, management is required to routinely make judgments and estimates about the effects of matters that are inherently uncertain. Actual results may differ from these estimates under different conditions or assumptions. The following discussion pertains to accounting estimates management believes are most critical to the presentation of the Company’s financial position and results of operations that require management’s most difficult, subjective, or complex judgments.
Future Metals Prices
Metals prices are key components in estimates that determine the valuation of some of the Company’s significant assets and liabilities, including properties, plant and equipment, deferred tax assets, and certain accounts receivable. Metals prices are also an important component in the estimation of reserves. As shown above in Item 1. – Business, metals prices have historically been volatile. Gold demand arises primarily from investment and consumer demand. Silver demand arises from investment demand, particularly in exchange-traded funds, industrial demand, and consumer demand. Investment
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demand for gold and silver can be influenced by several factors, including: the value of the U.S. dollar and other currencies, changing U.S. budget deficits, widening availability of exchange-traded funds, interest rate levels, the health of credit markets, and inflationary expectations. The investments in the construction industry, rising electrical and electronics production, and demand for industrial equipment are some of the major factors driving the demand for base metals and their prices.
Mineral Resources and Mineral Reserves
Critical estimates are inherent in the process of determining Mineral Resources and Mineral Reserves. The Mineral Resources and Mineral Reserves are affected largely by the assessment of future metals prices, as well as by engineering and geological estimates of ore grade, accessibility, and production costs. Metals prices used in estimating Mineral Resources and Mineral Reserves for the Company’s Production Stage Properties are based on conservative estimates of the average median consensus prices for each of the three years starting in 2026 through 2028 as provided by Bloomberg’s consensus commodity price forecast as at November 21, 2025. The 2028 consensus was used for the remaining life of mine. The Company’s assessment of Mineral Resources and Mineral Reserves at producing locations occurs at least annually. Mineral Reserves are a key component in the valuation of property, equipment, mine development, and related depletion and depreciation rates.
Mineral Reserve estimates are used in determining appropriate rates of units-of-production depreciation, with net book value of many assets depreciated over remaining estimated reserves. Mineral Resources and Mineral Reserves are also key components in forecasts of estimated future cash flows, which the Company compares to current asset values in an effort to ensure that carrying values are reported appropriately, as well as assessment of the recoverability of deferred tax assets related to expectations of future taxable income. Mineral Resources and Mineral Reserves are a culmination of many estimates and are not guarantees that the Company will recover the indicated quantities of metals or that it will do so at a profitable level.
Revenue
Concentrate sales are initially recorded based on 100% of the provisional sales prices, net of treatment and refining charges, at the time of delivery to the customer, at which point the performance obligations are satisfied and control of the product is transferred to the customer. Adjustments to the provisional sales prices are made to take into account the mark-to-market changes based on the forward prices of metals until final settlement occurs. The changes in price between the provisional sales price and final sales price are considered an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the quoted metal prices at the time of delivery. The embedded derivative, which does not qualify for hedge accounting, is adjusted to market through revenue each period prior to final settlement. Market changes in the prices of metals between the delivery and final settlement dates will result in adjustments to revenues related to previously recorded sales of concentrate. Sales are recorded net of charges for treatment charges, refining costs, smelting losses, and other charges negotiated with the buyer. These charges are estimated upon delivery of concentrates based on contractual terms and adjusted to reflect actual charges at final settlement. Historically, actual charges have not varied materially from the Company’s initial estimates.
Doré sales are recognized upon the satisfaction of performance obligations, which occurs when price and quantity are agreed upon with the customer. Doré sales are recorded using quoted metal prices, net of refining charges.
Depreciation and Amortization
Capitalized costs are depreciated or amortized using the straight-line method or unit-of-production (“UOP”) method at rates sufficient to depreciate such costs over the shorter of estimated productive lives of such assets or the useful life of the individual assets. Significant judgment is involved in the determination of the estimated life of the assets. The Company’s estimates for Mineral Reserves is used in determining the UOP rates. The Company’s estimates of proven and probable ore reserves may change, possibly in the near term, resulting in changes to depreciation, depletion, and amortization rates in future reporting periods. Productive lives of the assets range from 1 to 15 years, but do not exceed the useful life of the individual asset. Please see Item 8. Financial Statements —Note 1. Nature of Operations and Summary of Significant Accounting Policies for depreciation rates of major asset categories.
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Carrying Value of Stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Mine sequencing may result in mining material at a faster rate than can be processed. The Company generally processes the highest ore grade material first to maximize metal production; however, a blend of gold ore stockpiles may be processed to balance hardness and/or metallurgy in order to maximize throughput and recovery. Processing of lower grade stockpiled ore may continue after mining operations are completed. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number of contained ounces (based on assay data), and the estimated metallurgical recovery rates. Stockpile ore tonnages are verified by periodic surveys. Costs are added to stockpiles based on current mining costs, including applicable overhead, depreciation, and amortization relating to mining operations and removed at each stockpile’s average cost per recoverable unit as material is processed.
The Company records stockpiles at the lower of average cost or net realizable value, and carrying values are evaluated at least quarterly. Net realizable value represents the estimated future sales price based on short-term and long-term metals price assumptions that are applied to expected short-term (12 months or less) and long-term sales from stockpiles, less estimated costs to complete production and bring the product to sale. The primary factors that influence the need to record write-downs of stockpiles include declines in short-term or long-term metals prices, increases in costs of production inputs such as labor, fuel and energy, materials and supplies, as well as realized ore grades and recovery rates.
Rarely, in instances where material new information is discovered, management may utilize other assumptions such as future operating and capital costs, metal recoveries, production levels, commodity prices, Mineral Resource and Mineral Reserve quantities, engineering data, and other factors unique to each operation based on the life of mine plans. If short-term and long-term commodity prices decrease, estimated future processing costs increase, or other negative factors occur, it may be necessary to record a write-down of ore on stockpiles. A high degree of judgment is involved in determining such assumptions and estimates and no assurance can be given that actual results will not differ significantly from those estimates and assumptions.
Impairment of Long-Lived Assets
The Company evaluates the carrying value of long-lived assets to be held and used using a fair-value based approach when events and circumstances indicate that the related carrying amount of its assets may not be recoverable, such as changes in future metals prices, production levels, and costs. The economic environment and commodity prices may be considered as impairment indicators for the purposes of these impairment assessments. In accordance with U.S. GAAP, the carrying value of a long-lived asset or asset group is considered impaired when the anticipated undiscounted cash flows from such asset or asset group are less than its carrying value. In that event, a loss will be recorded in the Consolidated Statements of Operations based on the difference between book value and the estimated fair value of the asset or asset group computed using discounted estimated future cash flows, or the application of an expected fair value technique in the absence of an observable market price. Future cash flows include estimates of recoverable quantities to be produced from estimated Mineral Resources and Mineral Reserves, commodity prices (considering current and historical prices, price trends, and related factors), production quantities, production costs, and capital expenditures, all based on life-of-mine plans and projections. In estimating future cash flows, assets are grouped at the lowest level for which identifiable cash flows exist that are largely independent of cash flows from other asset groups. It is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and costs, and capital are each subject to significant risks and uncertainties.
Asset Retirement Obligation/Reclamation and Remediation Costs
The Company’s mining and exploration activities are subject to various laws and regulations, including legal and contractual obligations to reclaim, remediate, or otherwise restore properties at the time the property is removed from service. Accounting for reclamation and remediation obligations requires management to make estimates of the future costs that the Company will incur to complete the work required to comply with existing laws and regulations. Actual costs may differ from the amounts estimated. Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and
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revisions to the estimates of either the timing or amount of the reclamation and remediation costs. Also, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required.
Income Taxes
In preparing the consolidated financial statements, the Company estimates the actual amount of taxes currently payable or receivable, as well as deferred tax assets and liabilities attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. Changes in deferred tax assets and liabilities generally have a direct impact on earnings in the period of the changes. Mining taxes represent federal and state taxes levied on mining operations. As the mining taxes are calculated as a percentage of mining profits, the Company classifies them as income taxes. Where applicable tax laws and regulations are either unclear or subject to varying interpretations, it is possible that changes in these estimates could occur that materially affect the amounts of deferred income tax assets and liabilities recorded in the consolidated financial statements.
Each period, the Company evaluates the likelihood of whether some portion or all of each deferred tax asset will be realized and provide a valuation allowance for those deferred tax assets for which it is more likely than not that the related benefits will not be realized. When evaluating the valuation allowance, the Company considers historical and future expected levels of taxable income, the pattern and timing of reversals of taxable temporary timing differences that give rise to deferred tax liabilities, and tax planning initiatives. Levels of future taxable income are affected by, among other things, market gold and silver prices, production costs, quantities of Mineral Resources and Mineral Reserves, interest rates, federal and local legislation, and foreign currency exchange rates. If the Company determines that all or a portion of the deferred tax assets will not be realized, a valuation allowance is recorded with a charge to income tax expense. Conversely, if the Company determines that it will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced with a credit to income tax expense.
In addition, the calculation of income tax expense involves significant management estimation and judgment involving a number of assumptions. In determining these amounts, management interprets tax legislation in each of the jurisdictions in which the Company operates and makes estimates of the expected timing of the reversal of future tax assets and liabilities. The Company makes assumptions about future earnings, tax planning strategies, and the extent to which potential future tax benefits will be used. The Company is also subject to assessments by various taxation authorities, which may interpret tax legislation differently, which could affect the final amount or the timing of tax payments.
In October 2023, the Company received a notification from the Mexican Tax Administration Services (“SAT”) with a sanction of 331 million pesos (approximately $18.4 million) as the result of a 2015 tax audit that began in 2021. The 2015 tax audit performed by SAT encompassed various tax aspects, including but not limited to intercompany transactions, mining royalty tax, and extraordinary mining tax. Management is in process of disputing this tax notification and sent a letter of protest to the tax authorities along with providing all requested documentation. Management intends to use all legal avenues of protest, including filing a lawsuit with the Mexico court system if needed, to see that these adjustments are removed. Management believes the 2015 tax return was prepared correctly and that, as of December 31, 2025, the Company has no liability. Please also see Item 8. Financial Statements—Note 6. Income Taxes.
