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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021March 31, 2022
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from       to
Commission File No. 001-38387
HYCROFT MINING HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
8181 E. Tufts Avenue, Suite 510Denver, Colorado4300 Water Canyon Road, Unit 1 Winnemucca, Nevada
(Address of Principal Executive Offices)
82-2657796
(I.R.S. Employer
Identification No.)
8023789445
(Zip Code)
(303) 253-3267(775) 304-0260
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per share
HYMCThe Nasdaq Capital Market
Warrants to purchase common stockHYMCWThe Nasdaq Capital Market
Warrants to purchase common stockHYMCZThe Nasdaq Capital Market
Warrants to purchase common stockHYMCLThe Nasdaq Capital Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes   No 
As of November 10, 2021,May 4, 2022, there were 60,410,922197,029,741 shares of the Company’s common stock and no shares of the Company’s preferred stock issued and outstanding.
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HYCROFT MINING HOLDING CORPORATION
Quarterly Report on Form 10-Q
TABLE OF CONTENTS
PagePage
PARTPARTITEMPARTITEM
11
IIII1Legal ProceedingsII1Legal Proceedings
2Unregistered Sales of Equity Securities2Unregistered Sales of Equity Securities
3Defaults Upon Senior Secured Equity3Defaults Upon Senior Secured Equity
4Mine Safety Disclosures4Mine Safety Disclosures
5Other Information5Other Information

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ITEM I. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


INDEX TO FINANCIAL STATEMENTS

Page
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020Cash Flows
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2021 and 2020Deficit
Notes to Condensed Consolidated Financial Statements

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HYCROFT MINING HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
September 30,
2021
December 31,
2020
March 31,
2022
December 31,
2021
(unaudited)(unaudited)
Assets:Assets:Assets:
CashCash$19,753 $56,363 Cash$172,778 $12,342 
Accounts receivable347 426 
Income tax receivable - Note 1595 — 
Inventories - Note 416,833 12,867 
Ore on leach pads - Note 429,588 38,041 
Prepaids and other, net - Note 55,666 4,303 
Income tax receivableIncome tax receivable1,530 1,530 
Inventories - Note 3Inventories - Note 311,134 11,069 
Ore on leach pads - Note 3Ore on leach pads - Note 33,680 10,106 
Prepaids and other, net - Note 4Prepaids and other, net - Note 41,182 2,342 
Current assetsCurrent assets72,282 112,000 Current assets190,304 37,389 
Ore on leach pads - Note 46,142 7,243 
Plant, equipment, and mine development, net - Note 669,777 60,223 
Restricted cash - Note 734,293 39,677 
Other assets - Note 512,838 13,483 
Plant and equipment, net - Note 5Plant and equipment, net - Note 557,849 58,484 
Restricted cash - Note 6Restricted cash - Note 634,293 34,293 
Other assets - Note 4Other assets - Note 4600 600 
Assets held for sale - Note 7Assets held for sale - Note 710,308 11,558 
Total assetsTotal assets$195,332 $232,626 Total assets$293,354 $142,324 
Liabilities:Liabilities:Liabilities:
Accounts payable and accrued expensesAccounts payable and accrued expenses$10,852 $12,280 Accounts payable and accrued expenses$7,348 $9,430 
Deferred revenue - Note 131,598 — 
Debt, net - Note 9Debt, net - Note 912,745 5,120 Debt, net - Note 92,326 16,666 
Deferred gain on sale of royalty - Note 10Deferred gain on sale of royalty - Note 10125 124 Deferred gain on sale of royalty - Note 10— 125 
Other liabilities - Note 8Other liabilities - Note 85,847 4,157 Other liabilities - Note 85,592 5,044 
Current liabilitiesCurrent liabilities31,167 21,681 Current liabilities15,266 31,265 
Warrant liabilities - Note 114,149 15,389 
Debt, net - Note 9146,189 142,665 
Debt, net - Notes 9 and 19Debt, net - Notes 9 and 19137,377 143,638 
Deferred gain on sale of royalty - Note 10Deferred gain on sale of royalty - Note 1029,714 29,839 Deferred gain on sale of royalty - Note 1029,839 29,714 
Warrant liabilities - Notes 11 and 19Warrant liabilities - Notes 11 and 195,990 669 
Asset retirement obligation - Note 12Asset retirement obligation - Note 125,091 4,785 Asset retirement obligation - Note 125,295 5,193 
Other liabilities - Note 8Other liabilities - Note 8541 1,650 Other liabilities - Note 8301 339 
Total liabilitiesTotal liabilities$216,851 $216,009 Total liabilities$194,068 $210,818 
Commitments and contingencies - Note 2000
Stockholders' (deficit) equity:
Common stock, $0.0001 par value; 400,000,000 shares authorized; 60,410,922 issued and outstanding at September 30, 2021; and 59,901,306 issued and outstanding at December 31, 2020$$
Commitments and contingencies - Note 21Commitments and contingencies - Note 2100
Stockholders' equity (deficit):
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, 2021Common 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 $
Additional paid-in capitalAdditional paid-in capital540,562 537,370 Additional paid-in capital730,649 540,823 
Accumulated deficitAccumulated deficit(562,087)(520,759)Accumulated deficit(631,383)(609,323)
Total stockholders' (deficit) equity(21,519)16,617 
Total liabilities and stockholders' (deficit) equity$195,332 $232,626 
Total stockholders' equity (deficit)Total stockholders' equity (deficit)99,286 (68,494)
Total liabilities and stockholders' equity (deficit)Total liabilities and stockholders' equity (deficit)$293,354 $142,324 
The accompanying notes are an integral part of these unaudited condensed interimconsolidated financial statements.
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HYCROFT MINING HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands, except per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Revenues - Note 13$31,676 $12,291 $86,713 $31,051 
Revenues - Note 14Revenues - Note 14$9,166 $19,036 
Cost of sales:Cost of sales:Cost of sales:
Production costsProduction costs30,616 10,865 77,927 27,286 Production costs9,583 17,817 
Depreciation and amortizationDepreciation and amortization1,577 675 4,191 1,999 Depreciation and amortization920 1,041 
Mine site period costs - Note 411,467 14,230 24,445 34,292 
Write-down of production inventories - Note 4— — — 17,924 
Mine site period costsMine site period costs6,469 10,544 
Total cost of salesTotal cost of sales43,660 25,770 106,563 81,501 Total cost of sales16,972 29,402 
Operating expenses:Operating expenses:Operating expenses:
General and administrativeGeneral and administrative3,313 5,711 12,271 18,149 General and administrative3,072 3,794 
Projects and development2,344 — 3,860 — 
Write-off of deposit916 — 916 — 
Projects, exploration and developmentProjects, exploration and development1,038 493 
Accretion - Note 12Accretion - Note 12102 93 306 280 Accretion - Note 12102 102 
Impairment on equipment not in use - Note 5— 5,331 — 5,331 
Loss from operationsLoss from operations(18,659)(24,614)(37,203)(74,210)Loss from operations(12,018)(14,755)
Other (expense) income:Other (expense) income:Other (expense) income:
Interest expense, net of capitalized interest - Note 9Interest expense, net of capitalized interest - Note 9(5,461)(4,319)(15,176)(39,278)Interest expense, net of capitalized interest - Note 9(5,346)(4,449)
Fair value adjustment to warrants - Notes 11 and 18812 (3,354)10,956 (4,276)
Fair value adjustment to warrants - Notes 11 and 19Fair value adjustment to warrants - Notes 11 and 19(5,321)9,493 
Gain on sale of equipmentGain on sale of equipment625 — 
Interest incomeInterest income— — 156 Interest income— 23 
Loss before income taxes$(23,308)$(32,278)$(41,423)$(117,608)
Income tax benefit - Note 1595 — 95 — 
Net lossNet loss$(23,213)$(32,278)$(41,328)$(117,608)Net loss$(22,060)$(9,688)
Loss per share:Loss per share:Loss per share:
Basic - Note 16$(0.39)$(0.64)$(0.69)$(5.10)
Diluted - Note 16$(0.39)$(0.64)$(0.69)$(5.10)
Basic - Note 17Basic - Note 17$(0.27)$(0.16)
Diluted - Note 17Diluted - Note 17$(0.27)$(0.16)
Weighted average shares outstanding:Weighted average shares outstanding:Weighted average shares outstanding:
Basic - Note 1660,114,358 50,160,080 59,989,457 23,059,068 
Diluted - Note 1660,114,358 50,160,080 59,989,457 23,059,068 
Basic - Note 17Basic - Note 1781,201,453 59,901,306 
Diluted - Note 17Diluted - Note 1781,201,453 59,901,306 
The accompanying notes are an integral part of these unaudited condensed interimconsolidated financial statements.
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HYCROFT MINING HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Nine Months Ended September 30,
20212020
Cash flows used in operating activities:
Net loss$(41,328)$(117,608)
Adjustments to reconcile net loss for the period to net cash used in operating activities:
Non-cash portion of interest expense - Note 913,042 34,696 
Non-cash (gain) loss on fair value adjustment for warrant liabilities - Note 11(10,956)4,276 
Depreciation and amortization5,175 4,250 
Stock-based compensation - Note 142,227 1,991 
Write-off of deposit916 — 
Accretion - Note 12306 280 
Write-down of production inventories - Note 4— 17,924 
Impairment on equipment not in use - Note 5— 5,331 
Phantom share compensation— 225 
Changes in operating assets and liabilities:
Accounts receivable79 (500)
Income tax receivable(95)— 
Production-related inventories5,351 (39,763)
Materials and supplies inventories(1,141)(2,094)
Prepaids and other assets, net(1,634)(2,765)
Accounts payable and accrued expenses(1,852)6,926 
Deferred revenue1,598 — 
Other liabilities1,262 1,619 
Net cash used in operating activities(27,050)(85,212)
Cash flows used in investing activities:
Additions to plant, equipment, and mine development(11,908)(19,237)
Net cash used in investing activities(11,908)(19,237)
Cash flows (used in) provided by financing activities:
Principal payments on debt(2,978)— 
Principal payments on capital leases(58)— 
Proceeds from private placement— 75,963 
Proceeds from Sprott Credit Agreement— 68,600 
Proceeds from sale of royalty to Sprott - Note 10— 30,000 
Proceeds from forward purchase contract— 25,000 
Proceeds from Recapitalization Transaction— 10,419 
Proceeds from 1.25 Lien Note Issuances— 44,841 
Repayment of First Lien Agreement— (125,468)
Transaction and issuance costs— (15,801)
Repayment of Promissory Note— (6,914)
Net cash (used in) provided by financing activities(3,036)106,641 
Net (decrease) increase in cash and restricted cash(41,994)2,192 
Cash and restricted cash, beginning of period96,040 48,967 
Cash and restricted cash, end of period$54,046 $51,159 
Reconciliation of cash and restricted cash:
Cash$19,753 $11,505 
Restricted cash34,293 39,654 
Total cash and restricted cash$54,046 $51,159 
q
Three Months Ended March 31,
20222021
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 93,835 4,439 
Non-cash loss (gain) on fair value adjustment for warrant liabilities - Note 115,321 (9,493)
Depreciation and amortization920 1,568 
Stock-based compensation - Note 15401 538 
Accretion - Note 12102 102 
Gain on sale of equipment(625)— 
Changes in operating assets and liabilities:
Accounts receivable— 412 
Production-related inventories6,137 (3,970)
Materials and supplies inventories166 167 
Prepaids and other assets1,161 (1,268)
Accounts payable(2,848)1,800 
Other liabilities574 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 equipment711 — 
Proceeds for assets held for sale1,250 — 
Net cash provided by (used in) investing activities1,610 (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 costs190,179 — 
Net cash provided by financing activities165,742 — 
Net increase (decrease) in cash and restricted cash160,436 (19,843)
Cash and restricted cash, beginning of period46,635 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 cash34,293 39,700 
Total cash and restricted cash$207,071  $76,197 
See Note 1920 - Supplemental Cash Flow Information for additional details.
The accompanying notes are an integral part of these unaudited condensed interimconsolidated financial statements.
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HYCROFT MINING HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
(dollars in thousands)
Common Stock(1)
Treasury Stock(1)
Additional
Paid-in
Capital(1)
Accumulated
Deficit
Total
Stockholders'
Deficit
SharesAmountSharesAmount
Balance at January 1, 2020345,431 $— 22,103 $— $5,187 $(444,438)$(439,251)
Net loss— — — — — (34,618)(34,618)
Balance at March 31, 2020345,431 — 22,103 — 5,187 (479,056)(473,869)
Conversion of Seller's 2.0 Lien Notes to common shares of Seller and distribution of HYMC common stock14,795,153 (22,103)— 146,217 74,640 220,859 
Exchange of Seller's 1.5 Lien Notes for HYMC common stock16,025,316 — — 160,252 (14,569)145,685 
Common shares issued in private placement7,596,309 — — 75,962 — 75,963 
Exchange of Seller's 1.25 Lien Notes for HYMC common stock4,845,920 — — — 48,459 — 48,459 
Shares issued pursuant to forward purchase agreement with SPAC sponsor, including conversion of Class B shares4,813,180 — — — 12,814 — 12,814 
Unredeemed SPAC shares of MUDS public stockholders1,197,704 — — — 3,723 — 3,723 
Common shares issued pursuant to Sprott Credit Agreement496,634 — — — 6,282 — 6,282 
Common shares issued to underwriter44,395 — — — 444 — 444 
Vesting of restricted stock units— — — — 1,802 — 1,802 
Equity issuance costs— — — — (7,281)— (7,281)
Net loss— — — — — (50,712)(50,712)
Balance at June 30, 202050,160,042 $— $— $453,861 $(469,697)$(15,831)
Shares issued101 — — — — 
Stock-based compensation costs— — — — 16 — 16 
Equity issuance costs— — — — (960)— (960)
Net loss— — — — — (32,278)(32,278)
Balance at September 30, 202050,160,143 $— $— $452,918 $(501,975)$(49,052)
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at January 1, 202159,901,306 $$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, 202159,901,306 $$537,992 $(530,447)$7,551 
(1)Retroactively restated January 1, 2020 and March 31, 2020 for the reverse recapitalization as described in Note 2 - Summary of Significant Accounting Policies, and the restated reclassification of the Company's 5-Year Private Warrants as described in Note 11 - Warrants.
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Common StockTreasury StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders'
Equity
Common StockAdditional Paid-in CapitalAccumulated DeficitTotal Stockholders' Equity
SharesAmountSharesAmountSharesAmount
Balance at Balance at January 1, 202159,901,306 $— $— $537,370 $(520,759)$16,617 
Balance at January 1, 2022Balance at January 1, 202260,433,395 $$540,823 $(609,323)$(68,494)
Issuance of common stock and warrants - Note 13Issuance of common stock and warrants - Note 13136,370,064 14 189,398 — 189,412 
Vesting of restricted stock unitsVesting of restricted stock units— — 37 — 37 
Stock-based compensation costsStock-based compensation costs— — — — 507 — 507 Stock-based compensation costs— — 391 — 391 
Vesting of restricted stock units— — — — 104 — 104 
Net lossNet loss— — — — — (9,688)(9,688)Net loss— — — (22,060)(22,060)
Balance at March 31, 202159,901,306 — — 537,981 (530,447)7,540 
Stock-based compensation costs— — — — 1,011 — 1,011 
Vesting of restricted stock units63,674 — — — — — — 
5-Year Private Warrants transferred to 5-Year Public Warrants— — — — 284 — 284 
Net loss— — — — — (8,427)(8,427)
Balance at June 30, 202159,964,980 $— $— $539,276 $(538,874)$408 
Stock-based compensation costs— — — — 636 — 636 
Vesting of restricted stock units308,442 — — — 650 — 650 
Net loss— — — — — (23,213)(23,213)
Balance at September 30, 202160,273,422 $— $— $540,562 $(562,087)$(21,519)
Balance at March 31, 2022Balance at March 31, 2022196,803,459 $20 $730,649 $(631,383)$99,286 
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
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HYCROFT MINING HOLDING CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements

