Paramount Gold Nevada Corp. (PZG) is a company engaged in the business of acquiring, exploring, and developing precious metal projects in the United States. The company owns advanced stage exploration projects in the states of Nevada and Oregon, with a focus on expanding and upgrading known mineralized material to reserves.
Business Overview
Paramount's primary assets are the Sleeper Gold Project in Nevada and the Grassy Mountain Project in Oregon. The Sleeper Gold Project is located in Humboldt County, Nevada, approximately 26 miles northwest of the town of Winnemucca. The Grassy Mountain Project is located in Malheur County, Oregon, approximately 22 miles south of Vale, Oregon, and roughly 70 miles west of Boise, Idaho.
The company's strategy is to enhance the value of its projects by implementing exploration and engineering programs that have the goal of expanding and upgrading known mineralized material to reserves. Paramount is currently focused on the permitting and development of the Grassy Mountain Project, which it believes has the potential to become a significant gold and silver producer.
Financials
For the nine months ended March 31, 2024, Paramount reported a net loss of $5,462,764, compared to a net loss of $4,920,461 in the prior year period. The company did not generate any revenue during the nine-month period. Paramount's annual net income for the fiscal year ended June 30, 2023, was -$6,450,531, and the company did not generate any revenue during the year.
The company's operating cash flow for the nine months ended March 31, 2024, was -$3,064,814, compared to -$3,287,339 in the prior year period. Paramount's annual operating cash flow for the fiscal year ended June 30, 2023, was -$5,252,332. The company's annual free cash flow for the fiscal year ended June 30, 2023, was -$5,332,332.
Liquidity
As of March 31, 2024, Paramount had cash and cash equivalents of $7,012,365, compared to $824,920 as of June 30, 2023. The company had working capital of approximately $4,245,018 as of March 31, 2024.
In May 2020, the company established an $8.0 million "at the market" equity offering program with Cantor Fitzgerald & Co. and Canaccord Genuity LLC to proactively increase its financial flexibility. In March 2024, the company established a new $3.1 million "at the market" offering program with Cantor Fitzgerald & Co. and A.G.P./Alliance Global Partners. During the nine months ended March 31, 2024, the company issued 4,261,515 shares under the program for net proceeds of $1,167,893.
In December 2023, Paramount entered into a $15 million Secured Royalty Convertible Debenture with Sprott Private Resource Streaming and Royalty (US Collector), LP. The proceeds from the Debenture will be used to fund the continued permitting of the proposed Grassy Mountain Gold Mine and for general corporate purposes. The Debenture also allowed the company to repay its outstanding 2019 secured convertible notes and its bridge promissory note to Seabridge Gold Inc.
Operational Highlights
During the nine months ended March 31, 2024, Paramount achieved several key operational milestones:
- The Bureau of Land Management (BLM) filed the Notice of Intent in the Federal Registry, initiating the preparation of an Environmental Impact Statement in compliance with the National Environmental Policy Act process for the proposed Grassy Mountain Gold mine. - The State of Oregon issued a Notice to Proceed with the permitting and preparation of draft permits for the Grassy Mountain Project. - The State of Oregon's Technical Review Team determined that Paramount's Consolidated Permit Application for the Grassy Mountain Project is complete. - The company completed an updated technical report summary (TRS) for the Sleeper Gold Property under Item 1300 of Regulation S-K.
Outlook
Paramount expects to continue to incur losses as it advances the development of its Grassy Mountain Project, including ongoing permitting activities with state and federal agencies. The company's current business plan requires working capital to fund non-discretionary expenditures for its exploration and development activities, mineral property holding costs, and general and administrative expenses.
Subsequent to May 14, 2024, Paramount plans to fund its operations through a combination of existing cash on hand, the company's "at the market" equity offering program, insurance proceeds to fund reclamation and environmental obligations at the Sleeper Gold Project, and potential future equity financings or the sale of royalties.
Risks and Challenges
Paramount faces several risks and challenges in its pursuit of developing its mineral projects. These include:
- Obtaining the necessary permits and approvals from state and federal agencies for the development of the Grassy Mountain Project. - Securing sufficient funding to advance the Grassy Mountain Project through the permitting process and into construction. - Fluctuations in commodity prices, which could impact the economic viability of the company's projects. - Potential delays or cost overruns in the development of the Grassy Mountain Project. - Ongoing reclamation and environmental obligations at the Sleeper Gold Project.
Conclusion
Paramount Gold Nevada Corp. is a company with a promising portfolio of precious metal projects in Nevada and Oregon. The company's primary focus is on the development of the Grassy Mountain Project, which it believes has the potential to become a significant gold and silver producer. While the company faces several risks and challenges, its recent operational achievements and the $15 million Secured Royalty Convertible Debenture with Sprott provide a solid foundation for the company to continue advancing its projects and unlocking value for shareholders.