Paramount Gold Nevada Corp. - Quarter Report: 2023 March (Form 10-Q)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Small reporting company

Emerging growth company

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

☐ 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

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, or 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.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of registrant’s Common Stock outstanding, $0.01 par value per share, as of May 10, 2023 was 49,922,401.

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

Table of Contents


		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	2
	Condensed Consolidated Interim Balance Sheets as of March 31, 2023 (Unaudited) and June 30, 2022	2
	Condensed Consolidated Interim Statements of Operations for the Three-Months and Nine-Months Ended March 31, 2023 and March 31, 2022 (Unaudited)	3
	Condensed Consolidated Interim Statements of Stockholders’ Equity for the Nine-Months Ended March 31, 2023 (Unaudited) and Nine-Months Ended March 31, 2022	4
	Condensed Consolidated Interim Statement of Cash Flows for Nine-Months Ended March 31, 2023 and March 31, 2022 (Unaudited)	5
	Notes to Condensed Consolidated Interim Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	21

PART II	OTHER INFORMATION
Item 1A.	Risk Factors	22
Item 4.	Mine Safety Disclosures	22
Item 6.	Exhibits	23

Signatures	Directors, Executive Officers and Corporate Governance	24

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

PARAMOUNT GOLD NEVADA CORP.

Condensed Consolidated Interim Balance Sheets

(Unaudited)



	March 31, 2023			June 30, 2022
Assets
Current Assets
Cash and cash equivalents	$	590,505		$	2,484,156
Prepaid expenses and deposits		590,742			1,280,895
Total Current Assets		1,181,247			3,765,051
Non-Current Assets
Mineral properties		51,822,873			51,742,873
Reclamation bond		499,476			498,276
Property and equipment		5,060			6,513
Total Non-Current Assets		52,327,409			52,247,662
Total Assets	$	53,508,656		$	56,012,713
Liabilities and Stockholders' Equity
Liabilities
Current Liabilities
Accounts payable and accrued liabilities	$	657,324		$	638,256
Reclamation and environmental obligation, current portion		3,120,000			120,000
Convertible debt		3,608,719			—
Convertible debt, related parties		658,363			—
Notes payable, related party		1,034,521			—
Total Current Liabilities		9,078,927			758,256
Non-Current Liabilities
Convertible debt		—			3,570,430
Convertible debt, related parties		—			651,380
Deferred tax liability		277,627			277,627
Reclamation and environmental obligation, non-current portion		1,599,953			4,355,270
Total Non-Current Liabilities		1,877,580			8,854,707
Total Liabilities		10,956,507			9,612,963
Commitments and Contingencies (Note 12)
Stockholders' Equity
Common stock, par value $0.01, 200,000,000 authorized shares, 49,209,951 issued and outstanding at March 31, 2023 and 200,000,000 authorized shares, 46,591,081 issued and outstanding at June 30, 2022		492,101			465,912
Additional paid in capital		114,851,772			113,805,101
Accumulated deficit		(72,791,724	)		(67,871,263	)
Total Stockholders' Equity		42,552,149			46,399,750
Total Liabilities and Stockholders' Equity	$	53,508,656		$	56,012,713

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

PARAMOUNT GOLD NEVADA CORP.

Condensed Consolidated Interim Statements of Operations

(Unaudited)


	Three Months Ended March 31,						Nine Months Ended March 31,
	2023			2022			2023			2022

Expenses
Exploration		597,315			549,368			1,902,312			3,714,035
Land holding costs		157,143			163,011			475,341			477,338
Professional fees		12,919			26,510			281,542			92,523
Salaries and benefits		393,219			412,118			961,512			875,596
Directors' compensation		55,366			54,718			113,940			87,836
General and administrative		242,858			210,238			616,396			606,058
Accretion		111,561			45,969			334,683			137,907
Total Expenses		1,570,381			1,461,932			4,685,726			5,991,293
Net Loss before Other Expense		1,570,381			1,461,932			4,685,726			5,991,293
Other Expense (Income)
Other income		(47,123	)		(210,672	)		(93,406	)		(326,971	)
Interest and service charges		124,502			95,776			328,141			298,882
Net Loss	$	1,647,760		$	1,347,036		$	4,920,461		$	5,963,204

Loss per Common Share
Basic and diluted	$	0.03		$	0.03		$	0.10		$	0.15

Weighted Average Number of Common
Shares Used in Per Share Calculations
Basic and diluted		48,452,177			43,601,579			47,457,781			40,947,916

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

PARAMOUNT GOLD NEVADA CORP.