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ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
The Company’s exposure to market risks includes, but is not limited to, the following risks: changes in commodity prices, foreign currency exchange rates, provisional sales contract risks, changes in interest rates, and equity price risks. Currently, the Company does not use derivative financial instruments as part of an overall strategy to manage market risk. However, the Company may consider such arrangements in the future as it evaluates its business and financial strategy.
Commodity Price Risk
The results of the Company’s operations, cash flows, and financial condition largely depend upon the market prices of gold, silver, copper, lead, and zinc. Metal prices fluctuate widely and are affected by numerous factors beyond the Company’s control. The level of interest rates, the rate of inflation, government fiscal and monetary policy, the stability of exchange rates, and the world supply of and demand for gold, silver, and other metals, among other factors, can all cause significant fluctuations in commodity prices. Such external economic factors are, in turn, influenced by changes in international investment patterns, monetary systems, and political developments. The metal price markets have fluctuated widely in recent years, and future price declines could cause a mineral project to become uneconomic, thereby having a material adverse effect on the Company’s business and financial condition. Currently, the Company is not utilizing derivative contracts to protect the selling price for gold, silver, copper, lead, or zinc. The Company may, in the future, more actively manage its exposure through additional derivative contracts, although the Company has no intention of doing so in the near term.
In addition to materially adversely affecting the Company’s reserve estimates, results of operations and/or its financial condition, declining gold and silver prices could require a reassessment of the feasibility of a project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause delays in the implementation of a project.
Foreign Currency Risk
The Company’s foreign operation sells its gold, silver, copper, lead, and zinc production based on U.S. dollar metal prices. Fluctuations in foreign currency exchange rates do not have a material impact on the Company’s revenue since gold, silver, copper, lead, and zinc are sold worldwide in U.S. dollars.
Foreign currency exchange rate fluctuations can increase or decrease the Company’s costs to the extent that it pays costs in currencies other than the U.S. dollar. The Company is primarily impacted by Mexican peso rate changes relative to the U.S. dollar, as the Company incurs some costs in the Mexican peso. When the value of the peso rises in relation to the U.S. dollar, some of the Company’s costs in Mexico may increase, thus materially adversely affecting the Company’s operating results. Alternatively, when the value of the peso drops in relation to the U.S. dollar, peso-denominated costs in Mexico will decrease in U.S. dollar terms. Future fluctuations may give rise to foreign currency exposure, which may affect the Company’s financial results. Approximately 40% to 50% of expenses are paid in currencies other than the U.S. dollar.
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As of December 31, 2025, the Company held approximately 0.6 million Mexican pesos (or $32,000) and approximately 18,000 Canadian dollars (“C$”) (or $13,000). The Company has not utilized market-risk sensitive instruments to manage its exposure to foreign currency exchange rates. However, the Company may, in the future, actively manage its exposure to foreign currency exchange rate risk.
Provisional Sales Contract Risk
The Company enters into concentrate sales contracts which, in general, provide for a provisional payment to it based upon provisional assays and prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates determined at the quoted metal prices at the time of shipment. The embedded derivative, which does not qualify for hedge accounting, is adjusted to market through revenue each period prior to settlement. Changes in the prices of metals between the shipment and the final settlement date will result in adjustments to revenues related to the sales of concentrate previously recorded upon shipment. Please see Item 8. Financial Statements—Note 16. Derivatives for additional information.
Interest Rate Risk
The Company considers its interest rate risk exposure to be insignificant at this time.
Equity Price Risk
The Company has, in the past, and may in the future, seek to acquire additional funding by sale of common stock and other equity. The price of the Company’s common stock has been volatile in the past and may also be volatile in the future. As a result, there is a risk that the Company may not be able to sell its common stock at an acceptable price should the need for new equity funding arise.
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ITEM 8. | FINANCIAL STATEMENTS |
Page | |||
|---|---|---|---|
Index to Financial Statements: | |||
Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Spokane, Washington; PCAOB ID# | 68 | ||
Consolidated Balance Sheets at December 31, 2025 and 2024 | 70 | ||
Consolidated Statements of Operations for the years ended December 31, 2025 and 2024 | 71 | ||
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2025 and 2024 | 72 | ||
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024 | 73 | ||
Notes to Consolidated Financial Statements | 74 | ||
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Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Gold Resource Corporation
Denver, Colorado
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Gold Resource Corporation (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in shareholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition – Concentrate sales
As described in Notes 1 and 4 to the consolidated financial statements, the Company recognized $92.0 million of revenue from concentrate sales, $0.6 million and $5.9 million of realized and unrealized gains, respectively, on embedded derivatives for the year ended December 31, 2025. Concentrate sales are initially recorded based on provisional sales prices, net of treatment and refining changes, at the time of delivery to the customer, at which point the performance obligations are satisfied and control of the product is transferred to the customer. Adjustments to the provisional sales prices are made to take into account the mark-to-market changes based on the forward prices of metal until final settlement
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occurs. The changes in price between the provisional sales price and final sale prices are considered an embedded derivative that is required to be separated from the host contract for accounting purposes. The embedded derivative is adjusted to market through revenue each period prior to final settlement.
We identified revenue recognition of concentrate sales as a critical audit matter. The principal consideration for our determination is the judgment in estimating the value of consideration for concentrate sales, specifically the changes in metals prices between the time of delivery and final settlement. Auditing this judgment and estimate involved especially challenging and subjective auditor judgment due to the nature and extent of audit effort required to address the matter, including the need to involve personnel with specialized knowledge and skills.
The primary procedures we performed to address this critical audit matter included:
• | Testing the design and operating effectiveness of the Company’s internal controls over revenue recognition of concentrate sales. |
• | Utilizing personnel with specialized skill and knowledge in valuation to obtain published forward metals pricing. |
• | Assessing the reasonableness of management’s estimate for changes in metal prices between the time of delivery and final settlement with the customer by comparing it to the published forward metals pricing for the contracted quotational period of the customer contract. |
/s/
We have served as the Company's auditor since 2022.
March 18, 2026
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GOLD RESOURCE CORPORATION
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except share and per share amounts)
As of | As of | |||||
December 31, | December 31, | |||||
Note | 2025 | | 2024 | |||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | | $ | | ||
Accounts receivable, net | | | ||||
Inventories, net | 5 | | | |||
Prepaid expenses and other current assets | 7 | | | |||
Total current assets | | | ||||
Property, plant, and mine development, net | 8 | | | |||
Other non-current assets | 9 | | | |||
Total assets | $ | | $ | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | | $ | | ||
Mining royalty taxes payable, net | | | ||||
Accrued expenses and other current liabilities | 10 | | | |||
Total current liabilities | | | ||||
Reclamation and remediation liabilities | 12 | | | |||
Gold and silver stream agreements liability | 11 | | | |||
Deferred tax liabilities, net | 6 | | | |||
Contingent consideration | 14 | | | |||
Other non-current liabilities | 10 | | | |||
Total liabilities | | | ||||
Commitments and contingencies | 14 | |||||
Shareholders’ equity: | ||||||
Common stock - $ | | | ||||
Additional paid-in capital | | | ||||
Accumulated deficit | ( | ( | ||||
Treasury stock at cost, | ( | ( | ||||
Accumulated other comprehensive loss | ( | ( | ||||
Total shareholders’ equity | | | ||||
Total liabilities and shareholders’ equity | $ | | $ | | ||
The accompanying notes are an integral part of these consolidated financial statements.
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GOLD RESOURCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended December 31, 2025 and 2024
(U.S. dollars in thousands, except share and per share amounts)
For the year ended | |||||||
December 31, | |||||||
Note | | 2025 | | 2024 | |||
Sales, net | 4 | $ | | $ | | ||
Cost of sales: | |||||||
Production costs | | | |||||
Depreciation and amortization | | | |||||
Reclamation and remediation | | | |||||
Total cost of sales | | | |||||
Mine gross profit (loss) | | ( | |||||
Costs and expenses: | |||||||
General and administrative expenses | | | |||||
Mexico exploration expenses | | | |||||
Michigan Back Forty Project expenses | | | |||||
Stock-based compensation | 18 | | | ||||
Other expense, net | 19 | | | ||||
Total costs and expenses | | | |||||
Loss before income taxes | ( | ( | |||||
Income tax provision | 6 | | | ||||
Net loss | $ | ( | $ | ( | |||
Net loss per common share: | |||||||
Basic and diluted loss per common share | 20 | $ | ( | $ | ( | ||
Weighted average shares outstanding: |
| ||||||
Basic and diluted | 20 | | | ||||
The accompanying notes are an integral part of these consolidated financial statements.
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GOLD RESOURCE CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
for the years ended December 31, 2025 and 2024
(U.S. dollars in thousands, except share amounts)
| Number of | | Par Value of | | Additional Paid- | | Accumulated Deficit | | Treasury | | Accumulated | | Total | |||||||
Balance, December 31, 2023 | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Stock-based compensation | - | - | | - | - | - | | |||||||||||||
Common stock issued for vested restricted stock units | | - | - | - | - | - | - | |||||||||||||
Issuance of common stock, net of issuance costs (1) | | | | - | - | - | | |||||||||||||
Surrender of common stock for taxes due on vesting | ( | - | ( | - | - | - | ( | |||||||||||||
Net loss | - | - | - | ( | - | - | ( | |||||||||||||
Balance, December 31, 2024 | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
Stock-based compensation | - | - | | - | - | - | | |||||||||||||
Common stock issued for vested restricted stock units | | - | - | - | - | - | - | |||||||||||||
Issuance of common stock, net of issuance costs (1) | | | | - | - | - | | |||||||||||||
Surrender of common stock for taxes due on net settlement | ( | - | ( | - | - | - | ( | |||||||||||||
Equity settlement of PSUs and DSUs (2) | | - | | - | - | - | | |||||||||||||
Registered Direct Offering (1) | | | | - | - | - | | |||||||||||||
Issuance of equity to settle the loan (1) | | | | - | - | - | | |||||||||||||
Warrants | - | - | | - | - | - | | |||||||||||||
Net loss | - | - | - | ( | - | - | ( | |||||||||||||
Balance, December 31, 2025 | | $ | | $ | | $ | ( | $ | ( | $ | ( | $ | | |||||||
| (1) |
| (2) |
The accompanying notes are an integral part of these consolidated financial statements.
