-8UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2023

OR

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-36908

 

PARAMOUNT GOLD NEVADA CORP.

 

(Exact name of Registrant as specified in its Charter)

 

 

Nevada	98-0138393
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
665 Anderson Street Winnemucca, NV	89445
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (775) 625-3600

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share		PZG		NYSE American

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  NO 

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES  NO 

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. YES  NO 

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). YES  NO 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the 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		
Non-accelerated filer				Small 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). ☐

 

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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES  NO 

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on the NYSE American LLC on December 31, 2022, was $14,746,396.

The number of shares of Registrant’s Common Stock outstanding as of September 21, 2023 was 58,880,646.

 

 

 

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Table of Contents

				Page
PART I
Item 1.		Business		5
Item 1A.		Risk Factors		8
Item 1B.		Unresolved Staff Comments		14
Item 2.		Properties		14
Item 3.		Legal Proceedings		31
Item 4.		Mine Safety Disclosures		31
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		32
Item 6.		[Reserved]		33
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		33
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk		37
Item 8.		Financial Statements and Supplementary Data		37
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		38
Item 9A.		Controls and Procedures		38
Item 9B.		Other Information		38
Item 9C		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		38
PART III
Item 10.		Directors, Executive Officers and Corporate Governance		39
Item 11.		Executive Compensation		39
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		39
Item 13.		Certain Relationships and Related Transactions, and Director Independence		39
Item 14.		Principal Accounting Fees and Services		39
PART IV
Item 15.		Exhibits, Financial Statement Schedules		40

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-K contains “forward-looking statements” within the meaning of applicable securities laws relating to Paramount Gold Nevada Corp. (“Paramount”, “we”, “us”, “our”, or the “Company”) which represent our current expectations or beliefs including, but not limited to, statements concerning our operations, performance, and financial condition. These statements by their nature involve substantial risks and uncertainties, credit losses, dependence on management and key personnel, variability of quarterly results, and our ability to continue growth. Statements in this annual report regarding planned drilling activities and any other statements about Paramount’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements. You should also see our risk factors beginning on page 8. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact are forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “anticipate”, “intend”, “could”, “estimate”, or “continue” or the negative or other comparable terminology are intended to identify forward-looking statements. Other matters such as our growth strategy and competition are beyond our control. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

CAUTIONARY NOTE REGARDING DISCLOSURE OF MINERAL PROPERTIES

Mineral Reserves and Resources

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, and applicable Canadian securities laws, and as a result we report our mineral reserves and mineral resources according to two different standards. U.S. reporting requirements, for disclosure of mineral properties, are governed by Item 1300 of Regulation S-K (“S-K 1300”), as issued by the U.S. Securities and Exchange Commission (“SEC”). Canadian reporting requirements for disclosure of mineral properties are governed by National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”), as adopted from the definitions provided by the Canadian Institute of Mining, Metallurgy and Petroleum. Both sets of reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, but the standards embody slightly different approaches and definitions.

In our public filings in the U.S. and Canada and in certain other announcements not filed with the SEC, we disclose proven and probable reserves and measured, indicated and inferred resources, each as defined in S-K 1300. The estimation of measured resources and indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves, and therefore investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into S-K 1300-compliant reserves. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources, and therefore it cannot be assumed that all or any part of inferred resources will ever be upgraded to a higher category. Therefore, investors are cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or economically.



Technical Report Summaries and Qualified Persons

The scientific and technical information concerning our mineral projects in this Form 10-K have been reviewed and approved by “qualified persons” under S-K 1300. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and mineral resources included in this Form 10-K, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, sociopolitical, marketing or other relevant factors, please review the Technical Report Summaries for each of the Company’s material properties which are included as exhibits to, and incorporated by reference into, this Report.

 

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GLOSSARY OF MINING TERMS

In this report, the following terms have the following meanings:

alteration – any change in the mineral composition of a rock brought about by physical or chemical means.

assay – a measure of the valuable mineral content.

cut-off grade - is the grade (i.e., the concentration of metal or mineral in rock) that determines the destination of the material during mining. For purposes of establishing “prospects of economic extraction,” the cut-off grade is the grade that distinguishes material deemed to have no economic value (it will not be mined in underground mining or if mined in surface mining, its destination will be the waste dump) from material deemed to have economic value (its ultimate destination during mining will be a processing facility). Other terms used in similar fashion as cut-off grade include net smelter return, pay limit, and break-even stripping ratio.

development stage – is an issuer that is engaged in the preparation of mineral reserves for extraction on at least one material property.

development stage property - is a property that has mineral reserves disclosed, pursuant to S-K 1300, but no material extraction.

dip – the angle that a structural surface, a bedding or fault plane, makes with the horizontal, measured perpendicular to the strike of the structure.

disseminated – where minerals occur as scattered particles in the rock.

exploration results - are data and information generated by mineral exploration programs (i.e., programs consisting of sampling, drilling, trenching, analytical testing, assaying, and other similar activities undertaken to locate, investigate, define or delineate a mineral prospect or mineral deposit) that are not part of a disclosure of mineral resources or reserves. A registrant must not use exploration results alone to derive estimates of tonnage, grade, and production rates, or in an assessment of economic viability.

exploration stage property – is a property that has no mineral reserves disclosed.

fault – a surface or zone of rock fracture along which there has been displacement.

feasibility study – is a comprehensive technical and economic study of the selected development option for a mineral project, which includes detailed assessments of all applicable modifying factors, as defined by this section, together with any other relevant operational factors, and detailed financial analysis that are necessary to demonstrate, at the time of reporting, that extraction is economically viable. The results of the study may serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project.

formation – a distinct layer of sedimentary rock of similar composition.

geochemistry – the study of the distribution and amounts of the chemical elements in minerals, ores, rocks, solids, water, and the atmosphere.

geophysical surveys – a survey method used primarily in the mining industry as an exploration tool, applying the methods of physics and engineering to the earth’s surface.

grade – quantity of metal per unit weight of host rock.

heap leach – a mineral processing method involving the crushing and stacking of an ore on an impermeable liner upon which solutions are sprayed to dissolve metals, e.g., gold, copper etc.; the solutions containing the metals are then collected and treated to recover the metals.

host rock – the rock in which a mineral or an ore body may be contained.

indicated mineral resource - is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.

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initial assessment - is a preliminary technical and economic study of the economic potential of all or parts of mineralization to support the disclosure of mineral resources. The initial assessment must be prepared by a qualified person and must include appropriate assessments of reasonably assumed technical and economic factors, together with any other relevant operational factors, that are necessary to demonstrate at the time of reporting that there are reasonable prospects for economic extraction. An initial assessment is required for disclosure of mineral resources but cannot be used as the basis for disclosure of mineral reserves.

induced polarization – is a geophysical imaging technique used to identify the electrical chargeability of subsurface materials, such as ore.

inferred mineral resource - is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project, and may not be converted to a mineral reserve.

in-situ – in its natural position.

mapped or geological mapping – the recording of geologic information including rock units and the occurrence of structural features, attitude of bedrock, and mineral deposits on maps.

measured mineral resource - is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.

mineral resource – is 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 a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractible. It is not merely an inventory of all mineralization drilled or sampled.

mineralization – a natural accumulation or concentration in rocks or soil of one or more potentially economic minerals; also the process by which minerals are introduced or concentrated in a rock.

open pit or open cut – surface mining in which the ore is extracted from a pit or quarry, the geometry of the pit may vary with the characteristics of the ore body.

ore – mineral bearing rock that can be mined and treated profitably under current or immediately foreseeable economic conditions.

ore body – a mostly solid and fairly continuous mass of mineralization estimated to be economically mineable.

outcrop – that part of a geologic formation or structure that appears at the surface of the earth.

preliminary economic assessment – a study that includes an economic analysis of the potential viability of mineral resources taken at an early stage of the project prior to the completion of a preliminary feasibility study.

preliminary feasibility study ( or pre-feasibility study or PFS) – is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a qualified person has determined (in the case of underground mining) a preferred mining method, or (in the case of surface mining) a pit configuration, and in all cases has determined an effective method of mineral processing and an effective plan to sell the product.

(1) A pre-feasibility study includes a financial analysis based on reasonable assumptions, based on appropriate testing, about the modifying factors and the evaluation of any other relevant factors that are sufficient for a qualified person to determine if all or part of the indicated and measured mineral resources may be converted to mineral reserves at the time of reporting. The financial analysis must have the level of detail necessary to demonstrate, at the time of reporting, that extraction is economically viable.

(2) A pre-feasibility study is less comprehensive and results in a lower confidence level than a feasibility study. A pre-feasibility study is more comprehensive and results in a higher confidence level than an initial assessment.

probable mineral reserve - is the economically mineable part of an indicated and, in some cases, a measured mineral resource.

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production stage property – is a property with material extraction of mineral reserves.

proven mineral reserve – is the economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource.

qualified person - is an individual who is:

(1) A mineral industry professional with at least five years of relevant experience in the type of mineralization and type of deposit under consideration and in the specific type of activity that person is undertaking on behalf of the registrant; and

(2) An eligible member or licensee in good standing of a recognized professional organization at the time the technical report is prepared. For an organization to be a recognized professional organization, it must:

(i) Be either:

(A) An organization recognized within the mining industry as a reputable professional association; or
(B) A board authorized by U.S. federal, state or foreign statute to regulate professionals in the mining, geo-science or related field;

(ii) Admit eligible members primarily on the basis of their academic qualifications and experience;
(iii) Establish and require compliance with professional standards of competence and ethics;
(iv) Require or encourage continuing professional development;
(v) Have and apply disciplinary powers, including the power to suspend or expel a member regardless of where the member practices or resides; and
(vi) Provide a public list of members in good standing.

quartz – a mineral composed of silicon dioxide, SiO2 (silica)

RC (reverse circulation) drilling – a drilling method using a tri-cone bit or hammer bit, during which rock cuttings are pushed from the bottom of the drill hole to the surface through an inner tube, by liquid and/or air pressure moving through an outer tube.

rock – indurated naturally occurring mineral matter of various compositions.

sediment – particles transported by water, wind, gravity or ice.

sedimentary rock – rock formed at the earth’s surface from solid particles, whether mineral or organic, which have been moved from their position of origin and re-deposited.

strike – the direction or trend that a structural surface, e.g. a bedding or fault plane, takes as it intersects the horizontal.

strip – to remove barren rock or overburden in order to expose ore.

sulfide – a mineral including sulfur (S) and iron (Fe) as well as other elements; metallic sulfur-bearing mineral often associated with gold mineralization.

 

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PART I

Item 1. Business.

Paramount Gold Nevada Corp. is a Nevada corporation formed on June 15, 1992 under the name X-Cal (USA), Inc. Paramount Gold Nevada Corp. common stock trades on the NYSE American LLC under the symbol “PZG.” Unless the context otherwise requires, reference to “we,” “us,” “our,” “Paramount,” the “Company” and other similar references refer to Paramount Gold Nevada Corp.

INITIAL PUBLIC OFFERING AND ORGANIZATIONAL TRANSACTIONS

On April 17, 2015, we entered into the previously disclosed separation and distribution agreement (the “Separation Agreement”) with Paramount Gold and Silver Corp. (“PGSC”), to effect the separation (the “separation”) of the Company from PGSC, and to provide for the allocation between the Company and PGSC of the Company’s and PGSC’s assets, liabilities and obligations attributable to periods prior to, at and after the separation.

We filed a registration statement on Form S-1 in connection with the distribution (the “distribution”) by PGSC to its stockholders of all the outstanding shares of common stock of the Company, par value $0.01 per share. The registration statement was declared effective by the Securities and Exchange Commission (“SEC”) on April 9, 2015. On April 6, 2015, the Company filed a Form 8-A with the SEC to register its shares of common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. The distribution, which effected a spin-off of the Company from PGSC, was made on April 17, 2015, to PGSC stockholders of record on April 14, 2015. On the distribution date, stockholders of PGSC received one share of Company common stock for every 20 shares of PGSC common stock held. Up to and including the distribution date, PGSC common stock traded on the “regular-way” market; that is, with an entitlement to shares of Company common stock distributed pursuant to the distribution. As a result of the distribution, the Company is now a publicly traded company independent from PGSC. On April 20, 2015, the Company’s shares of common stock commenced trading on the NYSE American LLC (formerly NYSE MKT) under the symbol “PZG”. An aggregate of 8,101,371 shares of Company common stock were distributed in the distribution. In connection with our separation from PGSC and PGSC’s merger with and into Coeur Mining, Inc. (“Coeur”), PGSC contributed approximately $8.45 million to us as an equity contribution, and we issued 417,420 shares of our common stock, par value $0.01 per share, to Coeur in exchange for a cash payment by Coeur in the amount of $1.47 million.

