Document and Entity Information
Document and Entity Information | Sep. 29, 2020 |
Document and Entity Information | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | Amendment No. 2 |
Entity Registrant Name | HYCROFT MINING HOLDING CORP |
Entity Central Index Key | 0001718405 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 82-2657796 |
Entity Address, Address Line One | 8181 E. Tufts Ave., SuiteĀ 510 |
Entity Address, City or Town | Denver |
Entity Address, State or Province | CO |
Entity Address, Postal Zip Code | 80237 |
City Area Code | 303 |
Local Phone Number | 253-3267 |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2019USD ($) |
Assets: | |
Cash | $ 6,220,000 |
Restricted cash - Note 6 | 3,270,000 |
Accounts receivable | 97,000 |
Inventories - Note 4 | 4,453,000 |
Ore on leach pads - Note 4 | 22,062,000 |
Prepaids and other - Note 5 | 2,648,000 |
Current assets | 38,750,000 |
Restricted cash - Note 6 | 39,477,000 |
Plant, equipment and mine development, net - Note 6 | 51,207,000 |
Other assets, non-current - Note 5 | 5,203,000 |
Total assets | 134,637,000 |
Liabilities: | |
Accounts payable | 10,746,000 |
Interest payable | 846,000 |
Other liabilities, current - Note 8 | 3,939,000 |
Debt, net, current - Note 9 | 553,965,000 |
Current liabilities | 569,496,000 |
Other liabilities, non-current - Note 8 | 18,000 |
Debt, non-current ? Notes 9 and 20 | 0 |
Asset retirement obligation, non-current - Note 11 | 4,374,000 |
Total liabilities | 573,888,000 |
Commitments and contingencies - Note 20 | |
Stockholders' (Deficit) Equity: - Note 10 | |
Common stock, $0.0001 par value; 400,000,000 shares authorized; 50,160,042 issued and outstanding at June 30, 2020; and 345,431 issued and 323,328 outstanding at December 31, 2019 | 3,000 |
Additional paid-in capital | 5,184,000 |
Accumulated deficit | (444,438,000) |
Total stockholders' (deficit) | (439,251,000) |
Total liabilities and stockholders' equity | $ 134,637,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | May 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | |
Common stock, shares issued (in shares) | 50,160,042 | 50,160,042 | 3,095,650 | 2,758,689 |
Common stock, shares outstanding (in shares) | 50,160,042 | 50,160,042 | 2,897,568 | 2,598,035 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Revenues - Note 13 | $ 13,709 | $ 180 |
Cost of sales: | ||
Production costs | 11,041 | |
Depreciation and amortization | 1,011 | |
Write-down of production inventories - Note 4 | 18,617 | 0 |
Total cost of sales | 30,669 | |
Operating expenses: | ||
Project and development | 7,708 | 4,916 |
Pre-production depreciation and amortization | 1,067 | 3,472 |
Accretion - Note 11 | 422 | 1,271 |
General and administrative | 6,072 | 5,342 |
Reduction in asset retirement obligation - Note 10 | (1,880) | (16,987) |
Impairment of long-lived assets ? Note 6 | 63 | |
Write-down of supplies inventories | 144 | |
Write-down of mineral properties - Note 7 | 1,032 | |
Loss from operations | (33,941) | (8,151) |
Other income (expense): | ||
Interest expense, net of capitalized interest of $44 and $145, respectively - Note 8 | (64,844) | (50,893) |
Interest income | 795 | 464 |
Gain on retirement of debt - Note 9 | 3,321 | |
Loss before reorganization items and income taxes | (97,990) | (55,259) |
Reorganization items | (905) | (399) |
Loss before income taxes | (98,895) | (55,658) |
Income taxes - Note 15 | 0 | 145 |
Net loss | $ (98,895) | $ (55,803) |
Loss per share: | ||
Basic - Note 16 | $ (36.10) | $ (21.10) |
Diluted - Note 16 | $ (36.10) | $ (21.10) |
Weighted average shares outstanding: | ||
Basic - Note 16 | 2,739,505 | 2,645,194 |
Diluted - Note 16 | 2,739,505 | 2,645,194 |
Mine Development [Member] | ||
Operating expenses: | ||
Care and maintenance | $ 3,529 | $ 8,961 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
Capitalized interest | $ 290 | $ 272 | $ 334 | $ 417 | $ 551 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (98,895) | $ (55,803) |
Adjustments to reconcile net loss for the period to net cash used in operating activities: | ||
Depreciation, Depletion and Amortization | 2,078 | 3,472 |
Accretion | 422 | 1,271 |
Stock-based compensation - Note 14 | 1,102 | |
Non-cash portion of interest expense - Note 9 | 54,810 | 40,839 |
Write-down of production inventories | 18,617 | 0 |
Reduction in asset retirement obligation - Note 10 | (1,880) | (16,987) |
Change in value of phantom shares - Note 16 | 181 | (391) |
Impairment of long-lived assets ? Note 6 | 63 | |
Write-down of supplies inventories ? Note 3 | 144 | |
Write-down of mineral property - Note 7 | 1,032 | |
Gain on retirement of debt - Note 9 | (3,321) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (97) | |
Materials and supplies inventories | (977) | (182) |
Production-related inventories | (38,627) | (138) |
Prepaids and other | (387) | 947 |
Income tax receivable | 145 | |
Other assets, non-current | (120) | |
Accounts payable | 3,384 | 271 |
Interest payable | (203) | 548 |
Other liabilities | 758 | 1,228 |
Net cash used in operating activities | (59,771) | (26,925) |
Cash flows used in investing activities: | ||
Additions to plant, equipment, and mine development | (12,296) | (1,146) |
Net cash used in investing activities | (12,296) | (1,146) |
Cash flows from financing activities: | ||
Proceeds from debt | 71,831 | 27,881 |
Refinancing of First Lien | (762) | |
Refinancing issuance costs | (2,896) | (133) |
Repayments of principal on capital lease obligations | (47) | |
Retirement of convertible notes ? Note 11 | (106) | |
Net cash provided by financing activities | 68,173 | 27,595 |
Net increase in cash and restricted cash | (3,894) | (476) |
Cash, beginning of period | 52,861 | 53,337 |
Cash, end of period | $ 48,967 | $ 52,861 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Reconciliation of cash, cash equivalents and restricted cash: | |||||
Cash | $ 6,220 | $ 9,138 | |||
Restricted cash - Note 6 | $ 0 | 3,270 | $ 2,547 | 5,030 | |
Restricted cash - Note 6 | 39,631 | 39,477 | 38,924 | 38,693 | |
Total cash, cash equivalents and restricted cash | $ 86,924 | $ 48,967 | $ 54,047 | $ 52,861 | $ 53,337 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' (DEFICIT) EQUITY - USD ($) | Common stock | Treasury Stock | Additional Paid in Capital [Member] | Accumulated Deficit | Total | ||||
Beginning Balance at Dec. 31, 2017 | $ 3,000 | $ 5,184,000 | $ (289,740,000) | $ (284,553,000) | |||||
Beginning Balance (in shares) at Dec. 31, 2017 | 2,668,689 | 65,572 | |||||||
Net loss | (55,803,000) | (55,803,000) | |||||||
Shares issued (in shares) | 90,000 | ||||||||
Shares repurchased (shares) | 95,082 | ||||||||
Ending Balance at Dec. 31, 2018 | $ 3,000 | 5,184,000 | (345,543,000) | (340,356,000) | |||||
Ending Balance (in shares) at Dec. 31, 2018 | 2,758,689 | 160,654 | |||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (23,440,000) | (23,440,000) | |
Shares issued | $ 0 | [1] | $ 0 | [1] | 0 | [1] | 0 | 0 | |
Shares issued (in shares) | [1] | 10,105 | 0 | ||||||
Ending Balance at Mar. 31, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (368,983,000) | (363,796,000) | |
Ending Balance (in shares) at Mar. 31, 2019 | [1] | 317,936 | 17,927 | ||||||
Beginning Balance at Dec. 31, 2018 | $ 3,000 | 5,184,000 | (345,543,000) | (340,356,000) | |||||
Beginning Balance (in shares) at Dec. 31, 2018 | 2,758,689 | 160,654 | |||||||
Net loss | (45,387,000) | ||||||||
Ending Balance at Jun. 30, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (390,930,000) | (385,743,000) | |
Ending Balance (in shares) at Jun. 30, 2019 | [1] | 317,936 | 22,103 | ||||||
Beginning Balance at Dec. 31, 2018 | $ 3,000 | 5,184,000 | (345,543,000) | (340,356,000) | |||||
Beginning Balance (in shares) at Dec. 31, 2018 | 2,758,689 | 160,654 | |||||||
Net loss | (98,895,000) | (98,895,000) | |||||||
Shares issued (in shares) | 336,961 | ||||||||
Shares repurchased (shares) | 37,428 | ||||||||
Ending Balance at Dec. 31, 2019 | $ 3,000 | 5,184,000 | (444,438,000) | (439,251,000) | |||||
Ending Balance (in shares) at Dec. 31, 2019 | 3,095,650 | 198,082 | |||||||
Beginning Balance at Mar. 31, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (368,983,000) | (363,796,000) | |
Beginning Balance (in shares) at Mar. 31, 2019 | [1] | 317,936 | 17,927 | ||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (21,947,000) | (21,947,000) | |