Condensed Consolidated Interim Statements of Stockholders’ Equity

(Unaudited)


	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		—		—		117,826		—			117,826
Capital issued for payment of interest		341,297		3,413		157,000		—			160,413
Net loss		—		—		—		(1,840,216	)		(1,840,216	)
Balance at September 30, 2022		46,932,378		469,325		114,079,927	$	(69,711,479	)		44,837,773
Stock based compensation		—		—		63,005		—			63,005
Capital issued for financing		455,099		4,551		153,962		—			158,513
Net loss		—		—		—		(1,432,485	)		(1,432,485	)
Balance at December 31, 2022		47,387,477		473,876		114,296,894	$	(71,143,964	)		43,626,806
Stock based compensation		425,500		4,255		93,260		—			97,515
Capital issued for financing		938,658		9,387		305,788		—			315,175
Capital issued for payment of interest		458,316		4,583		155,830		—			160,413
Net loss		—		—		—		(1,647,760	)		(1,647,760	)
Balance at March 31, 2023		49,209,951	$	492,101	$	114,851,772	$	(72,791,724	)	$	42,552,149


	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		—		—		42,671		—			42,671
Capital issued for financing		2,202,352		22,024		1,807,527		—			1,829,551
Capital issued for payment of interest		168,690		1,687		161,955		—			163,642
Net loss		—		—		—		(1,913,745	)		(1,913,745	)
Balance at September 30, 2021		40,525,151		405,253		109,017,288		(61,947,692	)		47,474,849
Stock based compensation		—		—		41,880		—			41,880
Capital issued for financing		98,706		987		67,937		—			68,924
Net loss		—		—		—		(2,702,423	)		(2,702,423	)
Balance at December 31, 2021		40,623,857		406,240		109,127,105		(64,650,115	)		44,883,230
Stock based compensation		266,000		2,660		231,629		—			234,289
Capital issued for financing		5,465,330		54,653		4,261,352		—			4,316,005
Capital issued for payment of interest		235,894		2,359		158,054		—			160,413
Net loss		—		—		—		(1,347,036	)		(1,347,036	)
Balance at March 31, 2022		46,591,081	$	465,912	$	113,778,140	$	(65,997,151	)	$	48,246,901

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

PARAMOUNT GOLD NEVADA CORP.

Condensed Consolidated Interim Statements of Cash Flows

(Unaudited)


	Nine Months Ended March 31,
	2023			2022
Net Loss	$	(4,920,461	)	$	(5,963,204	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		1,453			1,731
Stock based compensation		278,346			318,840
Amortization of debt issuance costs		45,272			45,272
Interest expense		278,706			244,185
Accretion expense		334,683			137,907
Settlement of asset retirement obligations		(90,000	)		(33,236	)
Change in reclamation bonds accounts		(1,200	)		35,427
Effect of changes in operating working capital items:
(Increase)/Decrease in prepaid expenses		690,153			534,378
Increase/(Decrease) in accounts payable		95,709			(158,734	)
Cash used in operating activities		(3,287,339	)		(4,837,434	)
Cash flows from investing activities:
Purchase of mineral properties		(80,000	)		(45,000	)
Purchase of equipment		—			(2,723	)
Cash used in investing activities		(80,000	)		(47,723	)
Cash flows from financing activities
Capital issued for financing, net of share issuance costs		473,688			6,214,480
Proceeds from notes payable, related parties		1,000,000			—
Cash provided by financing activities		1,473,688			6,214,480

Change in cash during period		(1,893,651	)		1,329,323
Cash at beginning of period		2,484,156			3,113,064
Cash at end of period	$	590,505		$	4,442,387

See Note 4 for supplemental cash flow information

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

PARAMOUNT GOLD NEVADA CORP.

Notes to Condensed Consolidated Interim Financial Statements

For the Nine-Months Period Ended March 31, 2023 and 2022

(Unaudited)

Note 1. Description of Business and Summary of Significant Accounting Policies

Paramount Gold Nevada Corp. (the “Company” or “Paramount”), incorporated under Chapter 78 of Nevada Revised Statutes, and its wholly-owned subsidiaries are engaged in the acquisition, exploration and development of precious metal properties. The Company’s wholly owned subsidiaries include New Sleeper Gold LLC, Sleeper Mining Company, LLC, and Calico Resources USA Corp (“Calico”). The Company is in the process of exploring its mineral properties in Nevada and Oregon, United States. The Company’s activities are subject to significant risks and uncertainties, including the risk of failing to secure additional funding to advance its projects and the risks of determining whether these properties contain reserves that are economically recoverable. The Company’s shares of common stock trade on the NYSE American LLC under the symbol “PZG”.

Basis of Presentation and Preparation

The unaudited condensed consolidated interim financial statements are prepared by management in accordance with accounting principles for interim financial information and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures required by U.S. generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. In the opinion of management, all the normal and recurring adjustments necessary to fairly present the interim financial information set forth herein have been included.

The condensed consolidated interim financial statements have been prepared on an accrual basis of accounting, in conformity with U.S. GAAP, are presented in US dollars and follow the same accounting policies and methods of their application as the most recent annual financial statements. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. The condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements and related footnotes for the year ended June 30, 2022.

Significant Accounting Policies

Please see Note 1- Description of Business and Summary of Significant Accounting Policies contained in the 2022 10-K.

Note 2. Going Concern

The Company has not generated any revenues or cash flows from operations to date. As such the Company is subject to all the risks associated with development stage companies. Since inception, the Company has incurred losses and negative cash flows from operating activities which have been funded from the issuance of common stock, convertible notes and the sale of royalties on its mineral properties. The Company does not expect to generate positive cash flows from operating activities in the near future, if at all, until such time it successfully initiates production at its Grassy Mountain Project, including obtaining construction financing, completing the construction of the proposed mine and anticipates incurring operating losses for the foreseeable future.

The Condensed 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 may be unable to meet its obligations as they become due with one year after the date of 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 requires approximately $5.3 million in capital to repay the 2019 convertible notes and the note payable to Seabridge, both of which become due in September 2023. It also requires approximately $3.0 million to complete evaporation pond conversions as part of its reclamation and environmental obligations at its Sleeper Gold Project.

