| MINERAL PROPERTY |
4. MINERAL PROPERTY The Company did not incur any acquisition costs in respect of the Livengood Gold Project during the six months ended June 30, 2026: | | | | Mineral property costs | | Amount | Balance, December 31, 2025 | | $ | 55,375,124 | Acquisition costs | | | — | Balance, June 30, 2026 | | $ | 55,375,124 |
The following table presents costs incurred for mineral property activities for the six months ended June 30, 2026 and 2025: | | | | | | | | | June 30, 2026 | | June 30, 2025 | Mineral property costs: | | | | | | | Aircraft | | $ | 12,312 | | $ | 11,400 | Drilling/site preparation | | | 2,167,408 | | | — | Environmental | | | 154,860 | | | 111,385 | Equipment rental | | | 107,855 | | | 11,647 | Field costs | | | 1,496,574 | | | 90,201 | Geological/geophysical | | | 788,834 | | | 3,542 | Land maintenance and tenure | | | 707,086 | | | 690,950 | Legal | | | 150,865 | | | 35,918 | Transportation and travel | | | 23,193 | | | (4,647) | Total expenditures for the period | | $ | 5,608,987 | | $ | 950,396 |
Livengood Gold Project Property The Livengood property is located in the Tintina gold belt approximately 70 miles (113 kilometers) northwest of Fairbanks, Alaska. The property consists of land leased from the Alaska Mental Health Trust, a number of smaller private mineral leases, Alaska state mining claims purchased or located by the Company and patented ground held by the Company. Details of the leases are as follows: | a) | A lease of the Alaska Mental Health Trust mineral rights having a term commencing July 1, 2004 and extending 29 years until June 30, 2033, subject to further extensions beyond June 30, 2033 by either (1) commercial production or (2) payment of an annual advance minimum royalty and diligent pursuit of development. The lease requires minimum work expenditures and advance minimum royalties (all of which minimum royalties are recoverable from production royalties) which escalate annually with inflation. A net smelter return (“NSR”) production royalty of between 2.5% and 5.0% (depending upon the price of gold) is payable to the lessor with respect to the lands subject to this lease. In addition, an NSR production royalty of 1% is payable to the lessor with respect to the unpatented federal mining claims subject to the lease described in b) below and an NSR production royalty of between 0.5% and 1.0% (depending upon the price of gold) is payable to the lessor with respect to the lands acquired by the Company as a result of the purchase of LPI in December 2011. During the six months ended June 30, 2026 and from the inception of this lease, the Company has paid $622,865 and $6,576,303, respectively. |
| b) | A lease of federal unpatented lode mining claims having an initial term of ten years commencing on April 21, 2003 and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $50,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). An NSR production royalty of between 2% and 3% (depending on the price of gold) is payable to the lessors. The Company may purchase 1% of the royalty for $1,000,000. During the six months ended June 30, 2026 and from the inception of this lease, the Company has paid $50,000 and $1,130,000, respectively. |
| c) | A lease of patented lode claims having an initial term of ten years commencing January 18, 2007, and continuing for so long thereafter as minimum royalties are paid. In 2019, the Company acquired a 40% interest in the mining claims subject to the lease, providing the Company with a 40% interest in the lease. The lease requires a minimum royalty of $15,000 payable to the remaining third-party lessors on or before each anniversary date subsequent to January 18, 2017 (all of which minimum royalties are recoverable from production royalties). As of June 30, 2026 and since the inception of the lease, the Company has paid $330,000 in minimum royalties (excluding intercompany transfers) to all third-party lessors, which includes $239,000 in minimum royalties paid from the inception of the lease to those third - party lessors still remaining. A production royalty of 1.8% NSR is payable to the remaining third-party lessors. At any time during the term of the lease, the Company may exercise its option to purchase all interests of the remaining third-party lessors in the patented lode claims subject to the lease (including the production royalty) for $600,000 (less all minimum and production royalties paid to said lessors prior to the date the option is exercised), of which 10% of the purchase price is payable upon exercise, 40% is payable in equal installments over the subsequent four years following the exercise, and 50% is payable by way of the 1.8% NSR production royalty. Upon commencement of commercial production, the option must be exercised. |
| d) | A lease of unpatented federal lode mining and federal unpatented placer claims having an initial term of ten years commencing on March 28, 2007, and continuing for so long thereafter as advance minimum royalties are paid and mining related activities, including exploration, continue on the property or on adjacent properties controlled by the Company. The lease requires an advance minimum royalty of $15,000 on or before each anniversary date for the duration of the lease (all of which minimum royalties are recoverable from production royalties). The Company is required to pay the lessor the additional sum of $250,000 upon making a positive production decision, of which $125,000 is payable within 120 days of the decision and $125,000 is payable within a year of the decision (all of which are recoverable from production royalties). An NSR production royalty of 2% is payable to the lessor. The Company may purchase all of the interest of the lessor in the leased property (including the production royalty) for $1,000,000. The Company paid $15,000 of royalties during the six months ended June 30, 2026, for a total of $263,000 from the inception of this lease. |
Title to mineral properties The acquisition of title to mineral properties is a detailed and time-consuming process. The Company has taken steps to verify title to all mineral properties in which it has an interest. Although the Company has taken reasonable precautions to ensure that legal title to its properties is properly recorded in the name of the Company, there can be no assurance that such title will ultimately be secured.
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