Hycroft Mining Holding Corp 10-Q for FY2022 Q1

Hycroft Mining Holding Corp (HYMC)

10-Q 2022-05-04 For: 2022-03-31

Added on April 12, 2026

About this 10-Q

Hycroft Mining Holding Corp filed this 10-Q on May 4, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $9.17M; down 51.8% from $19.04M a year earlier
Net loss: $22.06M; compared with a net loss of $9.69M a year earlier
Diluted EPS: -$0.27; compared with -$0.16 a year earlier

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			Page
PART	ITEM
I	1	Financial Statements	2
	2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
	3	Quantitative and Qualitative Disclosures about Market Risk	44
	4	Controls and Procedures	43

II	1	Legal Proceedings	41
	1A	Risk Factors	44
	2	Unregistered Sales of Equity Securities	44
	3	Defaults Upon Senior Secured Equity	44
	4	Mine Safety Disclosures	44
	5	Other Information	44
	6	Exhibits	45
		Signatures	47


			Page
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Operations			5
Condensed Consolidated Statements of Cash Flows			6
Condensed Consolidated Statements of Stockholders’ Deficit			7
Notes to Condensed Consolidated Financial Statements			8


	March 31, 2022		December 31, 2021
	(unaudited)
Assets:
Cash	$	172,778	$	12,342
Income tax receivable	1,530		1,530
Inventories - Note 3	11,134		11,069
Ore on leach pads - Note 3	3,680		10,106
Prepaids and other, net - Note 4	1,182		2,342
Current assets	190,304		37,389
Plant and equipment, net - Note 5	57,849		58,484
Restricted cash - Note 6	34,293		34,293
Other assets - Note 4	600		600
Assets held for sale - Note 7	10,308		11,558
Total assets	$	293,354	$	142,324
Liabilities:
Accounts payable and accrued expenses	$	7,348	$	9,430
Debt, net - Note 9	2,326		16,666
Deferred gain on sale of royalty - Note 10	—		125
Other liabilities - Note 8	5,592		5,044
Current liabilities	15,266		31,265
Debt, net - Notes 9 and 19	137,377		143,638
Deferred gain on sale of royalty - Note 10	29,839		29,714
Warrant liabilities - Notes 11 and 19	5,990		669
Asset retirement obligation - Note 12	5,295		5,193
Other liabilities - Note 8	301		339
Total liabilities	$	194,068	$	210,818
Commitments and contingencies - Note 21
Stockholders' equity (deficit):
Common stock, $0.0001 par value; 400,000,000 shares authorized; 196,803,459 issued and outstanding at March 31, 2022; and 60,433,395 issued and outstanding at December 31, 2021	$	20	$	6
Additional paid-in capital	730,649		540,823
Accumulated deficit	(631,383)		(609,323)
Total stockholders' equity (deficit)	99,286		(68,494)
Total liabilities and stockholders' equity (deficit)	$	293,354	$	142,324


	Three Months Ended March 31,
	2022		2021
Revenues - Note 14	$	9,166	$	19,036
Cost of sales:
Production costs	9,583		17,817
Depreciation and amortization	920		1,041
Mine site period costs	6,469		10,544
Total cost of sales	16,972		29,402
Operating expenses:
General and administrative	3,072		3,794
Projects, exploration and development	1,038		493
Accretion - Note 12	102		102
Loss from operations	(12,018)		(14,755)
Other (expense) income:
Interest expense, net of capitalized interest - Note 9	(5,346)		(4,449)
Fair value adjustment to warrants - Notes 11 and 19	(5,321)		9,493
Gain on sale of equipment	625		—
Interest income	—		23
Net loss	$	(22,060)	$	(9,688)

Loss per share:
Basic - Note 17	$	(0.27)	$	(0.16)
Diluted - Note 17	$	(0.27)	$	(0.16)
Weighted average shares outstanding:
Basic - Note 17	81,201,453		59,901,306
Diluted - Note 17	81,201,453		59,901,306