Subsequent to May 12, 2023, the Company expects to fund operations as follows:

•

Existing cash on hand and working capital.

•

The existing at the market ("ATM") program with Cantor Fitzgerald & Co. and Canaccord Genuity LLC.

•

The existing Note facility with Seabridge

•

Insurance proceeds to fund reclamation and environmental obligations at its Sleeper Gold Project

•

Other debt, equity financings or sale of royalties.

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 September 2023. 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.

Note 3. Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization with the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value hierarchy are described below:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 Inputs that are both significant to the fair value measurement and unobservable.

Financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Our financial instruments include cash, accounts payable, accrued liabilities, notes payable and convertible debt. Due to their short maturity of our cash, accounts payable, notes payable and accrued liabilities, we believe that their carrying amounts approximate fair value as of March 31, 2023 and 2022. The carrying amount of convertible debt approximates fair value as the interest rate charged represents a market rate of interest.

Note 4. Non-Cash Transactions

For the nine months ended March 31, 2023, the Company issued 799,613 shares for payment of interest accrued on its outstanding 2019 Convertible Notes with a fair value of $320,826. The Company also issued 425,500 shares of Common stock under its equity compensation plans with a fair value of $142,650.

For the nine months ended March 31, 2022, the Company issued 404,584 shares for payment of interest accrued on its outstanding 2019 Convertible Notes with a fair value of $324,055. The Company also issued 266,000 shares of Common stock under its equity compensation plans with a fair value of $170,240.

Note 5. Capital Stock

Authorized Capital

Authorized capital stock consists of 200,000,000 common shares with par value of $0.01 per common share (June 30, 2022 – 200,000,000 common shares with par value $0.01 per common share).

For the three months ended March 31, 2023, the Company issued 938,658 shares of Common Stock from its ATM program for net proceeds of $315,175 and issued 458,316 shares for payment of interest accrued (Note 6) with a fair value of $160,413. The Company also issued 425,500 shares related to awards made under its equity compensation plans.

For the three months ended March 31, 2022, the Company issued 5,465,330 shares of Common Stock from its ATM program for net proceeds of $4,316,005 and issued 235,894 shares for payment of interest accrued (Note 6) with a fair value of $160,413. The Company also issued 266,000 shares related to awards made under its equity compensation plans.

For the nine months ended March 31, 2023, the Company issued 799,613 shares for payment of interest accrued (Note 6) with a fair value of $320,826 and issued 1,393,667 shares from its ATM program for net proceeds of $473,688. The Company also issued 425,500 shares related to awards made under its equity compensation plans.

For the nine months ended March 31, 2022, the Company issued 404,584 shares for payment of interest accrued (Note 6) with a fair value of $324,055 and issued 7,766,388 shares from its ATM for net proceeds of $6,214,480. The Company also issued 266,000 shares related to awards made under its equity compensation plans.

Stock Options, Restricted Stock Units and Stock Based Compensation

Paramount’s 2015 and 2016 Stock Incentive and Compensation Plans, which are stockholder-approved, permits the grant of stock options, restricted stock units and stock to its employees and directors for up to 3.5 million shares of common stock.

Total stock-based compensation for the three months ended March 31, 2023 and 2022 were $93,260 and $231,629, respectively.

Total stock-based compensation for the nine months ended March 31, 2023 and 2022 were $278,346 and $318,840, respectively.

Stock Options

Stock option awards are generally granted with an exercise price equal to the market price of Paramount’s stock at the date of grant and have contractual lives of 5 years. To better align the interests of its key executives, employees and directors with those of its shareholders a significant portion of those share option awards will vest contingent upon meeting certain stock price appreciation performance goals and other performance conditions. Option and share awards provide for accelerated vesting if there is a change in control (as defined in the Stock Incentive and Compensation Plans).

For the three months ended March 31, 2023, the Company did not grant stock options (2022 – nil).

For the nine months ended March 31, 2023, the Company granted 50,000 stock options (2022 - nil) with an exercise price of $0.60 and a term of 5 years. The stock options vested immediately on the date of grant.

The fair value for options granted for the nine months ended March 31, 2023 was calculated using the Black-Scholes option valuations method. The weighted average assumptions used were as follows:


	Nine Months Ended March 31, 2023			Nine Months Ended March 31, 2022
Weighted average risk-free interest rate		2.79	%	N/A
Weighted-average volatility		58	%	N/A
Expected dividends	0			N/A
Weighted average expected term (years)	5			N/A
Weighted average fair value	$	0.19		N/A

For the three months ended March 31, 2023, share-based compensation expense relating to service condition options and performance condition options was $nil and $2,856, respectively (2022 - $1,405 and $5,462).

For the nine months ended March 31, 2023, share-based compensation expense relating to service condition options and performance condition options was $12,021 and $9,689, respectively (2022 -$49,455 and $41,962).