1. Company Overview
Hycroft Mining Holding Corporation (formerly known as Mudrick Capital Acquisition Corporation ("MUDS")) and its subsidiaries (collectively, “Hycroft”, the “Company”, “we”, “us”, “our”, "it", "HYMC") is a U.S.-based gold and silver company that is focused on operating and developing its wholly owned Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. The Hycroft Mine is located in the State of Nevada and the corporate office is located in Denver, Colorado.Winnemucca, Nevada.
The Company restarted pre-commercial scale open pit mining operations at the Hycroft Mine during the second quarter of 2019 and began producing and selling gold and silver during the third quarter of 2019. The Company's operating plan to date has beenuntil November 2021 was primarily focused on developing the proprietarynovel two-stage heap oxidation and leach process ("Novel Process") detailed in the Hycroft Technical Report Summary ("TRS"), Heap Leaching Feasibility Study, prepared in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants,Rules, with an effective date of July 31, 2019 (the “2019 Technical Report”("2019 Hycroft TRS") and. Subsequent to November 2021, the Company's operating plan has been focused on advancing evaluations and developing technical studies for milling sulfide ore so that the Company can evaluate alternative processing technologies. Based upon the Company's findings to date,in 2021, including an analysis completed by an independent third-party research laboratory and independent reviews by two2 metallurgical consultants, the Company does not believe the Novel Process, as currently designed in the 2019 Technical Report,Hycroft TRS, is economic at current metal prices or those metal prices used in the 2019 Technical Report.Hycroft TRS. Additionally, as announced on November 10, 2021, as a result of current and expected ongoing cost pressures for many of the reagents and consumables used at the Hycroft Mine, and the timeline for completing the updated technical studies in early 2022, effective immediately the Company is discontinuingdiscontinued pre-commercial scale mining at its run-of-mine ("ROM")ROM operation. The Company will continue producing gold and silver from ore on the leach pads as long as it is economiceconomic. In February 2022, Hycroft, along with its third-party consultants, completed and filed the Initial Assessment Technical Report Summary for the Hycroft Mine ("2022 Hycroft TRS") which included a mineral resource estimate utilizing a milling and acid pressure oxidation ("Acid POX") process for sulfide mineralization and heap leaching process for oxide and transition mineralization. The Company will continue to build on the work to date and investigate opportunities identified through progressing the technical and data analyses leading up to the 2022 Hycroft TRS and will right-size the workforce to meet ongoing operational requirements. As a result, the Company is focusing its study efforts and resources on the necessary technical studies for milling sulfide ore and plans to file a newprovide an updated technical report prior to or concurrent with the filing of its Annual Report on Form 10-K for the year ended December 31, 2021, that will include associated mineral reserves and mineral resources.
On May 29, 2020, the Company consummated the Recapitalization Transaction (as defined below) as contemplated by a purchase agreement dated January 13, 2020, as amended on February 26, 2020 (the “Purchase Agreement”), by and among the Company, MUDS Acquisition Sub, Inc. (“Acquisition Sub”) and Hycroft Mining Corporation ("Seller"). Pursuant to the Purchase Agreement, Acquisition Sub acquired all of the issued and outstanding equity interests of the direct subsidiaries of Seller and substantially all of the other assets of Seller and assumed substantially all of the liabilities of Seller in a business combination and reverse recapitalization transaction (the "Recapitalization Transaction"). See Note 3 - Recapitalization Transaction for further details.
Restatement of Previously Issued Financial Statements
On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled "Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”). Specifically, the SEC Statement clarified guidance for all SPAC-related companies regarding the accounting and reporting for their warrants and focused in part on provisions in warrant agreements that provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and because the holder of such warrants would not beat an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude such warrants from being classified in equity and thus such warrants should be classified as a liability.
As previously disclosed in the Company's Annual Report on Form 10-K/A, as filed on May 14, 2021 (“2020 Form 10-K/A”), the Company restated its previously issued consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020, to make the necessary accounting corrections related to warrant accounting and to recognize certain warrants as a liability instead of as equity, in accordance with Accounting Standards Codification (“ASC”) 815-40, Contracts in Entity’s Own Equity. As a smaller reporting company that was not required to include quarterly financial information in the 2020 Form 10-K/A, the Company did not amend its previously issued Quarterly Reports on Form 10-Q for any period prior to December 31, 2020. The Company restated the condensed consolidated financial statements for the three and nine months ended September 30, 2020, as reflected below.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
The following presents the restated condensed consolidated financial statements as of and for the three and nine months ended September 30, 2020. The condensed consolidated statement of stockholders' equity reflects the restatement adjustments presented in the consolidated Balance Sheets presented below.
HYCROFT MINING HOLDING CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
September 30, 2020
As Previously ReportedRestatement AdjustmentAs Restated
Total assets$173,186 $— $173,186 
Liabilities:
Current liabilities$28,649 $— $28,649 
Other liabilities1,893 (190)1,703 
Debt, net140,959 — 140,959 
Deferred gain on sale of royalty29,812 — 29,812 
Asset retirement obligation4,654 — 4,654 
Warrant liabilities— 16,461 16,461 
Total liabilities$205,967 $16,271 $222,238 
Stockholders' deficit:
Common stock$$— $
Additional paid-in capital465,103 (12,185)452,918 
Accumulated deficit(497,889)(4,086)(501,975)
Total stockholders' deficit$(32,781)$(16,271)$(49,052)
Total liabilities and stockholders' deficit$173,186 $— $173,186 
HYCROFT MINING HOLDING CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(dollars in thousands)
Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
As Previously ReportedRestatement AdjustmentAs RestatedAs Previously ReportedRestatement AdjustmentAs Restated
Revenue$12,291 $— $12,291 $31,051 $— $31,051 
Total cost of sales(25,770)— (25,770)(81,501)— (81,501)
Operating expenses(11,135)— (11,135)(23,760)— (23,760)
Loss from operations(24,614)— (24,614)(74,210)— (74,210)
Other (expense) income:
Interest expense, net of capitalized interest(4,319)— (4,319)(39,278)— (39,278)
Fair value adjustment to warrants(190)(3,164)(3,354)(190)(4,086)(4,276)
Interest income— 156 — 156 
Net loss$(29,114)$(3,164)$(32,278)$(113,522)$(4,086)$(117,608)
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
HYCROFT MINING HOLDING CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Nine Months Ended September 30, 2020
As Previously ReportedRestatement AdjustmentAs Restated
Net loss$(113,522)$(4,086)$(117,608)
Adjustments to reconcile net loss for the period to net cash used in operating activities:
Non-cash portion of interest expense34,696 — 34,696 
Write-down of production inventories17,924 — 17,924 
Depreciation and amortization4,250 — 4,250 
Stock-based compensation1,991 — 1,991 
Fair value adjustment to warrants190 4,086 4,276 
Accretion280 — 280 
Impairment on equipment not in use - Note 55,331 — 5,331 
Phantom share compensation225 — 225 
Changes in operating assets and liabilities(36,577)— (36,577)
Net cash used in operating activities(85,212)— (85,212)
Net cash used in investing activities(19,237)— (19,237)
Cash flows from financing activities:106,641 — 106,641 
Net increase in cash and restricted cash2,192 — 2,192 
Cash and restricted cash, beginning of period48,967 — 48,967 
Cash and restricted cash, end of period$51,159 $— $51,159 
Total cash and restricted cash$51,159 $— $51,159 
appropriate time.
2. Summary of Significant Accounting Policies
Basis of presentation
These condensed consolidated interim financial statements of the Company have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, these condensed consolidated financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and the notes thereto as of and for the year ended December 31, 2020, as amended.2021. The Company continues to follow the accounting policies set forth in those audited consolidated financial statements. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements include all adjustments that are necessary for a fair presentation of the Company's interim financial position, operating results and cash flows for the periods presented.
Risks and UncertaintiesLiquidity
The Company has a single mine with its revenue, profitability, and cash flows substantially dependent on prevailing prices for gold and silver and its ability to mine and process sufficient volumes of ore cost effectively. Historically, the commodity markets have been very volatile, and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, access to capital and the quantities of mineral reserves that the Company can economically produce.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
In addition to changes in commodity prices, other factors such as changes in mine plans, increases in costs, geotechnical failures, changes in social, environmental or regulatory requirements, taxation policies, the ability to successfully implement new technologies for processing ore, timely financing for development, impacts of global events such as the COVID-19 pandemic, and management’s decision to expand production to commercial levels can adversely affect the Company’s ability to recover its investment in certain assets and result in impairment charges.
For more information on risks associated with the Company’ s business, please see Item 1A. Risk Factors in the 2020 Form 10-K/A.
Going concern
The financial statements of the Company have been prepared on a “going concern” basis, which contemplates the presumed continuation of the Company even though events and conditions exist that, when considered individually or in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern because it is probable that, without additional capital injections, the Company may be unable to meet its obligations as they become due within one year after the date that these financial statements were issued.
For the nine months ended September 30, 2021, the Company recorded a net loss of $41.3 million, which included a gain from Fair value adjustments to warrants of $11.0 million, and net cash used in operating activities was $27.1 million. As of September 30, 2021,March 31, 2022, the Company had available cash on hand of $19.8$172.8 million and working capital of $41.1$175.0 million Total liabilities of $216.9 million, and an Accumulated deficit of $562.1 million. Historically,which is expected to provide it with the Company has been dependent on various forms of debt and equity financingnecessary liquidity to fund its business, and the Company currently projects that it will require additional cash to meet its operating and investing requirements and future obligations as they become due within the next twelve months includingfrom the estimated $9.6date of this filing.      
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
While the Company expects to continue processing gold and silver ore on the leach pads and partially offset the cash that is projected to be used in its operations and investing activities, the Company does not expect to generate net positive cash from operations for the foreseeable future. Accordingly, the Company will be dependent on its unrestricted cash and other sources of cash to fund its business. As discussed in Note 13 - Stockholders' Equity, the Company raised gross proceeds of $194.4 million in cash payments requiredMarch 2022 through the following equity financings:
On March 14, 2022, the Company entered into subscription agreements with American Multi-Cinema, Inc. and 2176423 Ontario Limited pursuant to which the Company agreed to sell an aggregate of 46,816,480 units at a purchase price of $1.193 per unit for total gross proceeds, before deduction of fees and expenses, of $55.9 million.
On March 15, 2022, the Company implemented an at-the-market offering program pursuant to which the Company    registered the offer and sale from time to time of its common stock having an aggregate offering price of up to $500.0 million of gross proceeds. Under the at-the-market offering, which was completed on March 25, 2022, the Company sold 89,553,584 shares of common stock for gross proceeds, before commissions and offering expenses, of $138.6 million.
Also, as discussed in Note 9 - Debt, Net, as a result of the equity financings above, the Company reached an agreement with Sprott Private Resource Lending II (Collector), LP (the "Lender") with respect to the Credit Agreement among Hycroft Mining Holding Corporation, as borrower, Autar Gold Corporation MUDS, MUDS Holdco Inc., Allied VGH LLC, Hycroft Mining Holding Corporation, Hycroft Resources and Development, LLC, Sprott Private Resource Lending II (Collector) Inc., and Sprott Resources Lending Corp. (“Sprott Credit Agreement”).
While, which required the Company plans to continue processing gold and silver oreprepay principal under the facility in the amount of $10.0 million following the Company’s receipt of the $55.9 million cash proceeds discussed above. The Company also made the additional prepayment of $13.9 million on March 30, 2022.
In addition to the leach pads after ceasing mining operations for the pre-commercial scale ROM operation and partially offset the cash that is projected to be used in its operations and investing activities, the Company does not expect to generate net positive cash for the foreseeable future. Accordingly,above equity financings, the Company will be dependent on its unrestricted cash and other sources of cashcontinue to fund its business. The Company is actively evaluatingevaluate alternatives to raise additional capital necessary to fund the future development of the Hycroft Mine and ongoing working capital needs and exploringwill continue to explore other strategic initiatives to enhance stockholder value.
As discussed in Note 22 - Subsequent Events, to avoid potential non-compliance with the Sprott Credit Agreement, on November 9, 2021,Historically, the Company received a waiver for six monthshas been dependent on various forms of debt and equity financing to permitfund its business. While the Company has been successful in the past raising funds through equity and debt financings, no assurance can be given that additional financing will be available to it in amounts sufficient to cease active mining operations, and, in alignment with its current forecasts, reducemeet the minimum unrestricted cash balanceCompany’s needs or on terms acceptable to $9.0 million. Depending on the Company's ability to obtain additional cash andCompany. In the timing of any such cash,event that funds are not available, the Company may needbe required to obtain additional waivers frommaterially change its first lien lender in 2022 to comply with debt covenants. While the first lien lender has indicated a willingness to work with the Company, the Company cannot provide any assurance that it will be able to timely obtain cash or receive waivers from debt covenants that will allow the Company to avoid a default under our credit agreements and to continue operating.
The Company's ability to continue as a going concern is contingent upon securing additional funding for working capital, capital and project expenditures, satisfying debt covenants required under the Sprott Credit Agreement, and other corporate expenses so that we can continue to develop the Hycroft Mine by conducting targeted exploration and completing the necessary technical studies to determine the likely timeline to bring the sulfides into commercial scale operation.
These financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of any liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern. As such, recorded amounts in these financial statements (including without limitation, stockholders’ deficit) have been prepared on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Company’s assets or management’s assessment of the Company’s overall enterprise or equity value.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
business plans.
Use of estimates
The preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that affect amounts reported in these condensed consolidated financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver ounces on stockpiles, leach pads and in-process inventories; timing of near-term ounce production and related sales; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves;resources; estimates of life-of-mine production timing, volumes, costs and prices; future mining and current and future mining and processing plans; environmental reclamation and closure costs and timing; deferred taxes and related valuation allowances; estimates of the fair value of liability classified warrants, and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various other assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these condensed consolidated financial statements, and such differences could be material. Accordingly, amounts presented in these condensed consolidated financial statements are not indicative of results that may be expected for future periods.
Inventories
The Company’s production-related inventories include: (i) stockpiles; (ii) ore on leach pads; (iii) in-process inventories; and (iv) doré and off-site carbon and slag finished goods. Production-related inventories are carried at the lower of average cost or net realizable value per estimated recoverable gold ounce, which is computed for each category of production-related inventories at each reporting period.
Net realizable value represents the estimated future gold revenue of production-related inventories after adjusting for silver by-product revenue and deductions for further processing, refining, and selling costs. The estimated future revenue is calculated using sales prices based on the London Bullion Market Association’s (“LBMA”) quoted period-end metal prices. Estimates for silver revenue by-products credits and deductions for estimated costs to complete reflect the Company’s historical experience for expected processing, refining and selling plans. Actual net realizable values for gold sales may be different from such estimates. Changes to inputs and estimates resulting from changes in facts and circumstances are recognized as a change in management estimate on a prospective basis.
Stockpiles
Stockpiles represents ore that has been extracted from the mine and is available for further processing. Stockpiles are subject to oxidation over time which can impact expected future recoveries depending on the process recovery method. The value of the stockpiles is measured by estimating the number of tons added and removed from the stockpiles, the number of contained ounces based on assay data, and the estimated metallurgical recovery rates based on the expected processing method. Costs are added to the value of the stockpiles based on current mining costs, including applicable overhead and depreciation and amortization relating to the Company's mining operations.
Ore on leach pads
Ore on leach pads represents ore that has been mined and placed on leach pads where a solution is applied to dissolve the contained gold and silver. Costs are added to ore on leach pads based on current mining costs, including reagents, leaching supplies, and applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads to in-process inventories at an average cost per estimated recoverable ounce of gold.
Although the quantities of recoverable metal placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of metal actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored, and estimates are refined based on actual results over time and changes in future estimates.
In-process inventories
In-process inventories represent gold-bearing concentrated materials that are in the process of being converted to a saleable product using a Merrill-Crowe plant or carbon-in-column processing method. As gold ounces are recovered from in-process inventories, costs, including conversion costs are transferred to precious metals inventory at an average cost per ounce of gold.
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
Precious metals inventory
Precious metals inventory consists of doré and loaded carbon containing both gold and silver, which is ready for offsite shipment or at a third-party refiner before being sold to a third party. As gold ounces are sold, costs are recognized in Production costs and Depreciation and amortization in the consolidated statements of operations at an average cost per gold ounce sold.
Materials and supplies
Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.
Warrants
Warrant liabilities
The Company accounts for certain warrants to purchase shares of the Company’s common stock that were issued to the SPAC sponsor and/or underwriter in a private placement and/or pursuant to a forward purchase contract (the “5-Year Private Warrants”) that are not indexed to the Company’s own stock as warrant liabilities at fair value on the consolidated balance sheet. These warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of Other (expense) income on the condensed consolidated statement of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the (i) exercise or expiration of the 5-Year Private Warrants or (ii) the transfer of any 5-Year Private Warrants to any person who is not a permitted transferee, at which time the warrant liability will be reclassified to Additional paid-in capital on the condensed consolidated balance sheet.
Equity classified warrants
Warrants that are considered indexed to the Company's own stock, which are not required to be recorded as a liability are measured at fair value at the date of issuance and included in Additional paid-in capital on the condensed consolidated balance sheet and do not require subsequent remeasurement of the fair value.
Projects and development
Costs incurred to enhance our understanding of the recovery and processing of the current ore body to sustain production at existing operations that do not qualify for capitalization are expensed within Projects and development, which is included in Operating expenses on the condensed consolidated statement of operations. Projects and development costs include expenditures for: (i) analyzing established feasibility studies; (ii) conducting geological studies; (iii) oversight and project management; and (iv) drilling, engineering, and metallurgical activities.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
AccountingRecently adopted accounting pronouncements not yet adopted
In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases ("ASU 2016-02"). The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the consolidated statements of operations and classification within the consolidated statement of cash flows. In October 2019,August 2020, the FASB issued ASU No. 2019-10,2020-06, FinancialAccounting for Convertible Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)Contracts in an Entity’s Own Equity ("(“ASU 2019-10"2020-06”) that amends the effective date of. ASU 2016-022020-06 simplifies guidance on accounting for convertible instruments and contracts in an entity’s own equity including calculating diluted earnings per share. For emerging growth companies, such that the new standardguidance is effective for fiscal years beginning after December 15, 2021, and interimannual periods within fiscal years beginning after December 15, 2022. As the Company qualifies as an emerging growth company, the Company has elected to take advantage of the deferred effective date afforded to emerging growth companies. A modified retrospective transition approach is required to either the beginning of the earliest period presented or the beginning of the year of adoption. The Company has compiled its leases and is in the processearly adopted ASU 2020-06 as of estimating theJanuary 1, 2022, with no material impact on its condensed consolidated financial statements andor the related disclosures.
In December of 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), as part as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include removal of certain exceptions to the general principles of ASC 740, Income Taxes and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. For emerging growth companies, the new guidance iswas effective for annual periods beginning after December 15, 2021. As2021 and the Company qualifiesadopted ASU 2019-12 as an emerging growth company, the Company plans to take advantage of the deferred effective date afforded to emerging growth companies. The Company is currently evaluating theJanuary 1, 2022, with no material impact that adopting this update will have on its condensed consolidated financial statements and related disclosures.
In August 2020,or the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies guidance on accounting for convertible instruments and contracts in an entity’s own equity including calculating diluted earnings per share. For emerging growth companies, the new guidance is effective for annual periods beginning after December 15, 2022. As the Company qualifies as an emerging growth company, the Company plans to take advantage of the deferred effective date afforded to emerging growth companies. The Company is currently evaluating the impact that adopting this update will have on its consolidated financial statements and related disclosures.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force). ASU 2021-04 clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (e.g,e.g.,, warrants) that remain equity classified after modification or exchange. ASU 2021-04 provides guidance that will clarify whether an issuer should account for a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as (i) an adjustment to equity and, if so, the related earnings per share effects, if any, or (ii) an expense and, if so, the manner and pattern of recognition. TheFor emerging growth companies, the new guidance iswas effective for annual and interim periods beginning after December 15, 2021 and early adoption is permitted, including adoption in an interim period. Thethe Company is currently evaluating theadopted ASU 2021-04 as of January 1, 2022, with no material impact that adopting this update will have on its condensed consolidated financial statements andor the related disclosures.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
3. Recapitalization Transaction
Recapitalization Transaction with MUDS
On May 29, 2020, the Company, formerly known as Mudrick Capital Acquisition Corporation, consummated the Recapitalization Transaction (as defined below) as contemplated by a purchase agreement dated January 13, 2020, as amendedInventories and Ore on February 26, 2020 (the “Purchase Agreement”), by and among the Company, MUDS Acquisition Sub, Inc. (“Acquisition Sub”) and Hycroft Mining Corporation ("Seller"). Pursuant to the Purchase Agreement, Acquisition Sub acquired all of the issued and outstanding equity interests of the direct subsidiaries of Seller and substantially all of the other assets of Seller and assumed substantially all of the liabilities of Seller in a business combination and reverse recapitalization transaction (the "Recapitalization Transaction").
In connection with the consummation of the Recapitalization Transaction, MUDS and the entities purchased from Seller were consolidated under Hycroft Mining Holding Corporation, and the Company's certificate of incorporation was amended and restated to reflect the Company’s change in name. Pursuant to the consummation of the Recapitalization Transaction, the shares of common stock of Hycroft Mining Holding Corporation were listed on the Nasdaq Capital Market under the ticker symbol “HYMC”.
In conjunction with the Recapitalization Transaction, Seller’s indebtedness existing prior to the Recapitalization Transaction was either repaid, exchanged for indebtedness of the Company, exchanged for shares of common stock or converted into shares of Seller common stock, and the Company’s post-Recapitalization Transaction indebtedness included amounts drawn under the Sprott Credit Agreement and the assumption of the newly issued Subordinated Notes (as such terms are defined herein). Upon closing of the Recapitalization Transaction, the Company’s unrestricted cash available for use totaled $68.9 million, and the number of shares of common stock issued and outstanding totaled 50,160,042. In addition, upon closing, the Company had 34,289,999 outstanding warrants to purchase an equal number of shares of common stock at $11.50 per share and 12,721,901 warrants to purchase 3,210,213 shares of common stock at a price of $44.82 per share.
Prior to the Recapitalization Transaction, the Company was a SPAC with no business operations and on May 29, 2020 had assets and liabilities consisting primarily of $10.4 million of cash and $6.9 million of liabilities for accounts payable, accrued expenses, and deferred underwriting fees.
The Recapitalization Transaction was accounted for as a reverse recapitalization in accordance with ASC 805, Business Combinations. Under this method of accounting, for financial reporting purposes, MUDS has been treated as the “acquired” company and Seller has been treated as the “acquirer”. This determination was primarily based on (1) stockholders of Seller immediately prior to the Recapitalization Transaction received a majority of the voting power of the combined entity; (2) the operations of Seller prior to the Recapitalization Transaction comprise the only ongoing operations of the combined entity; (3) four of the seven members of the Board of Directors immediately following the Recapitalization Transaction were directors of Seller immediately prior to the Recapitalization Transaction; and (4) executive and senior management of Seller were appointed as the senior management of the Company.
Based on Seller being the accounting acquirer, the financial statements of the combined entity represent a continuation of the financial statements of Seller, with the acquisition treated as the equivalent of Seller issuing stock for the net assets of MUDS, accompanied by a recapitalization. The net assets of MUDS were recognized at historical cost as of the date of the Recapitalization Transaction, with no goodwill or other intangible assets recorded. Comparative information prior to the Recapitalization Transaction in these financial statements are those of Seller and the accumulated deficit of Seller has been carried forward after the Recapitalization Transaction. Shares of common stock issued and outstanding prior to the Recapitalization Transaction have been retroactively restated reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share).
For more information regarding debt issuances and extinguishments, royalty obligations, and warrant issuances related to the Recapitalization Transaction see Note 9 - Debt, Net, Note 10 - Deferred Gain on Sale of Royalty, and Note 11 - Warrants.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
4. InventoriesLeach Pads
The following table provides the components of Inventories and the estimated recoverable gold ounces therein (dollars in thousands):
September 30, 2021December 31, 2020March 31, 2022December 31, 2021
AmountGold OuncesAmountGold OuncesAmountGold OuncesAmountGold Ounces
Current inventories:
Inventories:Inventories:
Materials and suppliesMaterials and supplies$7,590 — $6,449 — Materials and supplies$4,158 — $4,376 — 
Merrill-Crowe process plantMerrill-Crowe process plant763 407 4,810 2,587 Merrill-Crowe process plant— — 11 
Carbon-in-columnCarbon-in-column3,399 2,052 299 166 Carbon-in-column6,028 3,174 3,493 2,044 
Finished goods (doré and off-site carbon)Finished goods (doré and off-site carbon)5,081 2,924 1,309 710 Finished goods (doré and off-site carbon)948 695 3,189 1,799 
Non-current inventories:
Stockpiles(1)
— 4,996 — — 
TotalTotal$16,833 10,379 $12,867 3,463 Total$11,134 3,869 $11,069 3,849 
(1)During 2021, the Company began stockpiling sulfide ore. The Company intends to use the stockpiles for testing related to the two-stage heap oxidation and leach process or for future processing through a mill and subsequent oxidation process. As of September 30, 2021, stockpiles had a value of $Nil due to the net realizable value analysis performed by the Company as discussed in the Mine site period costs section below.
As of September 30, 2021March 31, 2022 and December 31, 2020,2021, in-process inventories and finished goods inventories included $0.5 million and $0.3$0.4 million, respectively of capitalized depreciation and amortization costs. As of March 31, 2022 there were no indicators of impairment that would necessitate a write-down of the Company's Inventories or its Ore on leach pads.

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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
The following table summarizes Ore on leach pads and the estimated recoverable gold ounces therein (dollars in thousands):
September 30, 2021December 31, 2020
AmountGold OuncesAmountGold Ounces
Ore on leach pads, current$29,588 17,454 $38,041 21,869 
Ore on leach pads, non-current6,142 3,612 7,243 4,164 
Total$35,730 21,066 $45,284 26,033 
March 31, 2022December 31, 2021
AmountGold OuncesAmountGold Ounces
Ore on leach pads$3,680 2,693 $10,106 7,130 
Total$3,680 2,693 $10,106 7,130 
As of September 30, 2021March 31, 2022 and December 31, 2020, the current portion of2021, Ore on leach pads included $1.6$0.3 million and $1.8 million, respectively of capitalized depreciation and amortization costs. Additionally, as of September 30, 2021 and December 31, 2020 the non-current portion of Ore on leach pads included $0.4 million and $0.4$0.6 million, respectively of capitalized depreciation and amortization costs.
Write-down of production inventories
The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore contents to the actual gold ounces recovered (metallurgical balancing). As the Company did not experience a reduction in ounces expected to be recovered from the leach pads during 2021 to date, the Company did not record a Write-down of production inventories during the three and nine months ended September 30, 2021.
During the three and nine months ended September 30, 2020, based on metallurgical balancing results, the Company determined that 6,512 and 10,492 ounces of gold, respectively, that had been placed on the leach pads were no longer recoverable and recognized a Write-down of production inventories on the consolidated statements of operations, which included Production costs of $10.2 million and $16.7 million, respectively, and capitalized depreciation and amortization costs of $0.8 million and $1.2 million, respectively.The write-off of ounces during the three and nine months ended September 30, 2020 were primarily due to mismanagement of the oxidation process, improper adjustments to variables in the oxidation process for changes in the ore type based on domain, and improper solution management. As a result, the Company determined it would recover less gold ounces than planned for those sections of the leach pads.
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
Mine site period costs