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GOLD RESOURCE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 2025 and 2024
(U.S. dollars in thousands)
For the year ended December 31, | ||||||
Note | 2025 | | 2024 | |||
Cash flows from operating activities: | ||||||
Net loss | $ | ( | $ | ( | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||
Deferred income tax expense | | | ||||
Depreciation and amortization | | | ||||
Stock-based compensation | | | ||||
Interest on streaming liabilities | | | ||||
Other operating adjustments, net | 22 | | | |||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | ( | | ||||
Inventories | ( | | ||||
Prepaid expenses and other current assets | ( | ( | ||||
Other non-current assets | | | ||||
Accounts payable and other accrued liabilities | ( | | ||||
Cash settled liability awards | ( | ( | ||||
Mining royalty and income taxes payable, net | | ( | ||||
Net cash provided by (used in) operating activities | | ( | ||||
Cash flows from investing activities: | ||||||
Capital expenditures | ( | ( | ||||
Proceeds from the sale of investments | | | ||||
Net cash used in investing activities | ( | ( | ||||
Cash flows from financing activities: | ||||||
Net proceeds from note payable | 13 | | - | |||
Proceeds from ATM Program sales, net of issuance costs | | | ||||
Net proceeds from the Registered Direct Offerings | | - | ||||
Other financing activities | ( | ( | ||||
Net cash provided by financing activities | | | ||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | ||||
Net increase (decrease) in cash and cash equivalents | | ( | ||||
Cash and cash equivalents at beginning of period | | | ||||
Cash and cash equivalents at end of period | $ | | $ | | ||
Supplemental Cash Flow Information | ||||||
Income and mining taxes (refunded) paid | $ | ( | $ | | ||
Non-cash investing or financing activities: | ||||||
Value of common shares issued for share-based compensation redemption | $ | | $ | | ||
Value of common shares issued to extinguish term loan | $ | | $ | - | ||
Balance of capital expenditures in accounts payable | $ | | $ | | ||
Balance of equipment financing | $ | | $ | | ||
Change in estimate for asset retirement costs | $ | ( | $ | | ||
The accompanying notes are an integral part of these consolidated financial statements.
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GOLD RESOURCE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Gold Resource Corporation (the “Company”) was organized under the laws of the State of Colorado on August 24, 1998. The Company is a producer of doré containing gold and silver and metal concentrates that contain gold, silver, copper, lead, and zinc in Oaxaca, Mexico. The Company also has
Recent Developments
On January 26, 2026, the Company announced that it has entered into a definitive arrangement agreement and plan of merger with Goldgroup Mining Inc., whereby Goldgroup has agreed to acquire all of the issued and outstanding shares of the Company’s common stock. For additional information, please see Item 1. Business—Recent Developments and Item 8. Financial Statements—Note 24. Subsequent Events.
Significant Accounting Policies
Basis of Presentation
The Consolidated Financial Statements included herein are expressed in United States dollars and conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Consolidated Financial Statements include the accounts of the Company, its Mexican subsidiary, Don David Gold Mexico S.A. de C.V., and Aquila Resources Inc (“Aquila”) and its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.
Segment Reporting
The Company has
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. The more significant areas requiring the use of management estimates and assumptions relate to Mineral Resources and Mineral Reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production depreciation calculations; future ore grades, throughput, and recoveries; future metal prices; future capital and operating costs; environmental remediation, reclamation and closure obligations; the Back Forty Project Gold and Silver Stream Agreements with Osisko Bermuda Limited (“Osisko”); contingent consideration liabilities; permitting and other regulatory considerations; asset impairments; the valuation of the Company’s investments in equity securities; future foreign exchange rates, inflation rates, and applicable tax rates; and deferred tax asset valuation and allowances. Management routinely makes judgments and estimates about the effects of matters that are inherently uncertain and bases its estimates
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and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results could differ from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents consist of all cash balances and highly liquid investments with a remaining maturity of three months or less when purchased. Cash held in Mexican pesos or Canadian dollars is converted to U.S. dollars at the closing exchange rate at year end.
Accounts Receivable, net
Accounts receivable consists of trade receivables, which are recorded net of allowance for credit losses from the sale of doré and metals concentrates, as well as net of an embedded derivative based on mark-to-market adjustments for outstanding provisional invoices based on forward metal prices. Please see Item 8. Financial Statements—Note 16. Derivatives and Item 8. Financial Statements—Note 21. Fair Value Measurement for additional information related to the embedded derivative. As of both December 31, 2025 and 2024, the allowance for credit losses was
Inventories
The major inventory categories are set forth below:
Stockpile Inventories: Stockpile inventories represent ore that has been mined and is available for further processing. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, an estimate of the contained metals (based on assay data), and the estimated metallurgical recovery rates. Costs are allocated to stockpiles based on relative values of material stockpiled and processed using current mining costs incurred, including applicable overhead, depreciation, and amortization relating to mining operations. Material is removed at each stockpile’s average cost per tonne. Stockpiles are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and to bring the product to sale.
Concentrate Inventories: Concentrate inventories include metal concentrates located either at the Company’s facilities or in transit to its customer’s port. Inventories consist of copper, lead, and zinc metal concentrates, which also contain gold and silver mineralization. Concentrate inventories are carried at the lower of cost of production or net realizable value based on current metals prices.
Doré Inventory: Doré includes gold and silver doré bars held at the Company’s facility. Doré inventories are carried at the lower of cost of production or net realizable value based on current metals prices.
Materials and Supplies Inventories: Materials and supplies inventories consist of chemical reagents, parts, fuels, and other materials and supplies. Cost includes applicable taxes and freight. Materials and supplies inventory is carried at the lower of average cost or net realizable value.
Write-downs of inventory, when needed, are charged to production costs on the Consolidated Statements of Operations.
Property, Plant, and Mine Development
Land and Mineral Interests: The costs of acquiring land, mineral rights, and mineral interests are considered tangible assets. Administrative and holding costs to maintain an exploration property are expensed as incurred. If a mineable mineral deposit is discovered, such capitalized costs are amortized when production begins using the units of production (“UOP”) method. If no mineable mineral deposit is discovered, or such rights are otherwise determined to have diminished value, costs are expensed in the period in which this determination is made.
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Mine Development: This includes the cost of engineering and metallurgical studies; drilling and other related costs to delineate an ore body; and the cost of building access ways, shafts, lateral access, drifts, ramps, and other infrastructure. Costs incurred before mineralization is classified as Mineral Resources are expensed and classified as exploration expenses. Capitalization of mine development project costs that meet the definition of an asset begins once mineralization is classified as Mineral Resources.
Drilling costs incurred during the production phase for operational ore control are recorded as mine development and amortized using UOP. All other drilling and related costs are expensed as incurred.
Mine development costs are amortized using the UOP method based on estimated recoverable ounces in Mineral Reserves.
Property and Equipment: All items of property and equipment are carried at cost. Normal maintenance and repairs are expensed as incurred, while expenditures for major maintenance and improvements are capitalized. Gains or losses on disposition are recognized in other expense, net.
Construction in Progress: Expenditures for new facilities or equipment are capitalized and recorded at cost. Once completed and ready for its intended use, the asset is transferred to property and equipment to be depreciated or amortized.
Depreciation and Amortization: Capitalized costs are depreciated or amortized using the straight-line or UOP method at rates sufficient to depreciate such costs over the shorter of estimated productive lives of such assets or the useful life of the individual assets. The estimates for Mineral Reserves are a key component in determining the UOP depreciation rates. The estimates of Mineral Reserves may change, possibly in the near term, resulting in significant changes to depreciation and amortization rates in future reporting periods. The following are the estimated economic lives of depreciable assets:
Range of Lives | |||
Asset retirement costs | UOP | ||
Furniture, computer and office equipment | |||
Light vehicles and other mobile equipment | |||
Machinery and equipment | UOP to | ||
Mill facilities and related infrastructure | UOP to | ||
Mine development and mineral interests | UOP | ||
Buildings and infrastructure | UOP to | ||
Impairment of Long-Lived Assets
The Company evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset. If an impairment is indicated, a determination is made whether an impairment has occurred. Impairment losses are measured either 1) as the excess of carrying value over the total discounted estimated future cash flows, or 2) as the excess of carrying value over the fair value, using the expected fair value technique in the absence of an observable market price. Losses are charged to expense on the Company’s Consolidated Statements of Operations. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups.
Existing Mineral Resources and Mineral Reserves are included when estimating the fair value in determining whether the assets are impaired. The Company’s estimates of future cash flows are based on numerous assumptions, including expected gold and other commodity prices, production levels and costs, processing recoveries, capital requirements, and estimated salvage values. It is possible that actual future cash flows will be significantly different from the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels and costs, and capital requirements are each subject to significant risks and uncertainties.
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Fair Value of Financial Instruments
The recorded amounts of cash and cash equivalents, receivables from provisional concentrate sales, and accounts payable approximate fair value because of the short maturity of those instruments. The Company elected the fair value measurement option as the measurement basis for the equity investment in the common shares of Green Light Metals. This investment was sold in 2025.
Treasury Stock
Treasury stock represents shares of the Company’s common stock which have been repurchased on the open market at the prevailing market price at the time of purchase and have not been canceled. Treasury stock is shown at cost as a separate component of shareholders’ equity.
Revenue Recognition
The Company recognizes revenue from doré and concentrate sales.
Doré sales: Doré sales are recognized upon the satisfaction of performance obligations, which occurs upon delivery of doré and when the price and quantity are agreed with the customer. Doré sales are recorded using quoted metal prices, net of refining charges.