Share repurchased | 0 | [1] | 0 | [1] | 0 | [1] | 0 | 0 | |
Ending Balance at Jun. 30, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (390,930,000) | (385,743,000) | |
Ending Balance (in shares) at Jun. 30, 2019 | [1] | 317,936 | 22,103 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 3,000 | 5,184,000 | (444,438,000) | (439,251,000) | |||||
Beginning Balance (in shares) at Dec. 31, 2019 | 3,095,650 | 198,082 | |||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (34,618,000) | (34,618,000) | |
Ending Balance at Mar. 31, 2020 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (479,056,000) | (473,869,000) | |
Ending Balance (in shares) at Mar. 31, 2020 | [1] | 345,431 | 22,103 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 3,000 | 5,184,000 | (444,438,000) | (439,251,000) | |||||
Beginning Balance (in shares) at Dec. 31, 2019 | 3,095,650 | 198,082 | |||||||
Net loss | (84,408,000) | ||||||||
Ending Balance at Jun. 30, 2020 | $ 5,000 | [1] | $ 0 | [1] | 466,047,000 | [1] | (468,775,000) | (2,723,000) | |
Ending Balance (in shares) at Jun. 30, 2020 | [1] | 50,160,042 | 0 | ||||||
Beginning Balance at Mar. 31, 2020 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (479,056,000) | (473,869,000) | |
Beginning Balance (in shares) at Mar. 31, 2020 | [1] | 345,431 | 22,103 | ||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (49,790,000) | (49,790,000) | |
Ending Balance at Jun. 30, 2020 | $ 5,000 | [1] | $ 0 | [1] | $ 466,047,000 | [1] | $ (468,775,000) | $ (2,723,000) | |
Ending Balance (in shares) at Jun. 30, 2020 | [1] | 50,160,042 | 0 | ||||||
[1] | Retroactively restated for the reverse recapitalization as described in Note 2 - Summary of Significant Accounting Policies . |
Company Overview
Company Overview | 12 Months Ended |
Dec. 31, 2019 | |
Company Overview | |
Company Overview | 1. Company Overview Hycroft Mining Corporation (formerly known as Allied Nevada Gold Corp.) and its subsidiaries (collectively, āHMCā, the āCompanyā, āweā, āusā, āourā, etc.) is a U.S.-based gold producer that is focused on mining, developing, and exploring properties in the state of Nevada in a safe, environmentally responsible, and cost-effective manner. Gold and silver sales represent 100% of the Companyās operating revenues and, when operating, the market prices of gold and silver significantly impact the Companyās 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation These condensed consolidated interim financial statements have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (āGAAPā) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (āSECā). 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 financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements include all adjustments which are necessary for a fair presentation of the interim financial position, operating results and cash flows for the periods presented. Certain reclassifications have been made to the prior periods presented in these financial statements to conform to the current period presentation, which had no effect on previously reported total assets, liabilities, cash flows, or net loss. References to ā$ā refers to United States currency. Recapitalization Transaction with MUDS The Recapitalization Transaction (see Note 3 Recapitalization Transaction 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. The shares and net loss per common share prior to the Recapitalization Transaction, have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). See Note 3 ā Recapitalization Transaction Going concern The financial statements of the Company have been prepared on a āgoing concernā 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 Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. For the six months ended June 30, 2020, the Company incurred a net loss of $84.4 million and the net cash used in operating activities was $57.6 million. As of June 30, 2020, the Company had available cash on hand of $47.3 million, working capital of $68.0 million, total liabilities of $195.4 million, and an accumulated deficit of $468.8 million. Although the Company recently completed the Recapitalization Transaction with MUDS, using its internal forecasts and cash flow projection models, it currently projects there will be insufficient cash to meet its future obligations as they become due as the Company continues to ramp up the Hycroft Mineās operations from current levels or to levels which are contemplated by the 2019 Hycroft Technical Report. Consistent with our financial reporting and accounting policies, and as part of the preparation of the second quarter 2020 financial statements, the Company performed routine quarter-end metallurgical balancing analysis, which is a process that estimates the remaining recoverable gold and silver ounces on the leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, leach pad and solution sampling, estimated recovery percentages based on ore type, domain, and oxidation levels achieved, and quantities of gold and silver actually recovered. During the second quarter of 2020, based on metallurgical balancing results, the Company determined that 6,512 ounces of gold that had been placed on the leach pads were no longer recoverable and wrote-off such ounces. The write-down of these ounces significantly reduced the Companyās projected revenues for the second half of 2020. The Company has been unsuccessful in achieving its operating and production costs targets at the Hycroft Mine. During the second quarter of 2020, the Companyās production costs, mine site period costs, and the cash portion of the write-down of production inventories totaled $29.7 million, which exceeded second quarter 2020 revenues of $7.6 million by $22.1 million. Higher than planned operating and production costs were the result of: (1) increased contractor support for technical and manpower shortages in crusher operations, mobile maintenance, and leach pad operations; (2) overuse of processing reagents used in the leach pad operations due to poor planning, monitoring, and execution; (3) higher operating costs in the crusher, due to higher than planned belt failures; and (4) higher maintenance costs for the owned mining fleet, due to unexpected timing of component failures. As a result of actual second quarter 2020 operating and production costs incurred, the Company has revised its future forecasts of production and operating cost estimates for the second half of 2020 which has reduced its estimated future cash flows. The Companyās ability to continue as a going concern is contingent upon achieving its sales, production, cost, and other operating targets, as well as the success of a future financing transaction to provide additional capital financing for working capital and construction of its leach pad. The Company has begun the process of speaking with its financial advisors and stakeholders about options and timing related to securing additional financing or capital that may permit it to complete the construction of its leach pad and continue to ramp up its operations. While the Company has received a non-binding letter of support from its two largest stakeholders, the Board of Directors of the Company intends to evaluate its options to ensure the necessary capital is raised on terms favorable to and in the best interests of all of its shareholders. The Company has no commitment from any party to provide additional financing, and there can be no assurance that any funding will be available, or if available, that its terms will be favorable or acceptable to the Company. At this time, the Company does not have an expected time frame for, or an expectation with respect to, securing additional financial capital, if at all. 