On March 14, 2016, Paramount Gold Nevada Corp. and Calico Resources Corp. (“Calico”) entered into an Arrangement Agreement providing for the acquisition of Calico by Paramount. On July 7, 2016, after having received the approval of the Supreme Court of British Columbia to the transaction, Paramount and Calico completed the transaction contemplated by the Arrangement Agreement, pursuant to which Calico became a wholly owned subsidiary of Paramount.

On November 14, 2016, Calico Resources Corp. was merged into Calico Resources USA Corp. As a result, Calico Resources USA Corp. became a wholly owned subsidiary of Paramount.

OVERVIEW OF PARAMOUNT GOLD NEVADA CORP.

We are engaged in the business of acquiring, exploring and developing precious metals projects in the United States of America. Paramount owns both exploration and development stage projects in the states of Nevada and Oregon. We enhance the value of our projects by implementing exploration and engineering programs that are likely to expand and upgrade known mineral resources to mineral reserves. To further advance our projects towards the production decision, we manage the completion of the appropriate technical studies including feasibility studies and undertake permitting processes with the relevant local, state and federal regulators. Paramount believes there are several ways to realize the value of its projects: selling its projects to producers; joint venturing its projects with other companies; or building and operating small mines on its own.

The Company’s material Nevada property, the Sleeper Gold Project ("Sleeper"), is located in Humboldt County, Nevada.

Our material Oregon property, known as the Grassy Mountain Project (“Grassy Mountain”), is located in Malheur County, Oregon, and was acquired by way of statutory plan of arrangement in the Province of British Columbia, Canada with Calico in July 2016.

INTER-CORPORATE RELATIONSHIPS

We currently have three active wholly owned direct subsidiaries:

New Sleeper Gold LLC and Sleeper Mining Company, LLC, which operate our mining interests in Nevada.

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Calico Resources USA Corp., which holds our interest in the Grassy Mountain Project in Oregon.

The Company’s corporate structure is as follows:

 

COMPETITION

The mineral exploration industry is highly competitive. We compete with junior and senior mineral exploration companies, independent producers and institutional and individual investors who are actively seeking to acquire mineral exploration properties throughout the United States together with the equipment, labor and materials required to explore on those properties. Competition for the acquisition of mineral exploration properties is intense with many mineral exploration leases or concessions available through a competitive bidding process in which we may lack the technological information or expertise available to other bidders. Accordingly, these competitors may be able to spend greater amounts on acquiring mineral exploration interests of merit or on exploring or developing their mineral exploration properties. This advantage could enable our competitors to acquire mineral exploration properties of greater quality and interest to prospective investors who may choose to finance their exploration and development projects instead of the Company’s. Such competition could adversely impact our ability to attain the financing necessary for us to acquire further mineral exploration properties.

We do not compete with anyone with respect to our existing mineral claims because they are 100% controlled or owned by us. We believe we have or can acquire on reasonable terms the equipment, technical expertise and materials necessary to explore and develop our current properties.

GOVERNMENT REGULATION

General

Our business is subject to extensive federal, state and local laws governing the exploring, development, production, mine closure and reclamation, labor standards, taxes, protection of wildlife and other matters. The costs to comply with government regulations are substantial and possible future regulation could cause additional expenditures, restrictions and delays in the exploration and development of our properties. We cannot predict to extent future regulations might have an impact. Future changes to U.S. federal, state or local laws and regulations could have a material adverse effect upon us and our results of operations. For additional information regarding key regulatory risks, please the section titled "Risk Factors" included in Item 1A.

Mining Claim Maintenance

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Activities on our properties are conducted both upon federally owned land and private land. Most federally owned land is administered by the Bureau of Land Management (“BLM”). On existing claims owned by the federal government, we are required to pay annual claim maintenance fees of $165 per claim on or before September 1st at the State Office of the BLM. In addition, we are required to pay the county recorder of the county in which the claim is situated an annual fee. The county fees in Nevada and Oregon are $12.00 and $5.00 per claim, respectively. On certain claims we own, we are required to pay a fee of $165.00 for each 20 acres of an association placer. For any new claims we acquire by staking, we must file a certificate of location with the State Office of the BLM within 90 days of making the claim along with a fee equal to the amount of the annual claim maintenance fee.

Annual Payments we have made to federal and other state agencies to maintain our claims for the upcoming 2023-24 year are as follows:

Property		Number of Claims1				Total Annual Payment to Maintain Claims2
Sleeper Gold Project and Other Nevada Claims		2,623				$	490,194
Grassy Mountain Project and Other Oregon Claims		548				$	97,313
Total Annual Payment to Maintain Mining Claims						$	587,507

1. Does not include any placer claims contained within existing unpatented lode claims

2. Includes all fees paid to the BLM, respective counties and legal fees to file the claims

Permitting

The Grassy Mountain, Sleeper and other properties are subject to extensive U.S. federal and state permitting laws and regulations for the exploration, development and reclamation activities we undertake. For exploration activities on U.S. federally owned land, we are required to submit a Plan of Operation ("PoO") with the BLM, obtain permits and post financial security bonds that guarantee that reclamation is performed. We have received all permits required to carry out exploration activities for our material properties.

We are currently in the application phase of the permitting process of obtaining both state and federal permits that will allow us to build and operate a mine at Grassy Mountain. The permitting process for both federal and state levels requires us, among other things, a thorough study to determine the baseline conditions of the mining site and surrounding area, an environmental impact analysis, and proposed mitigation measures to minimize and offset the environmental impact of mining operations.

Reclamation of Previous Operations

Paramount is responsible for managing the reclamation activities from the previous mine operations at the Sleeper Gold Mine as directed by the BLM and the Nevada State Department of Environmental Protection ("NDEP"). As part of the comprehensive reclamation program, we undertake activities that include on-going monitoring and reporting, stabilizing, contouring, pond conversions and re-vegetating activities. Reclamation activities are conducted in accordance in with detailed plans which must be reviewed and approved by the both the BLM and NDEP. Additional information regarding our reclamation activities at Sleeper on Page 23.

HUMAN CAPITAL RESOURCES

As of June 30, 2023, we employed seven full-time employees and one consultant.

As an organization, we maintain a comprehensive compensation and benefits program to attract, retain and reward the talented employees who contribute to our business. In addition to a competitive base salary, our compensation and benefits program includes equity-based compensation and cash bonuses. We align the interest of our employees, consultants and directors with those of our shareholders by granting equity compensation with vesting conditions contingent upon meeting defined performance goals. These compensation programs are continually evaluated and updated by our Compensation Committee, our Board of Directors (our "Board") and management team, as appropriate, to reflect the evolving nature of our business and to remain competitive in attracting and retaining skilled talent.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE RESPONSIBILITY

At Paramount, we are committed to ensuring our business practices integrate to the fullest extent our corporate sustainability policy and environmental, social and governance priorities ("ESG"). Our sustainability framework was developed by engaging our key stakeholders with to goal of integrating sustainability into the Paramount business planning process. Paramount is committed to being the partner of choice by communities where it operates. To do this we need to build and maintain a strong reputation based on environmental stewardship and cultivating societal success. As we advance with our permitting efforts at our Grassy Mountain Project in Oregon we strive to achieve the following: i) achieve the smallest physical imprint when we close a mine and leave the land as close to the way we found it as possible, ii) work actively with the local communities in which we operate to participate in long-term economic development, and iii) implementing strong governance practices that promote environmental stewardship, societal success and strengthen equity performance.

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AVAILABLE INFORMATION

We file electronically with the SEC our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. We make available on our website at http://www.paramountnevada.com, free of charge, copies of these reports and other information as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information found on, or accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K. The SEC maintains an internet site that also contains these filings at http://www.sec.gov.

Item 1A. Risk Factors.

Described below are certain risks that we believe apply to our business and the industry in which we operate. You should carefully consider each of the following risk factors in conjunction with others provided in this Annual Report on Form 10-K and in our other public disclosures. The risks described below highlight potential events, trends or other circumstances that could adversely affect our business, financial condition, results of operations, cash flows, liquidity or access to sources of financing, and consequently, the market value of our common stock. These risks could cause our future results to differ materially from historical results. The risks described below are those that we have identified as material and is not an exhaustive list of all the risks we face. There may be others that we have not identified or that we have deemed to be immaterial. All forward-looking statements made by us or on our behalf are qualified by the risks described below.

RISK RELATED TO OUR INDUSTRY

The estimation of mineral reserves and mineral resources is imprecise and depends upon subjective factors.

Estimated mineral reserves and mineral resources may not be realized in actual production. Our results of operations and financial position may be adversely affected by inaccurate estimates. The mineral reserve and mineral resource figures presented in our public filings are estimates made by independent mining consultants with whom we contract. Mineral reserve and mineral resource estimates are a function of geological and engineering analyses that require us to make assumptions about production costs, recoveries and gold and silver market prices. Mineral reserve and mineral resource estimation is an imprecise and subjective process. The accuracy of such estimates is a function of the quality of available data and of engineering and geological interpretation, judgment and experience. Assumptions about gold and silver market prices are subject to great uncertainty as those prices fluctuate widely. Declines in the market prices of gold, silver, zinc or lead may render mineral reserves and mineral resources containing relatively lower grades of mineralization uneconomic to exploit, and we may be required to reduce mineral reserve and mineral resource estimates, discontinue development at one or more of our properties or write down assets as impaired. New or updated technical or geological information may also impact anticipated metal recovery rates. Any of these adjustments may adversely affect our financial condition, results of operations and cash flows.

The precious metals markets are volatile markets. This will have a direct impact on our revenues (if any) and profits (if any) and could have an adverse effect on our ongoing operations.

The price of both gold and silver has fluctuated significantly over the past few years. Despite the volatility in the price of gold, there continues to be interest in gold and silver mining and companies engaged in that business, including the exploration for both gold and silver. However, in the event that the price of these metals falls, the interest in the gold and silver mining industry may decline and the value of our business could be adversely affected. Even if we are able to generate revenues, there can be no assurance that any of our operations will prove to be profitable. Finally, in recent decades, there have been periods of both overproduction and underproduction of both gold and silver resources. Such conditions have resulted in periods of excess supply of and reduced demand on a worldwide basis and on a domestic basis. These periods have been followed by periods of short supply of and increased demand for both gold and silver. We cannot predict what the market for gold or silver will be in the future.

Mining operations are hazardous, raise environmental concerns and raise insurance risks.

The development and operation of a mine or mineral property involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. These risks include, among other things, ground fall, flooding, environmental hazards and the discharge of toxic chemicals, explosions and other accidents. Such occurrences may result in work stoppages, delays in production, increased production costs, damage to or destruction of mines and other producing facilities, injury or loss of life, damage to property, environmental damage and possible legal liability for such damages as well.

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Although the Company maintains liability coverage in an amount which it considers adequate for its operations, such occurrences, against which the Company may not be able, or may elect not to insure, may result in a material adverse change in the Company’s financial position. The nature of these risks is such that liabilities may exceed policy limits, in which event the Company would incur substantial uninsured losses.

We are subject to numerous environmental and other regulatory requirements.

All phases of mining and exploration operations are subject to governmental regulation including environmental regulation. Environmental legislation is becoming stricter, with increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and heightened responsibility for companies and their officers, directors and employees. There can be no assurance that possible future changes in environmental regulation will not adversely affect our operations. As well, environmental hazards may exist on a property in which we hold an interest that was caused by previous or existing owners or operators of the properties and of which the Company is not aware at present.

Government approvals and permits are required to be maintained in connection with our mining and exploration activities. Although we believe we currently have all required permits for our operations as currently conducted, there is no assurance that delays will not occur in connection with obtaining all necessary renewals of such permits for the existing operations or additional permits for any possible future changes to the Company’s operations, including any proposed capital improvement programs. Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may be liable for civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Amendments to current laws, regulations and permitting requirements, or more stringent application of existing laws, may have a material adverse impact on the Company resulting in increased capital expenditures or production costs, reduced levels of production at producing properties or abandonment or delays in development of properties.

RISKS RELATED TO OUR BUSINESS OPERATIONS

There is substantial doubt about our ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. This assumes continuing operations and the realization of assets and liabilities in the normal course of business.