	Three Months Ended March 31,
	2022		2021
Cash flows used in operating activities:
Net loss	$	(22,060)	$	(9,688)
Adjustments to reconcile net loss for the period to net cash used in operating activities:
Non-cash portion of interest expense - Note 9	3,835		4,439
Non-cash loss (gain) on fair value adjustment for warrant liabilities - Note 11	5,321		(9,493)
Depreciation and amortization	920		1,568
Stock-based compensation - Note 15	401		538
Accretion - Note 12	102		102
Gain on sale of equipment	(625)		—
Changes in operating assets and liabilities:
Accounts receivable	—		412
Production-related inventories	6,137		(3,970)
Materials and supplies inventories	166		167
Prepaids and other assets	1,161		(1,268)
Accounts payable	(2,848)		1,800
Other liabilities	574		632
Net cash used in operating activities	(6,916)		(14,761)
Cash flows provided by (used in) investing activities:
Additions to plant, equipment, and mine development	(351)		(5,082)
Proceeds for sale of equipment	711		—
Proceeds for assets held for sale	1,250		—
Net cash provided by (used in) investing activities	1,610		(5,082)
Cash flows provided by financing activities:
Principal payments on debt	(24,406)		—
Principal payments on capital leases	(31)		—
Proceeds from issuance of common stock, net of issuance costs	190,179		—
Net cash provided by financing activities	165,742		—
Net increase (decrease) in cash and restricted cash	160,436		(19,843)
Cash and restricted cash, beginning of period	46,635		96,040
Cash and restricted cash, end of period	$	207,071	$	76,197
Reconciliation of cash and restricted cash:
Cash	$	172,778	$	36,497
Restricted cash	34,293		39,700
Total cash and restricted cash	$	207,071	$	76,197


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


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


(State or other jurisdiction of incorporation or organization)


	Common Stock			Additional Paid-in Capital	Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at January 1, 2021	59,901,306	$	6		$	537,370	$	(520,759)	$	16,617
Stock-based compensation costs	—	—			507		—		507
Vesting of restricted stock units	—	—			115		—		115
Net loss	—	—			—		(9,688)		(9,688)
Balance at March 31, 2021	59,901,306	$	6		$	537,992	$	(530,447)	$	7,551


	March 31, 2022			December 31, 2021
	Amount		Gold Ounces	Amount		Gold Ounces
Inventories:
Materials and supplies	$	4,158	—	$	4,376	—
Merrill-Crowe process plant	—		—	11		6
Carbon-in-column	6,028		3,174	3,493		2,044
Finished goods (doré and off-site carbon)	948		695	3,189		1,799
Total	$	11,134	3,869	$	11,069	3,849


	March 31, 2022		December 31, 2021
Prepaids and other, net
Prepaids
Insurance	$	145	$	1,014
Mining claims and permitting fees	378		891
Prepaid taxes	209		—
License fees	202		186
Other	29		56
Deposits	219		195
Total	1,182		2,342

Other assets, non-current
Royalty - advance payment	600		600
Total	$	600	$	600


	Depreciation Life or Method	March 31, 2022		December 31, 2021
Leach pads	Units-of-production	$	17,431	$	17,431
Process equipment	5 - 15 years	17,755		17,735
Buildings and leasehold improvements	10 years	9,280		9,280
Mine equipment	5 - 7 years	6,026		6,224
Vehicles	3 - 5 years	1,454		1,454
Furniture and office equipment	7 years	330		330
Construction in progress and other		35,794		35,794
		$	88,070	$	88,248
Less, accumulated depreciation and amortization		(30,221)		(29,764)
Total		$	57,849	$	58,484


	March 31, 2022		December 31, 2021
Reclamation and other surety bond cash collateral	$	34,293	$	34,293


	March 31, 2022		December 31, 2021
Equipment not in use	$	9,913	$	11,163
Mine equipment	125		125
Materials and supplies	270		270
Total	$	10,308	$	11,558


	March 31, 2022		December 31, 2021
Other liabilities, current
Accrued compensation	$	3,121	$	2,641
Salary continuation payments	617		935
Restricted stock units	687		714
Deferred payroll tax liability	471		471
Excise tax liability	681		268
Accrued directors' fees	15		15
Total	$	5,592	$	5,044

Other liabilities, non-current
Finance lease liability	$	260	$	286
Operating lease liability	41		53
Total	$	301	$	339


(Exact name of registrant as specified in its charter)


(Address of Principal Executive Offices)


(I.R.S. Employer Identification No.)