The following table summarize the components of Mine site period costs (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Production related costs$10,956 $13,394 $23,341 $32,024 
Capitalized depreciation and amortization511 836 1,104 2,268 
Total$11,467 $14,230 $24,445 $34,292 
Mine site period costs are generally the result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, inefficient cost-volume structures, or other unusual costs and activities, and cannot be recorded to production-related inventories based on the threshold established by the calculation of the estimated net realizable value per ounce of gold, which incorporates estimated future processing, refining, and selling costs, as well as the value for silver by-product.
5.4. Prepaids and Other, Net
The following table provides the components of Prepaids and other, net and Other assets (dollars in thousands):
September 30,
2021
December 31,
2020
Prepaids and other, net
Prepaids
Insurance$2,191 $1,847 
Prepaid supplies inventory1,770 — 
Mining claims and permitting fees1,283 417 
License fees207 259 
Equipment mobilization— 423 
Other252 
Deposits208 1,105 
Total$5,666 $4,303 
Other assets, non-current
Equipment not in use$12,238 $12,238 
Royalty - advance payment600 360 
Prepaid supplies inventory— 885 
Total$12,838 $13,483 
Deposits
During the third quarter of 2021, the Company determined that additional equipment was no longer expected to be purchased under the current mine plan. Accordingly, a full reserve was applied against a $0.9 million deposit previously paid by the Company to an equipment supplier.
Equipment not in use
March 31,
2022
December 31,
2021
Prepaids and other, net
Prepaids
Insurance$145 $1,014 
Mining claims and permitting fees378 891 
Prepaid taxes209 — 
License fees202 186 
Other29 56 
Deposits219 195 
Total1,182 2,342 
Other assets, non-current
Royalty - advance payment600 600 
Total$600 $600 
As of September 30, 2021, equipment not in use was classified as Other assets and included ball mills, SAG mills, regrind mills, and related motors and components that were previously purchased by a predecessor of the Company. During the second quarter of 2020, the Company engaged an international equipment broker to advertise equipment not in use for potential sale. As a result, the Company recorded an adjustment of $5.3 million to the carrying value during the third quarter of 2020 to reflect the fair market value of the equipment not in use. As of September 30, 2021, the equipment remains not in use and it is uncertain if the Company will sell any of the equipment within one year.
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HYCROFT MINING HOLDING CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
Prepaid supplies inventory
The Company has multiple inventory consignment agreements with certain of its suppliers of parts used in the crushing, drilling,5. Plant and blasting processes that require the supplier to maintain a specified inventory of replacement parts and components that are exclusively for purchase and use at the Hycroft Mine. As part of the agreements, the Company is required to make certain payments in advance of receiving such consignment inventory at the mine site. The Company records advance payments as prepaid supplies inventory within Other assets until such inventory is received, at which point, the amounts are reclassified to Inventories.
Royalty - advance payment
As of September 30, 2021, royalty-advance payments included annual advance payments for a portion of the Hycroft Mine that is subject to a mining lease requiring a 4% net profit royalty be paid to the owner of certain patented and unpatented mining claims. Refer to Note 20 - Commitments and Contingencies for further detail.
6. Plant, Equipment, and Mine Development, Net
The following table provides the components of Plant equipment, and mine development,equipment, net (dollars in thousands):
Depreciation Life
or Method
September 30,
2021
December 31,
2020
Depreciation Life
or Method
March 31,
2022
December 31,
2021
Leach padsLeach padsUnits-of-production$17,708 $17,432 Leach padsUnits-of-production$17,431 $17,431 
Process equipmentProcess equipment5 - 15 years17,597 16,065 Process equipment5 - 15 years17,755 17,735 
Buildings and leasehold improvementsBuildings and leasehold improvements10 years10,507 10,507 Buildings and leasehold improvements10 years9,280 9,280 
Mine equipmentMine equipment5 - 7 years8,242 5,961 Mine equipment5 - 7 years6,026 6,224 
VehiclesVehicles3 - 5 years1,454 991 Vehicles3 - 5 years1,454 1,454 
Furniture and office equipmentFurniture and office equipment7 years352 322 Furniture and office equipment7 years330 330 
Mine developmentUnits-of-production6,673 756 
Mineral propertiesUnits-of-production37 37 
Construction in progress and otherConstruction in progress and other36,529 33,185 Construction in progress and other35,794 35,794 
$99,099 $85,256 $88,070 $88,248 
Less, accumulated depreciation and amortizationLess, accumulated depreciation and amortization(29,322)(25,033)Less, accumulated depreciation and amortization(30,221)(29,764)
TotalTotal$69,777 $60,223 Total$57,849 $58,484 
Mine development
During the ninethree months ended September 30, 2021,March 31, 2022 there were no events or changes in circumstances that would have required the Company incurred coststo evaluate the current carrying value of $5.9 millionits Plant and equipment, net for recoverability. Depreciation expense related to metallurgical testingPlant and drill work.
Construction in progressequipment, net was $0.9 million and other
The primary project included in construction in progress as of September 30, 2021 was construction of a new larger leach pad, which continued through February 2021 at which time construction was suspended ($3.2$1.0 million including $0.7 million of capitalized interest), resulting in construction costs for the new larger leach pad of $34.1 million since commencing construction in 2020.three months ended March 31, 2022 and 2021.
7.6. Restricted Cash
The following table provides the components of Restricted cash (dollars in thousands):
September 30,
2021
December 31,
2020
Reclamation and other surety bond cash collateral$34,293 $39,677 
March 31,
2022
December 31,
2021
Reclamation and other surety bond cash collateral$34,293 $34,293 
As of March 31, 2022 and December 31, 2021, our surface management surety bonds totaled $59.3 million, of which $58.3 million secures the financial assurance requirements for the Hycroft Mine, and $1.0 million secures the financial assurance requirements for the adjacent water supply well field and exploration project, which were partially collateralized by the Restricted cash shown above.
7. Assets Held For Sale
The following table summarizes the Company's Assets held for sale by asset class as of March 31, 2022 and December 31, 2021 (dollars in thousands):
March 31,
2022
December 31,
2021
Equipment not in use$9,913 $11,163 
Mine equipment125 125 
Materials and supplies270 270 
Total$10,308 $11,558 
The Assets held for sale are being marketed for sale and the Company has received interest from potential purchasers. It is the Company's intention to complete the sales of these assets within the upcoming year. During the three months ended March 31, 2022, the Company sold a regrind mill included in equipment not in use for gross proceeds of $1.3 million.
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HYCROFT MINING HOLDING CORPORATION
Notes to Unaudited Condensed Consolidated Financial Statements
As of September 30, 2021, the Company's BLM reclamation and similar obligations were secured with surety bonds totaling $59.3 million, which were partially collateralized by the Restricted cash shown above. During the nine months ended September 30, 2021 the Company replaced certain surety bonds with new surety bonds with lower cash collateral requirements, resulting in an approximate $5.4 million reduction in restricted cash.
8. Other Liabilities
The following table summarizes the components of current and non-current portions of Other liabilities (dollars in thousands):
September 30,
2021
December 31,
2020
March 31,
2022
December 31,
2021
Other liabilities, currentOther liabilities, currentOther liabilities, current
Accrued compensationAccrued compensation$2,849 $1,560 Accrued compensation$3,121 $2,641 
Salary continuation paymentsSalary continuation payments1,653 1,215 Salary continuation payments617 935 
Restricted stock unitsRestricted stock units736 913 Restricted stock units687 714 
Deferred payroll tax liabilityDeferred payroll tax liability471 436 Deferred payroll tax liability471 471 
Excise tax liabilityExcise tax liability100 — Excise tax liability681 268 
Accrued directors' feesAccrued directors' fees38 33 Accrued directors' fees15 15 
TotalTotal$5,847 $4,157 Total$5,592 $5,044 
Other liabilities, non-currentOther liabilities, non-currentOther liabilities, non-current
Salary continuation payments$70 $1,145 
Deferred payroll tax liability471 505 
Finance lease liabilityFinance lease liability$260 $286 
Operating lease liabilityOperating lease liability41 53 
TotalTotal$541 $1,650 Total$301 $339 
Salary continuation payments
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
Excise tax liability
A new mining excise tax applied to gross proceeds became effective on July 1, 2021, following the passing of Assembly Bill 495 at the Nevada Legislative Session ended on May 31, 2021. The new excise tax is a tiered tax, with a highest rate of 1.1% and the first payment is due in April 2022.

The Company has enteredbill does not take into separation agreements with former executives that provide for, among other things, continuationconsideration expenses or costs incurred to generate gross proceeds. Therefore, this tax will be treated as a gross receipts tax and not as a tax based on income. As a result, this new tax will be reported as a component of such former executives' salariesCost of sales and certain benefits for periodsnot as income tax expense. As of 12-24 months from the date of separation. Refer to Note 22 - Subsequent Events for further details on the separation agreements.
Deferred payroll tax liability
Under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”),March 31, 2022, the Company has deferred payment of certain employer payroll taxes, with 50% due December 31, 2021 and 50% due December 31, 2022.
accrued $0.7 million related to the annual excise tax, included in Other liabilities, current.
9. Debt, Net
Second Amendment to Sprott Credit Agreement
On March 30, 2022, the Company and Lender under the Sprott Credit Agreement entered into the Second Amended and Restated Credit Agreement (“Second A&R Agreement”), which: (a) extended the maturity date for all of the loans and other principal obligations under the Sprott Credit Facility by two years, to May 31, 2027; (b) provided for the Company to prepay principal under the facility in the amount of $10.0 million promptly upon the Company’s receipt of cash proceeds from the Private Placement Offering with American Multi-Cinema, Inc. and 2176423 Ontario Limited (the “Initial Equity Proceeds Prepayment”); (c) provided for the Company to prepay principal under the Sprott Credit Agreement in the amount of $13.9 million (representing 10% of the subsequent issuance of its equity interests consummated on or prior to March 31, 2022) (the “Subsequent Equity Proceeds Prepayments”); and (d) eliminated the prepayment premiums otherwise payable with respect to the Initial Equity Proceeds Prepayment, the Subsequent Equity Proceeds Prepayments and all future prepayments of principal under the Sprott Credit Facility. In addition, the Company’s obligations to prepay principal with proceeds of asset sales will be credited/offset by the aggregate amount of Initial Equity Proceeds Prepayment and the Subsequent Equity Proceeds Prepayments ($23.9 million), and to maintain a minimum amount of Unrestricted Cash (as defined in the Second A&R Agreement) was increased to $15.0 million. The Company: (i) paid the previously deferred additional interest of $0.5 million; (ii) made the Initial Equity Proceeds Prepayment of $10.0 million and paid in-kind a $3.3 million fee in connection with the modification and capitalized it to principal on March 16, 2022; and (iii) made the Subsequent Equity Proceeds Prepayment of $13.9 million on March 30, 2022. The Company accounted for the Second A&R Agreement as a debt modification as the Second A&R Agreement did not result in debt that was substantially different.
Amendment to the 10% Senior Secured Notes and Note Exchange Agreement
On March 14, 2022, the Company entered into an amendment to the 10% Senior Secured Notes and Note Exchange Agreement (the “Note Amendment”), with: (i) certain direct and indirect subsidiaries of the Company as Guarantors; (ii) holders of the 10% Senior Secured Notes (the "Subordinated 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 (collectively, the “Amending Holders”); and (iii) Wilmington Trust, National Association, in its capacity as collateral agent. The Note Amendment amends the Note Exchange Agreement dated as of January 13, 2020 (the “Note Exchange Agreement”) and the Subordinated Notes issued thereunder in order to extend the maturity date of the Subordinated Notes from December 1, 2025 to December 1, 2027. The Note Amendment also removes the requirements that a holder receive the consent of the Company and the other holders in order to transfer any Subordinated Note. The Amending Holders constituted all of the holders of the Subordinated Notes. The Note Amendment became effective upon the closing of a private placement upon receipt of $55.9 million gross cash proceeds (before deduction of fees and expenses). The Company accounted for the Note Amendment as a debt modification as the Note Amendment did not result in debt that was substantially different.
Debt covenants
The Company’s debt agreements contain representations and warranties, events of default, restrictions and limitations, reporting requirements, and covenants that are customary for agreements of these types.
As of September 30, 2021,March 31, 2022, the Company was in compliance with all covenants under its debt agreements. Refer to Note 22 - Subsequent Events for further details on the Company's debt covenants. 
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
Debt balances
The following table summarizes the components of Debt, net (dollars in thousands):
September 30,
2021
December 31,
2020
Debt, net, current:
Sprott Credit Agreement(1)
$13,185 $5,274 
Note payable(2)
125 — 
Less, debt issuance costs(565)(154)
Total$12,745 $5,120 
Debt, net, non-current:
Subordinated Notes$91,316 $84,797 
Sprott Credit Agreement, net of original issue discount ($8.2 million, net)57,082 61,894 
Note payable(2)
364 — 
Less, debt issuance costs(2,573)(4,026)
Total$146,189 $142,665 
(1)As of September 30, 2021 amount included: (i) $2.2 million of Additional Interest, as defined in the Sprott Credit Agreement and (ii) $11.0 million scheduled principal payments under the Sprott Credit Agreement, all due in the next twelve months. As of December 31, 2020, amount included $1.6 million of Additional Interest (as defined in the Sprott Credit Agreement) plus 5.0% of the Company's outstanding debt balance under the Sprott Credit Agreement.
(2)During the first quarter of 2021, the Company financed the $0.4 million purchase of a rental fuel/lube truck with a note payable to the vendor with an interest rate of 0.99%, requiring equal monthly payments for 48 months. During the third quarter of 2021, the Company financed a $0.1 million purchase of three Ford trucks with a note payable to the vendor with an interest rate of 4.54%, requiring equal monthly payments for 60 months.
March 31,
2022
December 31,
2021
Debt, net, current:
Sprott Credit Agreement$2,200 $17,223 
Note payable126 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 Notes95,940 93,599 
Note payable301 345 
Less, debt issuance costs(2,449)(2,115)
Total$137,377 $143,638 
The following table summarizes the Company's contractual payments of Debt, net, including current maturities, for the five years subsequent to September 30, 2021March 31, 2022 (dollars in thousands):
July 1, 2021 through December 31, 2021$4,242 
202216,980 
April 1, 2022 through December 31, 2022April 1, 2022 through December 31, 2022$1,744 
2023202324,298 20232,327 
2024202424,301 20242,329 
20252025103,470 20251,154 
2026202622 
20272027146,744 
TotalTotal173,291 Total154,320 
Less, original issue discount, net of amortization ($5.8 million)(11,219)
Less, debt issuance costs, net of amortization ($1.8 million)(3,138)
Less, original issue discount, net of accumulated amortization ($8.2 million)Less, original issue discount, net of accumulated amortization ($8.2 million)(12,168)
Less, debt issuance costs, net of accumulated amortization ($2.5 million)Less, debt issuance costs, net of accumulated amortization ($2.5 million)(2,449)
Total debt, netTotal debt, net$158,934 Total debt, net$139,703 
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements

Interest expense, net of capitalized interest
The following table summarizes the components of recorded Interest expense, net of capitalized interest (dollars in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Sprott Credit AgreementSprott Credit Agreement$2,820$2,526 $8,227 $3,322 Sprott Credit Agreement$1,493$1,552 
Subordinated NotesSubordinated Notes2,2272,018 6,520 2,729 Subordinated Notes2,3402,120 
Amortization of original issue discountAmortization of original issue discount1,1581,088 
Amortization of debt issuance costsAmortization of debt issuance costs358336 1,043 1,643 Amortization of debt issuance costs337335 
Other interest expenseOther interest expense56— 40 Other interest expense18
2.0 Lien Notes— — 12,902 
1.5 Lien Notes— — 8,635 
1.25 Lien Notes— — 6,218 
First Lien Agreement— — 4,575 
Promissory Note— — 141 
Capitalized interestCapitalized interest(561)(654)(895)Capitalized interest(654)
TotalTotal$5,461 $4,319 $15,176 $39,278 Total$5,346 $4,449 
The Company capitalizes interest to Plant equipment, and mine development,equipment, net for construction projects in accordance with ASC Topic 835, Interest. Interest expense incurred under the Subordinated Notes is payable-in-kind. In May 2021, the Company began paying cash for interest expense incurred under the Sprott Credit Agreement. Prior to May 2021, interest expense incurred under the Sprott Credit Agreement was payable-in-kind.
10. Deferred Gain on Sale of Royalty
On May 29, 2020, the closing dateAs of the Recapitalization Transaction,March 31, 2022, the Company and Sprott Private Resource Lending II (Co) Inc. (the “Payee”) entered into a royalty agreement with respect to the Hycroft Mine (the “Sprott Royalty Agreement”) in which Payee paid to the Company cash consideration in the amount of $30.0 million, for which the Company granted to Payee a perpetual royalty equal to 1.5% of the Net Smelter Returns from its Hycroft Mine, payable monthly. Net Smelter Returns for any given month are calculated as Monthly Production multiplied by the Monthly Average Gold Price and the Monthly Average Silver Price, minus Allowable Deductions, as such terms are defined in the Sprott Royalty Agreement. The Company is required to remit royalty payments to the Payee free and clear and without any present or future deduction, withholding, charge or levy on account of taxes, except Excluded Taxes as such term is defined in the Sprott Royalty Agreement.
The Company has the right to repurchase up to 33.3% (0.5% of the 1.5% royalty) of the royalty on each of the first and second anniversaries from May 29, 2020. The Company did not exercise its right to repurchase 0.5% on the first anniversary. The Sprott Royalty Agreement is secured by a first priority lien on certain property of the Hycroft Mine, including: (1) all land and mineral claims, leases, interests, and rights; (2) water rights, wells, and related infrastructure; and (3) stockpiles, buildings, structures, and facilities affixed to, or situated on, the Hycroft Mine, which ranks senior to security interests and liens granted pursuant to the Sprott Credit Agreement. In addition to the terms generally described above, the Sprott Royalty Agreement contains other terms and conditions commonly contained in royalty agreements of this nature.
During the three and nine months ended September 30, 2021, the Company recorded amortization of its deferred gain on the sale of its royalty of approximately $0.1 million and $0.1 million, respectively, and made payments of $1.0 million and $2.0 million, respectively. As of September 30, 2021, $0.1 million ofclassified the deferred gain from the sale of its royalty was recorded as a currentnon-current liability based uponas a result of the estimated gold and silver expected to be produced over the next 12 months, using the current mine plan, and current proven and probable mineral reserves.cessation of mining operations in November 2021.
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
11. WarrantsWarrant liabilities
The following table summarizes the Company's outstanding warrants (dollars in thousands):
Balance at January 1, 2021
Fair Value Adjustments(1)
Transfers to an Unrelated Third PartyBalance at
September 30, 2021
Balance at December 31, 2021
Fair Value Adjustments(1)
Balance at March 31, 2022
WarrantsAmountWarrantsAmountWarrantsAmountWarrantsAmountWarrantsAmountWarrantsAmountWarrantsAmount
Warrant liabilitiesWarrant liabilitiesWarrant liabilities
5-Year Private Warrants5-Year Private Warrants9,888,415 $15,326 — $(10,917)(394,863)$(284)9,493,552 $4,125 5-Year Private Warrants9,478,830 $664 — $5,308 9,478,830 $5,972 
Seller WarrantsSeller Warrants12,721,901 63 — (38)— — 12,721,901 25 Seller Warrants12,721,901 — 13 12,721,901 18 
TotalTotal22,610,316 $15,389 — $(10,955)(394,863)$(284)22,215,453 $4,150 Total22,200,731 $669 — $5,321 22,200,731 $5,990 
Equity classified warrants
5-Year Public Warrants24,401,483 $28,619 — $— 394,863 $284 24,796,346 $28,903 
Public Offering Warrants9,583,334 12,938 — — — — 9,583,334 12,938 
Total33,984,817 $41,557 — $— 394,863 $284 34,379,680 $41,841 
(1)Liability classified warrants are subject to fair value remeasurement at each balance sheet date in accordance with ASC 814-40, Contracts on Entity's Own Equity. As a result, fair value adjustments related exclusively to the Company's liability classified warrants. Refer to Note 1819 - Fair Value Measurements for further detail on the fair value of the Company's liability classified warrants.
The following table summarizes additional information on the Company's outstanding warrants:
Exercise PriceExercise PeriodExpiration DateWarrants Outstanding
Warrant liabilities
5-Year Private Warrants$11.50 5 yearsMay 29, 20259,493,552 
Seller Warrants40.31 7 yearsOctober 22, 202212,721,901 
Equity classified warrants
5-Year Public Warrants$11.50 5 yearsMay 29, 202524,796,346 
Public Offering Warrants10.50 5 yearsOctober 6, 20259,583,334 


Exercise PriceExercise PeriodExpiration DateWarrants Outstanding
Warrant liabilities
5-Year Private Warrants$11.50 5 yearsMay 29, 20259,478,830 
Seller Warrants40.31 7 yearsOctober 22, 202212,721,901 

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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements

Warrant liabilities
5-Year Private Warrants
Prior to the Recapitalization Transaction, MUDS issued 7,740,000 warrants to purchase 7,740,000 shares of common stock, and concurrently with the Recapitalization Transaction, the Company issued 2,500,000 private placement warrants as part of a forward purchase unit offering (collectively, the "5-Year Private Warrants"). Refer to Note 3 - Recapitalization Transaction for further detail on the Recapitalization Transaction. The 5-Year Private Warrants cannot be redeemed and can be exercised on a cashless basis if the 5-Year Private Warrants are held by the initial purchasers or their permitted transferees. If the 5-Year Private Warrants are transferred to someone other than the initial purchasers or their permitted transferees (an "Unrelated Third Party"), such warrants become redeemable by the Company under substantially the same terms as the 5-Year Public Warrants. Since the original issue of private warrants, transfers to an Unrelated Third Party totaled 746,448, including 351,585 and 394,863 in the year ended 2020 and in the nine months ended September 30, 2021, respectively, and therefore became classified as 5-Year Public Warrants.
Seller Warrants