We have incurred significant losses since our inception and expect to continue to incur losses as a result of costs and expenses related to maintaining our properties and general and administrative expenses. As of June 30, 2023, we had cash of approximately $0.8 million and an accumulated deficit of approximately $74.3 million. As a result of our evaluation of the Company’s liquidity for the next twelve months, we have included a discussion about our ability to continue as a going concern in our consolidated financial statements, and our independent auditor’s report for year ended June 30, 2023 includes an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” Our capital needs have, in recent years, been funded through sales of our debt and equity securities. In the event that we are unable to raise sufficient additional funds, we may be required to delay, reduce or severely curtail our operations or otherwise impede our on-going business efforts, which could have a material adverse effect on our business, operating results, financial condition, long-term prospects and ability to continue as a viable business.

It is possible investors may lose their entire investment in the Company.

Prospective investors should be aware that if we are not successful in our endeavors, your entire investment in the Company could become worthless. Even if we are successful in identifying mineral reserves that can be commercially developed, there can be no assurances that we will generate any revenues and therefore our losses will continue.

No revenue generated from operations.

We have not generated any revenues from operations. Our net loss for the fiscal year ended June 30, 2023 totaled $6.45 million. We have incurred losses in the past, and we will likely continue to incur losses in the future. Even if our drilling programs identify gold, silver or other mineral deposits, there can be no assurance that we will be able to commercially exploit these resources, generate any revenues or generate sufficient revenues to operate profitably.

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We will require significant additional capital to continue our exploration activities, and, if warranted, to develop mining operations.

None of our projects currently have proven or probable reserves. Substantial expenditures will be required to determine if proven and probable mineral reserves exist at any of our properties, to develop metallurgical processes to extract metal, to develop the mining and processing facilities and infrastructure at any of our properties or mine sites and, in certain circumstances, to acquire additional property rights. We have spent and will be required to continue to expend significant amounts of capital for drilling, geological and geochemical analysis, assaying, and, when warranted, feasibility studies with regard to the results of our exploration. We may not benefit from these investments if we are unable to identify commercially exploitable mineral reserves. If we decide to put one or more of our properties into production, we will require significant amounts of capital to develop and construct the mining and processing facilities and infrastructure required for mining operations. Our ability to obtain necessary funding for these purposes, in turn, depends upon a number of factors, including the status of the national and worldwide economy and the price of gold, silver and other precious metals. We may not be successful in obtaining the required financing, or if we can obtain such financing, such financing may not be on terms that are favorable to us. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration or development and the possible, partial or total loss of our potential interest in certain properties. Any such delay could have a material adverse effect on our results of operations or financial condition.

We cannot be assured that any of our projects are economically feasible or that feasibility studies will accurately forecast operating results.

Our future profitability depends on the economic feasibility of our projects. We have completed a feasibility study on our Grassy Mountain Project. There can be no assurance that the results of any feasibility study for the Sleeper Gold Project will be positive. Economic feasibility depends on many factors which include estimates on production rates, revenues, operating and capital costs. Completed feasibility studies for any of our projects and obtain financing to construct and initiate mining operations, there can be no assurance that actual operating results will not vary unfavorably from the estimates and assumptions included in a feasibility study.

We may acquire additional exploration stage properties, and we may face negative reactions if reserves are not located on acquired properties.

We may acquire additional exploration stage properties. There can be no assurance that we will be able to identify and complete the acquisition of such properties at reasonable prices or on favorable terms or that reserves will be identified on any properties that we acquire. We may also experience negative reactions from the financial markets if we are unable to successfully complete acquisitions of additional properties or if reserves are not located on acquired properties. These factors may adversely affect the trading price of our common stock or our financial condition or results of operations.

Our industry is highly competitive, attractive mineral lands are scarce, and we may not be able to obtain quality properties.

We compete with many companies in the mining industry, including large, established mining companies with substantial capabilities, personnel and financial resources. There is a limited supply of desirable mineral lands available for claim staking, lease or acquisition in the United States of America where we may conduct exploration activities. We may be at a competitive disadvantage in acquiring mineral properties because we compete with these individuals and companies, many of which have greater financial resources and larger technical staffs.

Title to mineral properties can be uncertain, and we are at risk of loss of ownership of one or more of our properties. Our ability to explore and operate our properties depends on the validity of our title to that property. A significant amount of our mineral properties consist of leases of unpatented mining claims. Unpatented mining claims provide only possessory title and their validity is often subject to contest by third parties or the federal government, which makes the validity of unpatented mining claims uncertain and generally more risky. These uncertainties 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. Since a substantial portion of all mineral exploration, development and mining in the United States now occurs on unpatented mining claims, this uncertainty is inherent in the mining industry. We have not obtained title opinions covering our entire properties, with the attendant risk that title to some claims, particularly title to undeveloped property, may be defective. There may be valid challenges to the title to our property which, if successful, could impair development and/or operations.

We have no mining operations and no history as a mining company.

We are a development stage company and have no ongoing mining operations of any kind. We have interests in mining claims which may or may not lead to production.

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We have no history of earnings or cash flow from mining operations. If we are able to proceed to production, commercial viability will be affected by factors that are beyond our control such as the particular attributes of the deposit, the fluctuation in metal prices, the cost of constructing and the operation of a mine, prices and refining facilities, the availability of economic sources for energy, government regulations including regulations relating to prices, royalties, restrictions on production, quotas on exploration of minerals, as well as the costs of protection of the environment.

If our exploration and development costs are higher than anticipated, then our profitability will be adversely affected.

We are currently proceeding with plans to explore and develop our mineral properties on the basis of estimated costs. If our exploration and development costs are greater than anticipated, then we will have fewer capital resources for other expenses and losses could increase. Factors that could cause exploration and development costs to increase include adverse weather conditions, difficult terrain, increased government regulation and shortages of qualified personnel.

Assuming no adverse developments outside of the ordinary course of business, our exploration and development budget will be approximately up to $4.0 million for the next twelve months. Exploration will be funded by our available cash reserves and future issuances of common stock, warrants or units. Our exploration program may vary significantly from what we have budgeted depending upon the results we achieve. Even if we identify mineral reserves which have the potential to be commercially developed, we will not generate revenues until such time as we undertake mining operations. Mining operations will involve a significant capital infusion. Mining costs are speculative and dependent on a number of factors including mining depth, terrain and necessary equipment. We do not believe that we will have sufficient funds to implement mining operations without additional capital raises of debt and or equity or without a joint venture partner, of which there can be no assurance.

Our continuing reclamation obligations at our properties could require significant additional expenditures.

We are responsible for the reclamation obligations related to disturbances located on all of our properties. We have posted a bond in the amount of the estimated reclamation obligation at the Sleeper Gold Project and the Grassy Mountain Project. At the Sleeper Gold Project, we are required to submit a mine closure plan to the BLM every three years. Based on a review by the BLM of our mine closure plan that Paramount submitted in July 2020, the BLM determined that our existing bond was sufficient. There is a risk that any cash bond, even if increased based on the analysis and work performed to update the reclamation obligations, could be inadequate to cover the actual costs of reclamation when carried out. The satisfaction of bonding requirements and continuing reclamation obligations will require a significant amount of capital. There is a risk that we will be unable to fund these additional bonding requirements, and further, that the regulatory authorities may increase reclamation and bonding requirements to such a degree that it would not be commercially reasonable to continue exploration activities, which may adversely affect our results of operations, financial performance and cash flows.

There may be insufficient mineral reserves to develop any of our properties, and our estimates may be inaccurate.

There is no certainty that any expenditures made in the exploration of any properties will result in discoveries of commercially recoverable quantities of ore. Most exploration projects do not result in the discovery of commercially mineable deposits of ore and no assurance can be given that any particular level of recovery of precious metals from discovered mineralization will in fact be realized or that any identified mineral deposit will ever qualify as a commercially mineable ore body which can be legally and economically exploited. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. There can be no assurance that precious metals recovered in small scale laboratory tests will be duplicated in large scale tests under on-site production conditions. Material changes in estimated reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.

We face fluctuating gold and mineral prices.

The value of any mineral reserves we develop, and consequently the value of our common stock, depends significantly on the value of such minerals. The price of gold and silver as well as other precious and base metals have experienced volatile and significant price movements over short periods of time and are affected by numerous factors beyond our control, including international economic and political trends, expectations of inflation, interest rates, global or regional consumption patterns, speculative activities and increases in production due to improved mining and production methods. The supply of and demand for gold and silver, as well as other precious and base metals, are affected by various factors, including political events, economic conditions and production costs in major mineral producing regions.

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Our estimates of mineral reserves and mineral resources are subject to uncertainty.

Estimates of mineral reserves and other mineral resources are subject to considerable uncertainty. Such estimates are arrived at using standard acceptable geological techniques and are based on the interpretations of geological data obtained from drill holes and other sampling techniques. Engineers use feasibility studies to derive estimates of cash operating costs based on anticipated tonnage and grades of ore to be mined and processed, the predicted configuration of the ore bodies, expected recovery rates of metal from ore, comparable facility and operating costs and other factors. Actual cash operating costs and economic returns on projects may differ significantly from the original estimates, primarily due to fluctuations in the current prices of metal commodities extracted from the deposits, changes in fuel costs, labor rates, changes in permit requirements, and unforeseen variations in the characteristics of the ore body. Due to the presence of these factors, there is no assurance that any geological reports will accurately reflect actual quantities of gold, silver or other metals that can be economically processed and mined by us.

If we are unable to obtain all of our required governmental permits, our operations could be negatively impacted.

Our future operations, including exploration and development activities, required permits from various governmental authorities. Such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to acquire all required licenses or permits or to maintain continued operations at our properties.

There is no assurance that there will not be title or boundary disputes.

Although we have investigated the right to explore and exploit our properties and obtained records from government offices with respect to all of the mineral claims comprising our properties, this should not be construed as a guarantee of title. Other parties may dispute the title to any of our properties or any property may be subject to prior unregistered agreements and transfers or land claims by aboriginal, native, or indigenous peoples. The title may be affected by undetected encumbrances or defects or governmental actions.

Local infrastructure may impact our exploration activities and results of operations.

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power and water supplies are important determinants that affect capital and operating costs. Unusual or infrequent weather phenomena, sabotage or government or other interference in the maintenance or provision of such infrastructure could adversely affect our activities and profitability.

Because of the speculative nature of exploration for gold and silver properties, there is substantial risk that our business will fail.

The search for precious metals as a business is extremely risky. We cannot provide any assurances that the gold or silver mining interests that we acquired will contain commercially exploitable reserves of gold or silver. Exploration for minerals is a speculative venture necessarily involving substantial risk. Any expenditure that we make may not result in the discovery of commercially exploitable reserves of precious metals.

We are in competition with companies that are larger, more established and better capitalized than we are.

Many of our potential competitors have greater financial and technical resources, as well as longer operating histories and greater experience in mining.

Exploration for economic deposits of minerals is speculative.

The business of mineral exploration is very speculative, since there is generally no way to recover any of the funds expended on exploration unless the existence of mineable reserves can be established. We can exploit those reserves by either commencing mining operations, selling or leasing our interest in the property or entering into a joint venture with a larger resource company that can further develop the property to the production stage. Unless we can establish and exploit reserves before our sources of funds are exhausted, we will have to discontinue operations, which could make our stock valueless.

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The loss of key members of our senior management team could adversely affect the execution of our business strategy and our financial results.

We believe that the successful execution of our business strategy and our ability to move beyond the exploratory stages depends on the continued employment of key members of our senior management team. If any members of our senior management team become unable or unwilling to continue in their present positions, our financial results and our business could be materially adversely affected.

We operate in a regulated industry and changes in regulations or violations of regulations may result in increased costs or sanctions that could reduce our revenues.

Our organization is subject to extensive and complex federal and state laws and regulations. If we fail to comply with the laws and regulations that are directly applicable to our business, we could suffer civil and/or criminal penalties or be subject to injunctions or cease and desist orders. While we believe that we are currently compliant with applicable rules and regulations, if there are changes in the future, there can be no assurance that we will be able to comply in the future, or that future compliance will not significantly adversely impact our operations.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our common stock.

Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully as a public company. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. We cannot be certain that our efforts to develop and maintain our internal controls will be successful, that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of the Sarbanes-Oxley Act of 2002. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm our operating results or cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

We are dependent upon information technology systems, which are subject to cybersecurity incidents, disruption, damage, failure and other risks associated with implementation and integration.

Our information technology systems used in our operations are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber attacks, natural disasters and defects in design. Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data or machines and equipment, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information, the corruption of data or the disabling, misuse or malfunction of machines and equipment. Various measures have been implemented to manage our risks related to information technology systems and network disruptions. However, given the unpredictability of the timing, nature and scope of information or operational technology disruptions, we could potentially be subject to production downtime, operational delays, operating accidents, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on cash flows, financial condition or results of operations.

