(10) Mineral Properties / Intangible Assets / Goodwill

Accounting Policy 

Mineral properties are classified as either tangible or intangible assets depending on the nature of the rights acquired: 

The Company capitalizes acquisition costs, including legal and other directly attributable expenses, when control of a mineral interest is obtained.

Exploration and evaluation expenditures are capitalized when they relate to specific mineral properties and management concludes that future economic benefits are probable. Regional or preliminary exploration expenditures not directly attributable to a specific property are expensed as incurred.

Development expenditures are capitalized once technical feasibility and commercial viability are demonstrable.

All mineral properties currently held by the Company are not yet in commercial production. Accordingly, no depletion, depreciation, or amortization has been recorded. Once production begins, tangible mineral property costs will be depreciated using the units-of-production method, and intangible mineral rights will be amortized over the estimated reserve life or evaluated for impairment if not yet placed in service.

Carrying Value and Impairment 

The Company evaluates its mineral properties for impairment indicators in accordance with ASC 360-10, Property, Plant, and Equipment. Assets are written down to fair value if events or changes in circumstances indicate that their carrying amount may not be recoverable. As of the reporting date, no such indicators have been identified.

Standalone mineral leases for which no separate consideration was paid and for which no independently measurable fair value is available are carried at a value of $0. These leases represent enabling legal rights associated with the underlying mineral assets and are evaluated as part of the related asset group for impairment purposes.

Business Combinations and Fair Value Allocation 

Mineral interests acquired in a business combination are recorded at fair value as of the acquisition date in accordance with ASC 805. Fair value is determined using market-participant assumptions and appropriate valuation techniques consistent with ASC 820.

On December 31, 2024, the Company acquired California Precious Metals LLC and Peeples Inc., which together held three mineral properties and previously processed mine tailings. The Peeples acquisition was accounted for as a business combination.

The acquired set included: 

These elements were evaluated collectively in determining the acquisition-date fair value of the identifiable net assets acquired and the appropriate accounting treatment under ASC 805, as described in the Company’s Form 10 and related correspondence with the SEC Staff.

Based on the acquisition-date fair value of the consideration transferred, the Company recorded identifiable net assets of approximately $432,000,000. No goodwill was recognized.

Net Assets Acquired 

 Schedule of Acquisition of Mineral Assets

The table above reflects the acquisition-date fair value assigned to the mineral assets acquired through the business combination under ASC 805. The tailings asset is supported by a substantial body of historical engineering, metallurgical, and technical data.

During the current period, the Company engaged an independent Qualified Person to conduct a multi-phase technical evaluation of the Skull Valley tailings as an initial step toward potential future technical reporting under Regulation S-K Subpart 1300. The Company cannot predict the timing or outcome of this evaluation, and there is no assurance that any mineral resources or reserves will be established under S-K 1300 standards.

As of the reporting date, the properties remain under evaluation, and no indicators of impairment have been identified. No depletion or amortization has been recorded.