A summary of stock option activity under the Stock Incentive and Compensation Plans as of March 31, 2023 is presented below:


Options	Options			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at June 30, 2021		1,998,995		$	1.17		3.31	$	—
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited or expired		(190,000	)		1.42		1.48		—
Outstanding at June 30, 2022		1,808,995		$	1.14		2.42	$	—
Granted		50,000			0.60		4.75		—
Exercised		—			—		—		—
Forfeited or expired		(303,995	)		1.40		—		—
Outstanding at March 31, 2023		1,555,000		$	1.08		2.11	$	—
Exercisable at March 31, 2023		1,096,664		$	1.08		2.09	$	—

A summary of the status of Paramount’s non-vested options as at March 31, 2023 is presented below:


Non-vested Options	Options			Weighted- Average Grant- Date Fair Value
Non-vested at June 30, 2021		1,033,998		$	0.55
Granted		—			—
Vested		(288,332	)		0.53
Forfeited or expired		(88,333	)		0.73
Non-vested at June 30, 2022		657,333		$	0.55
Granted		50,000			0.19
Vested		(95,002	)		0.28
Forfeited or expired		(153,995	)		0.74
Non-vested at March 31, 2023		458,336		$	0.47

As of March 31, 2023, there was approximately $10,204 of unamortized stock-based compensation expense related to non-vested stock options outstanding. The expenses are expected to be recognized over a weighted-average period of 1.18 years. The total fair value of stock based compensation that vested related to outstanding stock options during the three months ended March 31, 2023 and 2022, was $16,873 and $nil, respectively.

Restricted Stock Units ("RSUs")

RSUs are awards for service and performance which upon vesting and settlement entitle the recipient to receive one common share of the Company's Common Stock for no additional consideration, for each RSU held.

For the three months ended March 31, 2023 and 2022, the Company granted 630,000 and 701,000 respectively.

For the three months ended March 31, 2023, share-based compensation expenses related to service condition RSUs and performance condition RSUs was $43,896 and $28,262, respectively (2022 - $nil and $nil)

For the nine months ended March 31, 2023, share-based compensation expenses related to service condition RSUs and performance condition RSUs was $117,116 and $116,971, respectively (2022 -$nil and $nil)

A summary of RSUs activity is summarized as follows:


Restricted Share Unit Activity	Outstanding RSUs		Weighted average grant date fair value
Outstanding at June 30, 2021		—	$	—
Granted		701,000		0.65
Vested		—		—
Forfeited		—		—
Outstanding at June 30, 2022		701,000	$	0.65
Granted		630,000		0.30
Vested		350,500		0.65
Forfeited		—		—
Outstanding at March 31, 2023		980,500	$	0.43

As of March 31, 2023, there was approximately $237,002 of unamortized stock-based compensation expense related to outstanding RSUs. The expenses are expected to be recognized over the remaining weighted-average vesting periods of 1.01 years.

Note 6. Convertible Debt


	Debt
	March 31, 2023					June 30, 2022
	Current			Non-Current		Current		Non-Current
2019 Secured Convertible Notes	$	4,277,690			—	$	—	$	4,277,690
Less: unamortized discount and issuance costs		(10,608	)		—		—		(55,880	)
	$	4,267,082		$	—	$	—	$	4,221,810

In September 2019, the Company completed a private offering of 5,478 Senior Secured Convertible Notes (“2019 Convertible Notes”) at $975 per $1,000 face amount due in 2023. Each 2019 Convertible Note will bear an interest rate of 7.5% per annum, payable semi-annually. The effective interest rate of the 2019 Convertible Notes is 8.46%. The principal amount of the 2019 Convertible Notes will be convertible at a price of $1.00 per share of Paramount common stock. Unamortized discount and issuance costs of $275,883 will be amortized as an additional interest expense over the four year term of the 2019 Convertible Notes. For the nine months ended March 31, 2023 and 2022, the Company amortized $45,272 of discount and issuance costs. At any point after the second anniversary of the issuance of the convertible notes, Paramount may force conversion if the share price of its common stock remains above $1.75 for 20 consecutive trading days. The convertible notes are secured by a lien on all assets of the Company and the Company is required to maintain a cash balance of $250,000. At March 31, 2023, excluding the current 2019 Secured Convertible Notes, the cash covenant was met by the Company.

During the three and nine months ended March 31, 2023, there were no conversions of 2019 Convertible Notes to common stock of the Company.

As of March 31, 2023, there were 4,278 (2022 - 4278) notes outstanding of which 660 (2022 - 660) were held by related parties. Related parties consisted of a director of the Company and an affiliated shareholder Seabridge Gold Inc. ("Seabridge").

Note 7. Notes Payable, Related Party

On December 9, 2022, the Company issued a Bridge Promissory Note (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"). The Loan bears interest at a per annum rate of 12%, payable upon maturity or prepayment, and matures on September 30, 2023. The Company has the right to prepay the Loan, in whole or in part, at any time without penalty.

At March 31, 2023, the balance of the loan including accrued interest was $1,034,521.

Note 8. Mineral Properties

The Company has capitalized acquisition costs on mineral properties as follows:


	March 31, 2023		June 30, 2022
Sleeper and other Nevada based Projects	$	28,537,145	$	28,507,145
Grassy Mountain and other Oregon based Projects		23,285,728		23,235,728
	$	51,822,873	$	51,742,873

Sleeper:

Sleeper is located in Humboldt County, Nevada, approximately 26 miles northwest of the town of Winnemucca.

Grassy Mountain:

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.