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, stockholdersā equity) have been prepared in accordance with GAAP on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Companyās assets or managementās assessment of the Companyās overall enterprise or equity value. Use of estimates The preparation of the Companyās financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves; estimates of life-of-mine production timing and volumes; current and future mining and processing plans; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these financial statements, and such differences could be material. Accordingly, amounts presented in these financial statements are not indicative of results that may be expected for future periods. Cash Cash has historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of June 30, 2020 and December 31, 2019, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the Company held $39.6 million and $42.7 million in restricted cash, respectively. See Note 6 ā Restricted Cash Accounts receivable Accounts receivable consists of amounts due from customers for gold and silver sales. The Company has evaluated the customersā credit risk, payment history and financial condition and determined that no allowance for doubtful accounts is necessary. The entire accounts receivable balance is expected to be collected during the next 12 months. Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages; and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventories computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Write-downs of production inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. When a write-down is required, production-related inventories are adjusted to net realizable value with adjustments recorded as Write-down of production inventories Cost of sales Note 4 ā Inventories Mine site period costs The Company evaluates its mine site costs incurred, which are normally recorded to the carrying value of production-related inventories, to determine if any such costs are a result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, or other costs or activities which significantly increase the cost per ounce of production-related inventories and are considered unusual. If costs are determined to meet the criteria and, therefore, cannot be recorded to the carrying value of production-related inventories, then the Company recognizes such costs in the period incurred as Mine site period costs Depreciation and amortization mine site period costs Cost of sales Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 are transferred at an average cost per ounce of gold to precious metals inventory. Precious metals inventory Precious metals inventory consists of dorĆ© and loaded carbon containing both gold and silver, which is ready for offsite shipment and sale to a third party. As gold ounces are sold, costs are recognized in Production costs Depreciation and amortization Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Level 2 ā Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including Cash Restricted cash, Accounts receivable, Prepaids and other Accounts payable Other liabilities, current Note 18 - Fair Value Measurements Plant, equipment, and mine development, net Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or the units-of-production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 7 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs, and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable mineral reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable mineral reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to production-related inventories to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable mineral reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable mineral reserves and estimated metal recoveries associated with those mineral reserves. Equipment not in use From time to time the Company may determine that certain of its property and equipment no longer fit into its strategic operating plans and commence activities to sell such identified assets. The Company evaluates equipment not in use for held-for-sale classification in accordance with ASC Topic 360 Property, Plant, and Equipment . Other assets, non-current Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment, and mine development. The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 7 ā Plant, Equipment, and Mine Development, Net During the three months ended June 30, 2020, the Company determined a triggering event had occurred, as it has been unsuccessful in achieving its operating and production costs targets. As a result, the Company performed a recoverability test at June 30, 2020, and no impairments were recorded. Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of June 30, 2020 and December 31, 2019, there was no recorded amounts for mineral properties as such values had been written-down to $0 in previous periods. Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion Mineral properties Royalty obligation The Companyās royalty obligation is carried at amortized cost with reductions calculated by dividing actual gold and silver production by the estimated total life-of-mine production from proven and probable mineral reserves. Any updates to proven and probable mineral reserves or the estimated life-of-mine production profile would result in prospective adjustments to the amortization calculation used to reduce the carrying value of the royalty obligation. Amortization reductions to the royalty obligation are recorded to Production costs Cost of sales Derivative instruments The Company recognizes all derivatives as either assets or liabilities and measures those instruments at fair value. Changes in the fair value of derivative instruments, together with any gains or losses on derivative settlements and transactions, are recorded in earnings to Fair value adjustments As of June 30, 2020, the Companyās only recorded derivative was for warrants (see Note 18 - Fair Value Measurements Revenue recognition The Company recognizes revenue for gold and silver sales when it satisfies the performance obligation of transferring inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon sales prices and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. The majority of sales are in the form of dorĆ© bars, but the Company also sells loaded carbon and slag, a by-product. All sales are final. Stock-based compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant. Stock-based compensation costs are charged to General and administrative Note 14 - Stock-Based Compensation Phantom shares Non-employee members of Sellerās board of directors received phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. All phantom shares issued by Seller were terminated and paid in connection with the Recapitalization Transaction. See Note 14 - Stock-Based Compensation Note 18 ā Fair Value Measurements Reorganization items On March 10, 2015, a predecessor of the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā). Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 15 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās condensed consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements ā | 2. Summary of Significant Accounting Policies Basis of presentation The Consolidated Financial Statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (āGAAPā). Certain amounts in the 2018 Consolidated Financial Statements have been reclassified to conform to the 2019 presentation. References to ā$ā refers to United States dollars. Going concern The Consolidated Financial Statements of the Company have been prepared on a āgoing concernā basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. On March 10, 2015, the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā) in an effort to recapitalize the Companyās balance sheet by reducing its debt balances while concurrently providing additional liquidity. The Company continued to operate and produce gold and silver at its Hycroft Mine during the bankruptcy process. However, on July 8, 2015, the Company announced that it had suspended mining operations to maximize cash flow and minimize spending through the remainder of the Chapter 11 process. Effective October 22, 2015 (the āEffective Dateā), the Company completed its financial restructuring process and emerged from bankruptcy. From July 2015 through December 31, 2016, the Company produced gold and silver from its leach pads, actively running its processing facilities. The operation went into a care and maintenance mode as of January 1, 2017 when the Company stopped adding lime to the leach pads and wrote-down the remaining gold and silver on the leach pads to $0 due to the inability to economically recover the metal. As a result of going into care and maintenance, gold and silver production became a byproduct of maintaining the Hycroft Mine. Beginning January 1, 2017, the Company recorded all metal sales as a reduction to Care and maintenance, net Note 12 ā Gold and Silver Sales During 2019, the Company restarted