We could also be adversely affected by system or network disruptions if new or upgraded information technology systems are defective, not installed properly or not properly integrated into operations. Various measures have been implemented to manage the risks related to the system implementation and modification, but system modification failures could have a material adverse effect on our business, financial position and results of operations.

RISKS RELATED TO OUR COMMON STOCK AND INDEBTEDNESS

Our stock price may be volatile.

The market price of our common stock has been volatile. We believe investors should expect continued volatility in our stock price. Such volatility may make it difficult or impossible for you to obtain a favorable selling price for our shares.

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We may not have sufficient cash to meet our debt obligation.

As of June 30, 2023, we have $4.3 million in outstanding indebtedness in the form of convertible notes and $1.6 million in the form of a note payable. Our ability to repay the outstanding debt on at maturity will depend on the Company having sufficient cash on hand. We could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We cannot predict whether we would be able to refinance debt, issue equity or debt securities or dispose of assets to raise funds on a timely basis or on satisfactory terms. In a rising interest rate environment, the costs of borrowing additional funds or refinancing outstanding indebtedness would also be expected to increase. We may not be able obtain proceeds in an amount sufficient to meet any debt service obligations when due.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any dividends on our common stock. We intend to retain all of our earnings, if any, for the foreseeable future to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases. Our board of directors retains discretion to change this policy.

The exercise of our outstanding options may depress our stock price.

The exercise of outstanding options and the subsequent sale of the underlying common stock in the public market, or the perception that future sales of these shares could occur, could have the effect of lowering the market price of our common stock below current levels and make it more difficult for us and our stockholders to sell our equity securities in the future.

Sales or the availability for sale of shares of common stock by stockholders could cause the market price of our common stock to decline and could impair our ability to raise capital through an offering of additional equity securities.

 

Item 1B. Unresolved Staff Comments.

Not applicable as a smaller reporting company.

Item 2. Properties.

The following description of the Company’s mining properties is qualified in its entirety by reference to the Technical Report Summary for each of the properties included as exhibits to this Annual Report on Form 10-K (“Report”) and incorporated by reference into this Item 2. The information concerning our mining properties in this Report has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K. Subpart 1300 of Regulation S-K requires us to disclose our mineral resources, in addition to our mineral reserves, as of the end of our most recently completed fiscal year in the aggregate and for each of our individually material mining properties.

You are cautioned that mineral resources do not have demonstrated economic value. Mineral resources are subject to further exploration and development, are subject to additional risks, and no assurance can be made that they will eventually convert to future reserves. Investors are cautioned not to assume that any part of all of the Inferred Resource exists or is economically or legally mineable. See Item 1A, Risk Factors.

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Summary Disclosure

 

None of the Company’s material properties are in the production stage.

As summary overview of each material property is as follows:

Property:	Grassy Mountain
Stage:	Development
Location:	Oregon
Ownership:	100%
Titles and Mining Claims:	3 patented lode claims (62 acres), 455 unpatented lode claims (8,173 acres), 9 mill site claims (45 acres) and totaling approximately 8,280 acres
Key Permit Conditions:	Private and BLM administered land. Plan of Operations and other required State permits in place for exploration.
Mine Type:	Underground
Commodity:	Gold, Silver
Mineralization Styles:	Hot Spring Style, Low Sulfidation Epithermal
Other:	• Certain royalty interests have been granted with respect to the Grassy Mountain Project • A security interest in the Grassy Mountain Project has been granted in favor of the Convertible Note Holders (as defined below)

 

Property:	Sleeper Gold

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Stage:	Exploration
Location:	Nevada
Ownership:	100%
Titles and Mining Claims:	2474 unpatented lode claims (approximately 44,917 acres)
Key Permit Conditions:	BLM administered land. Plan of Operations and other required State permits in place for exploration.
Mine Type:	Open Pit Heap Leach
Commodity:	Gold, Silver
Mineralization Styles:	Low Sulfidation, Vein
Other:	• Certain royalty interests have been granted with respect to the Sleeper Gold Project • A security interest in the Sleeper Gold Project has been granted in favor of the Convertible Note Holders (as defined below)

Summary Gold Mineral Resources as of June 30, 2023(1,2,4,9):

		Measured Mineral Resources												Indicated Mineral Resources												Measured + Indicated Mineral Resources												Inferred Mineral Resources
		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)
United States
Grassy Mountain 3, 5,			21,153				0.017				363				12,902				0.030				392				34,055				0.022				755				1,151				0.037				42
Sleeper 6, 7, 8			5,403				0.016				85				174,535				0.010				1,812				179,938				0.011				1,897				132,176				0.009				1,214
Total			26,556				0.017				448				187,437				0.012				2,204				213,993				0.012				2,652				133,327				0.009				1,256

 

Summary of Silver Mineral Resources as of June 30, 2023(1,2,4,9):

		Measured Mineral Resources												Indicated Mineral Resources												Measured + Indicated Mineral Resources												Inferred Mineral Resources
		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)
United States
Grassy Mountain 3, 5,			21,153				0.072				1,529				12,902				0.115				1,480				34,055				0.088				3,009				1,151				0.109				126
Sleeper 6, 7, 8			5,403				0.105				570				174,535				0.118				20,661				179,938				0.118				21,231				132,176				0.071				9,454
Total			26,556				0.079				2,099				187,437				0.118				22,141				213,993				0.113				24,240				133,327				0.071				9,580

 

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Summary Gold Mineral Reserves as of June 30, 2023(1,2,3,4):

		Proven Mineral Reserves												Probable Mineral Reserves												Total Mineral Reserves
		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)
United States
Grassy Mountain			260				0.18				47				1,652				0.20				333				1,911				0.20				380
Total			260				0.18				47				1,652				0.20				333				1,911				0.20				380

Summary Silver Mineral Reserves as of June 30, 2023(1,2,3,4):

		Proven Mineral Reserves												Probable Mineral Reserves												Total Mineral Reserves
		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)				Tons (000s)				Grade (oz./ton)				Ounces (000s)
United States
Grassy Mountain			260				0.26				68				1,652				0.29				486				1,911				0.29				554
Total			260				0.26				68				1,652				0.29				486				1,911				0.29				554

 

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Individual Properties

GRASSY MOUNTAIN PROPERTY

Overview and Location

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 (43°40'10.8"N 117°21'34.2"W). The property is accessed by vehicle from the town of Vale by a private and BLM maintained dirt road. The project site is situated in the rolling hills of the high desert region of the far western Snake River Plain and consists of 455 unpatented lode claims and 3 patented lode claims all totaling roughly 8,280 acres. The local terrain is gentle to moderate, with elevations ranging from 3,300 to 4,300 feet above mean sea level. The geological setting, hydrothermal alteration, styles of gold-silver mineralization, and close spatial and timing association with silica sinter deposition, indicate that Grassy Mountain is an example of the hot-springs sub type of low-sulfidation, epithermal precious-metals deposits.

Power and Water

To effect mining operations power and water source infrastructure would need to be developed as it does not currently exist.

Property Agreements and Royalty Obligations

The following map illustrates the mining claims subject to royalty payments at the Grassy Mountain Project:

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Sherry and Yates Inc.

Prior to 2018, Calico had an annual lease agreement in place with Sherry & Yates Inc. Under the agreement Calico was required to make annual advance royalty payments at a rate of $100,000 per year. In a mining production scenario, the agreement provided for a production royalty payments based on the price of gold. In February 2018, Paramount exercised its option to reduce the existing Net Smelter Royalty from 6% down to 1.5% and acquired all the rights to the unpatented and patented mining claims subject to the agreement at the Grassy Mountain Project for a total payment of $2.4 million.

Seabridge Gold

Seabridge Gold Inc. (“Seabridge”), a TSX and NYSE listed company, holds a net profits interest (“NPI”) in a mining scenario at Grassy Mountain. The NPI is calculated at a rate of 10% on net profits on certain mining claims. Seabridge also holds an NPI put option in which during the 30-day period immediately following the day that Calico had delivered notice to Seabridge that a positive production decision has been made and construction financing has been secured with respect to the Grassy Mountain Project, Seabridge may cause Calico to purchase the NPI for CDN$10,000,000. If Seabridge exercises the right to cause Calico to purchase the NPI, the Company would likely need to seek additional equity or other financing to fund the purchase, which financing may not be available to the Company on favorable terms or at all.

Other agreements

Cryla LLC ("Cryla") leased 28 unpatented lode mining claims located west of Grassy Mountain to Calico in 2018. Calico is required to make an annual lease payment of $60,000. After June 2020, Calico may elect to acquire the property for $560,000 plus $3/oz of gold reserves, as defined by a pre-feasibility or higher confidence-level study. Cryla is entitled to a 2% NSR if the gold price is ≤US$1,500/oz and a 4% NSR if the gold price >US$1,500/oz. Calico is entitled to reduce the NSR to 1% by paying Cryla $800,000 under any circumstances. No Mineral Resources or Mineral Reserves are estimated on the Cryla claims.

Previous Operators

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Companies and individuals involved in exploration prior to Paramount’s Project interest include prospectors Richard “Dick” Sherry and Eugene “Skip” Yates (1986), Atlas Precious Metals (Atlas) (1986 to 1992), Golden Predator Mines U.S. Inc., Newmont Exploration Ltd (Newmont) (1992-1996), Tombstone Exploration Company Ltd (Tombstone) (1998), Seabridge, and Calico (2000 to 2015). Work completed included reconnaissance, geological mapping, geochemical sampling (soil, float, rock chip), geophysical surveys (airborne magnetic and radiometric, ground-based gravity, gradient array (IP/resistivity) controlled-source audio-frequency magnetotelluric (CSAMT)), core and reverse circulation (RC) drilling, and Mineral Resource estimation. This work defined the Grassy Mountain deposit, on which a feasibility study was completed in 1990 by Atlas assuming a combined heap leach/milling operation and open pit mining methods.

Work Completed by Paramount

Since acquiring its Project interest in 2016, Paramount has conducted an exploration review of the available Project data, helicopter-borne aeromagnetic and radiometric and CSAMT ground geophysical surveys, drilling, Mineral Resource and Mineral Reserve estimation, baseline environmental studies, and mining studies.

In addition to the above exploration programs, Paramount has progressed the Grassy Mountain Project through several stages of the state and federal permitting process. The Project will require county level, state level and federal permits to construct, operate and close a mining operation.

In November 2019, Paramount submitted its Consolidated Permit Application (“CPA”) to DOGAMI to enable the Company to build and operate its proposed, high grade underground gold mine located in Malheur County. The Application was reviewed by the DOGAMI and cooperating agencies for completeness. As part of this process, the permitting agencies provided Paramount with a list of supplemental information and recommendations required to submit a modified CPA. Paramount, the DOGAMI and the permitting agencies continued to work together to discuss the additional information requested, ensuring the submission of a complete modified CPA which will trigger the 225 day maximum permit evaluation process, upon which draft permits are issued.

In February 2020, the Company submitted a revised Plan of Operation (the ”PoO”) to the BLM outlining the Company’s plans to build and operate the proposed Grassy Mountain underground gold mine. The BLM has reviewed the PoO for completeness and has provided the Company with comments to address. The BLM has previously reviewed 19 of the baseline data reports (“BDRs”) and their requests for clarifications have all been addressed. The BLM will register a Notice of Intent (the ”Notice”) in the Federal Register once the application is deemed complete. The Notice initiates the Environmental Impact Statement (“EIS”) process under the National Environmental Policy Act.

In December of 2021, Paramount submitted a modified CPA with the State of Oregon and submitted a modified PoO to the BLM. Both modified applications incorporated additional information required by the regulators and mine design optimizations that were a result of feedback provided in Paramount’s initial application.

 

Technical Report Summary

The following is a brief summary of the proposed mining operation as detailed in the Technical Report Summary (the "Grassy TRS") on the Grassy Mountain Project, Oregon U.S.A. prepared for the Company by QP, Ausenco with an effective date of June 30, 2022. For more information, see Exhibit 96.1.

The Grassy Mountain mine will be an underground operation accessed via one decline and a system of internal ramps. One ventilation raise is included in the design to be used for ventilation and secondary egress. The mechanized cut-and-fill mining method was selected. The mining direction will be underhand. Cemented rock fill (CRF) will be used for backfill. The mechanized cut-and-fill method is highly flexible and can achieve high recovery rates in deposits with complex geometries, as is the case at the Grassy Mountain deposit. The estimated mine life is eight years

The process plant will be designed with conventional processing unit operations frequently used within the gold processing industry. The process plant will treat 750 tons/d and will operate with two shifts per day, 365 days per year, producing gold doré bars. The major equipment within the process plant is specified in accordance with the climate, site conditions, metal grades and metallurgical performance outlined in this report. Any deleterious metals present in the ore such as Mercury will be abated by specialized equipment installed in the process plant and are not expected to impact payability terms. The plant will have average head grades of 0.206 oz/ton Au and 0.293 oz/ton Ag.