Concentrate sales: Concentrate sales are initially recorded based on
Production Costs
Production costs include labor and benefits, royalties, concentrate and doré shipping costs, mining costs, fuel and lubricants, legal and professional fees related to mine operations, stock-based compensation attributable to mine workers, materials and supplies, repairs and maintenance, explosives, site support, housing and food, insurance, reagents, travel, medical services, security equipment, office rent, tools, and other costs that support mining operations.
Exploration Costs
Exploration costs are charged to expense as incurred. Costs to identify new Mineral Resources and to evaluate potential Mineral Resources are considered exploration costs. Exploration activities conducted within the defined Mineral Resources are capitalized.
Stock-Based Compensation
The Company accounts for stock-based compensation under the fair value recognition and measurement provisions of U.S. GAAP. Those provisions require all stock-based payments, including grants of stock options, restricted stock units (“RSUs”), performance share units (“PSUs”), and deferred share units (“DSUs”) to be measured based on the grant date
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fair value of the awards, with the resulting expense generally recognized on a straight-line basis in the Consolidated Statements of Operations over the period during which services are performed in exchange for the award. The majority of the awards are earned over a service period of three years. DSUs are earned immediately at grant and are expected to be paid out in cash in the future. PSUs and DSUs are considered liability instruments and marked-to-market each reporting period. The Company’s estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behaviors, additional stock option grants, and estimates of forfeitures.
Reclamation and Remediation Costs
Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and remediation costs. Reclamation obligations are based in part on when the spending for an existing environmental disturbance will occur. The Company reviews the reclamation obligation at least on an annual basis.
In 2014, the Company became a production stage company and therefore, started capitalizing asset retirement costs along with the asset retirement obligation. Please see Item 8. Financial Statements—Note 12. Reclamation and Remediation for additional information.
Accounting for reclamation and remediation obligations requires management to make estimates unique to each mining operation of the future costs expected to be incurred to complete the reclamation and remediation work required to comply with existing laws and regulations. Actual costs incurred in future periods could differ from the amounts estimated. Additionally, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required. Any such increases in future costs could materially impact the amounts charged to operations for reclamation and remediation.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss is presented in the Consolidated Statements of Changes in Shareholders’ Equity. Accumulated other comprehensive loss is composed of foreign currency translation adjustment effects related to the historical adjustment when the functional currency was the Mexican peso for the Mexico subsidiary. This loss will remain on the Consolidated Balance Sheets until the sale or dissolution of the Mexico subsidiary.
Income and Mining Royalty Taxes
Income and Mining Royalty Taxes are computed using the asset and liability method. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial and tax reporting purposes and the effect of net operating loss and foreign tax credit carryforwards using enacted tax rates in effect in the years in which the differences are expected to reverse. Deferred tax assets and liabilities are evaluated to determine if it is more likely than not that they will be realized. Deferred tax liabilities and deferred tax assets attributable to different tax-paying components of the entity or to different tax jurisdictions are not netted against each other. Please see Item 8. Financial Statements—Note 6. Income Taxes for additional information.
Net Loss Per Share
Basic loss per share is calculated based on the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the dilution that could occur if potentially dilutive securities, as determined using the treasury stock method, are converted into common stock. Potentially dilutive securities are excluded from the calculation when their inclusion would be anti-dilutive, such as periods when a net loss is reported or when the exercise price of the instrument exceeds the average fair market value of the underlying common stock.
Foreign Currency
The functional currency for all of the Company’s subsidiaries is the United States dollar (“U.S. dollar”).
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Concentration of Credit Risk
The Company has considered and assessed the credit risk resulting from its concentrate sales and doré sales arrangements with its customers. In the event that the Company’s relationships with its customers are interrupted for any reason, the Company believes that it would be able to locate another entity to purchase its metals concentrates and doré bars; however, any interruption could temporarily disrupt the Company’s sale of its products and materially adversely affect operating results.
Currently
| For the year ended | |||||
December 31, | ||||||
2025 | 2024 | |||||
Customer A | | % | | % | ||
Customer B | | % | | % | ||
Customer C | - | % | | % | ||
The following table shows accounts receivable from significant customers as a percentage of total accounts receivable as of December 31, 2025 and 2024:
| As of | | As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
Customer A | | % | | % | ||
Customer B | - | % | | % | ||
Customer C | - | % | | % | ||
Some of the Company’s operating cash balances are maintained in accounts that currently exceed federally insured limits. The Company believes that the financial strength of the depositing institutions mitigates the underlying risk of loss. To date, these concentrations of credit risk have not had a significant impact on the Company’s financial position or results of operations.
Streaming Liabilities
The Company presented the Back Forty Project gold and silver streaming liabilities initially at fair value and subsequently accreting it using a fixed market rate of interest, which is reviewed quarterly if there are any contractual amendments relating to the Osisko Stream Agreements. The interest rate is the Company’s estimated incremental borrowing rate and considers company specific factors, such as the probability for obtaining necessary permits and the completion of the mine facilities. Interest expense is recorded to the Consolidated Statements of Operations in other expense, net, and the accretion in the gold and silver stream agreements liability recorded on the Consolidated Balance Sheets.
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2. New Accounting Pronouncements
Recently adopted accounting pronouncements
The FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures in December 2023, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024, and are applied prospectively with retrospective application permitted. The Company has retrospectively adopted the income tax disclosures required under this amendment in the year ended December 31, 2025 financial statements.
Recently issued Accounting Standards Updates to become effective in future periods
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) to improve the disclosures about a public business entity’s expense and provide more detailed information about the types of expenses included in certain expense captions in the consolidated financial statements. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and the amendments in this update should be applied either prospectively or retrospectively. The Company is evaluating the impact this guidance will have on the disclosures in the consolidated financial statements.
3. Liquidity
The Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date on which these financial statements are issued. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Based on the Company’s current business plan, expectations, and assumptions considering current macroeconomic conditions, as well as based on the Company’s current forecasts, the Company believes that its existing cash and cash equivalents and cash flows from operations will be sufficient to meet its anticipated operating cash needs for at least the next twelve months from the issuance date of these financial statements.
To improve its cash position, during the year ended December 31, 2025, the Company raised $
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4. Revenue
The Company derives its revenue from the sale of doré and concentrates. The following table presents the Company’s net sales disaggregated by source:
For the year ended December 31, | ||||||
| 2025 |
| 2024 | |||
(in thousands) | ||||||
Doré sales, net | ||||||
Gold | $ | | $ | | ||
Silver | | | ||||
Less: Refining charges | ( | ( | ||||
Total doré sales, net | | | ||||
Concentrate sales | ||||||
Gold | | | ||||
Silver | | | ||||
Copper | | | ||||
Lead | | | ||||
Zinc | | | ||||
Less: Treatment and refining charges | ( | ( | ||||
Total concentrate sales, net | | | ||||
Realized gain - embedded derivative, net (1) | | | ||||
Unrealized gain (loss) - embedded derivative, net | | ( | ||||
Total sales, net | $ | | $ | | ||
| (1) | Copper, lead, and zinc are co-products. In the realized gain - embedded derivative, net, there are $ |
5. Inventories, net
At December 31, 2025 and 2024, inventories consisted of the following:
| As of |
| As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
(in thousands) | ||||||
Stockpiles - underground mine | $ | | $ | | ||
Concentrates | | | ||||
Doré, net | - | | ||||
Subtotal - product inventories | | | ||||
Materials and supplies (1) | | | ||||
Total | $ | | $ | | ||
| (1) | Net of reserve for obsolescence of $ |
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6. Income Taxes
The Company accounts for income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”) on a tax jurisdictional basis.