open pit mining at the Hycroft Mine, and produced and sold gold and silver. However, based on the financial results for the year ended December 31, 2019, the significant debt burden and the need for additional cash to expand the operations, the Company believes its operations cannot currently generate enough cash to make scheduled principal and interest payments required by its debt obligations and/or cover operating and general and administrative costs necessary to operate the Company. These conditions raise substantial doubt about the Companyās ability to continue as a going concern, since the Company is reliant on receiving future cash flows from financing activities to meet its obligations. While the Company has entered into a purchase agreement with MUDS, (the āMUDS transactionā) (as discussed in Note 21 ā Subsequent Events The ability to continue as a going concern is contingent upon the Companyās ability to expand mining operations to an economic level and to refinance its existing debt obligations, which the MUDS transaction is designed to support. During August 2019, M3 Engineering and Technology Corp. in association with SRK Consulting US and the Company completed a feasibility study (the ā2019 Hycroft Technical Reportā). The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. The 2019 restart of mining operations through December 31, 2019 was funded by the issuance of $72.0 million in Senior Secured Notes due June 30, 2020 (the ā1.25 Lien Notesā), discussed below. Additional short-term funding continues to be required. See Note 21 ā Subsequent Events These Consolidated Financial Statements do not include any adjustments related to the recoverability and classification of recorded assets or any other adjustments that might be necessary should the Company be unable to continue as a going concern. Use of estimates The preparation of the Companyās Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these Consolidated Financial Statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these Consolidated Financial Statements, and such differences could be material. Principles of consolidation The Consolidated Financial Statements include the accounts of HMC and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Cash Cash and cash equivalents have historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of December 31, 2019 and 2018, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the consolidated balance sheets. See Note 5 ā Restricted Cash Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages, and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventory quantities computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Losses that result from the application of the lower of cost or net realizable value accounting policy are recorded as a component of Cost of sales Note 3 ā Inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, production-related inventories would be adjusted to net realizable value and recorded as a component of Cost of sales Note 3 ā Inventories Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 or carbon in column processing method. As gold ounces are recovered using the Merrill-Crowe process, costs are transferred from in-process inventories at an average cost per ounce of gold to dorĆ© finished goods inventory. In-process inventories are valued at the average cost of the material fed into the process, plus the in-process conversion costs, including applicable depreciation and amortization relating to the process facilities incurred to that point in the process. Precious metals inventory Precious metals inventory consists of dorĆ© containing both gold and silver. While operations are actively producing gold and silver, and as the Company sells its in-process inventories, costs are recognized in Production costs Care and maintenance, net Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements Level 1 Level 2 Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including cash, prepaids and other, accounts payable, and other liabilities are carried at cost, which approximates their fair value due to the short-term nature of these instruments. Plant, equipment, and mine development Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or using the units-of- production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 6 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recoveries associated with those reserves. Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment and mine development. The Company reviews and evaluates its long-lived assets for recoverability annually and at interim periods if triggering events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 6 ā Plant, Equipment, and Mine Development, Net Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of December 31, 2019 and 2018, there was no value assigned to mineral properties as the value had been written-down to $0 in previous periods. Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion expense Mineral properties, net Derivative instruments The fair value of the Companyās derivative instruments is reflected as liabilities on the consolidated balance sheets. The Company does not hold derivative instruments for trading purposes. Derivative Instruments Not Designated as Hedges Previous equity stockholders of the Company received warrants with a seven-year term that represent 17.5% of the outstanding new common shares. These warrants were accounted for as a derivative instrument and included in Other liabilities, non-current Other, net See Note 11 ā Stockholdersā Equity Note 16 ā Fair Value Measurements Treasury Stock The Company records repurchases of common shares as Treasury stock at cost. Revenue recognition When actively operating, the Company recognizes revenue on gold and silver sales. During the year ended December 31, 2019, the Company began actively operating the Hycroft Mine and, as such, recorded gold and silver sales as Revenue Care and maintenance, net Care and maintenance, net The Company recognizes revenue for gold and silver production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon market price and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. All sales are final. Stock-Based Compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant and charged to expense over the requisite service period. The fair value of awards is determined using the stock price on either the date of grant (if subject only to service conditions) or the date that the Compensation Committee of the Board of Directors establishes applicable performance targets (if subject to performance conditions). The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date. See Note 13 ā Stock-Based Compensation Phantom shares Non-employee members of the Companyās board of directors receive phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment is equal to the fair market value of one share of common stock of the Company at the date of payment. Under the grant agreements, each phantom share vests on the date of grant and entitles the participant to a cash payment. For grants issued during 2019 and 2018, the cash payment is equal to the greater of the (1) grant date value and (2) the fair market value of one share of common stock of the Company at the date of payment. The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process. During the twelve months ended December 31, 2019, the Company recorded a $0.2 million increase in the value of phantom shares granted in 2015 and 2016, which is included in General and administrative General and administrative General and administrative Note 16 ā Fair Value Measurements Reorganization items, net Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items, net Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 14 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (āFASBā) issued Accounting Standards Update (āASUā) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 on January 1, 2019 using a modified retrospective approach. As there were no unfulfilled contracts outstanding as of December 31, 2018, there was no cumulative effect adjustment required to be recognized at January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements eliminated, while others were modified and there were some additions. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2018-13 in 2020, but will not have a material effect on the financial statement disclosures. |