In connection with the Recapitalization Transaction, the Company assumed the obligations and liabilities under that certain warrant agreement, dated as of October 22, 2015, by and between Seller and Computershare Inc., a Delaware corporation, and its wholly owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company, collectively as initial warrant agent; and Continental Stock Transfer & Trust Company, LLC was named as the successor warrant agent (the “Seller Warrant Agreement”). Pursuant to the assumption of the Seller Warrant Agreement, the warrants issued thereunder (the “Seller Warrants”) became exercisable into shares of common stock.
Under the Seller Warrant Agreement, certain adjustments are required to be made to: (i) the exercise price of each Seller Warrant; and (ii) the number of shares of common stock issuable upon exercise of each Seller Warrant upon issuing shares of common stock to “Restricted Persons” as defined in the Seller Warrant Agreement. As of September 30, 2021, the exercise price of each Seller Warrant was $40.31 per share of common stock and the number of shares of common stock issuable upon exercise of each Seller Warrant was 0.28055. As a result, an aggregate of 3,569,129 shares of common stock are issuable upon exercise of the 12,721,901 outstanding Seller Warrants. The Seller Warrants are listed on the Nasdaq Capital Market under the symbol "HYMCZ".
Equity classified warrants
5-Year Public Warrants
Prior to the Recapitalization Transaction, MUDS issued 20,800,000 units, with each unit consisting of 1 share of common stock and 1 warrant to purchase one share of common stock (the "IPO Warrants"), and concurrently with the Recapitalization Transaction, the Company issued 3,249,999 warrants upon substantially similar terms as part of a backstop unit offering (the "Backstop Warrants" and collectively with the IPO Warrants, the "5-Year Public Warrants"). Refer to Note 3 - Recapitalization Transaction for further detail on the Recapitalization Transaction. The Company has certain abilities to call the 5-year Public Warrants if the last reported sale price of common stock equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period. The 5-Year Public Warrants (other than the Backstop Warrants) are listed for trading on the Nasdaq Capital Market under the symbol "HYMCW".
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
Public Offering Warrants
On October 6, 2020, the Company issued 9,583,334 units in an underwritten public offering (the "Public Offering"), with each unit consisting of 1 share of common stock and 1 warrant to purchase one share of common stock (the "Public Offering Warrants"). Of the 9.6 million units issued, 5.0 million units were issued to Restricted Persons, as defined under the Seller Warrant Agreement. The Public Offering Warrants are immediately exercisable and entitle the holder thereof to purchase 1 share of common stock. The Company has certain abilities to call such Public Offering Warrants if the last reported sale price of common stock equals or exceeds $17.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period. The shares of common stock and Public Offering Warrants were separated upon issuance in the Public Offering. The Public Offering Warrants are listed for trading on the Nasdaq Capital Market under the symbol "HYMCL".
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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
12. Asset Retirement Obligation ("ARO")
The following table summarizes changes in the Company’s ARO (dollars in thousands):
September 30, 2021December 31, 2020March 31, 2022December 31, 2021
Balance, beginning of periodBalance, beginning of period$4,785 $4,374 Balance, beginning of period$5,193 $4,785 
Accretion expenseAccretion expense306 374 Accretion expense102 408 
Changes in estimates— 37 
Balance, end of periodBalance, end of period$5,091 $4,785 Balance, end of period$5,295 $5,193 
During the ninethree months ended September 30, 2021,March 31, 2022, the Company did not incur any additional reclamation obligations associated with additional disturbances, or other regulatory requirements. The Company estimates that no significant reclamation expenditures associated with the ARO will be made until 2047 and that reclamation work will be completed by the end of 2065. During the ninethree months ended September 30, 2021,March 31, 2022, there were no events or changes to the Company's regulatory environment or new or additional disturbances that would require a change to the Company's ARO due to changes in estimates. As a result, the Company did not record any adjustments to the ARO.
13. Stockholders' Equity
Common Stock
Private placement offering
On March 14, 2022, the Company entered into subscription agreements with American Multi-Cinema, Inc. and 2176423 Ontario Limited pursuant to which the Company agreed to sell the entities an aggregate of 46,816,480 units at a purchase price per unit of $1.193 with each unit consisting of 1 share of the Company’s common stock and 1 warrant to purchase a share of Common Stock ("Warrants") and the shares issuable upon exercise of the Warrants (the “Warrant Shares”), providing for a total purchase price of approximately $55.9 million (the "Private Placement Offering"). The Warrants have an exercise price of $1.068 per Warrant Share and will expire five years after issuance. On March 15, 2022, the Private Placement Offering closed and the Company received gross proceeds of $55.9 million before deducting expenses incurred in connection with therewith. As of March 31, 2022, the Company has incurred immaterial costs associated with the Private Placement Offering.
At-the-market offering
On March 15, 2022, the Company implemented an “at-the-market" offering ("ATM Program") by entering into an At Market Issuance Sales Agreement with B. Riley Securities, Inc. ("Sales Agreement"). Under the terms of the Sales Agreement, the Company may from time to time to or through the Agent, acting as sales agent or principal, offer and sell shares of its Class A common stock, par value $0.0001 per share, having a gross sales price of up to $500.0 million. Shares of common stock sold under the Sales Agreement, were issued pursuant to the Company’s shelf registration statement on Form S-3 (No. 333-257567) that the Securities and Exchange Commission declared effective on July 13, 2021, including the prospectus, dated July 13, 2021, and the prospectus supplement, dated March 15, 2022, as the same may be amended or supplemented. The Company completed the ATM Program on March 25, 2022, and received total gross proceeds, before deducting fees and expenses of the ATM Program, of $138.6 million for the sale of 89,553,584 shares of the Company’s common stock. Net proceeds, after deducting commissions and fees of $5.0 million (of which $0.8 million was included in Accounts payable and accrued expenses as of March 31, 2022), were $133.6 million.
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Table of Contents
HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
Equity Classified Warrants
The following table summarizes the Company's outstanding equity classified warrants included in Additional paid-in capital on the Condensed Consolidated Balance Sheets (dollars in thousands):
Balance at December 31, 2021Warrant IssuancesBalance at March 31, 2022
WarrantsAmountWarrantsAmountWarrantsAmount
Equity classified warrants
5-Year Public Warrants24,811,068 $28,912 — $— 24,811,068 $28,912 
Public Offering Warrants9,583,334 12,938 — — 9,583,334 12,938 
Private Placement Offering Warrants— — 46,816,480 25,604 46,816,480 25,604 
Total34,394,402 $41,850 46,816,480 $25,604 81,210,882 $67,454 
As discussed above, pursuant to the Private Placement Offering, the Company issued 46,816,480 Warrants with an exercise price of $1.068 per Warrant Share that expire five years from the date of issuance. The Warrants are deemed freestanding, equity-linked financial instructions that do not require liability classification under ASC Topic 480-10 Overall Debt because: (1) they are not mandatory redeemable shares; (2) they do not obligate the Company to buy back shares; and (3) they are not settled in a variable number of shares. As a result, the Company allocated the gross proceeds of $55.9 million from the Private Placement Offering between the Warrants and common stock as of the closing date of March 15, 2022. The Company used the Black-Scholes option pricing model to determine the fair value of the Warrants upon the issuance date using the following assumptions:
As of March 15, 2022
Expected term (years)5
Risk-free interest rate2.1 %
Expected volatility118.4 %
Expected dividend yield— 
The following table summarizes additional information on the Company's outstanding warrants:
Exercise priceExercise periodExpiration dateWarrants outstanding
Equity classified warrants
5-Year Public Warrants11.505 yearsMay 29, 202524,811,068 
Public Offering Warrants10.505 yearsOctober 6, 20259,583,334 
Private Placement Offering Warrants1.0685 yearsMarch 15, 202746,816,480 
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
14. Revenues
The table below is a summary of the Company’s gold and silver sales (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
202120202021202020222021
AmountOunces
Sold
AmountOunces
Sold
AmountOunces
Sold
AmountOunces
Sold
AmountOunces
Sold
AmountOunces
Sold
Gold salesGold sales$29,129 16,354 $11,623 6,056 $77,570 43,244 $29,234 16,854 Gold sales$8,906 4,773 $17,541 9,830 
Silver salesSilver sales2,547 105,478 668 27,251 9,143 352,480 1,817 97,954 Silver sales260 10,934 1,495 57,236 
TotalTotal$31,676 $12,291 $86,713 $31,051 Total$9,166 $19,036 
While the Company is not obligated to sell any of its gold and silver to one customer, the majority of gold and silver sales during both of the ninethree months ended September 30,March 31, 2022 and 2021 and 2020 were to three customers.one customer. For the three and nine months ended September 30, 2021, approximately 74.1% and 78.2%March 31, 2022, 100.0% of revenue was attributable to sales to the same customer, respectively. For the three and nine months ended September 30, 2020,March 31, 2021, approximately 53.8% and 69.1%96.5% of revenue was attributable to sales to one customer, respectively.
During the third quarter of 2021, the Company received $1.6 million in sales consideration for which the Company had not satisfied its performance obligation under its contract with the customer as of September 30, 2021. Such consideration received is included in Deferred revenue.customer.
14.15. Stock-Based Compensation
Performance and Incentive Pay Plan ("PIPP")
As of September 30, 2021,March 31, 2022, all awards granted under the PIPP were in the form of restricted stock units to employees, directors or consultants of the Company. Restricted stock units granted under the PIPP without performance-based vesting criteria typically vest in either equal annual installments over two to three years, or in entirety on the fourth anniversary after the grant date. Awards granted with performance-based vesting criteria typically vest in annual installments over two or three years subject to the achievement of certain financial and operating results of the Company. Certain restricted stock units granted to non-employee directors vested immediately while others vest in equal installments over a two to three year period. As of September 30, 2021March 31, 2022 there were 361,239602,989 shares available for issuance under the PIPP.
For restricted stock units granted in the first quarter of 2019 that had not vested as of September 30, 2021March 31, 2022, a price per share was not determined as of the grant date. The number of shares of common stock of the Company to be issued upon vesting is to be calculated on the vesting date, which is either the second or third anniversary of the date of the grant, or the annual date the compensation committee determines the achievement of the corporate performance targets. Such unvested restricted stock unit awards are included in the non-current portion of Other liabilities. Refer to Note 8 - Other Liabilities for further detail.
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HYCROFT MINING HOLDING CORPORATION
Notesshares of common stock to Consolidated Financial Statements
be issued upon vesting using the closing share price of its common stock on the last day of the period as quoted on the NASDAQ. For purposes of the outstanding unvested calculations below and the calculation of the shares available for issuance under the PIPP above, the Company used the closing share price on March 31, 2022 of $2.30 to estimate the number of shares of common stock to be issued upon vesting of these awards. As a result, actual shares of common stock issued upon vesting may be significantly different than these estimates.
The following table summarizes the Company’s non-vestedunvested share awards grantedoutstanding under the PIPP:
NineThree Months Ended
September 30, 2021March 31, 2022
Non-vestedUnvested at beginning of year(1)
545,6962,210,911 
Impact of fluctuations in share price47,196 (770,806)
GrantedCanceled/forfeited922,653 (61,550)
Canceled/forfeitedVested(2)
(226,283)
Unvested end of period(1)
(214,959)
Vested(191,413)
Non-vested at end of period1,109,1731,152,272 
(1)Amounts include liability-based awards for which the number of units awarded is not determined until the vesting date. The number of liability-based award units included in this amount are estimated using the market value of the Company's common shares as of September 30, 2021the end of each reporting period.
(2)The Company issued the shares of common stock related to the vesting of restricted stock units during the three months ended March 31, 2022 on April 8, 2022 as the Company was under a trading black-out until that date.
During the ninethree months ended September 30,March 31, 2022 and 2021, and the year ended December 31, 2020, the Company reclassified $0.8 million$36,912 and $1.8$0.1 million from the current portion of Other liabilities to Additional paid-in capital for restricted stock units that vested.
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
16. Income Taxes
The Company's anticipated annual tax rate is impacted primarily by the amount of taxable income associated with each jurisdiction in which its income is subject to income tax, permanent differences between the financial statement carrying amounts and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

DuringSection 382 of the three and nine months ended September 30, 2021,Internal Revenue Code ("IRC") imposes limitations on the use of U.S. federal net operating losses (“NOLs”) upon a more than 50% change in ownership in the Company recorded(ad defined in the IRC) within a three-year period. In connection with its at-the-market equity offering, the Company underwent a Section 382 ownership change on March 25, 2022. As a result, utilization of the Company’s NOL’s and certain unrealized losses are limited on an incomeannual basis. If the Section 382 annual limitation amount is not fully utilized in a particular tax benefit of $0.1 million for discrete items related estimatedyear, then the unused portion from that tax payments submitted prioryear is added to the Recapitalization Transaction. Section 382 annual limitation in subsequent years. The Company’s annual limitation under Section 382 is estimated to be approximately $1.3 million.
The Company incurred no net income tax expense or benefit for the same periods of 2020.three months ended March 31, 2022 and 2021. The effective tax rate for the three and nine months ended September 30,March 31, 2022, and 2021, and 2020, was 0.2%0.0% and 0.0%, respectively. The effective tax rates differed from the statutory rate during each period primarily due to changes in the valuation allowance established to offset net deferred tax assets and a current tax benefit related to prior year return-to-provision true-up.assets. The effective tax rate for the ninethree months ended September 30 2020March 31, 2022 was less than the U.S. statutory rate which was due to the current year tax loss, offsetting the change in valuation allowance.

A new mining excise tax applied to gross proceeds became effective on July 1, 2021 following the passing of Assembly Bill 495 at the Nevada Legislative Session ended on May 31, 2021. The new excise tax is a tiered tax, with a highest rate of 1.1% and the first payment expected in April 2022.

The bill does not take into consideration expenses or costs incurred to generate gross proceeds. Therefore, this tax will be treated as a gross receipts tax and not as a tax based on income. As a result, this new tax will be reported as a component of Cost of sales and not as income tax expense. As of September 30, 2021, the Company has accrued $0.1 million related to the annual excise tax, included in Accounts payable and accrued expenses.

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HYCROFT MINING HOLDING CORPORATION
Notes to Consolidated Financial Statements
16.17. Loss Per Share
The table below summarizes the Company's basic and diluted loss per share calculations (in thousands, except share and per share amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Net lossNet loss$(23,213)$(32,278)$(41,328)$(117,608)Net loss$(22,060)$(9,688)
Weighted average shares outstandingWeighted average shares outstandingWeighted average shares outstanding
BasicBasic60,114,358 50,160,080 59,989,457 23,059,068 Basic81,201,453 59,901,306 
DilutedDiluted60,114,358 50,160,080 59,989,457 23,059,068 Diluted81,201,453 59,901,306 
Basic loss per common shareBasic loss per common share$(0.39)$(0.64)$(0.69)$(5.10)Basic loss per common share$(0.27)$(0.16)
Diluted loss per common shareDiluted loss per common share$(0.39)$(0.64)$(0.69)$(5.10)Diluted loss per common share$(0.27)$(0.16)
Basic and diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period.  Loss per share amounts in the 2020 period exclude the common share effects from certain of Seller's debt instruments, which are reflected in the 2021 period. 
Due to the Company's net loss during the three and nine months ended September 30,March 31, 2022 and 2021, and 2020, there was no dilutive effect of common stock equivalents because the effects of such would have been anti-dilutive. The following table summarizes the shares excluded from the weighted average number of shares of common sharesstock outstanding, as the impact would be anti-dilutive (in thousands):
September 30,
20212020
Warrants56,595 37,500 
Restricted stock units1,190 149 
Total57,785 37,649 
March 31,
20222021
Warrants94,259 37,500 
Restricted stock units1,152 149 
Total95,411 37,649 
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
17.18. Segment Information
The Company's reportable segments are comprised of operating units that have revenues, earnings or losses, or assets exceeding 10% of the respective consolidated totals, and are consistent with the Company’s management reporting structure. Each segment is reviewed by the executive decision-making group to make decisions about allocating the Company's resources and to assess their performance. The tables below summarize the Company's segment information (dollars in thousands):
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended March 31,
Hycroft MineCorporate and OtherTotalHycroft MineCorporate and OtherTotalHycroft MineCorporate and OtherTotal
2021
Revenue - Note 13$31,676 $— $31,676 $86,713 $— $86,713 
20222022
Revenue - Note 14Revenue - Note 14$9,166 $— $9,166 
Cost of salesCost of sales43,660 — 43,660 106,563 — 106,563 Cost of sales16,972 — 16,972 
Other operating costsOther operating costs3,362 3,313 6,675 5,082 12,271 17,353 Other operating costs1,140 3,072 4,212 
Loss from operationsLoss from operations(15,346)(3,313)(18,659)(24,932)(12,271)(37,203)Loss from operations(8,946)(3,072)(12,018)
Interest expense, net of capitalized interest - Note 9Interest expense, net of capitalized interest - Note 9— (5,461)(5,461)— (15,176)(15,176)Interest expense, net of capitalized interest - Note 9(4)(5,342)(5,346)
Fair value adjustment to warrants - Notes 11 and 18— 812 812 — 10,956 10,956 
Fair value adjustment to warrants - Notes 11 and 19Fair value adjustment to warrants - Notes 11 and 19— (5,321)(5,321)
Gain on sale of equipmentGain on sale of equipment625 — 625 
Loss before income taxesLoss before income taxes$(15,346)$(7,962)$(23,308)$(24,932)$(16,491)$(41,423)Loss before income taxes$(8,325)$(13,735)$(22,060)
Income tax benefitIncome tax benefit— 95 95 — 95 95 Income tax benefit— — — 
Net lossNet loss$(15,346)$(7,867)$(23,213)$(24,932)$(16,396)$(41,328)Net loss$(8,325)$(13,735)$(22,060)
2020
Revenue - Note 13$12,291 $— $12,291 $31,051 $— $31,051 
Total AssetsTotal Assets$126,273 167,081 293,354 
20212021
Revenue - Note 14Revenue - Note 14$19,036 $— $19,036 
Cost of salesCost of sales25,770 — 25,770 81,501 — 81,501 Cost of sales29,402 — 29,402 
Other operating costsOther operating costs5,424 5,711 11,135 5,611 18,149 23,760 Other operating costs595 3,794 4,389 
Loss from operationsLoss from operations(18,903)(5,711)(24,614)(56,061)(18,149)(74,210)Loss from operations(10,961)(3,794)(14,755)
Interest expense, net of capitalized interest - Note 9Interest expense, net of capitalized interest - Note 9— (4,319)(4,319)— (39,278)(39,278)Interest expense, net of capitalized interest - Note 9— (4,449)(4,449)
Fair value adjustment to warrants - Notes 11 and 18— (3,354)(3,354)— (4,276)(4,276)
Fair value adjustment to warrants - Notes 11 and 19Fair value adjustment to warrants - Notes 11 and 19— 9,493 9,493 
Interest incomeInterest income— 156 — 156 Interest income23 — 23 
Net loss$(18,894)$(13,384)$(32,278)$(55,905)$(61,703)$(117,608)
Net income (loss)Net income (loss)$(10,938)$1,250 $(9,688)
Total AssetsTotal Assets$186,197 $36,705 $222,902 

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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
18.19. Fair Value Measurements
Recurring fair value measurements
The following table sets forth by level within the fair value hierarchy, the Company’s liabilities measured at fair value on a recurring basis (dollars in thousands).
Hierarchy
Level
September 30,
2021
December 31,
2020
Hierarchy
Level
March 31,
2022
December 31,
2021
Warrant liabilitiesWarrant liabilitiesWarrant liabilities
5-Year Private Warrants5-Year Private Warrants24,125 15,327 5-Year Private Warrants25,972 664 
Seller WarrantsSeller Warrants225 62 Seller Warrants218 
TotalTotal$4,150 $15,389 Total$5,990 $669 
5-Year Private Warrants
The 5-Year Private Warrants are valued using a Black-Scholes model that requires a variety of inputs including the Company's stock price, the strike price of the 5-Year Private Warrants, the risk-free rate, and the implied volatility. As the terms of the 5-Year Private Warrants are identical to the terms of the 5-Year Public Warrants except that the 5-Year Private Warrants, while held by the SPAC sponsor and/certain holders or SPAC underwriter and their permitted transferees, are precluded from mandatory redemption and are entitled to be exercise on a "cashless basis" at the holder’s election, the implied volatility used in the Black-Scholes model is calculated using a Monte-Carlo model of the 5-Year Public Warrants that factors in the restrictive redemption and cashless exercise features of the 5-Year Private Warrants. The Company updates the fair value calculation on at least a quarterly basis, or more frequently if changes in circumstances and assumptions indicate a change from the existing carrying value.
Seller Warrants
As part of the Recapitalization Transaction, the Company assumed Seller's obligations under the Seller Warrant Agreement and the 12.7 million Seller Warrants outstanding became exercisable into shares of the Company's common stock. The Seller Warrant Agreement also contains certain terms and features to reduce the exercise price and increase the number of shares of common stock each warrant is exercisable into. As a result, Seller Warrants are considered derivative financial instruments and carried at fair value. The fair value of Seller Warrants was computed by an independent third-party consultant (and validated by the Company) using a Monte Carlo simulation-based model that requires a variety of inputs, including contractual terms, market prices, exercise prices, equity volatility and discount rates. The Company updates the fair value calculation on at least an annual basis, or more frequently if changes in circumstances and assumptions indicate a change from the existing carrying value. See Note 11 - Warrants for additional information on the Seller Warrants.
Items disclosed at fair value
Debt, net
The Sprott Credit Agreement and the Subordinated Notes are privately held and, as such, there is no public market or trading information available for such debt instruments. As of September 30, 2021March 31, 2022 and December 31, 2020,2021, the fair value of the Company’s debt instruments was $161.8$139.3 million and $154.9$162.8 million, compared to the carrying value of $158.9$139.7 million and $147.8$160.3 million as of September 30, 2021March 31, 2022 and December 31, 2020,2021, respectively. The fair value of the principal of the Company’s debt instruments, including capitalized interest, was estimated using a market approach in which pricing information for publicly traded, non-convertible debt instruments with speculative ratings were analyzed to derive a mean trading multiple to apply to the DecemberMarch 31, 20202022 balances.
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
19.20. Supplemental Cash Flow Information
The following table provides supplemental cash flow information (dollars in thousands):
Nine Months Ended September 30,Three Months Ended March 31,
2021202020222021
Cash interest paidCash interest paid$2,153 $5,366 Cash interest paid$1,495 $— 
Significant non-cash financing and investing activities:Significant non-cash financing and investing activities:Significant non-cash financing and investing activities:
Increase in debt from in-kind interestIncrease in debt from in-kind interest13,696 — Increase in debt from in-kind interest2,340 3,971 
Plant, equipment, and mine development acquired by note payable538 — 
Mobile equipment acquired by note payableMobile equipment acquired by note payable— 407 
Plant, equipment, and mine development additions included in accounts payablePlant, equipment, and mine development additions included in accounts payable424 3,713 Plant, equipment, and mine development additions included in accounts payable— 911 
Liability based restricted stock units transferred to equityLiability based restricted stock units transferred to equity754 — Liability based restricted stock units transferred to equity37 — 
Exchange of Seller lien notes for HYMC common stock— 208,713 
Exchange of Seller lien notes for Subordinated Notes— 80,000 
Allocate and write-off Seller's debt issuance costs— 8,202 
Debt issuance costs paid in-kindDebt issuance costs paid in-kind3,300 — 
Accrual of equity issuance costs included in Accounts payable and accrued expenses
Accrual of equity issuance costs included in Accounts payable and accrued expenses
766 — 
20.21. Commitments and Contingencies
From time to time, the Company is involved in various legal actions related to its business, some of which are class action lawsuits. Management does not believe, based on currently available information, that contingencies related to any pending or threatened legal matter will have a material adverse effect on the Company’s financial statements, although a contingency could be material to the Company’s results of operations or cash flows for a particular period depending on the results of operations and cash flows for such period. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.
The Company has deductible-based insurance policies for certain losses related to general liability, workers’ compensation and automobile coverage. The Company records accruals for contingencies related to its insurance policies when it is probable that a liability has been incurred and the amount can be reasonably estimated. These accruals are adjusted periodically as assessments change or additional information becomes available. Insurance losses for claims filed and claims incurred but not reported are accrued based upon estimates of the aggregate liability for uninsured claims using historical loss development factors and actuarial assumptions followed in the insurance industry.
In February 2022, the Company engaged a financial advisor to assist with its financing efforts. During the three months ended March 31, 2022, the Company completed the Private Placement Offering, the ATM Program and entered into the Second A&R Agreement and Note Amendment without assistance from the financial advisor. As the Company completed the aforementioned equity and debt transactions during the engagement period, the Company is currently in discussions with its financial advisor regarding the engagement and fees. As the discussions are ongoing, the amount of a fee, if any, is not currently estimable. As a result, the Company has not provided for an amount due under the engagement within its condensed consolidated financial statements.
Financial commitments not recorded in the financial statements
As of September 30, 2021March 31, 2022 and December 31, 2020,2021, the Company's off-balance sheet arrangements consisted of operating lease agreements,a net smelter royalty arrangement and a net profit royalty arrangement, and a future purchase obligation for consignment inventory.
Operating leases
During the year ended December 31, 2020, the Company signed 2 leases for the rental of mining equipment. The operating leases for mobile mining equipment are used to supplement the Company’s own fleet. Each lease has less than a year remaining as of September 30, 2021. The total remaining minimum lease payments for the 2 leases was approximately $0.9 million as of September 30, 2021.
During the first quarter of 2021, the Company executed an operating lease agreement for a new large wheel loader with equal monthly payments of $0.1 million payable over four years, in addition to monthly maintenance payments based upon a fixed rate per service maintenance units. The total remaining minimum lease payments for this lease was approximately $7.8 million (including maintenance payments of $3.4 million) as of September 30, 2021.
The Company also holds operating leases for office buildings. Rent expense is $0.1 million annually and the leases expire between July 2021 and January 2022.arrangement.
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
Net profit royalty
A portion of the Hycroft Mine is subject to a mining lease that requires a 4% net profit royalty be paid to the owner of certain patented and unpatented mining claims. The mining lease also requires an annual advance payment of $120,000 every year mining occurs on the leased claims. All advance annual payments are credited against the future payments due under the 4% net profit royalty. An additional payment of $120,000 is required for each year total tons mined on the leased claims exceeds 5.0 million tons. As of September 30, 2021 total tons mined from the leased claims exceeded 5.0 million tons, for which the Company remittedceased mining operations in November 2021, the Company was not required additionalto pay the annual advance payment of $120,000 during the third quarter of 2021.in 2022. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid or accrued $3.0 million and included $0.6 million in Other assets in the consolidated balance sheetsCondensed Consolidated Balance Sheets as of September 30, 2021.March 31, 2022.
Net smelter royalty
Pursuant to the Sprott Royalty agreement in which the Company received cash consideration in the amount of $30.0 million, the Company granted a perpetual royalty equal to 1.5% of the Net Smelter Returns from its Hycroft Mine, payable monthly. Net Smelter Returns for any given month are calculated as Monthly Production multiplied by the Monthly Average Gold Price and the Monthly Average Silver Price, minus Allowable Deductions, as such terms are defined in the Sprott Royalty Agreement. The Company is required to remit royalty payments to the payee free and clear and without any present or future deduction, withholding, charge or levy on account of taxes, except Excluded Taxes as such term is defined in the Sprott Royalty Agreement.
As of September 30, 2021At both March 31, 2022 and December 31, 2020,2021, the estimated net present value of the Company’s net smelter royalty was $106.4 million and $148.4 million, respectively.$154.0 million. The net present value of the Company's net smelter royalty was modeled using the following level 3 inputs: (i) market consensus inputs for future gold and silver prices; (ii) a precious metals industry consensus discount rate of 5.0%; and (iii) estimates of the Hycroft Mine’s life-of-mine gold and silver production volumes and timing.
21.22. Related Party Transactions
Certain amounts of the Company's indebtedness have historically, and with regard to the $80.0 million of Subordinated Notes, are currently,were held by 5 financial institutions. As of September 30, 2021, 3March 31, 2022, 1 of the financial institutions, Mudrick Capital Management, L.P (“Mudrick”), held more than 10% of the common stock of the Company and, as a result, was considered a related party (a "Related Party" or the "Related Parties") in accordance with ASC 850, Related Party Disclosures. For the three months ended March 31, 2022, Interest expense, net of capitalized interest included $0.8 million for the debt held by the Related Party.
As of March 31, 2021, three of the financial institutions, Mudrick, Highbridge Capital Management, LLC (“Highbridge”), Mudrick Capital Management, L.P (“Mudrick”) and Whitebox Advisors, LLC (“Whitebox”("Whitebox"), held more than 10% of the common stock of the Company and, as a result, each arewas considered a related party (the "Related Parties") in accordance with ASC 850, Related Party Disclosures.Parties. For the three and nine months ended September 30,March 31, 2021, Interest expense, net of capitalized interest included $1.9$1.8 million and $5.5 million, respectively, for the debt held by Related Parties. For the three and nine months ended September 30, 2020, Interest expense, net of capitalized interest included $1.7 million and $29.5 million, respectively, for the debt held by Related Parties.
As of September 30, 2021March 31, 2022 and December 31, 2020,2021, the Related Parties held a total $76.7$34.8 million and $71.2$63.8 million, respectively, of debt.
Additionally, during 2020, the Company's Compensation Committee and Board of Directors approved annual Director compensation arrangements for non-employee directors, of which $0.2 million is payable to Mudrick as of September 30, 2021. During the three months ended September 30, 2021,March 31, 2022, the Company paid $0.03 million to Mudrick and Mudrick vested in 5,047 restricted stock units that will convert into the same number of shares of the Company's common stock upon the Mudrick representative no longer serving on the Company's Board of Directors.
In connection with the closing of the Public Offering on October 6, 2020, Highbridge and Mudrick acquired 833,333, and 3,222,222 of the units, consisting of shares of common stock and Public Offering Warrants, issued in the Public Offering, respectively. Refer to Note 11 - Warrants for further information.
Additionally, during the nine months ended September 30, 2021, the Company paid $0.2$1.0 million to Ausenco Engineering USA South ("Ausenco") for work performed on preparing an Acid POX milling technical study. Diane Garrett is currently ana non-executive director on Ausenco's Board of Directors.