(Zip Code)


	March 31, 2022		December 31, 2021
Debt, net, current:
Sprott Credit Agreement	$	2,200	$	17,223
Note payable	126		115
Less, debt issuance costs	—		(672)
Total	$	2,326	$	16,666

Debt, net, non-current:
Sprott Credit Agreement, net of original issue discount ($12.2 million, net)	$	43,585	$	51,809
Subordinated Notes	95,940		93,599
Note payable	301		345
Less, debt issuance costs	(2,449)		(2,115)
Total	$	137,377	$	143,638


April 1, 2022 through December 31, 2022	$	1,744
2023	2,327
2024	2,329
2025	1,154
2026	22
2027	146,744
Total	154,320
Less, original issue discount, net of accumulated amortization ($8.2 million)	(12,168)
Less, debt issuance costs, net of accumulated amortization ($2.5 million)	(2,449)
Total debt, net	$	139,703


	Balance at December 31, 2021			Fair Value Adjustments(1)			Balance at March 31, 2022
	Warrants	Amount		Warrants	Amount		Warrants	Amount
Warrant liabilities
5-Year Private Warrants	9,478,830	$	664	—	$	5,308	9,478,830	$	5,972
Seller Warrants	12,721,901	5		—	13		12,721,901	18
Total	22,200,731	$	669	—	$	5,321	22,200,731	$	5,990


	March 31, 2022		December 31, 2021
Balance, beginning of period	$	5,193	$	4,785
Accretion expense	102		408
Balance, end of period	$	5,295	$	5,193


	Balance at December 31, 2021			Warrant Issuances			Balance at March 31, 2022
	Warrants	Amount		Warrants	Amount		Warrants	Amount
Equity classified warrants
5-Year Public Warrants	24,811,068	$	28,912	—	$	—	24,811,068	$	28,912
Public Offering Warrants	9,583,334	12,938		—	—		9,583,334	12,938
Private Placement Offering Warrants	—	—		46,816,480	25,604		46,816,480	25,604
Total	34,394,402	$	41,850	46,816,480	$	25,604	81,210,882	$	67,454


	As of March 15, 2022
Expected term (years)	5
Risk-free interest rate	2.1	%
Expected volatility	118.4	%
Expected dividend yield	—


						Three Months Ended March 31, 2022
Unvested at beginning of year(1)						2,210,911
Impact of fluctuations in share price						(770,806)
Canceled/forfeited						(61,550)
Vested(2)						(226,283)
Unvested end of period(1)						1,152,272


	March 31,
	2022	2021
Warrants	94,259	37,500
Restricted stock units	1,152	149
Total	95,411	37,649


	Three Months Ended March 31,
	Hycroft Mine		Corporate and Other		Total
2022
Revenue - Note 14	$	9,166	$	—	$	9,166
Cost of sales	16,972		—		16,972
Other operating costs	1,140		3,072		4,212
Loss from operations	(8,946)		(3,072)		(12,018)
Interest expense, net of capitalized interest - Note 9	(4)		(5,342)		(5,346)
Fair value adjustment to warrants - Notes 11 and 19	—		(5,321)		(5,321)
Gain on sale of equipment	625		—		625
Loss before income taxes	$	(8,325)	$	(13,735)	$	(22,060)
Income tax benefit	—		—		—
Net loss	$	(8,325)	$	(13,735)	$	(22,060)