Inventories
Inventories | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Inventories | ||
Inventories | 4. Inventories The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 5,043 ā ā $ 2,559 ā Merrill-Crowe in process ā 410 226 ā 1,004 691 Carbon column in-process ā 2,209 1,397 ā 478 474 DorĆ© finished goods ā 1,641 885 ā 412 278 Total ā $ 9,303 2,508 ā $ 4,453 1,443 ā As of June 30, 2020 and December 31, 2019, in-process Inventories The following table summarizes Ore on leach pads ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Ore on leach pads ā $ 28,180 17,825 ā $ 22,062 17,019 ā As of June 30, 2020 and December 31, 2019 (including write-downs discussed below), Ore on leach pads 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). During the three and six months ended June 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 wrote-off these ounces. As a result, the Company recognized a Write-down of production inventories Mine site period costs During the three and six months ended June 30, 2020, the Company incurred $12.9 million and $20.1 million, respectively, of Mine site period costs | 3. Inventories The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 2,559 ā ā $ 1,582 ā Merrill-Crowe in process ā 1,004 691 ā ā ā Carbon column in-process ā 478 474 ā 478 482 DorĆ© finished goods ā 412 278 ā ā ā Total ā $ 4,453 1,443 ā $ 2,060 482 ā As of December 31, 2019 and 2018, in-process Inventories The following table summarizes ore on leach pads and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Ore on leach pads ā $ 22,062 17,019 ā $ ā ā ā As of December 31, 2019 (including the both write-downs discussed below) and 2018, Ore on leach pads Write-down of production inventories As discussed in Note 2 ā Summary of Significant Accounting Policies Write-down of production inventories In addition to the write-down related to metallurgical balancing during 2019, the Company performed its lower of cost or net realizable value test for the Ore on leach pads Write-down of production inventories |
Prepaids and Other Assets
Prepaids and Other Assets | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Prepaids and Other Assets | ||
Prepaids and Other Assets | 5. Prepaids and Other The following table provides the components of prepaids and other (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Prepaids and other ā ā Prepaids ā $ 4,283 ā $ 2,109 Deposits ā 539 ā 539 Total ā $ 4,822 ā $ 2,648 ā ā ā ā ā ā ā Other assets, non-current ā ā Equipment not in use ā $ 19,683 ā $ 19,683 Prepaid supplies inventory ā 885 ā ā Royalty - advance payment ā 240 ā 120 Deferred future financing costs ā ā ā 5,083 Total ā $ 20,808 ā $ 24,886 ā As of June 30, 2020 and December 31, 2019, equipment not in use in Other assets, non-current Other assets, non-current The Company has an inventory consignment agreement with a supplier of crusher parts, requiring 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 agreement, 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, non-current Inventories. | 4. Prepaids and Other Assets The following table provides the components of prepaids and other assets (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Prepaids and other ā ā Prepaids ā $ 2,109 ā $ 1,722 Deposits ā 539 ā 539 Total ā $ 2,648 ā $ 2,261 ā ā ā ā ā ā ā Other assets, non-current ā ā Deferred future financing costs ā 5,083 ā 1,158 Royalty ā advance payment ā 120 ā ā Total ā $ 5,203 ā $ 1,158 ā |
Restricted Cash
Restricted Cash | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Restricted Cash | ||
Restricted Cash | 6. Restricted Cash The following table provides the components of restricted cash (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Asset retirement obligation surety bonds (collateralized obligation) ā $ 39,631 ā 39,477 First Lien Agreement restricted cash - Note 9 ā ā ā 3,270 Total ā $ 39,631 ā $ 42,747 ā As of June 30, 2020, the Companyās asset retirement obligation was secured with surety bonds totaling $59.9 million, which were partially collateralized by the restricted cash shown above. Restricted cash from the Companyās First Lien Agreement was released on May 29, 2020 when such indebtedness was repaid in conjunction with the Recapitalization Transaction (see Note 3 - Recapitalization Transaction | 5. Restricted Cash The following table provides the components of restricted cash (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 First Lien agreement restricted cash ā Note 9 ā 3,270 ā 5,030 Asset retirement obligation surety bonds (collateralized obligation) ā 39,477 ā 38,693 Total ā $ 42,747 ā $ 43,723 ā |
Plant, Equipment, and Mine Deve
Plant, Equipment, and Mine Development, Net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Plant, Equipment, and Mine Development, Net | ||
Plant, Equipment, and Mine Development, Net | 7. Plant, Equipment, and Mine Development, Net The following table provides the components of plant, equipment, and mine development, net (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā June 30, ā December 31, ā of Method 2020 2019 Process equipment 5 ā $ 15,809 ā $ 14,770 Leach pads Units-of-production ā 17,431 ā 17,419 Buildings and leasehold improvements 10 years ā 10,507 ā 10,507 Mine equipment 5 ā 4,898 ā 4,716 Vehicles 3 ā 730 ā 136 Furniture and office equipment 7 years ā 290 ā 129 Mine development Units-of-production ā 408 ā 119 Construction in progress and other ā ā ā 13,736 ā 936 ā ā ā ā $ 63,809 ā $ 48,732 Less: accumulated depreciation and amortization ā ā ā (21,537) ā (17,208) Total ā ā ā $ 42,272 ā $ 31,524 ā During the six months ended June 30, 2020, new processing equipment was placed into service, construction of the restart leach pads was completed, and construction of a new larger leach pad began, which comprised substantially all of the construction in progress as of June 30, 2020. | 6. Plant, Equipment, and Mine Development, Net The following table provides the components of plant, equipment, and mine development, net (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā December 31, ā of Method 2019 2018 Process equipment ā 5 ā 13 years ā $ 14,770 ā $ 6,759 Leach pads ā Units-of-production ā 11,190 ā 11,190 Buildings and leasehold improvements ā 10 years ā 10,507 ā 10,507 Restart leach pads ā 18 months ā 6,229 ā ā Mine equipment ā 5 ā 4,716 ā 3,905 Vehicles ā 3 ā 136 ā 41 Furniture and office equipment ā 7 years ā 129 ā 22 Mine development ā Units-of-production ā 119 ā ā Construction in progress and other ā ā ā 20,619 ā 20,750 ā ā ā ā ā $ 68,415 ā $ 53,174 Less: accumulated depreciation and amortization ā ā ā ā (17,208) ā (11,770) Total ā ā ā ā $ 51,207 ā $ 41,404 ā During the year ended December 31, 2019, leach pads were constructed and used for the restart of mining operations. New processing equipment was also placed into service. For the years ended December 31, 2019 and 2018, the Company recorded depreciation and amortization related to plant, equipment and mine development of $5.4 million and $3.4 million, respectively. The Company capitalized $4.3 million of depreciation and amortization during 2019 to Ore on leach pads Impairment of long-lived assets During the years ended December 31, 2019, the Company recorded impairments of long-lived assets of $0.1 million. The impairment recorded during 2019 related to a leach pad expansion project that the Company determined it would not utilize and, therefore, did not complete. |
Mineral Properties, Net
Mineral Properties, Net | 12 Months Ended |
Dec. 31, 2019 | |
Mineral Properties, Net | |
Mineral Properties, Net | 7. Mineral Properties, Net The following table summarizes changes in the Companyās mineral properties, net (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Balance, beginning of year ā $ ā ā $ 1,093 Amortization of asset retirement cost asset ā ā ā (61) Write-down of mineral property ā ā ā (1,032) Balance, end of year ā $ ā ā $ ā ā During the year ended December 31, 2018, the Company wrote-down the asset retirement cost asset to $0 based on a decrease in the ARO. |
Other Liabilities
Other Liabilities | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Other Liabilities | ||