The plant feed will be trucked from the underground mine to a modular crushing facility that will include a jaw crusher as the primary stage and a cone crusher for secondary size reduction. The crushed ore will be ground by a ball mill in closed circuit with a hydro-cyclone cluster. The hydro-cyclone overflow with P80 of 150 mesh (106 µm) will flow to a leach–carbon-in-leach (CIL) recovery circuit via a pre-aeration tank. Gold and silver leached in the CIL circuit will be recovered onto activated carbon and eluted in a pressurized Zadra-style elution circuit and then recovered by electrowinning in the gold room. The gold–silver precipitate will be dried in a mercury retort oven and then mixed with fluxes and smelted in a furnace to pour doré bars. Carbon will be re-activated in a carbon regeneration kiln before being returned to the CIL circuit.

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CIL tails will be treated for cyanide destruction prior to pumping to the tailings storage facility (TSF) for disposal. The installed power for the process plant will be 4,445 hp and the power consumption is estimated to be 72 kWh/ton processed. Raw water will be pumped from borehole wells to a raw-water storage tank. Potable water will be sourced from the raw water tank and treated by a potable water treatment plant. Gland water will be supplied from the raw-water tank. Process water will primarily consist of TSF reclaim water. Reagents will include lime, sodium cyanide, sodium hydroxide, copper sulfate, hydrochloric acid and sodium metabisulfite.

A summary of the forecast project economics are as follows:

Area	Item	Units	LOM Total/Avg.
General	Gold price	US$/oz	1,750
	Silver price	US$/oz	22.00
	Mine life	years	7.75
	Total mill feed tons	tons x 1,000	2,070
Production (gold)	Mill head grade Au	oz/ton	0.19
	Mill recovery rate Au	%	92.78%
	Total mill ounces recovered Au	oz x 1,000	361.8
	Total average annual production Au	oz x 1,000	46.6
Production (silver)	Mill head grade Ag	oz/ton	0.28
	Mill recovery rate Ag	%	73.46%
	Total mill ounces recovered Ag	oz x 1,000	424.8
	Total average annual production Ag	oz x 1,000	54.5
Operating Costs	Mining cost	US$/ton milled	67.29
	Processing cost	US$/ton milled	33.92
	G&A cost	US$/ton milled	16.57
	Total operating costs	US$/ton milled	117.78
	Refining cost Au	US$/oz	5.00
	Refining cost Ag	US$/oz	0.50
	*Cash costs net of by-products	US$/oz Au	680.97
	**AISC net of by-products	US$/oz Au	815.09
Capital Costs	Initial capital	US$ M	136.2
	Sustaining capital	US$ M	36.1
	Closure costs	US$ M	12.4
Financials(pre-tax)	Pre-tax NPV, 5%	US$ M	134.9
	Pre-tax IRR	%	24.22%
	Pre-tax Payback	years	3.32
Financials(post-tax)	Post-tax NPV, 5%	US$ M	114.1
	Post-tax IRR	%	22.54%
	Post-tax Payback	years	3.32

Permitting and Current Proposed Development Program

Paramount expects to continue with both state and federal permitting activities for its proposed underground gold mine. With 22 baseline studies approved and accepted by the State of Oregon and the submitted modified CPA, the Company will continue working with the appropriate permitting agencies to ensure a complete permit application. Once the State of Oregon determines that the CPA is complete it will proceed to the drafting permits process which includes issuing an environmental evaluation and socio-economic impact analysis and the drafting of all relevant permits for the project. Under Oregon law the drafting permits process, which includes public notice and public hearing period, must be completed within 225 days. Subsequent to the drafting permit process if draft permits are issued, up to an additional 120 days is provided for further public consultation and the development and distribution of final permits. The costs incurred by the State of Oregon for the drafting permit and final permit processes will be reimbursed by the Company directly through cost recovery invoices received from DOGAMI or by permit fees established by individual permitting agencies. In addition to the state incurred costs, the Company will engage with its permitting and technical advisors and consultants to respond to any further information requests from the State's permitting agencies.

With respect to federal permitting, once the Notice is registered and the EIS had commenced, Paramount will also engage with its permitting and technical advisors to assist in the process. Paramount is required to reimburse the BLM for the cost of the EIS.

As of June 30, 2023, the net book value of the Grassy Mountain Property was approximately $23.2 million.

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Grassy Mountain Property Summary of Mineral Resources at the End of June 30, 2023 and June 2022

Note to Reader: Based on the assessment of the QPs and the Company it was determined that there were no material changes to the Grassy Mountain Property that required an updated Grassy TRS.

Gold (Au)(1,2,3,4,5,6,7)

		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Metallurgical Recovery
Measured mineral resources			21,153				0.017				363				80	%
Indicated mineral resources			12,902				0.030				392				80	%
Measured + Indicated mineral resources			34,055				0.022				755				80	%
Inferred mineral resources			1,151				0.037				42				80	%

Silver (Ag)(1,2,3,4,5,6,7)

		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Metallurgical Recovery
Measured mineral resources			21,153				0.072				1,529				60	%
Indicated mineral resources			12,902				0.115				1,480				60	%
Measured + Indicated mineral resources			34,055				0.088				3,009				60	%
Inferred mineral resources			1,151				0.109				126				60	%

Grassy Mountain Property Summary of Mineral Reserves at the End of June 30, 2023 and 2022

Gold (Au)(1,2,3)

		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Metallurgical Recovery
Proven mineral reserves			260				0.18				47				94.5	%
Probable mineral reserves			1,652				0.20				333				94.5	%
Total mineral reserves			1,912				0.20				380				94.5	%
Total plus mining loss & dilution			2,070				0.19				390				94.5	%

Silver (Ag)(1,2,3)

		Tons (000s)				Grade (oz./ton)				Ounces (000s)				Metallurgical Recovery
Proven mineral reserves			260				0.26				68				73.4	%
Probable mineral reserves			1,652				0.29				486				73.4	%
Total mineral reserves			1,912				0.29				554				73.4	%
Total plus mining loss & dilution			2,070				0.28				578				73.4	%

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Internal Controls – Grassy Mountain Property

Paramount’s internal controls at the Grassy Mountain project are designed to provide reasonable assurance that information and processes utilized in assessing its exploration results, as well as mineral resource and reserve estimation, and are reasonable and in line with industry best practices. These internal controls include quality assurance and quality control (“QA/QC”) programs in the collection and analysis of drill hole assay information based on:

All core and reverse-circulation samples were cataloged and stored in secure and designated areas on Paramount’s warehouse in vale Oregon. Data has been subject to validation, which includes checks on down hole surveys, collar coordinates, geological data, and assay data.

Prior to use in mineral resource or mineral reserve estimation, the selected data to support estimation were compiled from Paramount’s databases into RESPEC’s GeoSequel database and reviewed for improbable entries. Written procedures and guidelines are used to support estimation methods and approaches. Estimations include evaluation of modifying and technical factors. Internal controls and resource estimation procedures are discussed where required in the relevant chapters of the technical report summary.

SLEEPER GOLD PROJECT

Overview and Location

Sleeper is a material exploration property of the Company. The Company has the rights to explore, develop and mine the property through our 100% ownership of unpatented lode mining claims. Sleeper is located 26 miles northwest of Winnemucca, Nevada (41°20'03.1"N 118°03'09.7"W). Automobile and truck access to the property is by Interstate Highway 80 to Winnemucca, north on Highway 95 for 32 miles, west on Highway 140 for 14 miles, and then south for 6 miles on the maintained gravel Sod House Road to the project site. An office building, heavy equipment enclosure and warehousing facility are present on the Sleeper Gold Property. Necessary supplies, equipment and services to carry out full sequence exploration and mining development projects are available in Winnemucca, Reno, and Elko, Nevada.

Mining Claims

The Sleeper Gold mine and its 1,044 unpatented lode mining claims were acquired by PGSC through its acquisition of X-Cal Resources Ltd. in August 2010. Additional mining claims have been staked or acquired which now comprise the Sleeper Gold Project.

The 100% owned mining claims are summarized in the following table, (acreage is approximate):

The Sleeper Gold Project Properties		Claims				Approximate Acres
Sleeper Gold Mine			1,044				16,171
Dunes			394				7,405
Mimi			884				18,243
South Sleeper			152				3,098
Total			2,474				44,917

 

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The following map illustrates the general location of the Sleeper Gold Project and the associated mining claims:

 

 

 

Property Agreements and Royalty Obligations:

The Snyder Syndicate, a private company, holds a one percent (1%) net smelter return royalty on the 1,044 Sleeper Gold mine claims in a mining scenario.

Franco-Nevada U.S. Corporation (“Franco”) holds a two percent (2%) net smelter return royalty on minerals produced from 2,474 mining claims at the Sleeper Gold Project.

Evolving Gold holds a 2% net smelter return royalty on minerals produced from the SSG, SP and SS mining claims.

Dry Lake Placer Association hold a 3% net smelter return royalty on minerals produced from the Dry Creek Placer mining claims.

ICN holds a 0.5% net smelter return royalty on the SS & SP mining claims as well as a 1.5% net smelter return royalty on the Blue mining claims.

The following map illustrates the claims subject to the royalty:

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History of Previous Operations

The Sleeper Gold Project includes a historic open pit mine (the “Sleeper Gold mine”) operated by AMAX Gold Inc. (“Amax”) from 1986 until 1996, which produced 1.66 million ounces of gold and 2.3 million ounces of silver. All processing facilities and equipment related to the mining operations conducted by Amax have been removed from the site.

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Power and Water

As a result of Amax’s mine operation from 1986 to 1996, electrical power is provided to the property by power lines. Water is available from two deep wells located on the property.

Paramount’s Exploration History at Sleeper Gold Project

PGSC conducted its first exploration program at the Sleeper Gold mine in October 2010. It consisted of 19 drill holes totaling 18,065 feet and focused on verifying data on existing models and confirming continuity and strike extension of known mineralized zones. From July 1, 2011 through June 30, 2012, PGSC completed 79 drill holes totaling 21,013 feet and followed that up in the period from July 1, 2012, through June 30, 2013, with 38 drill holes totaling 55,104 feet.

In August 2011, PGSC announced the acquisition of 606 unpatented lode mining claims (the “Dunes Project”) located eleven miles south of the Sleeper Gold mine from ICN Resources Ltd. (“ICN”). In consideration, PGSC issued 400,000 shares of its common stock to ICN.

In July 2012, PGSC announced the staking of 920 new lode mining claims (the “Mimi Project”) adjacent to the west and immediately south, of the Sleeper Gold mine. The Mimi Project totals 18,400 acres.

In 2013, PGSC announced several results of a drilling campaign which was focused in and around the existing resource and pit areas. Assay results extended the mineralization east and south of the existing resource, opened up new depth potential below the existing sleeper pit and intercepted exceptional results in several zones. Additionally, PGSC undertook an extensive database review and as a result, a total of 473 core and RC holes have been re-logged and new cross-sections were generated. Paramount completed a re-interpreted lithological and structural model which will allow us to plan a new drill program and to update our mineralized material estimate model.

In August 2014, PGSC dropped a total of 212 mining claims from the Dunes and Mimi areas of the Sleeper Gold Project. These claims no longer had any geological value to the Company.

In August 2015, we completed an initial geophysical survey which consisted of a helicopter magnetometry study. The survey defined several possible exploration targets which were reviewed by our geological team. Additional surveys on areas covered by overburden will be evaluated for further testing. This testing can include Induced Polarization programs or other indirect methodologies. The Company believes that the resulting data derived from the geophysical program will produce valuable drilling targets. Future drill programs will be designed with the aim identifying new zones of mineralization with an emphasis on areas covered with overburden.

In April 2021, we purchased 152 unpatented lode claims from South Sleeper Resources LLC for a total consideration of $365,441. The claims are located approximately 2 miles south of past producing Sleeper Gold Mine. The purchased claims carry a mineral production royalty based on a Net Smelter Returns (“NSR”) of one percent (1%). The purchased claims are without known mineral reserves.

As of June 30, 2023, the net book value of the Sleeper Gold Property was approximately $28.1 million.