Total Assets	$	126,273	167,081		293,354

2021
Revenue - Note 14	$	19,036	$	—	$	19,036
Cost of sales	29,402		—		29,402
Other operating costs	595		3,794		4,389
Loss from operations	(10,961)		(3,794)		(14,755)
Interest expense, net of capitalized interest - Note 9	—		(4,449)		(4,449)
Fair value adjustment to warrants - Notes 11 and 19	—		9,493		9,493

Interest income	23		—		23
Net income (loss)	$	(10,938)	$	1,250	$	(9,688)

Total Assets	$	186,197	$	36,705	$	222,902


	Hierarchy Level	March 31, 2022		December 31, 2021
Warrant liabilities
5-Year Private Warrants	2	5,972		664
Seller Warrants	2	18		5
Total		$	5,990	$	669


	Payments Due by Period
	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years

Operating activities:
Net smelter royalty(1)	$	292,181	$	1,766	$	23,609	$	25,806	$	241,000
Remediation and reclamation expenditures(2)	70,100		—		—		—		70,100
Interest payments(4)	22,665		4,398		13,157		5,110		—
Crofoot royalty(3)	4,630		—		—		—		4,630
Financing activities:
Repayments of debt principal(4)	147,171		126		301		146,744		—
Additional interest payments(5)	7,149		2,200		4,949		—		—
Total	$	543,896	$	8,490	$	42,016	$	177,660	$	315,730


4.1						First Amendment to Warrant Agreement dated as of April 8, 2022 between Hycroft Mining Holding Corporation and American Multi-Cinema, Inc. (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K, filed with the SEC on April 11, 2022)
4.2						First Amendment to Warrant Agreement dated as of April 8, 2022 between Hycroft Mining Holding Corporation and 2176423 Ontario Limited (Incorporated by reference to Exhibit 10.3 to the Registrant's Form 8-K, filed with the SEC on April 11, 2022)
10.1						Second Amended and Restated Credit Agreement, dated as of March 30, 2022, by and between Hycroft Mining Holding Corporation, as borrower, Autar Gold Corporation (f/k/a Muds Holdco Inc.), Hycroft Resources & Development, LLC and Allied VGH LLC, as guarantors, Sprott Private Lending II (Collector), LP, as lender, and Sprott Resource Lending Corp. as arranger (Incorp orated by reference to Exhibit 10.1 to the Registra nt's Form 10-K , filed with the SEC on March 31, 2022).
10.2						Waiver and Amendment, dated January 6, 2022 between Hycroft Mining Holding Corporation and Sprott Private Resource Lending II (Collector), LP (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, filed with the SEC on January 10, 2022).
10.3						Waiver and Amendment, dated February 28, 2022 among Hycroft Mining Holding Corporation, Sprott Private Resource Lending II (Collector), LP and Sprott Private Resource Lending II (Co) Inc. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, filed with the SEC on March 1, 2022).
10.4						Letter Agreement dated March 11, 2022 between Hycroft Mining Holding Corporation and Sprott Private Resource Lending II (Collector), LP (Incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, filed with the SEC on March 15, 2022).
10.5						Subscription Agreement dated March 14, 2022 between Hycroft Mining Holding Corporation and American Multi-Cinema, Inc. (Incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, filed with the SEC on March 15, 2022).
10.6						Subscription Agreement dated March 14, 2022 between Hycroft Mining Holding Corporation and 2176423 Ontario Limited (Incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K, filed with the SEC on March 15, 2022).
10.7						Amendment to the 10% Senior Secured Notes and Note Exchange Agreement dated as of March 14, 2022 among Hycroft Mining Holding Corporation, certain subsidiaries of Hycroft Mining Holding Corporation and holders of the Notes, including certain funds affiliated with, or managed by, Mudrick Capital Management, L.P, Whitebox Advisors, LLC, Highbridge Capital Management, LLC, Aristeia Highbridge Capital Management, LLC and Wolverine Asset Management, LLC and Wilmington Trust, National Association, in its capacity as collateral agent (Incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K, filed with the SEC on March 15, 2022).