Other Liabilities | 8. Other Liabilities The following table summarizes the components of other liabilities, current and non-current (in thousands): ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Other liabilities, current ā ā ā ā ā ā Other accrued compensation ā $ 1,784 ā $ 1,139 Restricted stock units - Note 14 ā 50 ā 1,210 Accrued compensation for phantom shares - Note 18 ā ā ā 1,590 Total ā $ 1,834 ā $ 3,939 ā ā ā ā ā ā ā Other liabilities, non-current ā ā ā ā ā ā Seller Warrant liability - Notes 12 and 18 ā $ 18 ā $ 18 Payroll Tax Liability ā 135 ā ā Total ā $ 153 ā $ 18 ā | 8. Other Liabilities The following table summarizes the components of other liabilities, current and non-current (in thousands): ā ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Other liabilities, current ā ā Accrued compensation for phantom shares ā Note 16 ā $ 1,590 ā $ 884 Restricted stock units ā Note 13 ā 1,210 ā ā Other accrued compensation ā 1,139 ā 892 Other ā ā ā 14 Total ā $ 3,939 ā $ 1,790 ā ā ā ā ā ā ā Other liabilities, non-current ā ā Warrant liability ā Notes 11 and 16 ā $ 18 ā $ 18 ā |
Debt
Debt | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt | ||
Debt | 9. Debt, Net Debt covenants The Companyās 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 defined herein) 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. The Sprott Credit Agreement requires the Company to ensure that, at all times, both its Working Capital and Unrestricted Cash is at least $10.0 million, and that at least every six months from May 29, 2020 (or earlier as required per the terms of the Sprott Credit Agreement) it demonstrates its ability to repay and meet all present and future obligations as they become due with a financial Model that uses consensus gold and silver 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 June 30, 2020, the Company was in compliance with all covenants. Debt balances The following table summarizes the components of debt (in thousands): ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Debt, net, current: ā ā ā ā ā ā 2.0 Lien Notes ā $ ā ā $ 208,411 1.5 Lien Notes ā ā ā 137,050 First Lien Agreement ā ā ā 125,468 1.25 Lien Notes ā ā ā 77,212 Promissory Note ā ā ā 6,773 Less, debt issuance costs ā ā ā (949) ā ā $ ā ā $ 553,965 Debt, net, non-current: ā ā ā ā ā ā Subordinated Notes ā $ 80,711 ā $ ā Sprott Credit Agreement ā 63,114 ā ā Less, debt issuance costs ā (4,781) ā ā ā ā $ 139,044 ā $ ā ā As it relates to the $62.3 million initially recorded for the Sprott Credit Agreement on the May 29, 2020 closing of the Recapitalization Transaction, the Company recorded $70.0 million for the stated amount of the borrowing itself, $9.3 million for the additional interest payment obligation, and a $17.0 million discount (inclusive of the $1.4 million original issuance discount) which will be amortized to Interest expense, net Additional paid-in capital Sprott Credit Agreement On October 4, 2019, the Company, as borrower, certain subsidiaries of the Company, as guarantors, and Sprott Private Resource Lending II (Collector), LP. (āLenderā), as arranger, executed a secured multi-advance term credit facility pursuant to which Lender committed to make, subject to certain conditions set forth therein, term loans in an aggregate principal amount up to $110.0 million. On May 29, 2020, the Company entered into the Amended and Restated Credit Agreement (the āSprott Credit Agreementā) to update the conditions precedent and effect certain other changes to conform to the details of the business combination. On May 29, 2020, at the consummation of the business combination, the Company borrowed $70.0 million under the Sprott Credit Agreement, which was equal to the amount available under the first and second tranches, and issued to Lender 496,634 shares of HYMC common stock, which was equal to 1.0% of the Companyās post-closing shares of common stock outstanding. The Company paid an original issuance discount equal to 2.0% ($1.4 million) of the amount borrowed. The Company does not believe it is currently able to borrow under the third and final $40.0 million tranche of the Sprott Credit Agreement due to its inability to satisfy applicable conditions and production milestones required by certain conditions precedent to borrowing. Advances under the Sprott Credit Agreement bear interest monthly at a floating rate equal to 7.0% plus the greater of (i) US Dollar three-month LIBOR and (ii) 1.5%, per annum, accruing daily and compounded monthly. For a period of twelve (12) months following the May 29, 2020 initial advance date, no cash payments of interest or principal will be due, with 100% of interest accruing and being capitalized on a monthly basis to the outstanding principal balance of the Sprott Credit Agreement. Additionally, for each three-month period commencing on February 28, 2021 and ending on the maturity date, the Company shall pay Lender additional interest on the last business day of such three-month period, calculated according to a formula set forth in the Sprott Credit Agreement and currently equal to $0.5 million per quarter ($9.3 million in total over the life of the Sprott Credit Agreement). Upon the prepayment of the entire Sprott Credit Agreement, all remaining additional interest payments and all remaining and yet unpaid additional interest must be prepaid as well. The Company is required to make principal repayments beginning on August 31, 2021 and on the last business day of each calendar quarter thereafter. The first four (4) principal repayments are equal to two and one-half percent (2.5%) of the outstanding principal amount of the Sprott Credit Agreement on May 31, 2021 (including all capitalized interest thereon, if any, but excluding the principal repayment then due). All subsequent principal repayments are equal to seven and one-half (7.5%) of the outstanding principal amount of the Sprott Credit Agreement on May 31, 2021 (including all capitalized interest thereon, if any, but excluding the principal repayment then due). The entire outstanding balance of the Sprott Credit Agreement, together with all unpaid interest and fees (including all capitalized interest, if any), is due on the day that is five years from the last day of the month of the initial closing date, which shall be no later than May 31, 2025, the maturity date. The Company reviewed the features of the Sprott Credit Agreement for embedded derivatives, and determined no such instruments exist. The Sprott Credit Agreement may be repaid in whole or in part, at any time prior to the maturity date. Each prepayment or cancellation of the Sprott Credit Agreement (including capitalized interest, if any), whether in whole or in part, voluntarily or mandatory, subject to certain exceptions, that occurs on or prior to the fourth anniversary of the date of the initial advance is subject to a prepayment premium between 3.0% and 5.0%. The obligations of the Company under the Sprott Credit Agreement are guaranteed by Credit Parties and secured by a lien on all properties and assets now owned, leased or hereafter acquired or leased by any Credit Party, as such terms are defined and further detailed in the Sprott Credit Agreement. Subordinated Notes In connection with the business combination and pursuant to a 1.25 Lien Exchange Agreement, on May 29, 2020, the Company assumed $80.0 million in aggregate principal amount of Sellerās 1.25 Lien Notes that were exchanged as part of the Recapitalization Transaction (the Subordinated Notesā). The Subordinated Notes are secured and subordinate in priority to the obligations under the Sprott Credit Agreement. The Subordinated Notes bear interest at a rate of 10.0% per annum, payable in kind on a quarterly basis. The principal on the New Subordinated Notes is due December 1, 2025. 