23. Subsequent Events
Amendment to the Company’s Second Amended and Restated Certificate of Incorporation
On March 11, 2022, the Board approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation increasing the number of authorized shares of the Company’s common stock by 1,000,000,000 to a total of 1,400,000,000 (the “Certificate of Incorporation Amendment”) and directed that the Certificate of Incorporation Amendment be submitted for consideration by the stockholders of the Corporation. On March 15, 2022, AMC, Sprott, and entities affiliated
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HYCROFT MINING HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
22. Subsequent Events
Waiver and amendmentwith Mudrick Capital Management LP, who together constituted the holders of certain compensatory arrangements
On October 6, 2021,a majority of the common stock, approved the Certificate of Incorporation Amendment by written consent. The Certificate of Incorporation Amendment became effective upon filing of the Certificate of Incorporation Amendment with the Delaware Secretary of State on April 22, 2022, 20 days after the Company entered in a Waiver and Amendmentcommenced distribution of an Information Statement on Schedule 14C to the Transition and Succession Agreement and Consulting Agreement with Randy Buffington, the former Chairmanstockholders of the Board, President and Chief Executive Officer of the Company. The Waiver and Amendment amends the Transition and Succession Agreement and the Consulting Agreement between the Company and Mr. Buffington, dated July 1, 2020. The Waiver and Amendment terminated the remaining unpaid cash payments to Mr. Buffington pursuant to the Transition and Succession Agreement and Consulting Agreement in the aggregate amount of $0.7 million, in exchange for the issuance of an aggregate of up to 275,000 shares of the Company's common stock, of which 137,500 was issued on October 8, 2021, and the remaining shares to be issued on June 30, 2022.
Waiver of certain Sprott Credit Agreement provisions
On November 9, 2021, the Company entered into a waiver (the “Waiver”) with Sprott Private Resource Lending II (Collector), LP (the “Lender”) of certain provisions of the Sprott Credit Agreement. Pursuant to the Waiver, the Lender has: (i) permitted the Company to cease active mining operations; and (ii) to reduce the amount of unrestricted cash required to be maintained by the Company from not less than $10.0 million to not less than $9.0 million for the period ending May 10, 2022.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion, which has been prepared based on information available to us as of November 10, 2021,May 4, 2022, provides information that we believe is relevant to an assessment and understanding of our consolidated operating results and financial condition. As a result of the completion of the Recapitalization Transaction, the financial statements of Seller are now the financial statements of the Company. Prior to the Recapitalization Transaction, the Company had no operating assets but, upon consummation of the Recapitalization Transaction, the business and operating assets of Seller sold to the Company became the sole business and operating assets of the Company. Accordingly, the financial statements of Seller and its subsidiaries as they existed prior to the Recapitalization Transaction and reflecting the sole business and operating assets of the Company going forward, are now the financial statements of the Company. The following discussion should be read in conjunction with our other reports filed with the U.S. Securities and Exchange Commission (the “SEC”) as well as our condensed consolidated financial statements (the "Financial Statements") and the notes thereto (the "Notes") included in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021.March 31, 2022. Terms not defined herein have the same meaning defined in the Financial Statements and the Notes.
The following MD&A generally discusses our condensed consolidated financial condition and results of operations for 20212022 and 20202021 and year-to-year comparisons between 20212022 and 2020.2021.
Introduction to the Company
We are a U.S.-based gold and silver development company that is focused on operating and developing our wholly owned Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. Gold and silver sales represent 100% of our operating revenues and the market prices of gold and silver significantly impact our financial position, operating results, and cash flows. The Hycroft Mine is located in the State of Nevada and the corporate office is located in Denver, Colorado. TheWinnemucca, Nevada. We recently filed the 2022 Hycroft Mine had proven and probable mineral reserves of 11.9 million ounces ofTRS which contemplates processing gold and 478.5 million ounces of silver at December 31, 2020, as determined by deducting mineral reserves mined through December 31, 2020 from the mineral reserves estimated in the 2019 Technical Report. We are also evaluating alternativeore using milling and processing methods for developing a commercial scalepressure oxidation to process sulfide operation.
As discussed throughout this MD&A, including within the Hycroft Mine section, during the nine months ended September 30, 2021, while we have been ableore along with heap leaching to achieve or improve on certain of our internal operating, processing, salesprocess oxide and production cost targets, because the Company is operating at a pre-commercial scale, it has incurred a net operating loss with negative cash flows before financing activities creating substantial doubt about our ability to continue as a going concern. Refer to the Going Concern subsection of the Recent Developments section of this MD&A for additional details.transition ore.
Health and Safety
We believe that safety is a core value, and we support that belief through our philosophy of safe work performance. Our mandatory mine safety and health programs include employee engagement and ownership of safety performance, accountability, employee and contractor training, risk management, workplace inspection, emergency response, accident investigation, and program auditing. This integrated approach is essential to ensure that our employees, contractors, and visitors operate safely.
During the first ninethree months of 2021,2022, we reported no lost time accidents. The Hycroft Mine’s total reportable incidentrecordable injury frequency rate ("TRIFR") for the trailing twelve months, which includes other reportable incidents, is one of the metrics we use to assess safety performance, and it is well below industry averages and significantly below historical levels experienced at the Hycroft Mine. During the first ninethree months of 20212022 we continued our critical focus on safety, including allocating additional personnel, resources, workforce time, and communications to mine safety. These actions contributed to a reduction in our TRIFR to approximately 0.410.29 at September 30, 2021,March 31, 2022, compared with approximately 2.300.64 at December 31, 2020,2021, an approximate 82%54% reduction. We will continue our safety efforts to reach the level of safety we expect and need to keep our workforce, contractors, and visitors safe.
For health and safety actions specific to COVID-19, refer to the Recent Developments section of this MD&A.
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Executive Summary
During the first ninethree months of 2021ended March 31, 2022, we operated a conventional run-of-mine (“ROM”) operation at 2020 pre-commercial scale using a mix of the Hycroft-owned mining fleet and a rental mining fleet. As a result of current and expected ongoing cost pressures for many of the reagents and consumables used at the Hycroft Mine, and the timeline for completing our updated technical studies in early 2022, effective immediately the Company is discontinuing pre-commercial scale mining at its ROM operation. We will continuecontinued producing gold and silver from ore on the leach pads and expect to continue as long as it is economic and will right-size the workforce to meet ongoing operational requirements.remains economic. When the operation was started upre-started in 2019, mining oxide and transition ore allowed the Company to pre-strip overburden with some revenue offset to gain access to commercial scale sulfides ore.sulfide mineralization. With the change in focus from the two-stage heap oxidation and leachNovel Process to a milling operation, there is ample time to align the remaining pre-stripping with the start-up of commercial scale sulfide operations. We believe that this action will conserve cash and focus the Company's time and resources on its technical studies for sulfide ore. The metallurgical and variability drill program is ongoing with drilling expected to be completed byconcluded in the endfirst quarter of 20212022, and metallurgical analysis and test work continuingis expected to continue through the first halfthird quarter of 2022.
The Company has previously discussed its strategy for developing an economic sulfide process for Hycroft. Based on the Company's findings to-date, including the analysis completed by an independent third-party research laboratory and the independent reviews by two metallurgical consultants, the Company does not believe the novel two-stage sulfide heap oxidation and leach process ("Novel Process"), as currently designed in the 2019 Technical Report, dated July 31 2019 ("2019 Technical Report"), is economic at current metal prices or those metal prices used in the 2019 Technical Report. Subject to the challenges discussed below, we will complete test work that is currently underway and may advance our understanding of the Novel Process in the future.
Following a review of past and recent test work and based on the currently contemplated designs and operating parameters of the alternative sulfide processing methods being studied including the Novel Process, and milling with Atmospheric Alkalineatmospheric alkaline oxidation or Alkaline Oxidationalkaline pressure oxidation ("POX"), the Company, working closely with its industry leading technical consultants, completed pit optimization runs and trade-off analyses comparing the alternative processes which reflected that an acidAcid POX ("Acid POX") process has significantly better economics than other processes studied. Therefore, the Company is focusingfocused its study efforts and resources solely on the Acid POX pre-feasibility study ("PFS") beingInitial Assessment which was prepared by Ausenco, Engineering USA South Inc. ("Ausenco"), with completion expected in Q1an effective date of February 18, 2022. The Acid POX process under study involvesincluded in the 2022 Hycroft TRS is a conventional crushing, grinding, and flotation circuit that generates a concentrate to be fed to an autoclave facility commonly used for refractory gold ores in this region.
Operations highlights for the first nine months of 2021 included:2022 Highlights
Safety - Hycroft's safety performance continued to improve with a 0.410.29 trailing 12-month total reportable incident frequency rate (“TRIFR”)TRIFR at the end of the thirdfirst quarter of 2021, the lowest TRIFR achieved in the last 10 years at Hycroft.2022. This represents an approximate 82%54% reduction in TRIFR compared with 2.300.64 at the end of 2020.2021.
Production - Gold production for the three months ended March 31, 2022, was 5,358 ounces and silver production was 16,861 ounces, both in line with forecast. Processing of ore on leach pads is currently planned to proceed through the thirdsecond quarter of 20212022.
Strengthened balance sheet:
Raised gross cash proceeds of 14,831$194.4 million through a $55.9 million private placement offering and $138.6 million in an at-the-market equity offering program, before deductions of commissions, fees and expenses.
Amended the Sprott Credit Agreement such that no further scheduled payments of principal are required prior to maturity, which was extended by two years to May 31, 2027, after raising the $50.0 million minimum equity and paying a $3.3 million fee in-kind. In addition, we made a prepayment of $23.9 million as required under the amended agreement.
Amended the Subordinated Notes to extend debt maturity by two years to December 1, 2027 with continuing 10% interest payable in-kind.
The Company ended the first quarter of 2022 with $172.8 million of cash on hand and was in compliance with debt covenants.
Finalized Initial Assessment Technical Report - The Company along with its third-party consultants, completed and filed the Initial Assessment Technical Report Summary for the Hycroft Mine ("2022 Hycroft TRS") with an effective date of February 18, 2022. As of March 31, 2022, the Hycroft Mine had measured and indicated mineral resources of 9.6 million ounces of gold and 91,437446.0 million ounces of silver represented a 240% and 295% increase ininferred mineral resources of 5.0 million ounces produced, respectively, compared with the corresponding quarter in 2020. As of the end of the third quarter, gold and 150.4 million ounces of silver, productionwhich are approximately 91%contained in oxide, transitional and 75% of the mid-point of full-year 2021 guidance.sulfide ores.
Project Update
SalesDrill Results - As we initially reported in our February 22, 2022 news release, results from our 2021 drill program continue to be delayed due to backlogs in the third quarter of 2021 were 16,354 ounces of gold (average realized price of $1,781 per ounce)independent labs associated with reduced staffing levels from the Covid-19 pandemic and 105,478 ounces of silver (average realized price of $24.15 per ounce), contributing to a $19.4 million increase in revenue compared with third quarter of 2020.
Despite the higher production and sales compared to the respective 2020 periods,high demand for these services. To date, we have consistently generated year-to-date losses and used cash in operating activities as a result of operating a pre-commercial scale direct leaching ROM operation with high relative operating costs due to insufficient recoveries resulting from lower grades mined combined with escalating prices of consumables and reagents. The $42.0 million reduction in cash since the beginningreceived results for approximately 30% of the year was primarily duedrill samples. Additional results on the remaining samples are anticipated to cash used for operating activities of $27.1 million and cash used for investing activities of $11.9 million.
On September 3, 2021, Hycroft announced drill results frombe received over the higher-grade Vortex Zone highlighted by 51.8 meters of 2.47 g/t gold and 25.5 g/t silver, somecourse of the highest gold grades encountered at the Hycroft Mine.
Metallurgical drilling continued through the third quarter of 2021 with 55 holes drilled to date totaling 51,166 feet. This drill program, as previously disclosed, is to complete the necessary variability and metallurgical work on geologic domains that were not sufficiently tested in the past but represent a significant portion of the estimated life-of-mine production.