10.8						First Amendment to Subscription Agreement dated as of April 8, 2022 between Hycroft Mining Holding Corporation and American Multi-Cinema, Inc. (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K, filed with the SEC on April 11, 2022)
10.9						Letter Agreement, dated May 3, 2022 between Hycroft Mining Holding Corporation and Sprott Private Resource Lending II (Collector), LP.*

Rule 13a-14(a)/15d-14(a) Certifications.
31.1						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended*
31.2						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended*

Section 1350 Certifications.
32.1						Certification of Chief 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 Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

Mine Safety Disclosure Exhibits.
95.1						Mine Safety Disclosures*

Interactive Data File.
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						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


	HYCROFT MINING HOLDING CORPORATION (Registrant)

Date: May 4, 2022	By:	/s/ Diane R. Garrett
		Diane R. Garrett President, Chief Executive Officer, and Director (Principal Executive Officer)

Date: May 4, 2022	By:	/s/ Stanton Rideout
		Stanton Rideout Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)


			SPROTT PRIVATE RESOURCE LENDING II (COLLECTOR), LP 200 Bay Street Suite 2600 Toronto, ON M5J
			May 3, 2022


May 4, 2022			/s/ Diane R. Garrett
			Diane R. Garrett
			President and Chief Executive Officer


May 4, 2022			/s/ Stanton Rideout
			Stanton Rideout
			Executive Vice President and Chief Financial Officer


Mine or Operation1:	Total # of "Significant and Substantial" Violations Under §104(a)2	Total # of Orders Issued Under §104(b)3	Total # of Citations and Orders Issued Under §104(d)4	Total # of Flagrant Violations Under §110(b)(2)5	Total # of Imminent Danger Orders Under §107(a)6	Total Amount of Proposed Assessments from MSHA under the Mine Act7	Total # of Mining-Related Fatalities8	Pending Legal Actions9	Legal Actions Instituted10	Legal Actions Resolved11
Hycroft Mine (MSHA ID# 2601962)	—	—	—	—	—	—	—	—	—	2


1			MSHA assigns an identification number to each mine or operation and may or may not assign separate identification numbers to related facilities. The definition of “mine” under section 3 of the Mine Act includes the mine, as well as other items used in, or to be used in, or resulting from, the work of extracting minerals, such as land, structures, facilities, equipment, machines, tools, and minerals preparation facilities.
2			Represents the total number of citations issued by MSHA under Section 104 of the Mine Act for violations of health or safety standards that could significantly and substantially contribute to a serious injury if left unabated.
3			Represents the total number of orders issued under Section 104(b) of the Mine Act, which represents a failure to abate a citation under Section 104(a) of the Mine Act within the period prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines the violation has been abated.
4			Represents the total number of citations and orders issued by MSHA under Section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards.
5			Represents the total number of flagrant violations identified by MSHA under Section 110(b)(2) of the Mine Act.
6			Represents the total number of imminent danger orders issued under Section 107(a) of the Mine Act.
7			Amount represents the total United States dollar value of proposed assessments received from MSHA during the three months ended March 31, 2022.
8			Represents the total number of mining-related fatalities at mines subject to the Mine Act pursuant to Section 1503(a)(1)(G) of the Financial Reform Act.
9			Represents the total number of legal actions pending as of March 31, 2022 before the Federal Mine Safety and Health Review Commission as required by Section 1503(a) of the Financial Reform Act.
10			Represents the total number of legal actions instituted as of March 31, 2022 before the Federal Mine Safety and Health Review Commission as required by Section 1503(a) of the Financial Reform Act.
11			Represents the total number of legal actions resolved as of March 31, 2022 before the Federal Mine Safety and Health Review Commission as required by Section 1503(a) of the Financial Reform Act.


(a)			a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards under Section 104(e) of the Mine Act; or
(b)			the potential to have such a pattern.