Technical Report Summary

The Company is reporting a mineral resource estimate as prepared by QP, RESPEC Company LLC with an effective date of June 30, 2023. To determine the estimate the following material assumptions and criteria were used:

Item	Value	Unit
Mining Cost	2.40	$/tonne
Heap Leach Processing cost	3.08	$/tonne processed
Bio-oxidation Processing cost	8.52	$/tonne processed
Process rate	30,000	tonnes per day processed
General and Administration cost	0.46	$/tonne processed
Au price	1,800	$/oz
Ag price	22	$/oz
Au recovery	84.6	percent

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Ag recovery	52.3	percent
Royalty	1.5%	NSR

For more information for mineral resource estimate, see Exhibit 96.1 section 11.8, the Technical Report Summary on the Sleeper Gold Project, Nevada, U.S.A. ("Sleeper TRS") prepared for the Company by QP, RESPEC Company LLC with an effective date of June 30, 2023.

Current Proposed Program

In the Sleeper TRS, RESPEC concluded that the Sleeper project is a project of merit and warrants additional work. RESPEC recommends a work program totaling $3.9 million comprised of the following categories:

Category	Estimated Cost	Description
Initial Assessment	$150,000	Updated Initial Assessment ("IA") to assess the preliminary project economics.
Infill RC Drilling Program	$1,000,000	If the IA results are favorable, an infill drill program of approximately 7,600 meters to increase drill density to potentially upgrade inferred resources to measured and indicated resources, collect information regarding geo-technical data, hydrology, metallurgical testing and validate historical RC drilling.
Metallurgy including bio-oxidation test work	$250,000	If the IA results are favorable, a metallurgical test program that would support a pre-feasibility study. A testing program would be used to optimize bio-oxidation feed size and cycle time. Testing should include load/permeability type testing on bio-oxidation residues.
Pre-Feasibility Study	$2,500,000	If the IA results are favorable, a pre-feasibility is recommended. The required elements will be determined based on the results of the IA.
Total	$3,900,000

Geology and Mineralization

The Sleeper Gold Project is situated within the western, apparently older, part of the Northern Nevada Rift geologic province of Miocene age, along the western flank of the Slumbering Hills within Desert Valley. The geological structures that underlie Desert Valley appear to have been down-dropped 3,000 to 3,300 feet along the north-to northeast-trending normal faults along the western edge of the Slumbering Hills.

Four main types of gold mineralization are found within the Sleeper Gold Project deposit and may represent a continuum as the system evolved from a high level, high sulfidation system dominated by intrusion related fluids and volatiles to a low sulfidation meteoric water dominant system. In this setting the paragenetic relationships of the differing mineralization styles are as follows:

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Reclamation

Paramount is responsible for managing the reclamation activities from the previous mine operations at the Sleeper Gold Mine as directed by the BLM and the Nevada State Department of Environmental Protection. Under the filed BLM Plan of Operations (“PoO”) and reclamation permit a surety bond in the amount of $4 million has been posted as financial security to ensure that required reclamation activities are fulfilled. The surety bond for the Sleeper mine reclamation activities has been posted on behalf of the Company by an insurance company and forms a part of the Company’s comprehensive insurance program. The insurance policy, which is in effect until 2033, covers reclamation costs up to an aggregate of $25 million. The Company periodically submits updates to its Reclamation Cost Estimate (“RCE”) to the BLM to account for completed reclamation work or new reclamation requirements. As of September 2020, the Company’s RCE submitted in October 2019 was accepted by the BLM and the posted surety bond was deemed sufficient. The Company expects to file a revised RCE in the second half of calendar 2023 with the BLM. The revised RCE will incorporate the significant reclamation work that has been completed by the Company over the past several years.

In addition to the BLM reclamation requirements, the Company is required to satisfy the State of Nevada’s reclamation requirements under various permits it holds for the Sleeper Gold Project.

Summary of Sleeper Gold Property Mineral Resources at the End of June 30, 2023 and 2022

Gold (Au) (1,2,3,4,5,6,7,8) Silver (Ag) (1,2,3,4,5,6,7,8)

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		Years Ended June 30,
			2023				2022
Summary Mineral Resources Gold
Measured Resources
Total tons (000s)			5,403				—
Grade (oz./ ton)			0.016				—
Ounces (000s)			85				—
Indicated Resources
Total tons (000s)			174,535				—
Grade (oz./ ton)			0.010				—
Ounces (000s)			1,812				—
Measured and Indicated Resources
Total tons (000s)			179,938				—
Grade (oz./ ton)			0.011				—
Ounces (000s)			1,897				—
Inferred Resources
Total tons (000s)			132,176				237,600
Grade (oz./ ton)			0.009				0.0102
Ounces (000s)			1,214				2,417
Summary Mineral Resources Silver
Measured Resources
Total tons (000s)			5,403				—
Grade (oz./ ton)			0.105				—
Ounces (000s)			570				—
Indicated Resources
Total tons (000s)			174,535				—
Grade (oz./ ton)			0.118				—
Ounces (000s)			20,661				—
Measured and Indicated Resources
Total tons (000s)			179,938				—
Grade (oz./ ton)			0.118				—
Ounces (000s)			21,231				—
Inferred Resources
Total tons (000s)			132,176				237,600
Grade (oz./ ton)			0.071				0.1030
Ounces (000s)			9,454				24,458

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Internal Controls - Sleeper Gold Property

Paramount’s internal controls at the Sleeper project are designed to provide reasonable assurance that information and processes utilized in assessing its exploration results, as well as mineral resource and reserve estimation, and are reasonable and in line with industry best practices. These internal controls include quality assurance and quality control (“QA/QC”) programs in the collection and analysis of drill hole assay information based on:

All core and reverse-circulation samples were cataloged and stored in secure and designated areas on Paramount’s property. Data has been subject to validation, which includes checks on down hole surveys, collar coordinates, geological data, and assay data.

Prior to use in mineral resource or mineral reserve estimation, the selected data to support estimation were compiled from Paramount’s databases into RESPEC’s GeoSequel database and reviewed for improbable entries. Written procedures and guidelines are used to support estimation methods and approaches. Estimations include evaluation of modifying and technical factors. Internal controls and resource estimation procedures are discussed where required in the relevant chapters of the technical report summary.

Exploration and Drilling

Paramount’s internal controls protocols for exploration drilling are summarized in Section 8.2 of the technical report summary for the Sleeper property.

Mineral Resource Estimates

The methods and procedures used by RESPEC for the estimation of Paramount’s mineral resources at the Sleeper property are summarized in Section 11 of the Sleeper technical report summary. Mineral resources and mineral reserves are estimates that contain inherent risk and depend upon geologic interpretation and statistical inferences drawn from drilling and sampling analysis, which may prove to be unreliable. In addition, there are risks inherent to the assumptions of gold and silver recoveries and prices used to estimate cut off grades for the pit optimizations that constrain the estimated resources. Sections 11.8 and 11.9 of the Sleeper technical report summary provide information on the assessment of these risks.

Other Non-Material Properties

NEVADA

The Company owns additional mining claims in the State of Nevada that represents its non-material properties. The Mill Creek property which comprises 36 unpatented lode mining claims are located in Lander County. The Company intends to maintain the annual mining claim fees of approximately $7,000 for these claims.

The Mill Creek claims are without known mineral reserves and there is no current exploratory work being performed.

In August 2021, Paramount entered into an agreement with Nevada Select Royalty ("Nevada Select") to purchase 100% interest in the Bald Peak Project located in Mineral County, Nevada. The total consideration of $300,000 is payable to Nevada Select based upon a schedule determined by when Paramount receives a drilling permit from the federal regulators. Nevada Select will retain a 3% NSR and Paramount will have the right to reduce the NSR to 2% for a payment of $1 million.

OREGON

In October 2018, Paramount entered into an agreement with Cryla LLC (“Cryla”) that gives the Company the right to acquire 44 mining claims covering 580 acres located immediately to the west of the proposed Grassy Mountain Project. Paramount will make annual lease payments to Cryla and following year three of the agreement, Paramount has the right to purchase the claims for a cash payment of $560,000. If purchased, Cryla will maintain a production NSR based on the prevailing price of gold. Paramount has the right to reduce the NSR from 2% to 1% for a payment of $800,000.

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In November 2018, Paramount entered into an agreement with Nevada Select to purchase 100% interest in the Frost Project, which consists of 40 mining claims located approximately 12 miles west of its Grassy Mountain Project. A total consideration of $250,000 payable to Nevada Select will be based on certain events over time. Nevada Select will retain a 2% NSR on the Frost Claims and Paramount has the right to reduce the NSR to 1% for a payment of $1 million.

Item 3. Legal Proceedings.

None

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

Our common stock began trading on the NYSE American LLC under the symbol “PZG” on April 20, 2015. Prior to that time, there was no public market for our stock. The following table sets forth for the indicated periods the high and low intra-day sales prices per share for our common stock on the NYSE American LLC for the two most recent years.

				High					Low
	Year Ended June 30, 2023
First Quarter			$	0.49				$	0.28
Second Quarter			$	0.42				$	0.29
Third Quarter			$	0.43				$	0.29
Fourth Quarter			$	0.42				$	0.24
	Year Ended June 30, 2022
First Quarter			$	1.02				$	0.76
Second Quarter			$	0.91				$	0.65
Third Quarter			$	1.10				$	0.53
Fourth Quarter			$	0.72				$	0.45

HOLDERS

As of September 14, 2023, there were 154 registered shareholders of our common stock.

DIVIDENDS

We currently do not anticipate paying cash dividends for the foreseeable future.

RECENT SALE OF UNREGISTERED SECURITIES AND USE OF PROCEEDS

 

During the year-ended June 30, 2023, we issued 799,613 shares of common stock for payment of interest accrued and owing on our outstanding 2019 Convertible Notes. In issuing the foregoing securities, we relied on the exemptive provisions of Section 4(a)(2) of the Securities Act and Rule 506 thereunder.

EQUITY COMPENSATION PLAN

Set out below is information as of June 30, 2023 with respect to compensation plans (including individual compensation arrangements) under which our equity securities are authorized for issuance under our Equity Incentive Plan.

Equity Compensation Plan Information

Plan Category		Number of securities to be issued upon exercise of outstanding options and RSUs				Weighted- average exercise price per share of outstanding options and RSUs				Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by    security holders			2,385,500			$	1.05				423,000
Equity compensation plans not approved by    security holders			—			$	—				—
TOTAL			2,385,550								423,000

As of June 30, 2023, 980,500 restricted share units ("RSUs") were outstanding and 1,405,000 stock options were outstanding under our Equity Incentive Plans to acquire 2,385,500 Common Shares.

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Item 6. [Reserved].

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We are engaged in the business of acquiring, exploring and developing precious metal projects in the United States of America. Paramount owns both exploration and development stage projects in the states of Nevada and Oregon. We enhance the value of our projects by implementing exploration and engineering programs that are likely to expand and upgrade known mineral resources to mineral reserves. To further advance our projects towards the production decision, we manage the completion of the appropriate technical studies including feasibility studies and undertake permitting processes with the relevant local, state and federal regulators. The following discussion updates our outlook and plan of operations for the foreseeable future. It also analyzes our financial condition and summarizes the results of our operations for the years ended June 30, 2023 and 2022 and compares each year’s results to the results of the prior year.

Operating Highlights:

During the fiscal year-ended June 30, 2023, the Company conducted several exploration programs and continued with its permitting at its Grassy Mountain Project. Highlights include:

Outlook:

We believe that investors will gain a better understanding of our company if they understand how we measure and talk about our results. As an exploration and development company, we recognize the importance of managing our liquidity and capital resources. We pay close attention to non-discretionary cash expenses and look for ways to minimize them when possible. We ensure we have sufficient cash on hand to meet our annual land holding costs as the maintenance of mining claims and leases are essential to preserve the value of our mineral property assets.

Comparison of Operating Results for the year ended June 30, 2023 as compared to June 30, 2022

Results of Operations

We did not earn any revenue from mining operations for the years ended June 30, 2023 and 2022. During the year ended June 30, 2023, we completed various activities and milestones as described above in operating highlights. Other normal course of business activities included filing annual mining claim fees with the BLM, reclamation work at the Sleeper mine site and on-going reviews of its mining claims were completed.

Net Loss

Our net loss for the year ended June 30, 2023 was $6,450,531 compared to a net loss of $7,837,316 in the previous year. The decrease of approximately 18% is fully described below. We will continue to incur losses for the foreseeable future as we continue with our planned exploration and development programs.

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Expenses

Exploration, Development and Reclamation and Land Holding Costs

For the year ended June 30, 2023, exploration and development expenses were $2,595,709 compared to $4,436,266 in the prior year. This represents a decrease of 41% or $1,840,557 which was mainly due to the Company completing several exploration and development activities in 2023 at both its Oregon and Nevada based properties. Expenses related to our exploration or development activities are generally not comparable from period to period as activities will vary based on several factors. At Grassy Mountain the Company continued with permitting activities with state and federal permitting agencies and completed a TRS on the property. These expenses totaled $1,466,402. At Sleeper, the Company has re-assayed historical drill holes, digitized and re-verified its geological database, completed a TRS on the property and redesigned its E-cell pond conversion plans for upcoming reclamation work for expenses totaling $1,129,307.