next two quarters, assuming no further delays.
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Recent Developments
Goingconcern
As discussed in Note 2 - SummaryPotential under-estimation of Significant Accounting Policies to the Notes to the Financial Statements, events and conditions exist that, when considered individually orsilver in the aggregate, raise substantial doubt aboutresource model - Following our ability to continue as a going concern because without additional fundingreview of the resource in 2021, we announced on February 22, 2022, that silver may be unableunder-estimated in the resource model noting that a significant portion of historical drilling in the database does not include assay information for silver. With silver currently estimated to meet our obligations as they become due within one year aftercontribute 40-50% of the date that the financial statements for the period ended September 30, 2021 were issued. Although we completed the Recapitalization Transaction during the 2020 second quarter and completed the underwritten public offering on October 6, 2020, for estimated proceeds net of discount and equity issuance costs of $83.1 million, using our internal forecasts and cash flow projection models, we currently project we will likely require additional cash from financing activities in six to nine months from the date of this Quarterly Report on Form 10-Q to meet our operating and investing requirements and future obligations as they become due.
Our ability to continue as a going concern is contingent upon securing additional funding for working capital, capital and project expenditures, satisfying debt covenants required under the Sprott Credit Agreement, and other corporate expenses so that we can continue to developpotential value at the Hycroft Mine by conducting targeted exploration and completing the necessary technical studies to determine the likely timeline to bring the sulfides into commercial scale operation. Historically, we have been dependent on various forms of debt and equity financing to fund our business. While we monitor and evaluate opportunities on an ongoing basis to appropriately fund the Company and address our going concern, currently we do not have any agreements or understandings to issue any securities, including any securities under the $500 million universal shelf that was filedmilling process, we believe this information is an important factor to the overall understanding of the resource. This represents a significant potential opportunity at Hycroft. We have located a portion of the historical pulps and have sent them to an independent lab to re-analyze for the missing silver values. It may become necessary to conduct additional drilling to gather samples for the other areas of missing silver values as it could yield a significant opportunity for additional economic benefit.
Exploration - We have initiated work to conduct a robust exploration program during 2022 to follow up on the significant intercepts previously disclosed in Julyour press releases of September 8, 2021 and February 22, 2022. There has been no exploration drilling at Hycroft since 2014 and no prior focus on understanding the potential feeder to the resource..
Recent Developments
COVID-19
In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a pandemic, which continues to spread throughout the United States with new variants of the virus. Efforts implemented by local and national governments, as well as businesses, including temporary closures, have had adverse impacts on local, national and global economies. We have implemented health and safety policies and protocols for employees, contractors, and visitors that follow the guidelines published by the Center for Disease Control (CDC)("CDC") and the Mine Safety and Health Administration (MSHA)("MSHA"). During the first ninethree months of 2021, and the fourth quarter of 2020,ended March 31, 2022, our operations were limited byfaced certain limitations due to COVID-19, related absences, however the impact, while negative, did not materially and adversely affectimpact our operations. The extent
Mineral Resource Update
Gold equivalent mineral resources totaled 15.5 million ounces of the impactmeasured and indicated and 6.9 million ounces of COVID-19 on our operational and financial performance going forward will depend on certain developments, including but not limited to the duration and continued spread of the outbreak and strand mutations, the availability and use of vaccines, the development of therapeutic drugs and treatments, and the direct and indirect impacts on our employees, vendors, and customers, all of which are uncertain and cannot be fully anticipated or predicted. Sinceinferred. For this study, IMC developed the Hycroft Mine representsresource block model which includes data from 1981 to 2018 and includes 5,501 holes, representing 2,482,722 ft of drilling. The current inflationary environment and change in processing technique has resulted in increased cost assumptions and an associated higher cut-off grade partially mitigated by higher recoveries leading to a change in the entirety of our operations, any further COVID-19 outbreaks atmineral resource estimate, when compared with the mine site or any governmental restrictions implemented to combat the pandemic could result in a partial or an entire shutdownprior model.
The mineral resources were estimated based upon results of the 2022 Hycroft Mine itself, which would adversely impact our financial position, operating results, and cash flows.
During the third quarter of 2021, the site continued to manage COVID-19 control restrictionsTRS, as conducted in accordance with state, national,the Modernization Rules.
Private Placement
On March 14, 2022,the Company entered into subscription agreements (the “Subscription Agreements” and CDC guidelineseach a “Subscription Agreement”) with each of American Multi-Cinema, Inc. (“AMC”) and 2176423 Ontario Limited, an entity affiliated with Eric Sprott (“Sprott” and together with AMC, the “Purchasers”), pursuant to which the Company agreed to sell to the Purchasers, in a private placement, an aggregate of 46,816,480 units (“Units”) at a purchase price per Unit of $1.193, with each Unit consisting of one share of common stock, and one warrant to purchase a share of common stock and the shares issuable upon exercise of the warrants (the “Warrant Shares”), providing for a total purchase price of approximately $55.9 million (the “Private Placement”). The Warrants issued in the Private Placement have an exercise price of $1.068 per Warrant Share and will continueexpire five years after issuance.
The closing of the sales of securities pursuant to monitorthe Subscription Agreements occurred on March 15, 2022 for gross proceeds to the Company of approximately $55.9 million before deducting expenses incurred in connection with the Private Placement.The Company intends to use the proceeds for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital or capital expenditures and follow those guidelines going forward.other investments, which may include additional technical evaluations and studies, advancement of the Initial Assessment in the 2022 Hycroft TRS to a pre-feasibility and/or feasibility study and additional exploration at the Hycroft Mine.
To date, COVID-19 related absences have limited our operations from time-to-time, but did not materially disrupt our operations. Additionally, we have not experienced any material disruptionsThe Subscription Agreement with AMC, as amended, also provided AMC with the right to our supply chain becauseappoint a director to the Company’s board of COVID-19. However, we can provide no assurance that our operations will not be materially adversely affecteddirectors (the “Board”) and the Company agreed to support such director’s nomination so long as AMC retains at least 50% of the common stock purchased under the Subscription Agreement with AMC and holds at least 5% of the outstanding voting securities.
As required by the COVID-19 pandemic inSubscription Agreements, the future that could result from any worsening ofCompany prepared and filed a resale registration statement with the pandemic,SEC to register the effect of mutating strains, additional outbreaks ofcommon stock, warrants and Warrant Shares for sale under the pandemic, actions taken to contain the pandemic’s spread or treat its impact, continued availability of vaccines, and their distribution, acceptance and efficacy, and governmental, business and individual actions taken in response to the pandemic including government-imposed regulations regarding, among other things, COVID-19 testing, vaccine mandates and related workplace restrictions.Securities Act.
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Technical and operations review summaryAgreement with Sprott Private Resource Lending II (Collector), LP
The new leadership team established atOn November 10, 2021, the mine in late 2020 launched an extensive and detailed reviewCompany entered into a waiver with Sprott Private Resource Lending II (Collector) (the "Lender") of certain provisions of the Hycroft MineAmended and took immediate stepsRestated Credit Agreement effective November 10, 2021 (the "November 2021 Waiver"). Pursuant to rectify operational shortcomings, significantlythe November 2021 Waiver, the Lender permitted the Company to cease active mining operations and to reduce costs,the amount of Unrestricted Cash required to be maintained by the Company from not less than $10.0 million to not less than $9.0 million for the period ending May 10, 2022
On February 28, 2022 the Company entered into a waiver and put in place an operating team alignedamendment agreement with the Company’s long-term strategyLender (the "February 2022 Waiver and Amendment") amending the previous waiver and require that the Company maintain at least $7.5 million of Unrestricted Cash on the last day of February 2022 and at least $9.0 million on the last day of each month thereafter during the waiver period, waived all obligations of the Company to establishprepay the Hycroft Minefacility with the net cash proceeds of any mill asset sales until the earlier of the date on which the Company completes a private placement or other offering or issuance of its equity securities and March 31, 2022, and extended the payment due date for the February additional interest payment and the February principal payment until the earlier of any such offering date and March 31, 2022.
On March 11, 2022, the Company entered into an agreement (the “March 2022 Sprott Agreement”) with the Lender with respect to the Amended and Restated Credit Agreement, dated as a safety-focused, long-life, low-cost gold and silver producer. Incident and near miss reporting improved as expected asof May 29, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the team initiated numerous campaigns to recognize, report and eliminate safety hazards. To date,“Sprott Credit Agreement”) among the team has made significant strides atCompany, the Hycroft Mine through elevatingLender, the safety performance with a marked decreaseGuarantors (as defined in the twelve-month trailing TRIFR, improving the culture at Hycroft, and establishing operational improvements, including managing the leach pad operations with no write-off of leach pad ounces since the second quarter of 2020, and increasing operational efficiencies to reduce costs by idling high-cost equipment. In addition, a review of consumable consumption has resulted in lower costs by reducing consumption and utilizing vendors with lower unit costs. We have also continued to reduce our reliance on contractors which tend to be higher cost and less efficient.
In the fourth quarter of 2020, we formed a technical team to support the new leadership team in ongoing data analysis, developing processing models for future larger-scale sulfide leach operations and reviewing data and results from the pre-commercial leach pads. The technical team is comprised of Hycroft's technical team and industry leading consultants with expertise in metallurgy, open pit mining and heap leach processing, heap leach stacking and modeling and other process technologies,Sprott Credit Agreement) and the team also has access to a leading research and development laboratory. The mine site’s process team and leadership in conjunction with the industry leading consultants focused its efforts on identifying and investigating opportunities for improvements in operating parameters in the sulfide heap oxidation and leach process and additional processing alternatives resulting in work plans asother parties thereto. As described in the March 2022 Sprott Agreement, the Company was contemplating the sale or issuance of its equity securities pursuant to one or more transactions to be completed on or before March 31, 2022 (the “Equity Financing Transactions”). Pursuant to the March 2022 Sprott Agreement, if the Equity Financing Transactions resulted (or were likely to result pursuant to definitive subscription underwriting and/or similar legally binding agreements) in the Company’s receipt of total gross cash proceeds (before deduction of fees and expenses) of at least $50 million on or before March 31, 2022 (the “Required Equity Amount”), the Lender and the Company were obligated to amend the principal repayment terms under the Sprott Credit Agreement such that no further scheduled payments of principal shall be required prior to May 31, 2025 (the “Maturity Date”) (i.e., there will be no required regular amortization payments of the facility and the full principal balance of the facility shall be due and payable in a single “bullet” payment on the Maturity Date). The consummation of the Private Placement as described under “Private Placement” above satisfied the Required Equity Amount condition in the March 2022 Sprott Agreement.
The March 2022 Sprott Agreement also provided that, in connection with the modification of the required facility amortization payments, the Company shall pay in-kind to the Lender an amount equal to $3.3 million, with such amount to be capitalized and added to the principal amount owing under the Sprott Credit Agreement and accrue interest at the same rate and upon the same terms as the existing loans under the Sprott Credit Agreement; provided, the payment or prepayment of such capitalized principal amount shall not be subject to the Prepayment Premium (as defined in the Sprott Credit Agreement) or any other penalty or premium.
Second Amendment and Restatement of the Sprott Credit Agreement
On March 14, 2022, the Company reached an agreement in principle with the Lender to modify the terms of the Sprott Credit Agreement and other applicable loan documents. On March 30, 2022, the Company and Lender under the Sprott Credit Agreement entered into the Second Amended and Restated Credit Agreement dated March 30, 2022 (“Second A&R Agreement”), which (a) extended the maturity date for all of the loans and other principal obligations under the Sprott Credit Facility (as such term is defined in the Second A&R Agreement) by two years, to May 31, 2027; (b) provided for the Company to prepay principal under the Sprott Credit Facility in the amount of $10.0 million promptly upon the Company’s receipt of cash proceeds from the Private Placement offering (the “Initial Equity Proceeds Prepayment”); (c) provided for the Company to prepay principal under the Second A&R Agreement in the amount of $13.9 million (representing 10% of the subsequent issuance of its equity interests consummated on or prior to March 31, 2022) (the “Subsequent Equity Proceeds Prepayments”); and (d) eliminated the prepayment premiums otherwise payable with respect to the Initial Equity Proceeds Prepayment, the Subsequent Equity Proceeds Prepayments and all future prepayments of principal under the Sprott Credit Facility. In addition, the Company’s obligations (i) to prepay principal with proceeds of asset sales were credited/offset by the $23.9 million aggregate amount of Initial Equity Proceeds Prepayment and the Subsequent Equity Proceeds Prepayments, and (ii) to maintain a minimum amount of Unrestricted Cash (as defined in the Second A&R Agreement) was increased to $15.0 million. Pursuant to the agreement in principle, the Company made the Initial Equity Proceeds Prepayment of $10.0 million and paid in kind a $3.3 million fee in connection with the modification and capitalized it to principal on March 16, 2022 and following the execution of the Second A&R Agreement on March 30, 2022, the Company (i) paid the previously deferred additional interest payment of $0.5 million, and (ii) made the Subsequent Equity Proceeds Prepayment of $13.9 million. After giving effect to
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such prepayments the outstanding principal balance under the Second A&R Agreement was $57.9 million as of March 31, 2022 (before issuance discounts) including unpaid additional interest of approximately $7.1 million.
At-the-market Offering of Common Shares
2021 OutlookOn March 15, 2022, the Company implemented an “at-the-market offering” program (“ATM Program”) by entering into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (the “Agent”). Under the terms of the Sales Agreement, the Company had the right from time to time to or through the Agent, acting as sales agent or principal, to offer and sell shares of the Company’s common stock having a gross sales price of up to $500.0 million. section.The compensation payable to the Agent for sales of shares pursuant to the Sales Agreement was equal to 3.0% of the gross sales price for any shares of common stock sold through the ATM Program by Agent as sales agent under the Sales Agreement.Shares sold under the Sales Agreement, were issued pursuant to the Company’s shelf registration statement on Form S-3 (No. 333-257567) (the “Registration Statement”) that the SEC declared effective on July 13, 2021, including the prospectus, dated July 13, 2021, and the prospectus supplement, dated March 15, 2022.
On March 25, 2022, the Company terminated the ATM Program having sold 89,553,584 shares of common stock and generated aggregate gross proceeds before commissions and offering expenses of approximately $138.6 million.
Amendment to the 10% Senior Secured Notes and Note Exchange Agreement
On March 14, 2022, the Company entered into an amendment to the 10% Senior Secured Notes and Note Exchange Agreement (the “Note Amendment”), with (i) certain direct and indirect subsidiaries of the Company as Guarantors; (ii) holders of the 10% Senior Secured Notes (the "Subordinated 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 (collectively, the “Amending Holders”), and (iii) Wilmington Trust, National Association, in its capacity as collateral agent. The Note Amendment amends the Note Exchange Agreement dated as of January 13, 2020 (the “Note Exchange Agreement”) and the Subordinated Notes issued thereunder in order to extend the maturity date of the Subordinated Notes from December 1, 2025 to December 1, 2027. The Note Amendment also removes the requirements that a holder receive the consent of the Company and the other holders in order to transfer any Subordinated Note. The Amending Holders constituted all of the holders of the Subordinated Notes. The Note Amendment became effective upon the closing of the Private Placement Offering upon receipt of $55.9 million gross cash proceeds (before deduction of fees and expenses).
Amendment to the Company’s Second Amended and Restated Certificate of Incorporation
On March 11, 2022, the Board approved an amendment to the Company’s Second Amended and Restated Certificate of Incorporation increasing the number of authorized shares of the Company’s common stock by 1,000,000,000 to a total of 1,400,000,000 (the “Certificate of Incorporation Amendment”) and directed that the Certificate of Incorporation Amendment be submitted for consideration by the stockholders of the Corporation. On March 15, 2022, AMC, Sprott, and entities affiliated with Mudrick Capital Management LP, who together constituted the holders of a majority of the common stock, approved the Certificate of Incorporation Amendment by written consent. The Certificate of Incorporation Amendment became effective upon filing of the Certificate of Incorporation Amendment with the Delaware Secretary of State on April 22, 2022, 20 days after the Company commenced distribution of an Information Statement on Schedule 14C to the stockholders of the Company.
20212022 Outlook
Our current operating plan is to: (i) operate safely as we cease pre-commercial scale open pit mining and continue to process heap leach inventory until it is no longer economic in order to conserve cash;economic; (ii) complete the metallurgical test work associated with the variability drilling and advance the associated metallurgical test work;program; (iii) conduct exploration activities and targeted exploration drilling; and (iv) continue to advance the Acid POX technical study for sulfide ore. Based on the findings and results of that study, we plan to file a new technical report prior topre-feasibility or concurrent with our 2021 Annual Report on Form 10-K, that will include associated mineral reserves and mineral resources after which we plan to be in a position to provide an update in the second quarter of 2022 on the path forward for our commercial scale sulfide operations.feasibility level.
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Technical Activities
During the first nine monthsquarter of 2021,2022, we continued to work alongside our industry leadingindustry-leading consultants to provide additional and expanded information on the ore body and investigate opportunities for improvements in operating parameters for commercial scale operations at the Hycroft Mine. This information is critical in understanding the mineralogical properties of the deposit and ultimately the most economic processing technology for the various ore domains. Accordingly, we developed an approximate $10 million program for drilling and additional metallurgical and mineralogical studies in 2021 and early 2022. The drilling program is expected to bewas completed in the first quarter ofJanuary 2022, and the metallurgical test work portion of the program is expected to be completed in the secondearly third quarter of 2022. Lab testing continues to be challenged by labor shortages and equipment availability. As of September 30, 2021,March 31, 2022, we have spent $5.6$8.0 million under the program.
Ongoing and future technical work for the Hycroft Mine will be primarily focused on the PFS and technical report for the Acid POX milling for processing sulfide ore and completing the variability and metallurgical test work. We also plan to evaluate exploration opportunities targeting higher ore grades and expect to continue to advance the Novel Process as time and resources permit.grades.
Exploration – We have identified exploration drilling opportunities to follow up on higher grade areas that would benefit from expanded drilling in order to convert inferred blocks to measured or indicated blocks, and areas that are prospective for higher grade material. We currently have plans to opportunistically and cost effectively drill these areas as we have drilling capacity with the drill rigs that were contracted to complete the variability drilling program.
Mill sulfide processing options While our technical team has continued to progress and develop an understanding of the requirements for implementing the Novel Process on a commercial scale, we recently received a completed peer reviewed report from one of our independent technical consultants stating that, for reasons outlined below as well as increased commodity costs, it does not appear that the proprietary two-stage oxidation and leaching process as detailed in the 2019 Technical Report, will be economic as designed at current metal prices or those metal prices used in the 2019 Technical Report. Based on scoping level economic analyses on multiple processing options completed by our technical team, together with independent engineering firms and consultants and on the currently contemplated designs and operating parameters of the alternative sulfide milling processes being studied, we completed pit optimization runs comparing the alternative processes. The comparison indicates that using an Acid POX process is significantly more economic than the alternatives. Accordingly, we are focusing our efforts and resources solely on the pre-feasibility level technical study for milling and processing using an Acid POX process. We plan to file a new technical report that will include associated mineral reserves and mineral resources, as discussed in 2021 Outlook above.
Two-stage sulfide heap oxidation and leach process – As a result of challenges to consistently achieve targeted oxidation and recoveries from the Novel Process, our new technical and operating team, together with our industry leading metallurgical consultants, initiated detailed reviews of the technical information and prior work. We also had fresh samples of material from our Brimstone deposit metallurgically tested and launched a $10.0 million expanded variability drilling and metallurgical test program in late Q1 2021. While the variability metallurgical test work is on-going, the information to date supports our view that milling is likely the preferred method of processing sulfide ores at the Hycroft Mine. Additionally, while the chemistry of the two-stage sulfide oxidation and leach process has been confirmed, the commercial scale application of the process as currently understood will be economically challenged due to:
Higher operating costs - In the field work on the pre-commercial test pads, higher levels of soda ash were being applied to oxidize the transitional ore, and we were challenged to achieve the targeted oxidation levels consistently and repeatedly across the ore body. The test work has confirmed soda ash consumption is now estimated to be significantly in excess of what was estimated in the 2019 Technical Report. Moreover, the cost of soda ash and other reagents has increased substantially since 2019, which will negatively impact operating costs.
Higher capital costs - We identified a number of critical areas that had not been previously addressed and as a result, due to the implementation of on/off pads to avoid comingling solutions on the heap, the addition of a materials handling system, an agglomeration circuit and forced air injection pumping, capital costs are expected to be materially higher. Additionally, working capital is projected to be higher due to slower oxidation rates for some ores.
Lower recoveries on some ores - After reviewing all the column tests and considering additional factors in measuring oxidation and recovery rates, we were not able to consistently replicate a strong correlation between oxidation rates and gold recoveries. We believe that more test work is required before implementing this process in a commercial setting.
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Finer crush size will be required - The results from the Brimstone samples demonstrated that heavy silicification caused the gold in pyrite to be surrounded in gangue material which precluded oxidation and leach solutions from accessing and liberating the precious metals in pyrite at a ½ inch crush size. We believe that a milling operation is needed to achieve the finer grind size required to liberate the pyrite and allow solution contact.
We believe that more test and development work is required to demonstrate that this Novel Process can be applied successfully on a commercial scale and the analysis to date indicates the process may not be amenable to all ore domains at the Hycroft Mine. For the near term, we plan to complete the following test work which is important and will benefit all processing methods for the Hycroft Mine:
Column test work - Column tests are being performed on sulfide ores mined during the nine months ended September 30, 2021 . These column tests will provide additional information for the Novel Process.
Variability test work - The variability test work that is underway is necessary for all commercial scale sulfide processing options. The test work includes a suite of laboratory tests designed to:
understand the metallurgical characteristics of each geologic domain and their amenability to various processing technologies;
understand the metallurgical characteristics of sulfide material below the water table;
understand the role other minerals may play in the overall oxidation process;
determine amenability to oxidation in each geologic domain; and
establish a relationship between oxidation levels and gold recoveries across each geologic domain.


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Hycroft Mine
Operations
The following table provides a summary of operating results for the Hycroft Mine:
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Ore mined - sulfide stockpileOre mined - sulfide stockpile(ktons)4021,424Ore mined - sulfide stockpile(ktons)419
Ore mined - crusher feedOre mined - crusher feed(ktons)1,5422,507Ore mined - crusher feed(ktons)
Ore mined - ROMOre mined - ROM(ktons)1,6334886,654501Ore mined - ROM(ktons)— 2,466
Total ore minedTotal ore mined(ktons)2,0352,0308,0783,008Total ore mined(ktons)2,885
Waste minedWaste mined(ktons)1,5591,3454,5161,437Waste mined(ktons)1,195
Total minedTotal mined(ktons)3,5943,37512,5944,445Total mined(ktons)$— 4,080
Waste tons to ore tons strip ratioWaste tons to ore tons strip ratio(#)0.770.660.560.48Waste tons to ore tons strip ratio(#)— 0.41
Ore grade mined - goldOre grade mined - gold(oz/ton)0.0150.0150.0140.014Ore grade mined - gold(oz/ton)— 0.013
Ore grade mined - silverOre grade mined - silver(oz/ton)0.5900.2840.4090.205Ore grade mined - silver(oz/ton)— 0.258
Production - goldProduction - gold(oz)14,8314,35745,53212,342Production - gold(oz)5,35813,858
Production - silverProduction - silver(oz)91,43723,164320,81273,717Production - silver(oz)16,86194,845
Ounces sold - goldOunces sold - gold(oz)16,3546,05643,24416,854Ounces sold - gold(oz)4,7739,830
Ounces sold - silverOunces sold - silver(oz)105,47827,251352,48097,954Ounces sold - silver(oz)10,93457,236
Average realized sales price - goldAverage realized sales price - gold($/oz)$1,781 $1,919 $1,794 $1,735 Average realized sales price - gold($/oz)$1,866 $1,784 
Average realized sales price - silverAverage realized sales price - silver($/oz)$24.15 $24.51 $25.94 $18.55 Average realized sales price - silver($/oz)$23.78 $26.12 
As shown above, tons mined, ounces produced and ounces sold and average realized prices increased during the nine months ended September 30, 2021, compared with the same period of the prior year due to higher tons mined in 2021. The average price decreased during the three months ended September 30, 2021 consistent with the decrease in the spot price of goldMarch 31, 2022, compared with the same period of the prior year. These decreases reflect the Company's decision to cease mining operations in November 2021. The crusher did not operate during the first nine months of 2021,Company expects to continue to process gold and silver ore on leach pads until such time that it is no longer economic to do so and as planned, as all mined ore was routeda result, due to the leach pad as ROM and sulfide ore encountered was stockpiled.
Production and salesincreases in the first nine months of 2021 increased over the comparable 2020 period due to increased quantities of ROM ounces placed in the fourth quarter of 2020 andspot prices for gold during the first quarter of 2021. The recovered ounces produced in2022, the first nineaverage realized prices increased during the three months of 2021 resulted from continued leach production of those existing inventory ounces, additional ounces placed under leach, higher leach solution flows to the pad, and improved recovery performance from the Brimstone plant.ended March 31, 2022.