For financial reporting purposes, total loss before income taxes includes the following components:
Years Ended December 31, | ||||||
| 2025 | | 2024 | |||
(in thousands) | ||||||
U.S. operations | $ | ( | $ | ( | ||
Foreign operations | ||||||
Mexico | | ( | ||||
Canada | ( | - | ||||
Total loss before income taxes | $ | ( | $ | ( | ||
The Company’s total income tax provision consists of the following:
Years ended December 31, | ||||||
| 2025 | | 2024 | |||
(in thousands) | ||||||
Current taxes: | ||||||
U.S. Federal income tax | $ | ( | $ | - | ||
U. S. State income tax | | - | ||||
Foreign | ||||||
Mexico income and mining taxes | | | ||||
Canada income tax | ( | | ||||
Total current taxes | $ | | $ | | ||
Deferred taxes: | ||||||
U.S. Federal income tax | $ | ( | $ | ( | ||
Foreign | ||||||
Mexico income and mining taxes | | | ||||
Total deferred tax provision | $ | | $ | | ||
Total income tax provision | $ | | $ | | ||
The Company made the following income and mining tax payments, net of refunds:
Years Ended December 31, | ||||||
| 2025 | | 2024 | |||
(in thousands) | ||||||
United States | $ | ( | $ | - | ||
Mexico | ( | | ||||
Canada | ( | | ||||
Total income and mining taxes (refunded) paid | $ | ( | $ | | ||
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The provision for income taxes for the years ended December 31, 2025 and 2024 differs from the amount of income tax determined by applying the applicable United States statutory federal income tax rate to pre-tax income from operations as a result of the following differences:
For the year ended December 31, | |||||||||
| 2025 | | 2024 | ||||||
(in thousands) | % | (in thousands) | % | ||||||
Tax at U.S. federal statutory tax rate | $ | ( | | $ | ( | | |||
State and local income taxes, net of federal income tax effect | | ( | | - | |||||
Foreign tax effects | |||||||||
Mexico | |||||||||
Rate differential between Mexico and United States | | ( | ( | | |||||
Change in valuation allowances | ( | | | ( | |||||
Deduction for inflation in Mexico | ( | | ( | | |||||
Foreign exchange adjustments | | ( | | ( | |||||
Non-taxable or non-deductible items | | ( | | ( | |||||
Mining taxes | | ( | ( | | |||||
Other | | ( | ( | | |||||
Canada | |||||||||
Rate differential between Canada and United States | | ( | | ( | |||||
Change in valuation allowances | | ( | | ( | |||||
Other | | ( | | ( | |||||
Tax credits | |||||||||
Foreign tax credit expirations | | ( | - | - | |||||
Changes in valuation allowance | ( | | | ( | |||||
Nontaxable or nondeductible items | |||||||||
Share-based payment awards | | ( | | ( | |||||
Other adjustments | | ( | ( | | |||||
$ | | ( | $ | | ( | ||||
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The following table sets forth deferred tax assets and liabilities:
As of December 31, | ||||||
2025 | | 2024 | ||||
(in thousands) | ||||||
Deferred tax assets: | ||||||
Tax loss carryforward | $ | | $ | | ||
Property, plant, and mine development | | | ||||
Share-based compensation | | | ||||
Foreign tax credits | | | ||||
Inventory | | | ||||
Foreign Mining Tax | | - | ||||
Accrued Expenses | | | ||||
Gold and silver stream agreements liability | | | ||||
Asset retirement obligations | | | ||||
Accounts payable | | | ||||
Unrealized loss on investments | - | | ||||
Other | | | ||||
Total deferred tax assets | $ | | $ | | ||
Valuation allowance | ( | ( | ||||
Deferred tax assets after valuation allowance | $ | | $ | | ||
Deferred tax liabilities: | ||||||
Property, plant, and mine development | ( | ( | ||||
Unbilled revenue | ( | ( | ||||
Other | ( | ( | ||||
Total deferred tax liabilities | $ | ( | $ | ( | ||
Net deferred tax liability | $ | ( | $ | ( | ||
In accordance with ASC 740, the Company presents deferred tax assets net of its deferred tax liabilities on its Consolidated Balance Sheets on a jurisdictional basis. The net deferred tax liability of $
The Company evaluates the evidence available to determine whether a valuation allowance is required on deferred tax assets. In accordance with applicable accounting rules, a valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized, after considering all available evidence, both positive and negative. As of December 31, 2025 and 2024, the Company determined that a valuation allowance of $
With respect to the Mexico corporate income tax, in 2024, the Company recorded a valuation allowance on the Mexico corporate income tax net deferred tax assets for $
As discussed in the Mexico Mining Taxation section below, Mexico imposes a mining tax that is treated as an income tax. The Mexico mining tax is determined separately from corporate income tax. As of December 31, 2025, the Company recorded a partial valuation allowance of $
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The following table shows the changes in the Company’s valuation allowance balances:
Years Ended December 31, | ||||||
| 2025 | | 2024 | |||
(in thousands) | ||||||
Valuation allowance - beginning balance | $ | | $ | | ||
Additions charged to income tax expense | | | ||||
Increase due to initial valuation allowance placed on Mexico income tax | - | | ||||
Increase related to Mexico foreign exchange rates | | - | ||||
Decrease due to utilization of Mexico net operating loss carryforwards | ( | - | ||||
Additional allowances taken or written off | ( | ( | ||||
Valuation allowance - ending balance | $ | | $ | | ||
Of the total valuation allowance of $
At December 31, 2025, the Company has U.S. federal loss carryforwards of $
Mexico Mining Taxation
Mining entities in Mexico are subject to two mining duties, in addition to the
On November 15, 2024, the Mexican government signed into law a rate increase of the “special” mining duty from
The Company periodically transfers funds from its Mexican wholly owned subsidiary to the U.S. in the form of dividends. According to the existing U.S. – Mexico tax treaty, the dividend withholding tax between these countries is reduced to
Other Tax Disclosures
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. The OBBBA permanently extends multiple tax provisions of the 2017 Tax Cuts and Jobs Act, as well as repeals, modifies, and introduces various other tax provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others
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implemented through 2027. The Company does not anticipate the bill will have a material impact on the consolidated financial statements.
The Company files U.S. and various state income tax returns, as well as foreign income tax returns in Canada and Mexico, with varying statutes of limitations. In general, the statute of limitations is three years in the United States and in Canada. However, the Company has net operating loss and tax credit carryforward balances beginning in the tax year ended December 31, 2007 for the United States and in the tax year ended December 31, 2006 for Canada. As a result, all tax years since 2007 remain open to examination in the United States and all tax years since 2006 remain open to examination in Canada. In Mexico, the statute of limitations is generally five years, which currently is 2019 and forward. The Company is under audit in Mexico for the tax year ended December 31, 2015. All other years are closed to inspection outside of the standard statute of limitations window in Mexico.
In October 2023, the Company received a notification from the Mexican Tax Administration Services (“SAT”) with a sanction of
7. Prepaid Expenses and Other Current Assets
At December 31, 2025 and 2024, prepaid expenses and other current assets consisted of the following:
| As of |
| As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
(in thousands) | ||||||
Advances to suppliers | $ | | $ | | ||
Prepaid insurance | | | ||||
Prepaid income tax | - | | ||||
Other current assets | | | ||||
Total | $ | | $ | | ||
IVA taxes receivable, net is a value added (“IVA”) tax in Mexico assessed on purchases of materials and services and sales of products. Likewise, businesses owe IVA taxes as the business sells a product and collects IVA taxes from its customers. Businesses are generally entitled to recover the taxes they have paid related to purchases of materials and services, either as a refund or credit to IVA tax payable. Amounts recorded as IVA taxes in the consolidated financial statements represent the net estimated IVA tax receivable or payable, since there is a legal right of offset of IVA taxes. As of December 31, 2025, this resulted in a liability balance of $
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8. Property, Plant and Mine Development, net
At December 31, 2025 and 2024, property, plant and mine development consisted of the following:
| As of | | As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
(in thousands) | ||||||
Asset retirement costs (“ARO asset”) | $ | | $ | | ||
Construction-in-progress | | | ||||
Furniture and office equipment | | | ||||
Land | | | ||||
Mineral interest | | | ||||
Light vehicles and other mobile equipment | | | ||||
Machinery and equipment | | | ||||
Mill facilities and infrastructure | | | ||||
Mine development | | | ||||
Software and licenses | | | ||||
Subtotal | | | ||||
Accumulated depreciation and amortization | ( | ( | ||||
Total | $ | | $ | | ||
An asset retirement adjustment of $
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9. Other Non-current Assets
At December 31, 2025 and 2024, other non-current assets consisted of the following:
| As of | | As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
(in thousands) | ||||||
Investment in Green Light Metals | - | | ||||
Other non-current assets | | | ||||
Total | $ | | $ | | ||
Investment in Green Light Metals
On December 28, 2022, the Company received
10. Accrued Expenses and Other Liabilities
At December 31, 2025 and 2024, accrued expenses and other current and non-current liabilities consisted of the following:
| As of | | As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
(in thousands) | ||||||
Accrued royalty payments | $ | | $ | | ||
Accrual for short-term incentive plan | | | ||||
Liability for Aquila drillhole plugging | | | ||||
Share-based compensation liability - current | - | | ||||
Equipment financing | | | ||||
Taxes payable, net (1) | | - | ||||
Employee profit sharing obligation | | | ||||
Employee withholdings and taxes payable | | | ||||
Other payables | | | ||||
Total accrued expenses and other current liabilities | $ | | $ | | ||
Accrued non-current labor obligation | $ | | $ | | ||
Stock-based compensation liability | | | ||||
Other lease liability | | - | ||||
Other long-term liabilities | | | ||||
Total other non-current liabilities | $ | | $ | | ||
| (1) | Taxes payable, net includes IVA tax in Mexico, assessed on purchases of materials and services and sales of products. Likewise, businesses owe IVA taxes as they sell a product and collect IVA taxes from their customers. Businesses are generally entitled to recover the taxes they have paid related to purchases of materials and services, either as a refund or credit to IVA tax payable. Amounts recorded as IVA taxes in the consolidated financial statements represent the net estimated IVA tax receivable or payable, since there is a legal right of offset of IVA taxes. As of December 31, 2025, this resulted in a liability balance of $ |
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Under Mexican law, employees are entitled to receive statutory profit sharing (Participacion a los Trabajadores de las Utilidades or “PTU”) payments. The required cash payment to employees in the aggregate is equal to
As of December 31, 2025, $
PSU and DSU awards contain a cash settlement feature and are therefore classified as liability instruments and are marked to fair value each reporting period. Please see Item 8. Financial Statements —Note 18. Stock-Based Compensation for additional information.
11. Gold and Silver Stream Agreements
The following table presents the Company’s liabilities related to the Osisko Stream Agreements as of December 31, 2025 and 2024:
| As of | | As of | |||
December 31, | December 31, | |||||
2025 | 2024 | |||||
(in thousands) | ||||||
Liability related to the Osisko Gold Stream Agreement | $ | | $ | | ||
Liability related to the Osisko Silver Stream Agreement | | | ||||
Total liability | $ | | $ | | ||
The Osisko Stream Agreements contain customary provisions regarding default and security. In the event that the Company’s subsidiary, Aquilla Resources Inc., defaults under the Osisko Stream Agreements, including by failing to acquire the required permits and achieve commercial production by the agreed upon dates, it may be required to repay the deposit plus accumulated interest at a rate agreed with Osisko. If the subsidiary fails to do so, Osisko may elect to enforce its remedies as a secured party and take possession of the assets that comprise the Back Forty Project.