2.0 Lien Notes As discussed in Note 3 - Recapitalization Transaction 1.5 Lien Notes As discussed in Note 3 - Recapitalization Transaction 1.25 Lien Notes As discussed in Note 3 - Recapitalization Transaction First Lien Agreement As discussed in Note 3 - Recapitalization Transaction Note 6 - Restricted Cash Promissory Note As discussed in Note 3 - Recapitalization Transaction Interest expense, net The following table summarizes the components of recorded interest expense (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 2.0 Lien Notes ā $ 5,085 ā $ 6,997 ā $ 12,901 ā $ 13,743 1.5 Lien Notes ā 3,496 ā 4,601 ā 8,635 ā 9,034 1.25 Lien Notes ā 2,866 ā 852 ā 6,218 ā 1,130 First Lien Agreement ā 1,708 ā 2,547 ā 4,575 ā 5,058 Sprott Credit Agreement ā 796 ā ā ā 796 ā ā Subordinated Notes ā 711 ā ā ā 711 ā ā Amortization of debt issuance costs ā 635 ā 503 ā 1,307 ā 1,002 Promissory Note ā 57 ā 413 ā 142 ā 489 Capitalized interest ā (290) ā (272) ā (334) ā (417) Other interest expense ā 8 ā ā ā 8 ā ā ā ā $ 15,072 ā $ 15,641 ā $ 34,959 ā $ 30,039 ā The Company capitalizes interest to Plant, equipment, and mine development, net Interest | 9. Debt Debt covenants The Companyās debt agreements contain representations and warranties, events of default, and covenants that are customary for agreements of these types. The Companyās First Lien Term Loan Credit Agreement (the āFirst Lien Agreementā) contains financial covenants that, among other things, restrict or limit the ability of the Company to enter into liens, dispose of its assets, enter into hedging arrangements, pay dividends, purchase or redeem shares, incur or guarantee additional indebtedness, and make capital expenditures. The Second Lien Convertible Notes (the āConvertible Notesā), the Senior Secured Notes due June 30, 2020 (the ā1.5 Lien Notesā) and the 1.25 Lien Notes contain provisions that, among other things, restrict or limit the ability of the Company to incur or guarantee additional debt, pay dividends, enter into liens, or dispose of its assets. The Companyās First Lien Agreement, the Convertible Notes, the 1.5 Lien Notes and the 1.25 Lien Notes 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 December 31, 2019, we believe we were in compliance with all covenants related to the debt obligations. Debt balances The following table summarizes the components of debt (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Debt, current: ā ā Convertible Notes ā $ 208,411 ā $ ā 1.5 Lien Notes ā 137,050 ā ā First Lien Agreement ā 125,468 ā 125,468 1.25 Lien Notes ā 77,212 ā ā Other Note payable ā 6,773 ā 5,989 Less debt issuance costs ā (949) ā (71) Total ā $ 553,965 ā $ 131,386 ā ā ā ā ā ā ā Debt, non-current: ā ā Convertible Notes ā $ ā ā $ 179,874 1.5 Lien Notes ā ā ā 118,270 Less debt issuance costs ā ā ā (1,943) Total ā $ ā ā $ 296,201 ā Debt issued at the Effective Date First lien term loan agreement The Company entered into the First Lien Agreement on the Effective Date for an aggregate principal amount of $126.7 million. The First Lien Agreement originally matured March 31, 2017 and now matures on May 31, 2020. For the period from December 13, 2019 through January 31, 2020 the First Lien Agreement bore interest at either LIBOR plus 7.0% or an Alternate Base Rate Canada, as defined in the First Lien Agreement, plus 7.0% and thereafter increased to either LIBOR plus 7.5% or an Alternate Base Rate Canada plus 7.5%. Prior to December 13, 2019, the First Lien Agreement bore interest at either LIBOR plus 5.5% or an Alternate Base Rate Canada plus 4.5%. Fifty percent of the monthly Excess Cash Flow, as defined in the First Lien Agreement and subject to minimum cash balance restrictions, is required to be paid to reduce the outstanding amount under the First Lien Agreement. The maximum outstanding amount under the First Lien Agreement was initially determined by a Borrowing Base (as defined in the First Lien Agreement) that is based upon 80% of the net realizable value of the gold and silver in the Companyās ore on leach pads, in- process and finished goods inventories less estimated selling and processing costs. The repayment of the First Lien Agreement and other obligations under the First Lien Agreement are guaranteed by all of the direct and indirect domestic subsidiaries of the Company. The First Lien Agreement, the guarantees by the guarantors in respect thereof and all obligations under the First Lien Agreement, and such guarantees are secured by liens on substantially all of the assets of the Company and its subsidiaries. After a series of short-term maturity extensions through July 14, 2017, the Company amended the First Lien Agreement to provide for a maturity of January 31, 2019. After several short-term maturity extensions through February 22, 2019, the First Lien Agreement maturity was extended to December 13, 2019 (the āFebruary 2019 Extensionā). The extended amendment requires that the Company will maintain at all times a cash balance of $5.0 million, including a balance in a segregated account sufficient to pay projected First Lien Agreement interest payments for the succeeding three months. In conjunction with the close of the February 2019 Extension, the Company issued $18.0 million of 1.25 Lien Notes (discussed below). Pursuant to the February 2019 Extension, the Company obtained commitments from the holders of the 1.5 Lien Notes to purchase an additional $9.0 million of 1.25 Lien Notes during 2019, which was fulfilled in May 2019. Additionally, pursuant to the February 2019 Extension, the maximum outstanding amount under the First Lien Agreement is no longer determined by the Borrowing Base, however, the Company is to maintain at all times at least 175,000 recoverable gold equivalent ounces on the leach pads. The Company has agreed to certain operational and reporting milestones during the remaining life of the First Lien Agreement. Also, the Company agreed that it will ensure that the holders of the 1.5 Lien Notes or other parties acceptable to the Administrative Agent (as defined in the First Lien Agreement) will reduce the Bank of Nova Scotiaās holdings under the First Lien Agreement by $5.0 million within two The Company completed two additional maturity amendments in December 2019 and January 2020. As stated above, the First Lien Agreement now matures May 31, 2020. In connection with these two amendments, the Company has agreed to certain operational and reporting milestones during the remaining life of the First Lien Agreement. Second lien convertible notes The Company issued $95.0 million of Convertible Notes on the Effective Date pursuant to the Indenture. Of the initial $95.0 million in Convertible Notes issued, $90.0 million was received by the Company in cash. The remaining $5.0 million in Convertible Notes were issued in satisfaction of a backstop put option payment. Certain lenders provided a backstop to the commitments in respect of the Convertible Notes to the extent there was a shortfall (in such capacity, collectively, the āBackstop Note Lendersā) in exchange for a backstop put option payment. Each of the Backstop Note Lenders received a portion of the backstop put option payment of $5.0 million. Since the initial issuance of the $95.0 million in Convertible Notes, the Company issued, pursuant to the Indenture, an additional $20.0 million in aggregate principal amount of Convertible Notes upon substantially the same terms and conditions as those issued on October 22, 2015. In August 2018, the Company paid $0.1 million to retire $3.4 million of Convertible Notes resulting in a gain of $3.3 million. The Convertible Notes mature on October 22, 2020 and bear interest at a rate of 15% per annum, payable in-kind on a quarterly basis. The issuance of an additional $96.8 million in Convertible Notes has been made through December 2019, representing interest payments on the outstanding Convertible Notes, including $0.3 million that was prepaid upon issuance of additional notes. The Convertible Notes are convertible at an initial conversion price of $1.67 per share, subject to anti- dilution protection. There was no beneficial conversion feature as it was determined that the conversion price was equal to the commitment date value of the common stock. The obligations under the Convertible Notes and the guarantees by the guarantors in respect thereof are secured by liens on substantially all assets of the Company and the guarantors, subject to the priority of the liens that secure the obligations under the First Lien Agreement, the 1.25 Lien Notes and the 1.5 Lien Notes. In connection with the issuance of the Convertible Notes, an Intercreditor Agreement was entered into by and among the agent under the First Lien Agreement and the trustee under the Indenture. Additional debt issued 1.5 Lien Notes In May, 2016, the Company issued $10.0 million of the 1.5 Lien Notes, pursuant to a Note Purchase Agreement (the āNote Purchase Agreementā). The 1.5 Lien Notes bear interest at a rate of 15% per annum, which is payable in-kind on a quarterly basis, and mature June 30, 2020. The obligations under the 1.5 Lien Notes and the guarantees by the guarantors in respect