Other Oregon Based Projects

During the nine month period ended March 31, 2023, the Company made a payment to Nevada Select Royalty Inc. ("Nevada Select") in the amount of $50,000 on the anniversary date of receiving a drill permit for the Frost Project. See Note 12 for a description of the Frost Project.

Other Nevada Based Projects

During the nine month period ended March 31, 2023, the Company made a payment to Nevada Select in the amount of $30,000 after Paramount received a permit to drill the Bald Peak claims from the US Forestry Service. See Note 12 for a description of the Bald Peak claims.

Impairment of Mineral Properties

The Company reviews and evaluates its long-lived assets for impairment on an annual basis or more frequently when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. For the nine months ended March 31, 2023 and 2022, no events or changes in circumstance are believed to have impacted recoverability of the Company’s long-lived assets. Accordingly, it was determined that no interim impairment was necessary.

Note 9. Reclamation and Environmental

Reclamation and environmental costs are based principally on legal requirements. Management estimates costs associated with reclamation of mineral properties and properties under mine closure. On an ongoing basis the Company evaluates its estimates and assumptions; however, actual amounts could differ from those based on estimates and assumptions.

The Company has posted several cash bonds as financial security to satisfy reclamation requirements. The balance of posted cash reclamation bonds at March 31, 2023 is $499,476 (June 30, 2022 - $498,276).

Paramount is responsible for managing the reclamation activities from the previous mine operations at the Sleeper Gold Mine as directed by the Bureau of Land Management ("BLM") and the Nevada State Department of Environmental Protection (“NDEP”). Paramount has estimated the undiscounted reclamation costs for existing disturbances at the Sleeper Gold Project required by the BLM to be $3,639,771. These costs are expected to be incurred between the calendar years 2023 and 2060. Paramount has also estimated undiscounted reclamation cost as required by the NDEP to be $5,280,000. These costs include on-going monitoring and new requests from the NDEP to convert three processing ponds from the historical operations to evaporation cell ponds ("E-Cell") by the 2nd half of calendar year 2023. On-going monitoring costs are expected to be incurred between 2023 and 2039. The sum of expected costs by year are discounted using the Company’s credit adjusted risk free interest rate from the time it expects to pay the retirement to the time it incurs the obligation. The reclamation and environmental costs for the Sleeper Gold Project recorded on the balance sheet are equal to the present value of the estimated reclamation costs as required by both the BLM and NDEP.

The following variables were used in the calculation for the periods ending March 31, 2023 and June 30, 2022:


	Nine Months Ended March 31, 2023			Year Ended June 30, 2022
Weighted-average credit adjusted risk free rate		9.94	%		9.94	%
Weighted-average inflation rate		2.32	%		2.32	%

Changes to the Company’s reclamation and environmental costs for the Sleeper Gold Mine for the nine-month period ended March 31, 2023 and the year ended June 30, 2022 are as follows:


	Nine Months Ended March 31, 2023			Year Ended June 30, 2022
Balance at beginning of period	$	4,475,270		$	1,849,644
Accretion expense		334,683			183,693
Additions and change in estimates		—			2,475,169
Settlements		(90,000	)		(33,236	)
Balance at end of period	$	4,719,953		$	4,475,270

The balance of the reclamation and environmental obligation of $4,719,953 at March 31, 2023 (June 30, 2022 -$4,475,270) is comprised of a current portion of $3,120,000 (June 30, 2022 -$120,000) and a non-current portion of $1,599,953 (June 30, 2022 - $4,355,270). During the period ended March 31, 2023, the Company, reallocated $3,000,000 from the non-current portion of the reclamation and environmental obligation to the current portion to reflect the requirement from NDEP to complete E-Cell conversions within the next twelve months.

The Company recorded an accretion expense for the three and nine-month period ended March 31, 2023 of $111,561 and $334,683, respectively (2022 - $45,969 and $137,907).

Note 10. Other Income

The Company’s other income details for the three and nine-months ended March 31, 2023 and 2022 were as follows:


	Three Months Ended March 31, 2023		Nine Months Ended March 31, 2023		Three Months Ended March 31, 2022		Nine Months Ended March 31, 2022
Re-imbursement of reclamation costs	$	47,123	$	87,431	$	210,672	$	321,113
Leasing of water rights to third party		—		5,975		—		5,858
Total	$	47,123	$	93,406	$	210,672	$	326,971

Note 11. Segmented Information

Segmented information has been compiled based on the material mineral properties in which the Company performs exploration activities.

Expenses and mineral property carrying values by material project for the three and nine months ended March 31, 2023:


	Exploration Expenses				Land Holding Costs
	Three Months Ended March 31, 2023		Nine Months Ended March 31, 2023		Three Months Ended March 31, 2023		Nine Months Ended March 31, 2023		Mineral Properties at March 31, 2023
Sleeper Gold Project and other Nevada based Projects	$	182,626	$	794,402	$	118,765	$	360,206	$	28,537,145
Grassy Mountain Project and other Oregon based Projects		414,689		1,107,910		38,378		115,135		23,285,728
	$	597,315	$	1,902,312	$	157,143	$	475,341	$	51,822,873

Expenses for the three and nine-months ended March 31, 2022 and mineral property carrying values at June 30, 2022 by material project:


	Exploration Expenses				Land Holding Costs
	Three Months Ended March 31, 2022		Nine Months Ended March 31, 2022		Three Months Ended March 31, 2022		Nine Months Ended March 31, 2022		Mineral Properties As at June 30, 2022
Sleeper Gold Project and other Nevada based Projects	$	244,296	$	1,228,241	$	124,633	$	362,081	$	28,507,145
Grassy Mountain Project and other Oregon based Projects		305,072		2,485,794		38,378		115,257		23,235,728
	$	549,368	$	3,714,035	$	163,011	$	477,338	$	51,742,873

Additional operating expenses incurred by the Company are treated as corporate overhead with the exception of accretion expense which is discussed in Note 8.