Gold Streaming Agreement
In November 2017, Aquila entered into a stream agreement with Osisko, pursuant to which Osisko agreed to commit approximately $
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The $
Per the terms of the Osisko Gold Stream Agreement, Osisko will purchase
Silver Stream Agreement
Through a series of contracts, Aquila executed a silver stream agreement with Osisko to purchase
Per the terms of the Osisko Silver Stream Agreement, Osisko will purchase
The $
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12. Reclamation and Remediation
The following table presents the changes in the Company’s reclamation and remediation obligations for the years ended December 31, 2025 and 2024:
| 2025 | | 2024 | |||
(in thousands) | ||||||
Reclamation liabilities – balance at beginning of period | $ | | $ | | ||
Foreign currency exchange loss (gain) | | ( | ||||
Reclamation liabilities – balance at end of period | | | ||||
Asset retirement obligation – balance at beginning of period | | | ||||
Changes in estimate (1) | ( | | ||||
Liability for Aquila drillhole plugging | | ( | ||||
Accretion | | | ||||
Foreign currency exchange loss (gain) | | ( | ||||
Asset retirement obligation – balance at end of period | | | ||||
Total period end balance | $ | | $ | | ||
| (1) | In 2025, the Company updated its closure plan study, which resulted in a $ |
The following table presents the reclamation and remediation obligations as of December 31, 2025 and December 31, 2024:
| As of | As of | ||||
December 31, | December 31, | |||||
2025 | | 2024 | ||||
(in thousands) | ||||||
Current reclamation and remediation liabilities (1) | $ | | $ | | ||
Non-current reclamation and remediation liabilities | | | ||||
Total | $ | | $ | | ||
| (1) | The current portion of reclamation and remediation liabilities related to drill hole plugging in Aquila, Michigan, are included in Accrued expenses and other current liabilities. Please see Item 8. Financial Statements—Note 10. Accrued Expenses and Other Liabilities for additional information. |
The Company’s undiscounted reclamation liabilities of $
The Company’s asset retirement obligations reflect the additions to the asset for reclamation and remediation costs in property, plant, and mine development, post-2013 development stage status, which were discounted using a credit adjusted risk-free rate of
13. Loan Payable
On June 26, 2025, the Company executed a loan agreement in the amount of $
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In connection with the loan agreement, the Company has issued a common stock purchase warrant to an affiliate of one of the private investors for the purchase of up to
On September 3, 2025, the Company fully paid its outstanding term loan liability balance of $
14. Commitments and Contingencies
As of December 31, 2025 and 2024, the Company had equipment purchase commitments aggregating approximately $
Contingent Consideration
With the Aquila acquisition, the Company assumed a contingent consideration. On December 30, 2013, Aquila’s shareholders approved the acquisition of
The contingent consideration is composed of the following:
The value of future installments is based on C$
| a. | C$ |
| b. | C$ |
| c. | C$ |
| d. | C$ |
Initially, the Company intended to pay the first C$
The total value of the contingent consideration as of December 31, 2025 and 2024 was $
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The following table shows the change in the balance of the contingent consideration for the year ended December 31, 2025 and for the year ended December 31, 2024:
| 2025 | | 2024 | |||
(in thousands) | ||||||
Beginning Balance of contingent consideration: | ||||||
Non-current contingent consideration | $ | | $ | | ||
Change in value of contingent consideration - non-current | | ( | ||||
Ending Balance of contingent consideration: | ||||||
Non-current contingent consideration | $ | | $ | | ||
Other Contingencies
The Company has certain other contingencies resulting from litigation, claims, and other commitments and is subject to a variety of environmental and safety laws and regulations incident to the ordinary course of business. The Company currently has no basis to conclude that any or all of such contingencies will materially affect its financial position, results of operations, or cash flows. However, in the future, there may be changes to these contingencies, or additional contingencies may occur, any of which might result in an accrual or a change in current accruals recorded by the Company, and there can be no assurance that their ultimate disposition will not have a material adverse effect on the Company’s financial position, results of operations or cash flow.
On December 10, 2021, the Company acquired Aquilla Resource Inc which had substantial liabilities that relate to the Osisko Stream Agreements. Under the agreements, Osisko deposited a total of $
15. Shareholders’ Equity
The Company’s At-The-Market Offering Agreement with H.C. Wainwright & Co., LLC (the “Agent”), which was entered into in November 2019, was renewed in June 2023, pursuant to which the Agent agreed to act as the Company’s sales agent with respect to the offer and sale from time to time of the Company’s common stock having an aggregate gross sales price of up to $
On January 21, 2025, the Company closed on a registered direct offering for the purchase of
In connection with the loan the Company received on June 26, 2025, the Company issued
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These warrants qualified for equity accounting and were valued using a Black-Scholes model, with the significant input assumptions being an expected term of ,
16. Derivatives
Embedded Derivatives
Concentrate Sales
Concentrate sales contracts contain embedded derivatives due to the provisional pricing terms for shipments pending final settlement. At the end of each reporting period, the Company records an adjustment to accounts receivable and revenue to reflect the mark-to-market adjustments for outstanding provisional invoices based on forward metal prices. Please see Item 8. Financial Statements —Note 21. Fair Value Measurement for additional information.
The following table summarizes the Company’s unsettled sales contracts at December 31, 2025, with the quantities of metals under contract subject to final pricing occurring through March 2026:
Gold | Silver | Copper | Lead | Zinc | Total | |||||||||||||
| (ounces) |
| (ounces) |
| (tonnes) |
| (tonnes) |
| (tonnes) | |||||||||
Under contract | ||||||||||||||||||
Average forward price (per ounce or tonne) | $ | $ | $ | $ | $ | |||||||||||||
Unsettled sales contracts value (in thousands) | $ | $ | $ | $ | $ | $ | | |||||||||||
The Company manages credit risk by entering into arrangements with counterparties believed to be financially strong, and by requiring other credit risk mitigants, as appropriate. The Company actively evaluates the implicit creditworthiness of its counterparties, and monitors credit exposures.
17. Employee Benefits
Effective October 2012, the Company adopted a profit-sharing plan (the “Plan”) which covers all U.S. employees. The Plan meets the requirements of a qualified retirement plan pursuant to the provisions of Section 401(k) of the Internal Revenue Code. The Plan also provides eligible employees the opportunity to make tax deferred contributions to a retirement trust account up to
On April 23, 2021, a decree that reforms labor outsourcing in Mexico was published in the Federation’s Official Gazette. This decree amended the outsourcing provisions, whereby operating companies can no longer source their labor resources used to carry out the core business functions from service entities or third-party providers. Under Mexican law, employees are entitled to receive statutory profit sharing PTU payments. The required cash payment to employees in the aggregate is equal to
18. Stock-Based Compensation
The Company’s compensation program comprises three main elements: base salary, an annual short-term incentive plan (“STIP”) cash award, and long-term equity-based incentive compensation (“LTIP”) in the form of stock options, RSUs, PSUs, and DSUs.
The Gold Resource Corporation 2016 Equity Incentive Plan (the “Incentive Plan”) allows for the issuance of up to
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Company’s Board of Directors, on the recommendation of the Compensation Committee, implemented a program to issue DSUs, which are qualifying instruments under the terms of the Company’s Incentive Plan, to eligible directors. Additionally, pursuant to the terms of the Incentive Plan, any award outstanding under the prior plan that is terminated, expired, forfeited, or canceled for any reason, will be available for grant under the Incentive Plan.
The Company’s STIP provides for an annual cash bonus payable upon achievement of specified performance metrics for its management team. As of December 31, 2025, the Company accrued $
Stock-Based Compensation Expense
Stock-based compensation expense for stock options, RSUs, PSUs, and DSUs is as follows:
For the year ended December 31, | |||||
2025 | | 2024 | |||
(in thousands) | |||||
Stock options | $ | - | $ | | |
Restricted stock units | | | |||
Performance share units | | | |||
Deferred share units | | ( | |||
Total | $ | | $ | | |
The estimated unrecognized stock-based compensation expense from unvested RSUs, as of December 31, 2025, was $
Stock Options
A summary of stock option activity under the Incentive Plan for the years ended December 31, 2025 and 2024 is presented below:
| Stock | | Weighted | | Weighted Average | | Aggregate | ||||
Outstanding as of December 31, 2023 | | $ | | $ | - | ||||||
Granted, Exercised, Expired, or Forfeited | | | |||||||||
Outstanding as of December 31, 2024 | | $ | | $ | - | ||||||
Expired | ( | | |||||||||
Outstanding as of December 31, 2025 | | $ | | $ | - | ||||||
Vested and exercisable as of December 31, 2025 | | $ | | $ | - | ||||||
During the years ended December 31, 2025 and 2024,
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The following table summarizes information about stock options outstanding as of December 31, 2025:
Outstanding | Exercisable | |||||||||||
Range of Exercise Prices | | Number of | | Weighted Average | | Weighted | | Number of | | Weighted | ||
$ | | $ | | | $ | | ||||||
$ | | $ | | | $ | | ||||||
| $ | | | $ | | |||||||
Restricted Stock Units
A summary of RSU activity under the Incentive Plan for the years ended December 31, 2025 and 2024 is presented below:
| Restricted | | Fair | Weighted Average | Weighted Average | ||||||
Nonvested as of December 31, 2023 | | $ | | $ | | ||||||
Granted | | | |||||||||
Granted in lieu of bonus | | | |||||||||
Vested but not redeemed (deferred) | ( | | |||||||||
Vested and redeemed | ( | | |||||||||
Vested and withheld for net settlement | ( | | |||||||||
Forfeited | ( | | |||||||||
Nonvested as of December 31, 2024 | | $ | | $ | | ||||||
Vested but not redeemed (deferred) | ( | | |||||||||
Vested and redeemed | ( | | |||||||||
Vested and withheld for net settlement | ( | | |||||||||
Forfeited | ( | | |||||||||
Nonvested as of December 31, 2025 | | $ | | $ | | ||||||
RSUs of
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Performance Stock Units
A summary of PSU activity under the Incentive Plan for the years ended December 31, 2025 and 2024 is presented below:
| Performance | | Liability Balance | Weighted Average | ||||
Outstanding as of December 31, 2023 | | $ | | $ | | |||
Granted | | | ||||||
Redeemed | ( | | ||||||
Forfeited | ( | | ||||||
Outstanding as of December 31, 2024 (1) | | $ | | $ | | |||
Redeemed (2) | ( | | ||||||
Withheld for net settlement | ( | | ||||||
Forfeited | ( | | ||||||
Outstanding as of December 31, 2025 (1) | | $ | | $ | | |||
| (1) | As of December 31, 2023, the |
| (2) | In connection with the departure of Alberto Reyes, the Company’s former Chief Operating Officer, |
Starting in 2022, the Company’s Board of Directors approved granting PSUs to the Company’s management team. PSUs cliff vest in
PSUs of
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Deferred Stock Units
A summary of DSU activity under the Incentive Plan for the years ended December 31, 2025 and 2024 are presented below:
| Deferred | | Liability Balance | Weighted Average | ||||
Outstanding as of December 31, 2023 | | $ | | $ | | |||
Granted in lieu of board fees | | | ||||||
Outstanding as of December 31, 2024 | | $ | | $ | | |||
Granted in lieu of board fees | | | ||||||
Redeemed (1) | ( | | ||||||
Withheld for net settlement | ( | | ||||||
Outstanding as of December 31, 2025 | | $ | | $ | | |||
| (1) | In connection with the departure of Alberto Reyes, the Company’s former Chief Operating Officer, |
Effective January 1, 2021, the Company’s Board of Directors, on the recommendation of the Compensation Committee, implemented a program to issue deferred stock units to members of the Company’s Board of Directors. Additionally, members of the Board may elect, at the beginning of each year, that a portion of their board fees be paid in DSUs rather than in cash. DSUs are qualifying instruments under the terms of the Company’s Incentive Plan, and therefore, do not require additional shareholder approval. The vesting and settlement terms of the DSUs are determined by the Compensation Committee at the time the DSUs are awarded.