For the year ended June 30, 2022, at Grassy Mountain, the Company continued with the permitting process with the State of Oregon and the BLM and submitted modified permit applications and at our Frost Property completed a drill program. Total exploration and development expenses at Grassy Mountain and Frost Project during the year that were $2,859,348. At Sleeper, the Company completed a small drill program to test zones of mineralization and at its Bald Peak Project conducted rock surface sampling, completed a geophysical survey and planned for a future exploratory drill program. We also incurred expenses related to the reclamation program at the Sleeper Project. These reclamation expenses are reimbursed from an insurance policy the Company holds related to the closure and reclamation of the past producing Sleeper mine. Total exploration and reclamation expenses at our Nevada based properties during that year were $1,576,918.

For the year ended June 30, 2023, land holding costs decreased by $7,865 or by 1% from the prior year of $640,349 to $632,484. The decrease is primarily due to an decrease in the professional fees incurred to file and maintain the mining claims with the BLM and respective counties.

Salaries and Benefits

For the year ended June 30, 2023, salary and benefits increased by 4% or by $42,593 from the prior year to $1,238,895. Salary and benefits are comprised of cash and stock-based compensation of the Company’s executive and corporate administration teams. The increase primarily reflects higher equity based compensation recorded in the current year compared to the previous comparable year. Included in the salary and benefits expense amount for the year ended June 30, 2023 and 2022 was non-cash stock based compensation of $317,762 and $259,670 respectively.

Directors’ Compensation

For the year ended June 30, 2023, directors’ compensation increased by 26% or by $29,475 from the prior year ended June 30, 2022. The decrease is due to the stock-based compensation recorded in the current year-ended June 30, 2023 compared to the prior year ended June 30, 2022.

Professional Fees and General and Administration

For the year ended June 30, 2023, professional fees were $377,822 compared to $130,765 in the prior year. This represents an increase of 189% or $247,057. The increase was due to several factors including the timing of the recording of the audit fees for the fiscal year ended June 30, 2022 after engaging the Company's new auditor, higher auditor quarterly review expenses and incurring one-time consulting and legal fees in the period. Professional fees included legal, advisory and consultant expenses incurred on corporate and operational activities on a period-by-period basis.

For the year ended June 30, 2023, general and administration expenses decreased by 2% to $774,817 from $790,668 in the prior year. In general, these expenses which include travel, investor relations, office expenses and information technology costs remained stable from the prior year comparable period.

Asset Retirement Obligation

For the year ended June 30, 2023, the Company's asset retirement obligation for the Sleeper Gold Project decreased to $4,436,902 from $4,475,270 from the prior year ended June 30, 2022. The net decrease of $38,368 was the result of settlements of $120,001 plus a downward revision in estimate of $364,612 offset by current year accretion of $446,245. In the prior fiscal year, our estimate was based on proposals received to complete the pond conversions from third party contractors. During the current fiscal year, the company received several new bid proposals to complete the work and the winning bids for the conversions were lower than the previous proposals. The work to complete the ponds are expected to be completed in the second half of calendar year 2023 and the costs are expected to be reimbursed by the insurance policy held by the Company for government mandated reclamation at the Sleeper Gold Project.

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Liquidity and Capital Resources

Operating, Investing and Financing Activities

At June 30, 2023, we had cash and cash equivalents of $824,920 compared to $2,484,156 as at June 30, 2022. In May 2020, the Company established an “at the market” equity offering program (“ATM”) with Cantor Fitzgerald & Co. and Canaccord Genuity LLC to proactively increase financial flexibility. During the fiscal year ended June 30, 2023 the Company issued 6,996,054 shares (2022- 7,766,388 shares) for net proceeds of $2,219,796 (2022 -$6,119,954) under the program.

Subsequent to the year ended June 30, 2023, the Company sold 3,515,257 shares under the program for gross proceeds of $1,130,430. It also entered into an an amendment to its 2019 Convertible Notes with a majority of the note holders, to extend the maturity date of the 2019 Convertible Notes to be the earlier of (i) September 30, 2024 or (ii) the date of funding of the transaction contemplated by that certain non-binding term sheet by an between the Company and Sprott Resource and Streaming Royalty Corp.

In December 2022, the Company issued the Note to Seabridge, an entity affiliated with the Chairman of our Board of Directors, Rudi Fronk, and an owner of approximately 5.5% of our outstanding common stock, pursuant to which the Company may borrow, in one or more advances, the principal amount of up to $1,500,000. The Loan bears interest at a per annum rate of 12%, payable upon maturity or prepayment, and matures on September 30 2023. At the year ended June 30, 2023, the Company had borrowed $1,500,000 from Seabridge. Subsequent to the year ended June 30, 2023, the Company and Seabridge entered into an agreement to extend the maturity date of the Note to Seabridge to November 30, 2023 and increase the applicable annual interest rate to 13%.

The main uses of cash were comprised of the following material amounts:

In addition to cash used in operating activities, the Company used and received cash as follows:

Going Concern

The Consolidated Financial Statements of the Company have been prepared on a “going concern” basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in aggregate, raise substantial doubt about the Company’s ability to continue as a going concern because it is possible that the Company will be required to adversely change its current business plan or man be unable to meet its obligations as they become due within one year after the date that these financial statements were issued.

Paramount expects to continue to incur losses as a result of costs and expenses related to maintaining its properties and general and administrative expenses. Since 2015, the Company has relied on equity financings, debt financings and sale of royalties to fund its operations and the Company expects to rely on these forms of financing to fund operations into the near future. The Company will also continue to identify ways to reduce its cash expenditures.

Paramount’s current business plan requires working capital to fund non-discretionary expenditures for its exploration and development activities on its mineral properties, mineral property holding costs and general and administrative expenses. It also requires approximately $6.0 million in capital to repay the 2019 convertible notes and the note payable to Seabridge which become due in September 2024 and November 2023 respectively.

We anticipate our twelve-month cash expenditures for our fiscal year ending June 30, 2024 to be as follows:

For discretionary exploration and development, subject to available cash on hand and additional share issuances, we are budgeting the following amounts:

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For any interest that accrues and is owing on the outstanding convertible debt, the Company expects to elect to pay the semi-annual interest payment in shares of its Common Stock.

Subsequent to September 25, 2023, the Company expects to fund operations as follows:

Historically, we have been successful in accessing capital through equity and debt financing arrangements or by the sale of royalties on its mineral properties, no assurance can be given that additional financing will be available to it in amounts sufficient to meet its needs, or on terms acceptable to the Company. In the event that we are unable to obtain additional capital or financing, our operations, exploration and development activities will be significantly adversely affected. The continuation of the Company as a going concern is dependent on having sufficient capital to maintain our operations and to repay debt which become due in November 2023 and September 2024. In considering our financing plans, our current working capital position and our ability to reduce operating expenses the Company believes there is substantial doubt about its ability to continue as a going concern twelve months after the date that our financial statements are issued.

Critical Accounting Policies and Estimates

Management considers the following policies to be most critical in understanding the judgments that are involved in preparing the Company’s consolidated financial statements and the uncertainties that could impact the results of operations, financial condition and cash flows. Our financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. Management believes the Company’s critical accounting policies are those related to mineral property acquisition costs, exploration and development cost, derivative accounting and foreign currency translation.

Estimates

The Company prepares its consolidated financial statements and notes in conformity to United States Generally Accepted Accounting Principles (“U.S. GAAP”) and requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, including those related the adequacy of the Company’s reclamation and environmental obligation, and assessment of impairment of mineral properties. Management bases these estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Mineral property acquisition costs

The Company capitalizes the cost of acquiring mineral properties and will amortize these costs over the useful life of a property following the commencement of production or expense these costs if it is determined that the mineral property has no future economic value or the properties are sold or abandoned. Costs include cash consideration and the fair market value of shares issued on the acquisition of mineral properties. Properties acquired under option agreements, whereby payments are made at the sole discretion of the Company, are recorded in the accounts of the specific mineral property at the time the payments are made.

The amounts recorded as mineral properties reflect actual costs incurred to acquire the properties and do not indicate any present or future value of economically recoverable reserves.

Exploration expenses

We record exploration expenses as incurred. When we determine that precious metal resource deposit can be economically and legally extracted or produced based on established proven and probable reserves, further exploration expenses related to such reserves incurred after such a determination will be capitalized. To date, we have not established any proven or probable reserves and will continue to expense exploration costs as incurred.

Asset Retirement Obligation

The fair value of the Company’s asset retirement obligation (“ARO”) is measured by discounting the expected cash flows using a discount factor that reflects the credit-adjusted risk free rate of interest, while taking into account the inflation rate. The Company prepares estimates of the timing and amounts of expected cash flows and ongoing reclamation expenditures are charged against the ARO as incurred to the extent they relate to the ARO. Significant judgments and estimates are made when estimating the fair value of ARO.

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Off-Balance Sheet Arrangements

We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or capital resources.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange Rate Risk

The Company holds cash balances in both U.S. and Canadian dollars. We transact most of our business in U.S. dollars. We do not manage our foreign currency exchange rate risk through the use of financial or derivative instruments, forward contracts or hedging activities.

 

In general, the strengthening of the U.S. dollar will positively impact our expenses transacted in Canadian dollars. Conversely, any weakening of the U.S. dollar will increase our expenses transacted in Canadian dollars. We do not believe that any weakening of the U.S. dollar as compared to the Canadian dollar will have an adverse material effect on our operations.

 

Interest Rate Risk

The Company’s investment policy for its cash and cash equivalents is focused on the preservation of capital and supporting the liquidity requirements of the Company. The Company’s interest earned on its cash balances is impacted on the fluctuations of U.S. interest rates. We do not use interest rate derivative instruments to manage exposure to interest rate changes. We do not believe that interest rate fluctuations will have any material effect on our operations.

 

Item 8. Financial Statements and Supplementary Data.

Our financial statements, accompanying notes and Report of Independent Registered Public Accounting Firm are included in this Annual Report on Form 10-K beginning on page F-1, which are incorporated in this Item 8 by reference.

 

 

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including the Principal Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of such date. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Principal Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under then supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2023. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated 2013 Framework. Based on this assessment, our management concluded that, as of June 30, 2023, our internal control over financial reporting is effective based on those criteria.

Because we are a smaller reporting company, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting for so long as we are a smaller reporting company.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes to our internal control over financial reporting that occurred during the year ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by Items 401, 405, 406, 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be contained in the Company’s 2023 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2023 (the “2023 Proxy Statement”) and is hereby incorporated by reference thereto.

Item 11. Executive Compensation.

The information required by Item 402 and paragraph (e)(4) and (e)(5) of Item 407 of Regulation S-K will be contained in the Company’s 2023 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2023 and is hereby incorporated by reference thereto.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 201(d) and Item 403 of Regulation S-K will be contained in the Company’s 2023 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2023 and is hereby incorporated by reference thereto.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by Item 404 and Item 407(a) of Regulation S-K will be contained in the Company’s 2023 Proxy Statement, to be filed with the SEC 120 days following the end of the Company’s fiscal year ended June 30, 2023 and is hereby incorporated by reference thereto.

Item 14. Principal Accounting Fees and Services.

The information required by Item 9(e) of Schedule 14A will be filed in the Company’s 2023 Proxy Statement, to be filed with the SEC within 120 days following the end of the Company’s fiscal year ended June 30, 2023 and is hereby incorporated by reference thereto. The Company's independent registered public accounting firm is Moss Adams LLP, Denver, CO, PCAOB ID: 659.

 

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PART IV

Item 15. Exhibits, Financial Statement Schedules.