thereof are secured by liens on substantially all assets of the Company and the guarantors, subject to the priority of the liens that secure the obligations of the First Lien Agreement and the 1.25 Lien Notes but superior in priority to the liens that secure the obligations of the Convertible Notes and the unsecured obligations of the Company. In connection with the issuance of the 1.5 Lien Notes, an Intercreditor Agreement was entered into by and among the agent under the First Lien Agreement and the collateral agent under the Note Purchase Agreement. Additionally, an Intercreditor Agreement was entered into by and among the collateral agent under the Note Purchase Agreement and the trustee under the Indenture. The following table summarizes the issuance of 1.5 Lien Notes bifurcated by Note issuances and interest in-kind during the years ended December 31, 2019, 2018, 2017 and 2016 (in thousands): ā ā ā ā ā ā ā ā ā ā Transaction Period Note Issuances Interest In-Kind Total Year ended December 31, 2016 ā $ 26,200 ā $ 1,535 ā $ 27,735 Year ended December 31, 2017 ā 41,000 ā 7,512 ā 48,512 Year ended December 31, 2018 ā 28,000 ā 14,023 ā 42,023 Year ended December 31, 2019 ā ā ā 18,780 ā 18,780 Total ā $ 95,200 ā $ 41,850 ā $ 137,050 ā While each 1.5 Lien Notes issuance is pursuant to a new Note purchase agreement, all the 1.5 Lien Notes have the same terms and security priority as the original issuance in May 2016. The 1.5 Lien Notes provide the holders the right upon a change of control, as defined in the Note Purchase Agreement, to require the Company to repurchase all of the holderās notes for 110% of the outstanding principal balance, plus accrued and unpaid interest. Furthermore, the 1.5 Lien Notes give the Company the right upon a change of control, as defined in the Note Purchase Agreement, to redeem the notes for 110% of the outstanding principal balance, plus accrued and unpaid interest. 1.25 Lien Notes On February 22, 2019, the Company issued $18.0 million of the 1.25 Lien Notes, pursuant to a Note Purchase Agreement (the ā1.25 Note Purchase Agreementā). The 1.25 Lien Notes bear interest at a rate of 15% per annum, which is payable in-kind on a quarterly basis, and mature June 30, 2020. The obligations under the 1.25 Lien Notes and the guarantees by the guarantors in respect thereof are secured by liens on substantially all assets of the Company and the guarantors, subject to the priority of the liens that secure the obligations of the First Lien Agreement but superior in priority to the liens that secure the obligations of the 1.5 Lien Notes, the Convertible Notes and the unsecured obligations of the Company. In connection with the issuance of the 1.25 Lien Notes, an Intercreditor Agreement was entered into by and among the agent under the First Lien Agreement and the collateral agent under the 1.25 Note Purchase Agreement, and an Intercreditor Agreement was entered into by and among the collateral agent under the Note Purchase Agreement and the collateral agent under the 1.25 Note Purchase Agreement. Additionally, an Intercreditor Agreement was entered into by and among the collateral agent under the 1.25 Note Purchase Agreement and the trustee under the Indenture. Additional 1.25 Lien Notes were issued in 2019 pursuant to new Note purchase agreements. All of the 1.25 Lien Notes have the same terms and security priority as the original issuance in February 2019. A total of $77.2 million of 1.25 Lien Notes were issued during 2019, including $5.2 million of interest in-kind notes. Other notes payable On October 15, 2014, the Company entered into a Release and Settlement Agreement (the āSettlement Agreementā) and a Promissory Note (the āPromissory Noteā) resolving and settling any and all disputes between Jacobs Field Services North America and the Company. A First Amendment to the Settlement Agreement was executed on April 5, 2016, a Second Amendment was executed on October 6, 2016, a Third Amendment was executed on December 21, 2017 (the āThird Amendmentā), a Fourth Amendment was executed on December 31, 2018 (the āFourth Amendmentā) and a Fifth Amendment was executed on June 27, 2019 (the āFifth Amendmentā). The Fourth Amendment amended the Promissory Note to begin accruing interest January 1, 2019, at the rate of 5% per annum, to be added to the principal of the Promissory Note. Interest for 2018 was prepaid coincident with the execution of the Third Amendment. Pursuant to the Fourth Amendment, a delayed payment fee of 5.5% of the principal balance as of June 30, 2019, including accrued interest, was added to the principal balance of the Promissory Note. The due date of the Promissory Note was extended to December 31, 2019, pursuant to the Fifth Amendment. A Sixth Amendment was executed on December 19, 2019 (the āSixth Amendmentā), which extended the Promissory Note due date to June 30, 2020. On each of December 31, 2019 and 2018, coincident with the execution of the Sixth Amendment and Fourth Amendment, delayed payment fees of 2% of the principal balance at each date, or $0.1 million and $0.1 million, respectively, were added to the principal balance of the Promissory Note. Interest expense The following table summarizes the components of recorded interest expense (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Second Lien Convertible Notes ā $ 28,537 ā $ 24,923 1.5 Lien Notes ā 18,763 ā 14,012 First Lien Agreement ā 10,022 ā 9,589 1.25 Lien Notes ā 5,241 ā ā Amortization of debt issuance costs ā 2,047 ā 1,802 Promissory Note ā 785 ā 567 Capitalized interest ā (551) ā ā Total interest expense ā $ 64,844 ā $ 50,893 ā We capitalize interest to Property and equipment, net Interest |
Asset Retirement Obligation
Asset Retirement Obligation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Asset Retirement Obligation | ||
Asset Retirement Obligation | 11. Asset Retirement Obligation The following table summarizes changes in the Companyās ARO (in thousands): ā ā ā ā ā ā ā ā ā 2020 2019 Balance at January 1, ā $ 4,374 ā $ 5,832 Accretion expense ā 187 ā 211 Balance at June 30, ā $ 4,561 ā $ 6,043 ā | 10. Asset Retirement Obligation The following table summarizes changes in the Companyās ARO (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Balance, beginning of year ā $ 5,832 ā $ 21,548 Accretion expense ā 422 ā 1,271 Changes in estimates ā (1,880) ā (16,987) Balance, end of year ā $ 4,374 ā $ 5,832 ā Changes in estimates during the year ended December 31, 2019 were driven by increased equipment and diesel costs but were more than offset by an increase in our credit-adjusted risk free rate, which is used to discount the future reclamation costs. Changes in estimate during 2018 were primarily a result of the Company extending the life-of-mine estimate to 30 years. Due to the extended life of mine, reclamation expenditures are delayed by approximately 25 years from the prior estimated schedule. As of December 31, 2019, the Company estimated that no significant reclamation expenditures will be made until 2047 and that reclamation work will be completed by the end of 2065. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Stockholders' Equity | ||
Stockholders' Equity | 12. Stockholdersā Equity Following the May 29, 2020 Recapitalization Transaction, as of June 30, 2020, the total number of shares of all classes of capital stock which we have authority to issue is 410,000,000, of which 400,000,000 are common stock, par value $0.0001 per share, and 10,000,000 are preferred stock par value $0.0001 per share. The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect to each of our class of capital stock are discussed below. Common stock As of June 30, 2020, there were 50,160,042 shares of common stock issued and outstanding. Each holder of common stock is entitled to one vote for each share of common stock held by such holder. The holders of common stock are entitled to the payment of dividends and other distributions as may be declared from time to time by the Board in accordance with applicable law and to receive other distributions from the Company. Subject to the terms of the Recapitalization Transaction and as of May 29, 2020, certain new and existing holders of common stock of the Company, are subject to a lock-up periods, which ranged from six Preferred stock As of June 30, 2020, there were no shares of preferred stock issued and outstanding. