Reclamation and Environmental

3 Months Ended

Sep. 30, 2023

Environmental Remediation Obligations [Abstract]

Reclamation and Environmental

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 September 30, 2023 is $546,176 (June 30, 2023 - $546,176).

Paramount is responsible for managing the reclamation activities from the previous mine operations at the Sleeper Gold Mine as directed by the 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 $3,725,110. These costs are expected to be incurred between the calendar years 2023 and 2060. At September 30, 2023, Paramount has also estimated undiscounted reclamation cost as required by the NDEP to be $4,600,515. 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 by the end of calendar year 2023. These costs are expected to be incurred between calendar years 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 for the reclamation to the time it incurs the obligation. The asset retirement obligation for the Sleeper Gold Project recorded on the balance sheet is 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 September 30, 2023 and June 30, 2023:

	Three Months Ended September 30, 2023			Year Ended June 30, 2023
Weighted-average credit adjusted risk free rate		9.93	%		9.93	%
Weighted-average inflation rate		2.49	%		2.49	%

Changes to the Company’s reclamation and environmental costs for the Sleeper Gold Mine for the three month period ended September 30, 2023 and the year ended June 30, 2023 are as follows:

	Three Months Ended September 30, 2023			Year Ended June 30, 2023
Balance at beginning of period	$	4,436,902		$	4,475,270
Accretion expense		110,559			446,245
Additions and change in estimates		—			(364,612	)
Settlements		(30,000	)		(120,001	)
Balance at end of period	$	4,517,461		$	4,436,902

The balance of the reclamation and environmental obligation of $4,517,461 at September 30, 2023 (June 30, 2023 -$4,436,902) is comprised of a current portion of $2,560,515 (June 30, 2023 -$2,560,515) and a non-current portion of $1,956,946 (June 30, 2023 - $1,876,387).

The Company recorded an accretion expense for the three month period ended September 30, 2023 of $110,559 (2022 - $111,561).