Note 12. Commitments and Contingencies

Other Commitments

Paramount has an agreement to acquire 44 mining claims (“Cryla Claims”) covering 589 acres located immediately to the west of the proposed Grassy Mountain site from Cryla LLC. Paramount is obligated to make annual lease payments of $60,000 per year until 2033 with an option to purchase the Cryla Claims for $560,000 at any time. The term of the agreement is 25 years and commenced in 2018. In the event Paramount exercises its option to acquire the Cryla Claims, all annual payments shall be credited against a production royalty that will be based on a prevailing price of the metals produced from the Cryla Claims. The royalty rate ranges between 2% and 4% based on the daily price of gold. The agreement with Cryla can be terminated by Paramount at any time. All lease payments under the agreement are up-to-date and no other payments were made during the three and nine month periods ended March 31, 2023. The Cryla Claims are without known mineral reserves and there is no current exploratory work being performed.

Paramount has an agreement with Nevada Select Royalty to purchase 100% of 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. For the three and nine-month periods ended March 31, 2023, the Company made a payment of $50,000 and all required payments under the agreement are up-to-date. The Frost Claims are without known mineral reserves.

The Company has an agreement with Nevada Select to purchase the Bald Peak mining claims in the States of Nevada and California for a total consideration of $300,000. Payments under the agreement will be based on achieving certain events over time. Upon signing the agreement Paramount made a payment to Nevada Select of $20,000. During the nine-month period ended March 31, 2023, a payment was made to Nevada Select for $30,000 after the Company received a drill permit from the US Forestry Service. All payments under the agreement are up to date as of March 31, 2023. The Bald Peak Claims are without known mineral reserves.

Seabridge Gold Inc. ("Seabridge") holds a Net Profit Interest ("NPI") put option in which during the 30-day period immediately following the day that the Company has 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 the Company to purchase the NPI for CDN$10,000,000. If Seabridge exercises the right to cause the Company 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. As of March 31, 2023, Seabridge holds approximately 5.5% of the outstanding common stock of the Company and three members of Paramount's board of directors are either officers or directors of Seabridge.

Note 13. Subsequent Events

Subsequent to the period end, the Company sold 5,536,790 shares under its at the market program for gross proceeds of $1,929,613.

The Company also borrowed $500,000 from Seabridge pursuant to the Note described in Note 7.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements in this Quarterly Report on Form 10-Q (“Form 10-Q”) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give the Company's current expectations and forecasts of future events. All statements other than statements of current or historical fact contained in this quarterly report, including statements regarding the Company's future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “plan,” and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. These statements are based on the Company's current plans, and the Company's actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this quarterly report may turn out to be inaccurate. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q, and in the risk factors on Form 10-K that was filed with the U.S. Securities and Exchange Commission ("SEC") on October 13, 2022. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.

Cautionary Note to U.S. Investors

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 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.

Overview

We are a company engaged in the business of acquiring, exploring and developing precious metal projects in the United States of America. Paramount owns advanced stage exploration projects in the states of Nevada and Oregon. We enhance the value of our projects by implementing exploration and engineering programs that have the goal to expand and upgrade known mineralized material to reserves. 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 three and nine months ended March 31, 2023 and compares these results to the results of the prior year three and nine months ended March 31, 2022.

Operating Highlights:

For the three and nine months ended March 31, 2023, the Company highlights include:

•

The Oregon State Technical Review Team ("TRT") accepted the Cultural Resources final baseline data report ("BDR") as complete. All required BDRs have been accepted as complete by the TRT and is a key condition in deeming the Company's permit application as complete.

•

The Federal Bureau of Land Management ("BLM") has accepted the Plan of Operation ("PoO") for the proposed underground Grassy Mountain gold mine as complete. With completeness, the BLM will issue a Notice of Intent which initiates the Environmental Impact Statement ("EIS") process under the National Environment Policy Act.

•

The Company received the permit from the U.S. Forest Service to drill its Bald Peak Project in Mineral County, Nevada.

•

The Oregon State Technical Review Team accepted and approved both the geo-chemistry and groundwater BDRs. Both BDRs are required to be approved in order for the State of Oregon to determine, along with other application information,

that Company's submitted Consolidated Permit Application (the “CPA”) is complete. As of March 31, 2023, the completeness determination has not been made by the State of Oregon.

•

The TRT approved the Environmental Evaluation ("EE") outline which allows the State of Oregon's contracted consultant to begin its work on EE in advance to the CPA being deemed complete.

•

The Company made progress with the BLM by responding and providing additional information that will allow the Company to submit an updated PoO. Once the PoO is accepted by the BLM and a notice in the Federal Registry is filed, the Environmental Impact Statement process will begin.