DSUs are vested immediately at grant and are redeemable in cash or shares—at the discretion of the Company—at the earlier of
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19. Other Expense, net
During the years ended December 31, 2025 and 2024, other expense, net consisted of the following:
For the year ended December 31, | ||||||
| 2025 | | 2024 | |||
(in thousands) | ||||||
Unrealized currency exchange loss | $ | | $ | | ||
Realized currency exchange loss | | | ||||
Realized and unrealized gain from gold and silver rounds, net | ( | ( | ||||
Realized and unrealized loss from sale of investments (1) | | | ||||
Loss on disposal of fixed assets | | | ||||
Interest on streaming liabilities (2) | | | ||||
Severance | | | ||||
Interest on note payable | | - | ||||
Loss on loan payoff | | - | ||||
Other expense | | | ||||
Total | $ | | $ | | ||
| (1) | In the first quarter of 2025, through its subsidiary, Aquila Resources USA Inc., the Company entered into a share purchase agreement with multiple purchasers to sell all of its interest in the Green Light Metals shares, for C$ |
| (2) | Periodic interest expense is based on a fixed market rate of interest which is reviewed quarterly if there are any contractual amendments relating to the Osisko Stream Agreements. |
20. Net Loss per Common Share
Basic loss per common share is calculated based on the weighted average number of shares of common stock outstanding for the period. Diluted Loss per common share is calculated based on the assumption that stock options outstanding, which have an exercise price less than the average market price of the Company’s common stock during the period, would have been exercised on the later of the beginning of the period or the date granted and that the funds obtained from the exercise were used to purchase common shares at the average market price during the period. All of the Company’s restricted stock units are considered to be anti-dilutive because of the net loss. As of December 31, 2025 and 2024, restricted stock units of
The effect of the Company’s dilutive securities is calculated using the treasury stock method, and only those instruments that result in a reduction in net income per common share are included in the calculation. Options to purchase
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Basic and diluted net loss per common share is calculated as follows:
For the year ended | |||||
December 31, | |||||
2025 | | 2024 | |||
Numerator: | |||||
Net loss (in thousands) | $ | ( | $ | ( | |
Denominator: | |||||
Basic and diluted weighted average common shares outstanding | | | |||
Basic and diluted net loss per common share | $ | ( | $ | ( | |
21. Fair Value Measurement
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
Level 2 | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and |
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity.) |
As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. These assets and liabilities are remeasured for each reporting period. The following tables set forth certain of the Company’s assets and liabilities measured at fair value by level within the fair value hierarchy as of December 31, 2025 and 2024:
| As of | As of | | |||||
December 31, | December 31, | Input Hierarchy Level | ||||||
2025 | | 2024 | ||||||
(in thousands) | ||||||||
Cash equivalents | $ | | $ | | Level 1 | |||
Accounts receivable, net | $ | | $ | | Level 2 | |||
Investment in equity securities-Green Light Metals | $ | - | $ | | Level 3 | |||
The following methods and assumptions were used to estimate the fair value of each class of financial instrument:
Cash equivalents: Cash equivalents primarily consist of a sweep account into money market funds, which are held at cost, which approximates fair value.
Accounts receivable, net: Accounts receivable, net include amounts due to the Company for deliveries of concentrates and doré sold to customers. Concentrate sales contracts provide for provisional pricing as specified in such contracts. These sales contain an embedded derivative related to the provisional pricing mechanism which is bifurcated and accounted for as a derivative. At the end of each reporting period, the Company records an adjustment to sales to reflect the mark-to-market of outstanding provisional invoices based on the forward price curve. Because these provisionally priced sales have not yet settled as of the reporting date, the mark-to-market adjustment related to these invoices is included in accounts receivable as of each reporting date. At December 31, 2025 and 2024, the Company had
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an unrealized gain of $
Investment in equity securities—Green Light Metals: Upon maturity on December 28, 2022, the Company received
Gains and losses related to changes in the fair value of embedded derivates (in thousands) in accounts receivable were included in the Company’s Consolidated Statements of Operations as shown in the following:
For the year ended December 31, | Statements of Operations Classification | ||||||||
| | 2025 | | 2024 | | ||||
Note | |||||||||
Realized and unrealized derivative gain, net | 16 | $ | | $ | | Sales, net | |||
Realized/Unrealized Derivatives
The following tables summarize the Company’s realized/unrealized derivatives, net (in thousands):
| Gold |
| Silver |
| Copper |
| Lead |
| Zinc |
| Total | |||||||
For the year ended December 31, 2025 | ||||||||||||||||||
Realized gain (loss) | $ | | $ | | $ | | $ | ( | $ | ( | $ | | ||||||
Unrealized gain | | | | | | | ||||||||||||
Total realized/unrealized derivatives, net | $ | | $ | | $ | | $ | | $ | ( | $ | | ||||||
| Gold |
| Silver |
| Copper |
| Lead |
| Zinc |
| Total | |||||||
For the year ended December 31, 2024 | ||||||||||||||||||
Realized gain | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
Unrealized (loss) gain | ( | ( | ( | | ( | ( | ||||||||||||
Total realized/unrealized derivatives, net | $ | | $ | | $ | | $ | | $ | | $ | | ||||||
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22. Supplementary Cash Flow Information
During the years ended December 31, 2025 and 2024, other operating adjustments and write-downs within the net cash provided by operations on the Consolidated Statements of Cash Flows consisted of the following:
| For the year ended December 31, | |||||
2025 | | 2024 | ||||
(in thousands) | ||||||
Unrealized gain on gold and silver rounds | $ | ( | $ | ( | ||
Unrealized foreign currency exchange loss | | | ||||
Unrealized loss on investments | - | | ||||
Loss on disposition of fixed assets | | | ||||
Increase in reserve for inventory | | | ||||
Other, net | | | ||||
Total other operating adjustments, net | $ | | $ | | ||
23. Segment Reporting
The Company has organized its operations into
The Company’s operating segments reflect the way in which internally-reported financial information is used to make decisions and allocate resources. The Chief Executive Officer, who is considered to be the CODM, reviews financial information presented on both a consolidated and an operating segment basis for purposes of making decisions and assessing financial performance. Net income or loss before income taxes is the measure of segment profit or loss that is regularly reviewed and is most consistent with the measurement principles used in the consolidated financial statements. The significant expenses reviewed by the CODM are production costs, depreciation and amortization, reclamation and remediation, exploration expense, and other expense, net. The CODM uses this information to assess current and/or future performance expectations, and the result of this assessment may be a reallocation of financial and/or non-financial resources among the reportable segments.
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The following tables provide a summary of financial information related to the Company’s segments (in thousands):
| Oaxaca, | | Michigan, | | Total | | Corporate | | Total | ||||||
For the year ended December 31, 2025 | |||||||||||||||
Sales, net | $ | | $ | - | $ | | $ | - | $ | | |||||
Production costs | | - | | - | | ||||||||||
Depreciation and amortization | | | | | | ||||||||||
Reclamation and remediation | | - | | - | | ||||||||||
Exploration expense | | | | - | | ||||||||||
G&A expenses, including Stock-based compensation | - | - | - | | | ||||||||||
Other expense, net (1) | | | | | | ||||||||||
Income (loss) before income taxes | $ | | $ | ( | $ | | $ | ( | $ | ( | |||||
Total assets as of December 31, 2025 | $ | | $ | | $ | | $ | | $ | | |||||
Expenditures for long-lived assets | $ | | $ | - | $ | | $ | - | $ | | |||||
| Oaxaca, | | Michigan, | | Total | | Corporate | | Total | ||||||
For the year ended December 31, 2024 | |||||||||||||||
Sales, net | $ | | $ | - | $ | | $ | - | $ | | |||||
Production costs | | - | | - | | ||||||||||
Depreciation and amortization | | | | | | ||||||||||
Reclamation and remediation | | - | | - | | ||||||||||
Exploration expense | | | | - | | ||||||||||
G&A expenses, including Stock-based compensation | - | - | - | | | ||||||||||
Other expense, net (1) | | | | | | ||||||||||
Loss before income taxes | $ | ( | ( | $ | ( | $ | ( | $ | ( | ||||||
Total assets as of December 31, 2024 | $ | | $ | | $ | | $ | | $ | | |||||
Expenditures for long-lived assets | $ | | $ | - | $ | | $ | - | $ | | |||||
| (1) | Please see Item 8. Financial Statements—Note 19. Other Expense, net for additional information. |
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24. Subsequent Events
On January 26, 2026, the Company announced that it has entered into a definitive arrangement agreement and plan of merger (the “Arrangement Agreement”) with Goldgroup Mining Inc. (“Goldgroup”), whereby Goldgroup has agreed to acquire all of the issued and outstanding shares of the Company’s common stock (the “Transaction”).
Pursuant to the Arrangement Agreement, the Company’s stockholders will receive
The Transaction is expected to close in the second quarter of 2026, subject to customary closing conditions (including approval by the stockholders of each of the Company and Goldgroup and approval by the Mexican National Antitrust Commission).