Included in Part II of this report:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of June 30, 2023 and 2022

Consolidated Statements of Operations for the years ended June 30, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended June 30, 2023 and 2022

Consolidated Statements of Stockholders’ Equity for the years ended June 30, 2023 and 2022

Notes to Consolidated Financial Statements

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Exhibit Number		Description
1.1		Controlled Equity OfferingSM Sales Agreement, dated as of May 20, 2020, by and between Paramount Gold Nevada Corp., Cantor Fitzgerald & Co. and Canaccord Genuity LLC (Incorporated herein by reference to Exhibit 1.1 to Current Report on Form 8-K of the Company filed on May 20, 2020)
1.2		Agency Agreement, dated as of June 24, 2020, by and between Paramount Gold Nevada Corp., Canaccord Genuity Corp. and Cantor Fitzgerald Canada Corporation. (Incorporated herein by reference to Exhibit 1.2 to Current Report on Form 8-K of the Company filed on June 25, 2020)
2.1		Form of Separation and Distribution Agreement by and between Paramount Gold and Silver Corp. and the Registrant.1
2.2		Agreement and Plan of Merger among Coeur Mining, Inc., Hollywood Merger Sub, Inc., Paramount Gold and Silver Corp., and the Registrant, Dated as of December 16, 2014.1
2.3		Arrangement Agreement and Plan of Arrangement dated March 14, 2016, among Paramount Gold Nevada Corp. and Calico Resources Corp. (Incorporated herein by reference to Exhibit 2.1 to Current Report on Form 8-K of the Company filed on March 17, 2016)
3.1		Certificate of Amended and Restated Articles of Incorporation.2
3.2		Amended and Restated Bylaws.2
4.1*		Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
4.2		Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on February 9, 2017)
4.3		Form of Warrant (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on June 29, 2018)
4.4		Form of Senior Secured Convertible Note (Incorporated herein by reference to Exhibit 4.1 to Current Report on Form 8-K of the Company filed on September 13, 2019)
10.1		2015 Stock Incentive and Equity Compensation Plan.2
10.2		2016 Stock Incentive and Equity Compensation Plan (Incorporated herein by reference to Exhibit 1 to Definitive Proxy Statement on Schedule 14A of the Company filed on October 28, 2016)
10.3		Form of Stock Subscription Agreement between Coeur Mining, Inc. and the Registrant.3
10.4		Employment Agreement dated October 26, 2015 between Company and Glen Van Treek (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on October 26, 2015)
10.5		Employment Agreement dated October 26, 2015 between Company and Carlo Buffone (Incorporated herein by reference to Exhibit 10.2 to Current Report on Form 8-K of the Company filed on October 26, 2015)
10.6		Amended Employment Agreement Glen Van Treek dated August 10, 2016 (Incorporated herein by reference to exhibit 10.1 to Current Report on Form 8-K of the Company filed on August 12, 2016)
10.7		Amended Employment Agreement Carlo Buffone dated August 10, 2016 (Incorporated herein by reference to exhibit 10.2 to Current Report on Form 8-K of the Company filed on August 12, 2016)
10.8		Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on February 9, 2017)
10.9		Form of Subscription Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on June 29, 2018)
10.10		Form of Security Agreement (Incorporated herein by reference to Exhibit 10.1 to Current Report on Form 8-K of the Company filed on September 13, 2019)
21.1*		List of subsidiaries.
23.1*		Consent of Moss Adams LLP, Independent Registered Public Accounting Firm
23.2*		Consent of Qualified Person for Technical Report Summary for the Grassy Mountain Project - Ausenco Engineering Canada Inc.
23.3*		Consent of Qualified Person for Technical Report Summary for the Grassy Mountain Project - Arrowhead Underground LLC
23.4*		Consent of Qualified Person for Technical Report Summary for the Grassy Mountain Project - Geotechnical Mine Solutions
23.5*		Consent of Qualified Person for Technical Report Summary for the Grassy Mountain Project - RESPEC Company LLC
23.6*		Consent of Qualified Person for Technical Report Summary for the Grassy Mountain Project - SLR International Corporation
23.7*		Consent of Qualified Person for Technical Report Summary for the Grassy Mountain Project - WSP USA Inc.
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
96.1		Technical Report Summary for the Grassy Mountain Project, Oregon, U.S.A. (Incorporated by reference to exhibit 96.1 to the Registrant's Current Report on Form 8-K filed on October 6, 2022 (File. No. 001-36908)
96.2		Technical Report Summary for the Sleeper Gold Project, Nevada, U.S.A. (Incorporated by reference to exhibit 96.1 to the Registrants's Current Report on Form 8-K filed on September 12, 2023 (File No. 001-36908)
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

* Filed herewith.

1 Incorporated by reference to the exhibit filed in the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 filed on February 23, 2015.

2 Incorporated by reference to the exhibit filed in the Registrant’s Form 10-Q filed on May 22, 2015.

3 Incorporated by reference to the exhibit filed in the Registrant’s Amendment No. 3 to Registration Statement on Form S-1 filed on April 2, 2015.

 

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Paramount Gold Nevada Corp.
Date: September 25, 2023		By:	/s/ Rachel Goldman
			Rachel Goldman
			(Director and CEO)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name		Title		Date
/s/ Rachel Goldman		Director and CEO (Principal Executive Officer)		September 25, 2023
Rachel Goldman
/s/ Carlo Buffone		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)		September 25, 2023
Carlo Buffone
/s/ Glen Van Treek		Director, President and Chief Operating Officer		September 25, 2023
Glen Van Treek
/s/ Rudi Fronk		Director		September 25, 2023
Rudi Fronk
/s/ John Carden		Director		September 25, 2023
John Carden
/s/ Eliseo Gonzalez-Urien		Director		September 25, 2023
Eliseo Gonzalez-Urien
/s/ Christopher Reynolds		Director		September 25, 2023
Christopher Reynolds
/s/ Pierre Pelletier		Director		September 25, 2023
Pierre Pelletier
/s/ Samantha Espley		Director		September 25, 2023
Samantha Espley

 

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB Audit ID 659)		F-1
Consolidated Balance Sheets as of June 30, 2023 and 2022		F-2
Consolidated Statements of Operations for the Years ended June 30, 2023 and 2022		F-3
Consolidated Statements of Stockholders’ Equity for the Years ended June 30, 2023 and 2022		F-4
Consolidated Statements of Cash Flows for the Years ended June 30, 2023 and 2022		F-5
Notes to Consolidated Financial Statements		F-6

 

F-1

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of

Paramount Gold Nevada Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Paramount Gold Nevada Corp. and subsidiaries (the “Company”) as of June 30, 2023 and June 30, 2022, the related consolidated statements of operations, stockholders’ equity and cash flows for the year 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 consolidated financial position of the Company as of June 30, 2023 and June 30, 2022, and the consolidated 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.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has not generated revenues or cash flows from operations and does not expect to generate any in the near future, and the Company will require additional capital to settle the promissory note payable and convertible notes that mature in November 2023 and September 2024, respectively, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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 audits 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 to 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 provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the (consolidated) financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Moss Adams LLP

Denver, Colorado

September 25, 2023

We have served as the Company’s auditor since 2022.

 

 

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PARAMOUNT GOLD NEVADA CORP.

Consolidated Balance Sheets

as of June 30, 2023 and 2022

		June 30, 2023				June 30, 2022
Assets
Current Assets
Cash and cash equivalents		$	824,920			$	2,484,156
Prepaid expenses and deposits			1,472,286				1,280,895
Total Current Assets			2,297,206				3,765,051
Non-Current Assets
Mineral properties			51,458,261				51,742,873
Reclamation bonds			546,176				498,276
Property and equipment			4,579				6,513
Total Non-Current Assets			52,009,016				52,247,662
Total Assets		$	54,306,222			$	56,012,713
Liabilities and Stockholders' Equity
Liabilities
Current Liabilities
Accounts payable and accrued liabilities		$	937,219			$	638,256
Reclamation and environmental obligation, current portion			2,560,515				120,000
Convertible debt			3,614,465				—
Convertible debt, related parties			658,363				—
Notes payable, related party			1,579,397				—
Total Current Liabilities			9,349,959				758,256
Non-Current Liabilities
Convertible debt			—				3,570,430
Convertible debt, related parties			—				651,380
Deferred tax liability			240,043				277,627
Reclamation and environmental obligation, non-current portion			1,876,387				4,355,270
Total Non-Current Liabilities			2,116,430				8,854,707
Total Liabilities			11,466,389				9,612,963
Commitments and Contingencies (Note 14)
Stockholders' Equity
Common stock, par value $0.01, 200,000,000 authorized shares, 54,812,248 issued and outstanding at June 30, 2023 and 200,000,000 authorized shares, 46,591,081 issued and outstanding at June 30, 2022			548,124				465,912
Additional paid in capital			116,613,503				113,805,101
Accumulated deficit			(74,321,794	)			(67,871,263	)
Total Stockholders' Equity			42,839,833				46,399,750
Total Liabilities and Stockholders' Equity		$	54,306,222			$	56,012,713

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-2

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PARAMOUNT GOLD NEVADA CORP.

Consolidated Statements of Operations

for the Years ended June 30, 2023 and 2022

		Year Ended June 30,
		2023				2022
Expenses
Exploration			2,595,709				4,436,266
Land holding costs			632,484				640,349
Professional fees			377,822				130,765
Salaries and benefits			1,238,895				1,196,302
Directors' compensation			143,192				113,717
General and administrative			774,817				790,668
Accretion			446,245				183,693
Total Expenses			6,209,164				7,491,760
Net Loss before Other Expense			6,209,164				7,491,760
Other Expense (Income)
Other income			(184,059	)			(330,971	)
Interest and service charges			463,010				398,900
Net Loss before Income Taxes			6,488,115				7,559,689
Income Taxes
Deferred tax expense (benefit)			(37,584	)			277,627
Net Loss		$	6,450,531			$	7,837,316
Loss per Common Share
Basic and diluted		$	0.13			$	0.19
Weighted Average Number of Common
Shares Used in Per Share Calculations
Basic and diluted			48,695,858				42,354,842

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-3

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PARAMOUNT GOLD NEVADA CORP.

Consolidated Statements of Stockholders’ Equity

for the Years ended June 30, 2023 and 2022

		Shares (#)				Common Stock				Additional Paid-In Capital				Deficit				Total Stockholders' Equity
Balance at June 30, 2022			46,591,081			$	465,912			$	113,805,101			$	(67,871,263	)		$	46,399,750
Stock based compensation			425,500				4,255				345,737				—				349,992
Capital issued for financing			6,996,054				69,961				2,149,835				—				2,219,796
Capital issued for payment of interest			799,613				7,996				312,830				—				320,826
Net loss			—				—				—				(6,450,531	)			(6,450,531	)
Balance at June 30, 2023			54,812,248				548,124				116,613,503				(74,321,794	)			42,839,833

 

		Shares (#)				Common Stock				Additional Paid-In Capital				Deficit				Total Stockholders' Equity
Balance at June 30, 2021			38,154,109			$	381,542			$	107,005,135			$	(60,033,947	)		$	47,352,730
Stock based compensation			266,000				2,660				437,667				—				440,327
Capital issued for financing			7,766,388				77,664				6,042,290				—				6,119,954
Capital issued for payment of interest			404,584				4,046				320,009				—				324,055
Net loss			—				—				—				(7,837,316	)			(7,837,316	)
Balance at June 30, 2022			46,591,081				465,912				113,805,101				(67,871,263	)			46,399,750

The accompanying notes are an integral part of these consolidated financial statements.

 

F-4

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PARAMOUNT GOLD NEVADA CORP.

Consolidated Statements of Cash Flows

for the Years ended June 30, 2023 and 2022

		Year Ended June 30,
		2023				2022
Net Loss		$	(6,450,531	)		$	(7,837,316	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation			1,934				2,169
Stock based compensation			349,992				440,327
Amortization of debt issuance costs			51,018				60,308
Interest expense			240,702				325,283
Accretion expense			446,245				183,693
Settlement of asset retirement obligations			(120,001	)			(33,236	)
Change in reclamation bonds accounts			(1,200	)			35,427
Deferred tax expense (benefit)			(37,584	)			277,627
Effect of changes in operating working capital items:
(Increase)/Decrease in prepaid expenses			(191,391	)			(153,499	)
Increase/(Decrease) in accounts payable			458,484				(1,922	)
Cash used in operating activities			(5,252,332	)			(6,701,139	)
Cash flows from investing activities:
Increase of reclamation bond			(46,700	)			—
Purchase of mineral properties			(80,000	)			(45,000	)
Purchase of equipment			—				(2,723	)
Cash used in investing activities			(126,700	)			(47,723	)
Cash flows from financing activities
Capital issued for financing, net of share issuance costs			2,219,796				6,119,954
Proceeds from notes payable, related parties			1,500,000				—
Cash provided by financing activities			3,719,796				6,119,954
Change in cash during period			(1,659,236	)			(628,908	)
Cash at beginning of period			2,484,156				3,113,064
Cash at end of period		$	824,920			$	2,484,156

 

See Note 5 for supplemental cash flow information Paramount Gold Nevada Corp.

 

The accompanying notes are an integral part of these consolidated financial statements.

 

F-5

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PARAMOUNT GOLD NEVADA CORP.

Notes to Consolidated Financial Statements

F-10

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F-14

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F-17

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