•

Completed new technical reports summaries ("TRS") for the Grassy Mountain Property and the Sleeper Gold Property under Item 1300 of Regulation S-K.

Outlook and Plan of Operation:

We believe that investors will gain a better understanding of the Company if they understand how we measure and disclose our results. As a development stage company, we do not generate cash flow from our operations. We recognize the importance of managing our liquidity and capital resources. We pay close attention to all 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.

Having accomplished many of the activities we outlined in our Annual Report on Form 10-K for the year ended June 30, 2022, the Company now expects to undertake the following activities in the next several months:

Grassy Mountain Project:

Paramount expects to continue with both state and federal permitting activities for its proposed underground gold mine. With all 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 the Oregon Department of Geology and Mineral Industries 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 a Notice of Intent is registered and the Environmental Impact Statement has commenced, Paramount will also engage with its permitting and technical advisors to assist in the process.

Sleeper Gold Project:

In completing the Sleeper TRS, the Company undertook a comprehensive review of the project’s database which included over 4,000 drill holes dating back to the early 1980s from the time of the first discovery of mineralization to when the mine was closed in 1996. Given the lack of digitization of the original drill hole database, the Company has, under the direction of QP RESPEC Company LLC, engaged in digitizing and re-verifying the entire Sleeper database.

Once the data verification is complete and a higher confidence level can be applied to the resources and allowing for additional 3D modeling, Paramount will continue to advance the evaluation of Sleeper to update the Sleeper TRS in 2023.

Comparison of Operating Results for the three and nine months ended March 31, 2023 and 2022

We did not earn any revenue from mining operations for the three and nine months ended March 31, 2023 and 2022.

Net Loss

Our net loss for the three-months ended March 31, 2023 was $1,647,760 compared to a net loss of $1,347,036 in the previous three-month period ended March 31, 2022. The drivers of the increase in net loss of 22% are fully described below.

Our net loss for nine months ended March 31, 2023, was $4,920,461 compared to a net loss of $5,963,204 in the previous nine-month period ended March 31, 2022. The drivers of the decrease in net loss of 17% are fully described below.

The Company expects to incur losses for the foreseeable future as we continue with our planned exploration and development programs.

Expenses

Exploration and Land Holding Costs

For the three months ended March 31, 2023 and 2022, exploration expenses were $597,315 and $549,368, respectively. This represents an increase of 9% or $47,947. 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. These expenses totaled $414,689. At Sleeper, the Company continued with the digitizing and reverification of its geological database and redesigned its E-Cell conversion plans for upcoming reclamation work totaling $182,626. In the prior year comparable period, the Company focused its efforts on preparing its modified permit applications for the Grassy Mountain Project, completed a drill program at its Frost property and incurred expenses related to reclamation activities its Sleeper Gold Project.

For the three months ended March 31, 2023 and 2022, land holding costs were $157,143 and $163,011, respectively. The decrease in land holding costs was primarily due to 2022 costs associated with staking additional mining claims with respect to the Bald Peak Project in Nevada.

For the nine months ended March 31, 2023 and 2022, exploration expenses were $1,902,312 and $3,714,035, respectively. This represents a decrease of 49% or $1,811,723. 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 $1,107,910. 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 $794,402. In the prior year comparable period, the Company continued with permitting activities for the Grassy Mountain Project, completed a drill program at the Frost Project and incurred on-going reclamation expenses at its Sleeper Gold Project.

For the nine months ended March 31, 2023 and 2022, land holding costs were $475,341 and $477,338, respectively. The decrease in land holding costs was primarily due to 2022 costs associated with staking additional mining claims with respect to the Bald Peak Project in Nevada.

Salaries and Benefits

For the three-month period ended March 31, 2023 and 2022, salary and benefits were $393,219 and $412,118, respectively. This represents a decrease of 5%. Salary and benefits are comprised of cash and equity based compensation of the Company’s executive and corporate administration teams. The decrease primarily reflects lower equity based compensation that was recorded during the three-month period ended March 31, 2023 compared to the three-month period ended March 31, 2022. Included in the salary and benefits expense amount for the three months ended March 31, 2023 and 2022 was non-cash equity based compensation of $71,597 and $61,690, respectively.

For the nine months ended March 31, 2023 and 2022, salary and benefits were $961,512 and $875,596, respectively. This represents an increase of 10%. The increase is a result of higher equity based compensation that was recorded during the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022. Included in the salary and benefits expense amount for the nine months ended March 31, 2023 and 2022 was non-cash equity based compensation of $237,037 and $146,273, respectively.

Directors’ Compensation

For the three-month period ended March 31, 2023 and 2022, directors’ compensation expenses were $55,366 and $54,718, respectively. This represents an increase of 1%. Directors’ compensation consists of cash and stock-based compensation of the Company’s board of directors. The increase reflects higher equity based compensation recorded in the current quarter compared to the prior year’s comparable period.

For the nine months ended March 31, 2023 and 2022, directors compensation expenses were $113,940 and $87,836, respectively. This represents an increase of 30%. The increase in costs reflects a higher equity based compensation and the addition of a new board member in the current year compared to the prior year's comparable period.

Professional Fees and General and Administration

For the three months ended March 31, 2023 and 2022, professional fees were $12,919 and $26,510, respectively. This represents a decrease of $13,591. The decrease was mainly due to less one-time consulting fees and legal fees incurred in the period. Professional fees include legal, advisory and consultant expenses incurred on corporate and operational activities being performed by the Company on a period-by-period basis.