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ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
ITEM 9A.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that the Company files under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Chief Executive Officer and the Chief Financial Officer, with assistance from management, have evaluated the effectiveness of disclosure controls and procedures as of December 31, 2025. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the material weakness reported in the Annual Report on Form 10-K for the year ended December 31, 2024 on April 8, 2025 was remediated and the disclosure controls and procedures were effective as of December 31, 2025.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, any system of internal control over financial reporting, no matter how well designed, may not prevent or detect misstatements due to the possibility that a control can be circumvented or overridden or that misstatements due to error or fraud may occur that are not detected. Also, because of changes in conditions, internal control effectiveness may vary over time. Management, with the participation of the Chief Executive Officer and the Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 based on the framework set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013) and concluded that, after implementing the remediation plan as described below, the Company has maintained effective internal control over financial reporting as of December 31, 2025 based on the COSO criteria.
Remediation of Previously Reported Material Weakness
As previously disclosed in Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, management identified a material weakness in its internal control over financial reporting as management did not have adequate policies and procedures to maintain effective internal control over the accounting treatment of complex areas. During the year ended December 31, 2025, the Company implemented the following measures designed to improve its internal control over financial reporting and to remediate the deficiencies that led to this material weakness:
| ● | The Company designed and implemented controls over the evaluation of non-routine, unusual, or complex transactions that are subject to technical accounting standards and significant judgment or differences in interpretation in reaching technical accounting conclusions, including the involvement of outside third-party accounting experts. |
| ● | The Company designed and implemented controls over its technical accounting conclusions to require various quality control reviews prior to finalization for non-routine, unusual, or complex transactions that are subject to significant judgment or differences in interpretation. |
Management has completed its testing of the design and operating effectiveness of these newly implemented controls. Based on this testing, the Company has concluded that these controls are operating effectively and that the previously identified material weakness has been remediated as of December 31, 2025.
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Changes in Internal Control over Financial Reporting
Other than discussed above, there have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the fourth quarter of the year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
ITEM 9B.OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
During the three months ended December 31, 2025, no director or Section 16 officer of the Company
ITEM 9C. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
None.
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PART III
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
The information required by this item is incorporated by reference from the information to be contained in the Proxy Statement for the 2026 Annual Meeting of Shareholders (“2026 Proxy Statement”), which the Company will file within 120 days after the end of the fiscal year ended December 31, 2025.
Code of Ethics
The Company has adopted a code of ethics that applies to all of employees, including the principal executive officer, principal financial officer, principal accounting officer, and those of officers performing similar functions. The full text of the code of ethics can be found on the Corporate Governance page on the Company’s website. In the event the Board of Directors approves an amendment to or waiver from any provision of the code of ethics, the Company will disclose the required information pertaining to such amendment or waiver on its website.
Insider Trading Policy
The Company has also
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference from the information to be contained in the 2026 Proxy Statement.
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The information required by this item is incorporated by reference from the information to be contained in the 2026 Proxy Statement.
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The information required by this item is incorporated by reference from the information to be contained in the 2026 Proxy Statement.
ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item is incorporated by reference from the information to be contained in the 2026 Proxy Statement.
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PART IV
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
The following exhibits are filed with or incorporated by referenced in this report: | |
Item No. | Description |
2.1 | Arrangement Agreement and Plan of Merger, dated as of January 25, 2026, between Gold Resource Corporation, Goldgroup Mining Inc. and Goldgroup Merger Sub Inc. (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2026). |
3.1 | Articles of Incorporation of the Company as filed with the Colorado Secretary of State on August 24, 1998 (incorporated by reference from Exhibit 3.1 to the Company’s Registration Statement on Form SB-2 filed with the SEC on October 28, 2005). |
3.1.1 | Articles of Amendment to the Articles of Incorporation as filed with the Colorado Secretary of State on September 16, 2005 (incorporated by reference from Exhibit 3.1.1 to the Company’s Registration Statement on Form SB-2 filed with the SEC on October 28, 2005). |
3.1.2 | Articles of Amendment to the Articles of Incorporation as filed with the Colorado Secretary of State on November 8, 2010 (incorporated by reference from Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on November 10, 2010). |
3.1.3 | Articles of Amendment to the Articles of Incorporation as filed with the Colorado Secretary of State on June 4, 2021 (incorporated by reference from Exhibit 3.1.3 to the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2023). |
3.2 | Amended and Restated Bylaws of the Company dated August 9, 2010 (incorporated by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on August 12, 2010). |
3.2.1 | Amendment dated March 25, 2013 to Amended and Restated Bylaws of the Company dated August 9, 2010 (incorporated by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 27, 2013). |
3.2.2 | Amendment dated April 3, 2018 to the Amended and Restated Bylaws of the Company dated August 9, 2010 (incorporated by reference from Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on April 3, 2018). |
3.2.3 | Amendment dated August 6, 2024 to the Amended and Restated Bylaws of the Company dated August 9, 2010 (incorporated by reference from Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 7, 2024). |
4.1 | Description of Capital Stock (incorporated by reference from Exhibit 4.1 to the Company’s Form 10-K filed with the SEC on March 10, 2022). |
10.1 | Exploitation and Exploration Agreement between the Company and Jose Perez Reynoso dated October 14, 2002 (incorporated by reference from Exhibit 10.1 to the Company’s Registration Statement on Form SB-2 filed with the SEC on October 28, 2005). |
10.2 | Mining Exploration and Exploitation Agreement between Don David Gold, S.A. de C.V. and Jose Perez Reynoso effective November 21, 2002 (incorporated by reference from Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2012). |
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10.3 | Amendment to Mining Exploration and Exploitation Agreement between Don David Gold Mexico, S.A. de C.V. and Jose Perez Reynoso effective August 3, 2012 (incorporated by reference Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 9, 2012). |
10.4# | Gold Resource Corporation 2016 Equity Incentive Plan (incorporated by reference from Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed with the SEC on December 7, 2016). |
10.5# | Form of Stock Option Agreement (incorporated by reference from Exhibit 10.5 to the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2020). |
10.6# | Form of RSU Agreement (incorporated by reference from Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2020). |
10.7# | Form of RSU Agreement (incorporated by reference from Exhibit 10.7 to the Company’s Annual Report on Form 10-K filed with the SEC on March 2, 2020). |
10.8# | Form of Indemnification Agreement between the Company and its directors and officers (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 18, 2013). |
10.9 | At-The-Market Offering Agreement dated November 29, 2019 between the Company and H.C. Wainwright & Co., LLC (incorporated by reference from Exhibit 1.1 to the Company’s Registration Statement on Form S-3 filed with the SEC on November 29, 2019). |
10.10# | Employment Agreement dated December 31, 2020 between Gold Resource Canada Corporation and Allen Palmiere (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 31, 2020). |
10.11# | Employment Agreement dated May 12, 2021 between Gold Resource Canada Corporation and Alberto Reyes (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 18, 2021). |
10.12# | Employment Agreement dated August 2, 2023 between Gold Resource Corporation and Chet Holyoak (incorporated by reference from Exhibit 10.12 to the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024). |
10.13 | Arrangement Agreement by and among Gold Resource Corporation, Gold Resource Acquisition Sub, Inc. and Aquila Resources Inc. dated October 5, 2021 (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 12, 2021). |
10.14 | Aquila and Osisko - Amended and Restated Gold Purchase Agreement (incorporated by reference from Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2022). |
10.15 | Aquila and Osisko - Amended and Restated Silver Purchase Agreement (incorporated by reference from Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed with the SEC on March 10, 2022). |
10.16 | Form of Common Stock Purchase Warrant (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 30, 2025). |
10.17 | Form of Voting and Support Agreement, dated as of January 26, 2026 (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 26, 2026). |
19.1 | Insider Trading Policy (incorporated by reference from Exhibit 19.1 to the Company’s Annual Report on Form 10-K filed with the SEC on April 8, 2025). |
21* | Subsidiaries of the Company. |
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23.1* | Consent of BDO USA, P.C., Independent Registered Public Accounting Firm. |
23.2* | Consent of Qualified Person. |
23.3* | Consent of Qualified Person. |
23.4* | Consent of Qualified Person. |
23.5* | Consent of Qualified Person. |
31.1* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer. |
31.2* | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer. |
32* | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer and Chief Financial Officer. |
96.1 | Technical Report Summary for the Back Forty Mine Project effective as of September 30, 2023 (incorporated by reference from Exhibit 96.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 27, 2023). |
96.2* | Technical Report Summary for the Don David Gold Mine effective as of December 31, 2025. |
97.1 | Policy for Recoupment of Executive Compensation effective July 26, 2023 (incorporated by reference from Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2024). |
101* | The following items from the Annual Report on Form 10-K for the year ended December 31, 2025 are furnished herewith, formatted in inline XBRL: (A) Cybersecurity; (B) the following financial statements: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements; (C) Insider Trading Policy; and (D) Rule 10b5-1 Trading Arrangements. |
104 | Cover Page Interactive Data File (embedded within the XBRL document). |
* | Filed herewith |
# | Indicates management contract or compensatory plan, contract or arrangement. |
ITEM 16. | FORM 10-K SUMMARY |
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ||
GOLD RESOURCE CORPORATION | ||
Date: March 18, 2026 | /s/ Allen Palmiere | |
By: Allen Palmiere, Chief Executive Officer, |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Allen Palmiere |
| Chief Executive Officer, President and Director |
| March 18, 2026 | |
Allen Palmiere | (Principal Executive Officer) | ||||
/s/ Chet Holyoak | Chief Financial Officer | March 18, 2026 | |||
Chet Holyoak | (Principal Financial and Accounting Officer) | ||||
/s/ Ron Little | Director | March 18, 2026 | |||
Ron Little | |||||
/s/ Lila Murphy | Director | March 18, 2026 | |||
Lila Murphy | |||||
/s/ Peter Gianulis | Director | March 18, 2026 | |||
Peter Gianulis | |||||
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FAQ
How did Gold Resource Corporation (GORO) perform financially in 2025?
What were Gold Resource Corporation’s 2025 production results at Don David Gold Mine?
How did GORO strengthen its liquidity during 2025?
What is the planned merger between Gold Resource Corporation and Goldgroup Mining?
How many GORO shares are outstanding and what was its recent market value?
What are the main risks highlighted for Gold Resource Corporation (GORO)?
