Note 5 - Investment in the Peak Gold JV

9 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

           5. Investment in the Peak Gold JV 

The Company initially recorded its investment at the historical book value of the assets contributed to the Peak Gold JV, which was approximately $1.4 million. As of March 31, 2023, the Company has contributed approximately $33.8 million to the Peak Gold JV.  KG Mining acquired 70% of the Peak Gold JV on September 30, 2020 in connection with the Kinross Transactions.  As of March 31, 2023, the Company held a 30.0% membership interest in the Peak Gold JV.

The following table is a roll-forward of the Company’s investment in the Peak Gold JV as of March 31, 2023:

	Investment
	in Peak Gold, LLC
Investment balance at June 30, 2021	$	—
Investment in Peak Gold, LLC		3,706,000
Loss from equity investment in Peak Gold, LLC		(3,706,000	)
Investment balance at June 30, 2022	$	—
Investment in Peak Gold, LLC		14,400,000
Loss from equity investment in Peak Gold, LLC		(14,400,000	)
Investment balance at March 31, 2023	$	—

In conjunction with the CORE Transactions, and KG Mining assuming the role of manager of the Peak Gold JV, the Peak Gold JV converted its method of accounting from US GAAP to International Financial Reporting Standards (“IFRS”).  The condensed unaudited financial statements presented below have been converted from IFRS to US GAAP for presentation purposes.  The following table presents the condensed unaudited results of operations for the Peak Gold JV for the three and nine month periods ended March 31, 2023 and 2022, and for the period from inception through March 31, 2023 in accordance with US GAAP: 

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended		Period from Inception January 8, 2015 to
	March 31, 2023		March 31, 2022		March 31, 2023		March 31, 2022		March 31, 2023
EXPENSES:
Exploration expense	$	645,992	$	1,831,148	$	4,636,985	$	7,180,583	$	63,048,512
General and administrative		34,593		383,659		143,485		1,075,816		12,424,505
Total expenses		680,585		2,214,807		4,780,470		8,256,399		75,473,017
NET LOSS	$	680,585	$	2,214,807	$	4,780,470	$	8,265,399	$	75,473,017

    The Company’s share of the Peak Gold JV’s results of operations for the three and nine months ended March 31, 2023 was a loss of approximately $0.2 million and $1.4 million, respectively.  The Company’s share in the results of operations for the three and nine months ended March 31, 2022 was a loss of approximately $0.7 million and $2.5 million respectively.  The Peak Gold JV loss does not include any provisions related to income taxes as the Peak Gold JV is treated as a partnership for income tax purposes. As of March 31, 2023 and June 30, 2022, the Company’s share of the Peak Gold JV’s inception-to-date cumulative loss of approximately $43.4 million and $42.0 million, respectively, exceeded the historical book value of our investment in the Peak Gold JV, of $33.8 million. Therefore, the investment in the Peak Gold JV had a balance of zero as of each March 31, 2023 and June 30, 2022. The Company is currently obligated to make additional capital contributions to the Peak Gold JV in proportion to its percentage membership interest in the Peak Gold JV in order to maintain its ownership in the Peak Gold JV and not be diluted.  Therefore, the Company only records losses up to the point of its cumulative investment, which was approximately $33.8 million as of March 31, 2023. The portion of the cumulative loss that exceeds the Company’s investment will be suspended and recognized against earnings, if any, from the Company’s investment in the Peak Gold JV in future periods. The suspended losses for the period from inception to March 31, 2023 are approximately $9.6 million.