For the three-month period ended March 31, 2023, general and administration expenses increased by 16% to $242,858 from $210,238 from the three-month period ended March 31, 2022. The increase in general and administration expenses from the previous year’s comparable period was mainly due to higher investor relations expenses.

For the nine months ended March 31, 2023 and 2022, professional fees were $281,542 and $92,523, respectively. This represents an increase of $189,019. The increase was due to the timing of the recording of the audit fees for the fiscal year ended June 30, 2022 after engaging the Company's new auditor in the current period and incurring one-time consulting and legal fees in the period.

For the nine months ended March 31, 2023 and 2022, general and administration expenses were $616,396 and $606,058, respectively. This represents an increase of 2% and was mainly due to higher investor relations expenses.

Liquidity and Capital Resources

As an exploration and development company, Paramount funds its operations, reclamation activities and discretionary exploration programs with its cash on hand. At March 31, 2023, we had cash and cash equivalents of $590,505 compared to $2,484,156 as at June 30, 2022. We had negative working capital of approximately $8.0 million which is primarily attributed to the current 2019 convertible notes, notes payable to Seabridge and our current reclamation and environmental obligation at Sleeper. Our plans to address the negative working capital and improve our liquidity position are described below under Going Concern and Capital Resources.

In May 2020, the Company established an $8.0 million “at the market” equity offering program with Cantor Fitzgerald & Co. and Canaccord Genuity LLC to proactively increase its financial flexibility. During the nine-months ended March 31, 2023, the Company issued 1,393,757 shares under the program for net proceeds of $473,688. Subsequent to the period ended March 31, 2023, the Company sold 5,536,790 shares under the program for gross proceeds of $1,929,613.

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. The Company has the right to prepay the Loan, in whole or in part, at any time without penalty. During the nine-months ended March 31, 2023, the Company borrowed $1,000,000 from Seabridge and subsequent to the period end, borrowed an additional $500,000.

The main uses of cash for the nine months ended March 31, 2023 were:

•

cash used in operating activities of $3,287,339 were mainly used to fund our permitting and exploration activities at our projects, salary and benefits costs of our employees and ongoing general and administration costs.

Going Concern and Capital Resources

The Condensed 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 many be unable to meet its obligations as they become due with one year after the date of that these financial statements were issued.

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 $5.3 million in capital to repay the 2019 convertible notes and the note payable to Seabridge which both become due in September 2023.

We anticipate our twelve-month cash expenditures to be as follows:

•

$3.2 million on corporate, land claim maintenance and general expenses

We anticipate our twelve-month cash discretionary exploration and development, subject to available cash on hand as follows:

•

$3.0 million on the Grassy Mountain Project state and federal permitting activities

•

$0.25 million on the Sleeper Gold Project

•

$3.0 million for E-Cell conversions at the Sleeper Gold Project

The Company anticipates that the costs associated with the proposed reclamation activities, including the E-Cell conversions, as mandated by state and federal regulators at Sleeper, will be covered by its existing insurance program. To avoid the need for upfront working capital and waiting for reimbursement by the insurance program, the Company is in talks with its insurance carrier to pay the contractor directly for completed E-Cell conversion work prior to commencing the project. In case the Company is unable to commence the E-Cell conversions within the set timeline, it may seek an extension from NDEP.

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 May 12, 2023, the Company expects to fund operations as follows:

•

Existing cash on hand and working capital.

•

The existing ATM program with Cantor Fitzgerald & Co. and Canaccord Genuity LLC.

•

The existing Note facility with Seabridge.

•

Other debt, equity financings or sale of royalties.

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 costs, stock-based compensation, asset retirement obligations and foreign currency translation.

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 a 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 expenses as incurred.

Stock Based Compensation

For stock option grants with market conditions that affect vesting, the Company uses a lattice approach incorporating a Monte Carlo simulation to value stock options granted.

Option awards are generally granted with an exercise price equal to the market price of Paramount’s stock at the date of grant and have contractual lives of 5 years. To better align the interests of its key executives, employee and directors with those of its shareholders a significant portion of those share option awards will vest contingent upon meeting certain stock price appreciation performance goals and other performance conditions. Option and share awards provide for accelerated vesting if there is a change in control (as defined in the employee share option plan). For stock option grants made, the Company used the Black-Scholes option valuation model to value stock options granted. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make

estimates which are subjective and may not be representative of actual results. Changes in assumptions can materially affect estimates of fair values.

Use of 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 to long-lived assets and asset retirement obligations. 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.

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 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable as a smaller reporting company.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Because of its inherent limitations, disclosure controls and internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART II – OTHER INFORMATION

Item 1A. Risk Factors.

There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the year ended June 30, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

PART IV

Item 6. Exhibits.

(a)

Index to Exhibits


Exhibit Number		Description
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.
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.
101.INS*		Inline XBRL Instance Document -the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, has been formatted in Inline XBRL.

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Paramount Gold Nevada Corp.

Date: May 12, 2023	By:	/s/ Rachel Goldman
		Rachel Goldman
		Chief Executive Officer

Date: May 12, 2023	By:	/s/ Carlo Buffone
		Carlo Buffone
		Chief Financial Officer