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Results of Operations
Revenues
Gold revenue
The table below summarizes gold sales, ounces sold and average realized prices for the following periods (dollars in thousands, except per ounce amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Gold revenueGold revenue$29,129 $11,623 $77,570 $29,234 Gold revenue$8,906 $17,541 
Gold ounces soldGold ounces sold16,354 6,056 43,244 16,854 Gold ounces sold4,773 9,830 
Average realized price (per ounce)Average realized price (per ounce)$1,781 $1,919 $1,794 $1,735 Average realized price (per ounce)$1,866 $1,784 
During the three and nine months ended September 30, 2021,March 31, 2022, gold revenue was $29.1$8.9 million, and $77.6 million, respectively, compared to $11.6 million and $29.2$17.5 million for the comparable periodsperiod of 2020.2021. The significant increasedecrease in revenue during the 2021 periods2022 period was attributable to the mine having morecessation of mining operations in November 2021. As a result, significantly less ore was under leach during the 2022 period as mining and processing operations increased beginningcompared to the prior period of 2021. This decrease was partially offset by an increase in the second quarter of 2020, resulting inaverage realized price which was due to higher production-related inventory balances andspot prices for gold revenue during the three and nine months ended September 30, 2021. Gold revenue was also adversely affected during the three and nine months ended September 30, 2020 due to lower gold ounces available for sale as a result of write-downs of recoverable gold ounces on the leach pads (see Note 4 - Inventories to the Notes to the Financial Statements).March 31, 2022.
Silver revenue
The table below summarizes silver sales, ounces sold and average realized prices for the following periods (dollars in thousands, except per ounce amounts):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Silver revenueSilver revenue$2,547 $668 $9,143 $1,817 Silver revenue$260 $1,495 
Silver ounces soldSilver ounces sold105,478 27,251 352,480 97,954 Silver ounces sold10,934 57,236 
Average realized price (per ounce)Average realized price (per ounce)$24.15 $24.51 $25.94 $18.55 Average realized price (per ounce)$23.78 $26.12 
During the three and nine months ended September 30, 2021,March 31, 2022, silver revenue was $2.5$0.3 million and $9.1 million, respectively, compared to $0.7 million and $1.8$1.5 million for the comparable periodsperiod of 2020.2021. Similar to gold revenue, the increasedecrease in silver revenue during the thirdfirst quarter of 20212022 was attributable to the mine having more ore under leach as compared to the same 2020 period. During the nine-month period, we also benefited from favorable silver prices, which were over $7 per ounce higher compared to the same periodcessation of 2020. Silver revenue was also adversely affected during the three and nine months ended September 30, 2020 due to lower silver ounces available for sale as a result of write-downs of recoverable ounces on the leach pads.mining activities in November 2021.
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Total cost of sales
Total cost of sales consists of Production costs, Depreciation and amortization, and Mine site period costs, and Write-down of production inventories. The table below summarizes total cost of sales for the following periods (dollars in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
Three Months Ended
March 31,
202120202021202020222021
Production costsProduction costs$30,616 $10,865 $77,927 $27,286 Production costs$9,583 $17,817 
Depreciation and amortizationDepreciation and amortization1,577 675 4,191 1,999 Depreciation and amortization920 1,041 
Mine site period costsMine site period costs11,467 14,230 24,445 34,292 Mine site period costs6,469 10,544 
Write-down of production inventories— — — 17,924 
Total cost of salesTotal cost of sales$43,660 $25,770 $106,563 $81,501 Total cost of sales$16,972 $29,402 
Production costs
For the three and nine months ended September 30, 2021, weMarch 31, 2022, the Company recognized $30.6$9.6 million, and $77.9 million, respectively, in Production costs, or $1,872 and $1,802, respectively,$2,008 per ounce of gold sold, compared to $10.9$17.8 million and $27.3 million respectively, or $1,794 and $1,619$1,813 per ounce of gold, sold during the same period of 2020.2021. The increasedecrease in Production costs was primarily due to a respective increasedecrease in the sales volumes of gold and silver of 10,298 and 26,390 ounces sold respectively, atof 5,057 ounces sold, partly offset by a higher average inventory cost per ounce during the three and nine months ended September 30, 2021March 31, 2022 compared to the same periods of 2020. As discussed in the below Mine site period costs section, throughout 2020 and the nine months ended September 30, 2021, a high operating cost structure at current levels of production has resulted in Mine site period costs to adjust ending inventory values of gold that approximate the net realizable value per ounce of gold (after considering future costs to complete and sell) as determined in accordance with our accounting policies. Accordingly, production costs per ounce of gold sold has been partially limited by the impact of recognizing Mine site period costs, which lowers the carrying value of production-related inventories. Reductions in the spot price of gold at the reporting periods as compared to prior reporting periods can result in additional Mine site period costs.2021.
Depreciation and amortization
Depreciation and amortization was $1.6 million and $4.2$0.9 million or $96 and $97$193 per ounce of gold sold for the three and nine months ended September 30, 2021,March 31, 2022, respectively, compared to $0.7 million and $2.0$1.0 million or $111 and $119$106 per ounce of gold sold, during the same periods of 2020.2021. The decreaseincrease in total depreciation and amortization costs per ounce of gold sold was largely due to an increasea decrease of 10,298 and 26,3905,057 gold ounces sold during the three and nine months ended September 30, 2021March 31, 2022 compared to the same periodsperiod of 2020.2021.
Mine site period costs
During the three and nine months ended September 30, 2021,March 31, 2022, inclusive of depreciation and amortization, wethe Company recorded $11.5$6.5 million and $24.4 million, respectively, of Mine site period costsCost of sales for costs that were in excess of the net realizable value per ounce of gold inventories, compared to $14.2 million and $34.3$10.5 million during the same periods of 2020.2021. Such period costs are generally the result of costs related to activities at the Hycroft Mine that do not qualify for capitalization to production-related inventories or adjustments to production inventories that are the result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, inefficient cost-volume structures, or other unusual costs and activities, and cannot be recorded to production-related inventories based on the threshold established by the calculation of the estimated net realizable value per ounce of gold.
Write-down of production inventories
We did not record any production-related inventory write-downs during the three and nine months ended September 30, 2021. As discussed in Note 4 - Inventories to the Notes to the Financial Statements, based on metallurgical balancing results, during the three and nine months ended September 30, 2020, we determined that 6,512 and 10,492 ounces of gold that had been placed on the leach pads were no longer recoverable and recognized $Nil and $17.9 million, respectively, of Write-down of production inventories on the consolidated statements of operations, which included production costs of $10.2 million and $16.7 million, and capitalized depreciation and amortization costs of $0.8 million and $1.2 million, respectively.
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General and administrative
General and administrative totaled $3.3 million and $12.3 million during the three and nine months ended September 30, 2021, respectively, compared to $5.7 million and $18.1 million during the same periods of 2020. The decrease of $2.4$3.1 million during the three months ended September 30, 2021March 31, 2022 compared to $3.8 million during the same period of 2021. The decrease of $0.7 million during the three months ended March 31, 2022 was primarily due to decreases in: (i)in salary and compensation costs of $2.1$0.6 million due to severance costs for our former CEO and CFO recorded during the third quarter of 2020; and (ii) legal, professional,reduced headcount and consulting fees associated with general corporate matters and obligations as a public companyformer employees of $0.5 million.the Company that ended during 2021 of $0.2 million . Such decreases were offset by an increase in insurance related costs of $0.2$0.1 million.
The decrease of $5.8 million during the nine months ended September 30, 2021 was primarily due to decreases in: (i) salary and compensation costs of $5.7 million; (ii) insurance costs of $1.6 million; and (iii) employer and property related taxes of $0.7 million, partially offset by increases in: (i) legal, professional, and consulting fees associated with general corporate matters and obligations as a public company of $1.3 million; and (ii) director compensation for the members of our committees created upon becoming a public company of $0.7 million.
Projects, exploration and development
During the three and nine months ended September 30, 2021,March 31, 2022, Projects, exploration and development costs totaled $2.3$1.0 million compared to $0.5 million for the same period of 2021. Projects, exploration and $3.9 million and weredevelopment are related to the following activities:to: (i) analyzing established feasibilitycompleting technical studies; (ii) conducting geological studies; (iii) oversight and project management; and (iv) exploration drilling, engineering, and metallurgical activities. We did not incur any such costsThe increase of $0.5 million during the three and nine months ended September 30, 2020.March 31, 2022 was the result of additional costs for the 2022 Hycroft TRS that was issued in February 2022 without established mineral reserves.
Accretion
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We recorded $0.1 million and $0.3 millionTable of ContentsAccretion during both the three and nine months ended September 30, 2021 and 2020, which related to our Asset retirement obligation and future reclamation costs. Refer to Note 12 - Asset Retirement Obligation to the Notes to the Financial Statements for further detail.
Interest expense, net of capitalized interest
As discussed and detailed in Note 9 - Debt, Net to the Notes to the Financial Statements, Interest expense, net of capitalized interest totaled $5.5 million and $15.2$5.3 million during the three and nine months ended September 30, 2021, respectively,March 31, 2022, compared to $4.3 million and $39.3$4.4 million during the same periodsperiod in 2020.2021. The decreaseincrease of $1.1 million and $24.2$0.9 million during the three and nine months ended September 30, 2021March 31, 2022 was athe result of completinga higher balance outstanding on the Recapitalization Transaction on May 29, 2020, which causedSubordinated Notes at March 31, 2022 as compared to the exchange or conversion of the majority of Seller's $627.8 millionsame period in 2021. The higher outstanding indebtedness to equity, thus resulting in post-Recapitalization Transaction indebtedness totaling $159.8 millionbalance for the Sprott Credit Agreement and Subordinated Notes.Notes was due to quarterly interest payments that are paid in-kind as additional indebtedness.
Fair value adjustments to warrants
During the three and nine months ended September 30,March 31, 2022, the Fair value adjustments to warrants resulted in a non-cash loss of $5.3 million as the market trading values of the publicly-listed warrants increased.
During the three months ended March 31, 2021, the Fair value adjustments to warrants resulted in a non-cash gain of $0.8$9.5 million and $11.0 million, respectively, as the market trading values of our publicly listedthe publicly-listed warrants decreased, which was primarily due to a decrease in the underlying trading price of ourthe common shares. We did not incur any such warrant adjustment during the three and nine months ended September 30, 2020. stock.
Refer to Note 11 - WarrantsWarrant Liabilities to the Notes to the Consolidated Financial Statements for further detail.
Write-off of deposit
During the third quarter of 2021, the Company determined that additional equipment was no longer expected to be purchased under the current mine plan. Accordingly, a full reserve was applied against the $0.9 million deposit previously paid by the Company to an equipment supplier. Refer to Note 5 - Prepaids and Other, Net to the Notes to the Consolidated Financial Statements for further detail.
Interest income
Interest income totaled approximately $Nil during both of the three and nine months ended September 30, 2021, respectively, compared with $9,000 and $0.2 million during the same periods in 2020. During the quarter ended September 30, 2021 the Company replaced certain surety bonds with new surety bonds with lower cash collateral requirements, in which none of the accounts holding the cash collateral earns interest income, resulting in no Interest income for the three and nine months ended September 30, 2021.
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Income taxes
During the three and nine months ended September 30, 2021, we recognized an income tax benefit of $0.1 million which was the result of a discrete item related to estimated tax payments made during prior periods which will be refunded. There was no income tax benefit or expense, net, recognized during the three and nine months ended September 30, 2020. We haveMarch 31, 2022 and 2021. The Company has not recorded any future income tax benefits for net losses, generated after the completion of the Recapitalization Transaction, due to a full valuation allowance recorded against ourthe net operating loss carryforward earned aftercarryforward.
Section 382 of the Recapitalization Transaction. Internal Revenue Code ("IRC") imposes limitations on the use of U.S. federal net operating losses (“NOLs”) upon a more than 50% change in ownership in the Company (as defined in the IRC) within a three-year period. In connection with its at-the-market equity offering, the Company underwent a Section 382 ownership change on March 25, 2022. As a result, utilization of the Company’s NOL’s and certain unrealized losses are limited on an annual basis. If the Section 382 annual limitation amount is not fully utilized in a particular tax year, then the unused portion from that tax year is added to the Section 382 annual limitation in subsequent years. The Company’s annual limitation under Section 382 is estimated to be approximately $1.3 million.
For additional details, refer to Note 1516 - Income Taxes to the Notes to the Financial Statements.
Net loss
For the reasons discussed above, wethe Company recorded a net loss of $23.2 million and $41.3$22.1 million for the three and nine months ended September 30, 2021, respectively,March 31, 2022, which included a gainloss from Fair value adjustments to warrants of $0.8 million and $11.0$5.3 million compared to net losses of $32.3 million and $117.6$9.7 million for the three and nine months ended September 30, 2020.March 31, 2021, which included a $9.5 million gain from Fair value adjustment to warrants.
Liquidity and Capital Resources
General
The Company's unrestricted cash position at September 30, 2021March 31, 2022 was $19.8$172.8 million as compared with $56.4$12.3 million at December 31, 2020.2021. While the Company plans to continue processing gold and silver ore on the leach pads after ceasing mining operations for the pre-commercial scale ROM operation and partially offset the cash that is projected to be used in operations and investing activities, we dothe Company does not expect to generate net positive cash for the foreseeable future. Accordingly, wethe Company will be dependent on ourits unrestricted cash and other sources of cash to fund ourthe business. We are actively evaluating alternativesAs discussed in Note 13 - Stockholders' Equity in the Notes to raise additional capital necessary to fund future developmentthe Financial Statements,the Company raised gross proceeds of approximately $194.4 million in March 2022, before deduction of commissions and ongoing working capital needs while exploring other strategic initiatives to enhance stockholder value.expenses, through the following equity financings:
To avoid potential non-compliance with our first lien loan,On March 14, 2022, the Company has received a waiver for six monthsentered into the Subscription Agreements with American Multi-Cinema, Inc. and 2176423 Ontario Limited pursuant to permit it to cease active mining operations, and, in alignment with our current forecasts, reduce the minimum unrestricted cash balance to $9 million. Depending on our ability to obtain additional cash and the timing of any such cash, we may need to obtain additional waivers from our first lien lender in 2022 to comply with our debt covenants. While our first lien lender has indicated a willingness to work withwhich the Company we cannot provide any assurance that we will be able to timely obtain cash or receive waivers from debt covenants that will allow us to avoid a default under our credit agreements and to continue operating.
On May 29, 2020, we completed the Recapitalization Transaction that provided cash available for usesold on March 15, 2022 an aggregate of $68.9 million. As part of the Recapitalization Transaction, Seller’s indebtedness existing prior to the Recapitalization Transaction was either repaid, exchanged for indebtedness of the Company, exchanged for shares of our common stock or converted into shares of Seller common stock, and our post-Recapitalization Transaction indebtedness included amounts drawn under the Sprott Credit Agreement and the assumption of the newly issued Subordinated Notes. Additionally, on October 6, 2020, the Company issued 9,583,33446,816,480 units, in an underwritten public offering at an offering price to of $9.00 per unit (the "Public Offering"), with each unit consisting of one share of our common stock and one warrant to purchase one share of our common stock, at an exercisea purchase price of $10.50$1.193 per share,unit for total gross proceeds, before deduction of fees and expenses, of net of discount and equity issuance costs$55.9 million.
On March 15, 2022, the Company implemented the ATM Program. On March 25, 2022 the Company terminated the ATM Program and announced that it had sold 89,553,584 shares of $83.1common stock under the ATM Program and generated aggregate gross proceeds before commissions and offering expenses of approximately $138.6 million. Prior to the closing of the Recapitalization Transaction, our primary source of liquidity was proceeds received from the issuance of related-party debt instruments, which were used to finance the 2019 restart of mining operations at the Hycroft Mine and all working capital and capital expenditures thereafter.
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In addition, the Company will continue to evaluate alternatives to raise additional capital necessary to fund the future development of the Hycroft Mine and will continue to explore other strategic initiatives to enhance stockholder value.
Historically, the Company has been dependent on various forms of debt and equity financing to fund its business. While the Company has been successful in the past raising funds through equity and debt financings, no assurance can be given that additional financing will be available to it in amounts sufficient to meet the Company’s needs or on terms acceptable to the Company. In the event that funds are not available, the Company may be required to materially change its business plans.
OurTo avoid potential non-compliance with the Sprott Credit Agreement, the Company obtained a series of waivers and entered into amendments to the Sprott Credit Agreement.Please see Debt Covenants below and Note 9 - Debt, Netin the Notes to the Financial Statements for information regarding additional waivers received and modifications to the Sprott Credit Agreement, including the Second A&R Agreement.
The Company's future liquidity and capital resources management strategy entails a disciplined approach to monitor the timing and amountdepth of any drilling, metallurgical and mineralogical studies and operational tonnage ramp-up or ramp-downthe continuation of processing the Hycroft Mineremaining leach pad inventory while attempting to remain in a position that allows usthe Company to respond to changes in ourthe business environment, such as a decrease in metal prices or lower than forecasted future cash flows, and changes in other factors beyond ourthe Company's control. As discussed in the Going concernThe Company subsection of the Recent Developments section of this MD&A, using estimates of future production levels and costs, operational metrics, and planned capital, project, drilling, and development costs, at current metal spot prices, we do not expect the Hycroft Mine to report positive net operating cash flows during the 12 months following the issuance date of this report. We havehas undertaken efforts aimed at managing ourits liquidity and preserving ourits capital resources by, among other things: (i) monitoring metal prices and the impacts (near-term and future) they have on ourthe business and cash flows; (ii) adopting a plan to ceaseceasing open pit mining operations to reduce net cash outflows while continuing to process leach pad inventory until such time as it is no longer economic; (iii) reducing the size of ourthe workforce to reflect the cessation of mining operations; (iv) controlling our working capital and managing discretionary spending; (v) reviewing contractor usage and rental agreements for more economic options, including termination of certain agreements in accordance with their terms; (vi) decreasing restricted cash balances that collateralize bonds;bonds, as available; and (vii) planning the timing and amounts of capital expenditures and drilling, metallurgical and mineralogical study costs at the Hycroft Mine and deferring such items that are not expected to benefit our near term operating plans. We are also undertakingThe Company has undertaken and continue to undertake additional efforts to: (i) monetize non-core assets and excess materials and supplies inventories; (ii) return excess rental and leased equipment; (iii) sell certain uninstalled grinding mills that are not expected to be needed for a future milling operation; (iv) evaluate sellingsell other uninstalled grinding mills if the proceeds contribute to enhancing a future milling operation; and (v) work with existing debt holders to adjust debt service requirements. In addition, as of October 6, 2021, we entered into an agreement with Randy Buffington, our former Chairman, President and Chief Executive Officer to terminate $0.7 million in aggregate future cash payments in exchange for the termination of the remainder of his restrictive covenant of non-competition and issuance of up to 275,000 shares of HYMC common stock.
We are actively evaluating alternatives to raise additional capital necessary to fund future development and ongoing working capital needs and exploring other strategic initiatives to enhance stockholder value.
Cash and liquidity
We haveThe Company has placed substantially all of ourits cash in operating accounts with a well-capitalized financial institution, thereby ensuring balances remain readily available. Due to the nature of our operations and the composition of our current assets, our Cash, Accounts receivable, and metal inventories represent substantially all of ourthe liquid assets on hand. Additionally, we arethe Company is provided with additional liquidity as ounces are recovered from the Ore on leach pads, processed into finished goods, and sold at prevailing spot prices to our customers.
The following table summarizes our projected sources of future liquidity, as recorded within our financial statementsthe Financial Statements (dollars in thousands):
September 30, 2021December 31, 2020March 31, 2022December 31, 2021
CashCash$19,753 $56,363 Cash$172,778 $12,342 
Accounts receivable347 426 
Metal inventories(1)
Metal inventories(1)
9,243 6,418 
Metal inventories(1)
6,976 6,693 
Ore on leach pads(2)
Ore on leach pads(2)
29,588 38,041 
Ore on leach pads(2)
3,680 10,106 
Assets held-for-saleAssets held-for-sale10,308 11,558 
Total projected sources of future liquidityTotal projected sources of future liquidity$58,931 $101,248 Total projected sources of future liquidity$193,742 $40,699 
(1)Metal inventories contained approximately 5,3833,869 recoverable ounces of gold that are expected to be sold within the next 12 months. Assuming a gold selling price of $1,743$1,942 per ounce (the September 30, 2021March 31, 2022 P.M. fix) and excluding any proceeds from silver sales, the sale of all gold ounces estimated to be recovered from our metal inventories would provide us with $9.4$7.5 million of revenue. See Note 43 - Inventories and Ore on Leach Pads to the Notes to the Financial Statements for additional information.
(2)The current portion of Ore on leach pads contained approximately 17,4542,693 ounces of gold that are expected to be processed into finished goods and then sold within the next 12 months. Assuming a gold selling price of $1,743$1,942 per ounce (the September 30, 2021March 31, 2022 P.M. fix) and excluding any proceeds from silver sales, the sale of all gold ounces estimated to be recovered from our ore on leach pads would provide us with $30.4$5.2 million of revenue. We also have oreSee Note 3 - Inventories and Ore on leach pads that is not expected to be processed into finished goods within the next 12 months of $6.3 million; accordingly, we exclude this inventory from our projected sources of future liquidity. See Note 4 - InventoriesLeach Pads to the Notes to the Financial Statements for additional information.
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NineThree months ended September 30, 2021March 31, 2022 compared to the ninethree months ended September 30, 2020March 31, 2021
The following table summarizes our sources and uses of cash for the following periods (dollars in thousands):
Nine Months Ended
September 30,
Three Months Ended
March 31,
2021202020222021
Net lossNet loss$(41,328)$(117,608)Net loss$(22,060)$(9,688)
Net non-cash adjustmentsNet non-cash adjustments10,710 68,973 Net non-cash adjustments9,954 (2,846)
Net change in operating assets and liabilitiesNet change in operating assets and liabilities3,568 (36,577)Net change in operating assets and liabilities5,190 (2,227)
Net cash used in operating activitiesNet cash used in operating activities(27,050)(85,212)Net cash used in operating activities(6,916)(14,761)
Net cash used in investing activitiesNet cash used in investing activities(11,908)(19,237)Net cash used in investing activities1,610 (5,082)
Net cash (used in) provided by financing activitiesNet cash (used in) provided by financing activities(3,036)106,641 Net cash (used in) provided by financing activities165,742 — 
Net (decrease) increase in cashNet (decrease) increase in cash(41,994)2,192 Net (decrease) increase in cash160,436 (19,843)
Cash and restricted cash, beginning of periodCash and restricted cash, beginning of period96,040 48,967 Cash and restricted cash, beginning of period46,635 96,040 
Cash and restricted cash, end of periodCash and restricted cash, end of period$54,046 $51,159 Cash and restricted cash, end of period$207,071 $76,197 
Cash used in operating activities
During the ninethree months ended September 30, 2021, weMarch 31, 2022, the Company used $27.1$6.9 million of cash in operating activities primarily attributable to a net loss of $41.3$22.1 million, the cash impact of which was equal to $30.6$12.1 million, and $3.6$5.2 million used forwas provided by working capital, which included $5.4a $6.1 million decrease for production-related inventories as the Company continues to process the remaining gold and silver ore on its leach pads which was partly offset by cash used to increase production-related inventories.reduce Accounts payable of $2.8 million. The largest non-cash items included in net incomeloss during the ninethree months ended September 30, 2021March 31, 2022 included a $11.0$5.3 million gainloss from Fair value adjustments to warrants and Non-cash portion of interest expense of $13.0$3.8 million.
For the ninethree months ended September 30, 2020, weMarch 31, 2021, the Company used $85.2$14.8 million of cash forin operating activities primarily attributable to a net loss of $117.6$9.7 million, the cash impact of which was equal to $48.6$12.5 million, and $36.6$2.2 million was used for working capital, including the operational ramp up following the 2019 restart of the Hycroft Mine using a net $39.8which included $4.0 million used to increase production-related inventory balances. Cash outflows duringinventories. The largest non-cash items included in net loss for the ninethree months ended September 30, 2020 were partially offsetMarch 31, 2021 included a $9.5 million gain from Fair value adjustments to warrants and Non-cash portion of interest expense of $4.4 million.
Cash provided by certain non-cash expenses(used in) investing activities
For the three months ended March 31, 2022, investing activities provided cash of $1.6 million primarily from the sale of a regrind mill, which was included in Net lossAssets held for sale,, including $34.7 for gross proceeds of $1.3 million and other mobile mine equipment and materials and supplies for proceeds of non-cash interest expense and a $17.9 million Write-down$0.7 million. In addition, the Company purchased mobile mine equipment of production inventories.$0.4 million.
CashFor the three months ended March 31, 2021, the Company used $5.1 million in investing activities
For the nine months ended September 30, 2021 and 2020, we used $11.9 million and $19.2 million, respectively, in investing activities. For the nine months ended September 30, 2021, expenditures included (i) $3.7 million for purchased equipment and refurbishments; (ii) $5.6 million which primarily related to metallurgical and mineralogical studies; and (iii)expenditures of $2.5 million spent(exclusive of capitalized interest of $0.7 million) for the leach pad expansion project (which excludes $0.7and $1.4 million for purchased equipment. The Company completed construction of capitalized interest) to complete constructionthe leach pad to the appropriate point inat which we believethe Company believes there would be minimal risk of adverse impacts to the leach pad. For the nine months ended September 30, 2020, the majority of the capital expenditures related to construction of new leach pad space.
Cash (used in) provided by financing activities
During the ninethree months ended September 30, 2021 we repaid $3.0 million of the Additional Interest and principal which is classified as debt under the terms of our Sprott Credit Agreement. CashMarch 31, 2022 cash provided by financing activities of $165.7 million was $106.6 million for the nine months ended September 30, 2020, which included proceeds from financing instruments consummated in connection with the Recapitalization Transaction of $254.8 million, offset by principal payments on debt of $132.4 million and payments for legal and consulting feesprimarily related to the Recapitalization Transactionequity offerings completed during the period: (i) the Private Placement offering completed on March 15, 2022 for gross proceeds of $15.8$55.9 million, and (ii) the ATM Program completed on March 25, 2022 for net proceeds of $134.3 million. These amounts were offset by the required prepayments under the Second A&R Agreement of $24.4 million, including $0.5 million of additional interest.
There were no cash financing activities during the three months ended March 31, 2021.
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Future capital and cash requirements
The following table provides ourthe Company's gross contractual cash obligations as of September 30, 2021,March 31, 2022, which are grouped in the same manner as they were classified in the cash flows in order to provide a better understanding of the nature of the obligations and to provide a basis for comparison to historical information. We believeThe Company believes that the following provides the most meaningful presentation of near-term obligations expected to be satisfied using current and available sources of liquidity (dollars in thousands):
Payments Due by PeriodPayments Due by Period
TotalLess than
1 Year
1 - 3
Years
3 - 5
Years
More than
5 Years
TotalLess than
1 Year
1 - 3
Years
3 - 5
Years
More than
5 Years
Operating activities:Operating activities:Operating activities:
Net smelter royalty(1)
Net smelter royalty(1)
$403,121 $1,766 $23,609 $25,806 $351,940 
Net smelter royalty(1)
$292,181 $1,766 $23,609 $25,806 $241,000 
Remediation and reclamation expenditures(2)
Remediation and reclamation expenditures(2)
62,032 — — — 62,032 
Remediation and reclamation expenditures(2)
70,100 — — — 70,100 
Interest payments(3)(4)
Interest payments(3)(4)
13,582 6,004 7,575 — 
Interest payments(3)(4)
22,665 4,398 13,157 5,110 — 
Operating lease requirements(4)
8,185 2,616 5,569 — — 
Crofoot royalty(5)
4,630 120 480 480 3,550 
Consignment inventory(6)
833 833 — — — 
Crofoot royalty(3)
Crofoot royalty(3)
4,630 — — — 4,630 
Financing activities:Financing activities:Financing activities:
Repayments of debt principal(7)
211,584 11,392 62,235 137,957 — 
Additional interest payments(8)
8,249 2,200 6,049 — — 
Repayments of debt principal(4)
Repayments of debt principal(4)
147,171 126 301 146,744 — 
Additional interest payments(5)
Additional interest payments(5)
7,149 2,200 4,949 — — 
TotalTotal$712,216 $24,931 $105,517 $164,246 $417,522 Total$543,896 $8,490 $42,016 $177,660 $315,730 
(1)Under the Sprott Royalty Agreement, we arethe Company is required to pay a perpetual royalty equal to 1.5% of the Net Smelter Returns from ourthe Hycroft Mine, payable monthly that also includes an additional amount for withholding taxes payable by Sprott.the royalty holder. Amounts presented above incorporate estimates of ourthe current life-of-mine plan for mineral resources and are based on consensus pricing for gold and silver. See Note 10 - Deferred Gain on Sale of Royalty to the Notes to the Financial Statements for additional information.
(2)Mining operations are subject to extensive environmental regulations in the jurisdictions in which they are conducted and we are required, upon cessation of operations, to reclaim and remediate the lands that our operations have disturbed. The estimated undiscounted cash outflows of these remediation and reclamation obligations are reflected here. In the above presentation, no offset has been applied for the $59.3 million of our reclamation bonds or for the $34.3 million of cash collateral for those bonds included in Restricted Cash.
(3)Under the Sprott Credit Agreement, we are required to pay interest beginning in the 13th month after the initial advance on May 29, 2020 to Sprott Private Resource Lending II (Collector), LP.
(4)As noted below in the Off-balance sheet arrangements section of this MD&A, we have operating leases for mine equipment and office space.
(5)We areThe Company is required to pay a 4% net profits royalty, including advance royalty payments of $120,000 in any year where mining occurs on the Crofoot claims and an additional $120,000 if tons mined from the Crofoot claim blocks exceed 5.0 million tons. See Note 2021 - Commitments and Contingencies.to the Notes to the Financial Statements for additional information.. Amounts shown represent ourthe current estimates of cash payment timing using consensus pricing for gold and silver.
(6)As noted below in the Off-balance sheet arrangements section of this MD&A, and as discussed in Note 5 - Prepaids and Other, Net to the Notes to the Financial Statements, we have future purchase obligation for consignment inventory.
(7)(4)Repayments of principal on debt consists of amounts due under the Sprott Credit Agreement (as amended by the Second A&R Agreement), the Subordinated Notes and notes payable for equipment purchases. Included in the repayment of the Subordinated Notes principal is interest that has been capitalized as payable in-kind on a quarterly basis, and on a monthly basis for the Sprott Credit Agreement (as amended by the Second A&R Agreement) for the first 12 months after the initial advance. Also included in the repayment of the Sprott Credit Agreement is the $3.3 million fee that has been capitalized as payable in-kind in connection with the Second A&R Agreement. See Note 9 - Debt, Net to the Notes to the Financial Statements for additional information.
(8)(5)Additional interest payments consist of repayments of additional interest under the Sprott Credit Agreement (as amended by the Second A&R Agreement), commencing February 28, 2021 (with the first cash payment due three months after such date) and ending on the maturity date. See Note 9 - Debt, Net to the Notes to the Financial Statements for additional information.
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Debt covenants
OurThe Company's debt agreements contain representations and warranties, events of default, restrictions and limitations, reporting requirements, and covenants that are customary for agreements of these types.
The Sprott Credit Agreement (as amended by the Second A&R Agreement) contains covenants that, among other things, restrict or limit the ability of the Company to enter into encumbrances (other than Permitted Encumbrances), incur indebtedness (other than Permitted Indebtedness), dispose of its assets (other than Permitted Disposals), pay dividends, and purchase or redeem shares, as such terms are defined in the Sprott Credit Agreement.Agreement (as amended by the Second A&R Agreement). The Sprott Credit Agreement (as amended by the Second A&R Agreement) requires the Company to ensure that, at all times, both its Working Capital and Unrestricted Cash are at least $10.0 million (subsequently reduced by the Waiver and Waiver Amendment discussed below), as such terms are defined in the Sprott Credit Agreement (as amended by the Second A&R Agreement), and that at least every six months we demonstrate ourthe Company demonstrates its ability to repay and meet all present and future obligations as they become due with a financial Modelmodel that uses consensus gold prices discounted by 5.0%, as such terms are defined in the Sprott Credit Agreement.. The Subordinated Notes (as defined herein) include customary events of default, including those relating to a failure to pay principal or interest, a breach of a covenant, representation or warranty, a cross-default to other indebtedness, and non-compliance with security documents. As of September 30, 2021,March 31, 2022, the Company was in compliance with all covenants under its debt agreements.
On November 9, 2021, weFebruary 28, 2022, the Company entered into a waiver (the “Waiver”)the February 2022 Waiver and Amendment with Sprott Private Resource Lending II (Collector), LP (the “Lender”) of certain provisions ofthe Lender amending the November 2021 Waiver. Pursuant to the February 2022 Waiver and Amendment, the Lender: (i) waived the Company’s obligation under the Sprott Credit Agreement. PursuantAgreement to the Waiver, the Lender has: (i) permitted the Company to cease active mining operations; and (ii) to reduce the amount of unrestricted cash required to be maintained by the Company from not less than $10.0 million to not less thanmaintain at least $9.0 million forof Unrestricted Cash on the last day of each calendar month during the period ending May 10, 2022 (the “Waiver Period”), provided that, the Company maintained at least $7.5 million of Unrestricted Cash on the last day of February 2022 and at least $9.0 million on the last day of each month thereafter during the Waiver Period; (ii) waived all obligations of the Company to prepay the facility with the net cash proceeds of any Mill Asset Sales (as defined in the February 2022 Waiver and Amendment) until the earlier of: (A) the date on which the Company completes a private placement or other offering or issuance of its equity securities (the “Offering Date”); and (B) March 31, 2022; and (iii) extended the payment due date for the additional February interest payment and the February principal payment until the earlier of: (A) the Offering Date; and (B) March 31, 2022. Further, pursuant to the February 2022 Waiver and Amendment, any failure by the Company to comply with the terms of the preceding sentence would constitute an immediate Event of Default under the Credit Agreement.
On March 11, 2022, the Company entered into the March 2022 Sprott Agreement with the Lender with respect to the Sprott Credit Agreement. As described in the March 2022 Sprott Agreement, the Company was contemplating Equity Financing Transactions to be completed on or before March 31, 2022. Pursuant to the March 2022 Sprott Agreement, if the Equity Financing Transactions result (or are likely to result pursuant to definitive subscription underwriting and/or similar legally binding agreements) in the Company’s receipt of total gross cash proceeds (before deduction of fees and expenses) of the Required Equity Amount on or before March 31, 2022, the Lender and the Company were obligated to amend the principal repayment terms under the Sprott Credit Agreement such that no further scheduled payments of principal shall be required prior to May 31, 2025 (the “Maturity Date”) (i.e., there will be no required regular amortization payments of the facility and the full principal balance of the facility shall be due and payable in a single “bullet” payment on the Maturity Date). The consummation of the Private Placement satisfied the Required Equity Amount condition in the March 2022 Sprott Agreement.
The March 2022 Sprott Agreement also provides that, in connection with the modification of the required facility amortization payments, the Company shall pay to the Lender an amount equal to $3.3 million, with such payment to be capitalized and added to the principal amount owing under the Sprott Credit Agreement and accrue interest at the same rate and upon the same terms as the existing loans under the Sprott Credit Agreement; provided, the payment or prepayment of such capitalized principal amount shall not be subject to the Prepayment Premium (as defined in the Sprott Credit Agreement) or any other penalty or premium.
On March 14, 2022, the Company reached an agreement in principle with the Lender to modify the terms of the Sprott Credit Agreement and other applicable loan documents. On March 30, 2022, the Company and Lender under the Sprott Credit Agreement entered into the Second A&R Agreement, which: (a) extended the maturity date for all of the loans and other principal obligations under the Sprott Credit Facility by two years, to May 31, 2027; (b) provided for the Initial Equity Proceeds Prepayment in the amount of $10.0 million promptly upon the Company's receipt of cash proceeds from the Private Placement; (c) provided for the Subsequent Equity Proceeds Prepayments in the amount of $13.9 million (representing 10% of the subsequent issuance of its equity interests consummated on or prior to March 31, 2022); and (d) eliminated the prepayment premiums otherwise payable with respect to the Initial Equity Proceeds Prepayment, the Subsequent Equity Proceeds Prepayments and all future prepayments of principal under the Sprott Credit Facility. In addition, the Company’s obligations to: (i) prepay principal with proceeds of asset sales were credited/offset by the $23.9 million aggregate amount of Initial Equity
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Proceeds Prepayment and the Subsequent Equity Proceeds Prepayments; and (ii) to maintain a minimum amount of Unrestricted Cash was increased to $15.0 million. Pursuant to the agreement in principle, the Company made the Initial Equity Proceeds Prepayment of$10.0 million and paid in kind a $3.3 million fee in connection with the modification and capitalized it to principal on March 16, 2022 and following the execution of the Second A&R Agreement on March 30, 2022, the Company: (i) paid the previously deferred additional interest payment of $0.5 million; and (ii) made the Subsequent Equity Proceeds Prepayment of $13.9 million. After giving effect to such prepayments the outstanding principal balance under the Second A&R Agreement was estimated as of March 31, 2022 to be $57.9 million (before issuance discounts) including unpaid additional interest of approximately $7.1 million.
Off-balance sheet arrangements
As of September 30, 2021,March 31, 2022, our off-balance sheet arrangements consisted of operating lease agreements, a net profit royalty arrangement and a net smelter royalty arrangement (see Note 2021 - Commitments and Contingencies to the Notes to the Financial Statements).
Accounting Developments
The following accounting pronouncements were adopted by the Company during the three months ended March 31, 2022:
In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies guidance on accounting for convertible instruments and contracts in an entity’s own equity including calculating diluted earnings per share. For emerging growth companies, the new guidance is effective for annual periods beginning after December 15, 2022. The Company early adopted ASU 2020-06 as of January 1, 2022, with no material impact on its condensed consolidated financial statements or the related disclosures.
In December of 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), as part as part of its overall simplification initiative to reduce costs and a future purchase obligation for consignment inventory (see Note 5 - Prepaids and Other, Netcomplexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Amendments include removal of certain exceptions to the Notes togeneral principles of ASC 740, Income Taxes and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. For emerging growth companies, the Financial Statements).
Subsequent Events
Waiver and amendment of certain compensatory arrangements
On October 6, 2021, the Company entered in a Waiver and Amendment to the Transition and Succession Agreement and Consulting Agreement with Randy Buffington, the former Chairman of the Board, President and Chief Executive Officer of the Company. The Waiver and Amendment amends the Transition and Succession Agreement and the Consulting Agreement between the Company and Mr. Buffington, dated July 1, 2020. The Waiver and Amendment terminated the remaining unpaid cash payments to Mr. Buffington pursuant to the Transition and Succession Agreement and Consulting Agreement in the aggregate amount of $0.7 million, in exchangenew guidance was effective for the issuance of an aggregate of up to 275,000 shares of the Company's common stock, of which 137,500 was issued on October 8,annual periods beginning after December 15, 2021 and the remaining shares to be issuedCompany adopted ASU 2019-12 as of January 1, 2022, with no material impact on June 30, 2022.its condensed consolidated financial statements or the related disclosures.
Waiver of certain Sprott Credit Agreement provisions
On November 9,In May 2021, the Company entered into a waiver (the “Waiver”) with Sprott Private Resource Lending II (Collector)FASB issued ASU 2021-04, Earnings Per Share (Topic 260), LP (the “Lender”)Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of certain provisionsFreestanding Equity-Classified Written Call Options (a consensus of the Sprott Credit Agreement. PursuantFASB Emerging Issues Task Force). ASU 2021-04 clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (e.g., warrants) that remain equity classified after modification or exchange. ASU 2021-04 provides guidance that will clarify whether an issuer should account for a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as (i) an adjustment to equity and, if so, the Waiver,related earnings per share effects, if any, or (ii) an expense and, if so, the Lender has: (i) permittedmanner and pattern of recognition. For emerging growth companies, the new guidance was effective for annual periods beginning after December 15, 2021 and the Company to cease active mining operations; and (ii) to reduce the amount of unrestricted cash required to be maintained by the Company from not less than $10.0 million to not less than $9.0 million for the period ending May 10, 2022.
Appointment of New Chairman to Board of Directors
On November 9, 2021, David Kirsch notified the Company’s board of directors of his resignation as a director and Chairman of the board of directors, effective immediately. Mr. Kirsch’s decision was not the result of any dispute or disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On November 9, 2021, the Company's board of directors appointed its independent lead director, Eugene Davis, to replace Mr. Kirsch as Chairman of the board of directors.
Retirement of Executive Officer
Mr. Jack Henris has announced his retirement effectiveadopted ASU 2021-04 as of January 1, 2022, with no material impact on its condensed consolidated financial statements or the end of 2021 and will remain available to assist with the finalization of the Acid POX PFS and other technical work.
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Accounting Developments
For a discussion of any recently issued and/or recently adopted accounting pronouncements, see Note 2 - Summary of Significant Accounting Policies to the Notes to the Financial Statements.related disclosures.
Critical Accounting Estimates
This MD&A is based on ourthe Condensed Financial Statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these statements requires us to make assumptions, estimates, and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. For information on the most critical accounting estimates used to prepare the Condensed Financial Statements, see the Critical Accounting Estimates section included in Part II – Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020, as amended on May 14, 2021.
The following new critical accounting estimate was adopted during the nine months ended September 30, 2021, see Note 2 - Summary of Significant Accounting Policies to the Notes to the Financial Statements for additional information.
Fair value of warrant liability
Estimate Required:

We account for the 5-Year Private Warrants to purchase shares of our common stock that are not indexed to our own stock as liabilities at fair value on the balance sheet. The warrants are subject to remeasurement at each balance sheet date, and any change in fair value is recognized as a component of Other (expense) income, net on the statement of operations. We will continue to adjust the liability for changes in fair value of the 5-Year Private Warrants until the earlier of the (i) exercise or expiration of the 5-Year Private Warrants or (ii) the transfer of any 5-Year Private Warrants to any person who is not a permitted transferee, at which time the applicable warrant liability will be extinguished and will be reclassified to additional paid-in capital. We use the closing market price to estimate the fair value of our 5-Year Public Warrants and our Public Offering Warrants. The terms of the 5-Year Private Warrants are substantially identical to the 5-Year Public Warrants except the 5-Year Private Warrants, while held by the SPAC sponsor and/or SPAC underwriter and their permitted transferees, are precluded from mandatory redemption and are entitled to exercise on a “cashless basis” at the holder’s election. Accordingly, we use a Black-Scholes model with an appropriate estimate of volatility considering volatility of the 5-Year Public Warrants and using a Monte Carlo simulation model to incorporate the redemption and cashless exercise features in the 5-Year Private Warrants. Significant judgment is required in determining the expected volatility of our common stock. Due to the limited history of trading of our common stock, we determined expected volatility based on a peer group of publicly traded companies. Increases (decreases) in the assumptions result in a directionally similar impact to the fair value of the Warrant liability.

Impact of Change in Estimate:

A $0.01 increase or decrease in the fair value estimate per 5-Year Private Warrant would result in an increase or decrease to Warrant liabilities of $0.1 million with the offset in Fair value adjustment to warrants.

Cautionary Statement Regarding Forward-Looking Statements
In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the SEC, all as may be amended from time to time. All statements, other than statements of historical fact, included herein or incorporated by
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reference, that address activities, events or developments that we expect or anticipate will or may occur in the future, are forward-looking statements, including but not limited to such things as:
The words “estimate”, “plan”, “anticipate”, “expect”, “intend”, “believe”, “project”, “target”, “budget”, “may”, “can”, “will”, “would”, “could”, “should”, “seeks”, or “scheduled to”, or other similar words, or negatives of these terms or other variations of these terms or comparable language or any discussion of strategy or intentions identify forward-looking statements. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefit of the “safe harbor” provisions of such laws. These statements involve known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual results, performance or achievements to be materially different from any results, performance, or achievements expressed or implied by such forward-looking
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statements. Forward-looking statements are based on current expectations. Important factors that could cause actual results, performance, or achievements to differ materially from those in the forward-looking statements include, but are not limited to:
Although we have attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results, performance or achievements may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results, performance, or achievements are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results, performance or achievements may not be indicative of results, performance or achievements in subsequent periods.
Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Any forward-looking statements that we make in this Quarterly Report on Form 10-Q speak only as of the date of those statements, and we undertake no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.
Please see “Risk Factors” set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, as amended May 14, 2021, and in this Quarterly Report on Form 10-Q, for more information about these and other risks. These risks may include the following and the occurrence of one or more of the events or circumstances alone or in combination with other events or circumstances, may have a material adverse effect on our business, cash flows, financial condition and results of operations. Important factors and risks that could cause actual results to differ materially from those in the forward-looking statements include, among others:
Industry-relatedRisks related to changes in our operations at the Hycroft Mine including:
Risks associated with the cessation of pre-commercial scale mining operations at the Hycroft Mine;
Uncertainties concerning estimates of mineral resources;
Risks related to a lack of a completed feasibility study; and
Risks related to our ability to re-establish commercially feasible mining operations.
Industry related risks including:
Fluctuations in the price of gold and silver;
Uncertainties concerning estimates of mineral reserves and mineral resources;
Uncertainties relatingrelated to the ongoing COVID-19 pandemic;
The intense competition in recruitment and retention of qualified employees within the mining industry;
The commercial success of, and risks related to, our development activities;
Uncertainties and risks related to our reliance on contractors and consultants;
Availability and cost of equipment, supplies, energy, or reagents;
The inherently hazardous nature of mining activities, including environmental risks;
Our insurance may not be adequate to cover all risks associated with our business, or cover the replacement costs of our assets or may not be available for some risks;
Potential effects on our operations of U.S. federal and state governmental regulations, including environmental regulation and permitting requirements;
Cost of compliance with current and future government regulations;
Uncertainties relatingrelated to obtaining or retaining approvals and permits from governmental regulatory authorities;
Cost of compliance with current and future government regulations, including environmental regulations;
Potential challenges to title in our mineral properties;
Our insurance may not be adequate to cover all risks associated with our business;
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Risks associated with proposed legislation in Nevada that could significantly increase the costs or taxationcost of mine development on our operations; andunpatented mining claims;
Changes to the climate andRisks associated with regulations and pending legislation governing issues involving climate change could result in increased costs, which could have a material adverse effect on our business; and
Changes to the climate and regulations regarding climate change.
Business-related risks including:
Risks related to our liquidity and going concern considerations;
Risks related to our ability to raise capital on favorable terms or at all;
Risks related to the proprietary two-stage heap oxidation and leach process at the Hycroft Mine and estimates of production.
Our ability to achieve our estimated production and sales rates and stay within our estimated operating and production costs and capital expenditure projections;
Risks related to the decline of our gold and silver production;
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Our ability to successfully eliminate or meaningfully reduce processing and mining constraints; the results of our planned 2021 technical efforts and how the data resulting from such efforts could adversely impact processing technologies applied to our ore, future operations and profitability;
Risks related to delays in completing the Acid POX PFS and providing updated information on our mining process and mineral reserves and mineral resources;
Risks related to our reliance on one mine with a new process;
Risks related to our limited experience with a largely untested process of oxidizing and heap leaching sulfide ore.
Uncertainties and risks related to our reliance on contractors and consultants;
Availability and cost of equipment, supplies, energy, or commodities;
The commercial success of, and risks relating to, our development activities;
Risks related to slope stability;
Risks related to our substantial indebtedness, including cross acceleration and our ability to generate sufficient cash to service our indebtedness;
Uncertainties resulting from the possible incurrence of operation and net losses in the future;
Uncertainties related to our ability to replace and expand our ore mineral reserves;
The costs related to our land reclamation requirements;
The loss of key personnel or our failure to attract and retain personnel;
Risks related to our substantial indebtedness, including operating and financial restrictions under existing indebtedness, cross acceleration and our ability to generate sufficient cash to service our indebtedness;
The costs related to our land reclamation requirements;
Risks related to technology systems and security breaches;
Any failure to remediate any possiblePossible litigation as a result of a material weakness in our internal controls over financial reporting; and
Risks that our principal stockholders will be able to exert significant influence over matters submitted to stockholders for approval.
Risks related to our common stock and warrants, including:
Volatility in the price of our common stock and warrants;
Potential declines in the valueRisks related to potential dilution as a result of our common stock and warrants due to substantial future sales of our common stock and/or warrants;equity offerings;
Risks associated with future offerings of senior debt or equity securities;
Risks related to delisting by Nasdaq;
Risks that the warrants may expire worthless;worthless and that certain warrants are being accounted for as a liability;
The valuation of our 5-Year Private Warrants could increase the volatility in our net income (loss).
Anti–takeoverAnti-takeover provisions could make a third partythird-party acquisition of us difficult; and
Risks related to limited access to our financial information,disclosure, as we have elected to take advantage of the disclosure requirement exemptions granted to emerging growth companies and smaller reporting companies.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As the Company qualifies as smaller reporting company under Item 10(f) of Regulation S-K, quantitative and qualitative disclosures about market risk are not required, and such are omitted from this filing.

ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published consolidated financial statements. Internal control over financial reporting is promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting, no matter how well designed, has inherent limitations and may not prevent
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or detect misstatements. Therefore, even effective internal control over financial reporting can only provide reasonable assurance with respect to the financial statement preparation and presentation.
Hycroft Mining Holding Corporation management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as required by Rules 13a-15(b) and 15d-15(b) under the Exchange Act as of September 30, 2021. OurMarch 31, 2022.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designedwere effective as of March 31, 2022 to reasonably assureprovide such reasonable assurance that information required to be disclosed by us, including our consolidated subsidiaries, in reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to
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allow timely decisions regarding disclosure and is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission’s rules and forms.
Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of September 30, 2021 to provide such reasonable assurance, solely as a result of a material weakness identified related to the misapplication of GAAP in accounting for our 5-Year Private Warrants.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements could not be prevented or detected on a timely basis. We identified a material weakness in our controls over the accounting for complex financial instruments. Our controls to evaluate the accounting for complex financial instruments, such as our 5-Year Private Warrants, did not operate effectively to appropriately apply the provisions of ASC 815-40. This material weakness resulted in the failure to prevent a material error in our accounting for the 5-Year Private Warrants and the resulting restatement of our previously issued financial statements.
In response to this material weakness, the Company’s management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we are improving these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards. Our plans at this time include acquiring enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding the application of complex accounting transactions. Our remediation plan can only be accomplished over time and will be continually reviewed to determine that it is achieving its objectives. We can offer no assurance that these initiatives will ultimately have the intended effects.
Notwithstanding this material weakness, management has concluded that our financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in accordance with U.S. generally accepted accounting principles.
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must consider the benefits of controls relative to their costs. Inherent limitations within a control system include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. While the design of any system of controls is to provide reasonable assurance of the effectiveness of disclosure controls, such design is also based in part upon certain assumptions about the likelihood of future events, and such assumptions, while reasonable, may not take into account all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be prevented or detected.
Part II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time we are involved in various legal actions related to our business, some of which are class action lawsuits. We do not believe, based on currently available information, that contingencies related to any pending or threatened legal matter will have a material adverse effect on our financial statements,Financial Statements, although a contingency could be material to our results of operations or cash flows for a particular period depending on our results of operations and cash flows for such period. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
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ITEM 1A. RISK FACTORS
AlthoughAs the Company qualifies as a smaller reporting company under Item 10(f) of Regulation S-K, and risk factors are not required to be included in a quarterly report weand such are supplementing the risk factors previously disclosed in the 2020 Form 10-K/A with the following risk factor:

If the Acid POX PFS is not completed and the related technical report is not filed with the SEC prior to or concurrent with our 2021 Annual Report on Form 10-K, we would be unable to provide updated information or report any mineral reserves and mineral resources as of December 31, 2021 in the 2021 Annual Report on Form 10-K as filed by its due date, which could negatively impact our ability to obtain additional financing.

A delay in completing the Acid POX PFS and providing updated information on our mining process and mineral reserves and mineral resources could negatively impact our ability to obtain additional financing. Further, a delay in the new technical report being completed could delay our ability to provide an update in the second quarter of 2022 on the path forward for our commercial scale sulfide operations and we would not be able to report mineral reserves or mineral resources in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants.omitted from this filing.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On October 6, 2021, the Company agreed to issue an aggregate of up to 275,000 shares of the Company's common stock as consideration for entering into a Waiver and Amendment to the Transition and Succession Agreement with Randy Buffington, the former Chairman of the Board, President and Chief Executive Officer of the Company. The Waiver and Amendment terminated the remaining unpaid cash payments to Mr. Buffington pursuant to the Transition and Succession Agreement and Consulting Agreement in the aggregate amount of $0.7 million, in exchange for the issuance. On October 8, 2021, 137,500 shares of common stock with a grant date fair value of $0.2 million were issued to Randy Buffington, with the remaining 137,500 shares of common stock to be issued on June 30, 2022.None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES

Safety and health is our highest priority, which is why we have a mandatory mine safety and health program that includes employee and contractor training, risk management, workplace inspection, emergency response, accident investigation, and program auditing. We consider this program to be essential at all levels to ensure that our employees, contractors, and visitors are always in an environment that is safe and healthy.
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.
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ITEM 5. OTHER INFORMATION
(a)None.Subsequent to the execution and delivery of the Second A&R Agreement, it was discovered that Sections 2.9 and 2.10 of the Sprott Credit Agreement erroneously refer to "the Maturity Date" as the date through which Additional Interest (as defined in the Second A&R Agreement) is to be incurred by the Company. The actual intention and understanding of each of the parties was that Additional Interest under the Sprott Credit Agreement (as amended by the Second A&R Agreement) would only be incurred through the original maturity date, May 31, 2025. On May 3, 2022, the Company, the Lender and the other parties to the Second A&R Agreement entered into a Letter Agreement with amended Sections 2.9 and 2.10 of the Second A&R Agreement by replacing each reference to "the Maturity Date" which "May 31, 2025".    
(b)Not applicable.
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ITEM 6. EXHIBITS
(a)Exhibits
Exhibit
Number
Description
,
10.14.1
4.2
10.1
10.2
10.210.3
10.4
10.5
10.6
10.7
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10.8
10.9
Rule 13a-14(a)/15d-14(a) Certifications.
31.1
31.2
Section 1350 Certifications.
32.1
32.2
Mine Safety Disclosure Exhibits.
95.1
Interactive Data File.
101.INSInline 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.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
HYCROFT MINING HOLDING CORPORATION
(Registrant)
Date: November 12, 2021May 4, 2022By:/s/ Diane R. Garrett
Diane R. Garrett
President, Chief Executive Officer, and Director
(Principal Executive Officer)
Date: November 12, 2021May 4, 2022By:/s/ Stanton Rideout
Stanton Rideout
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)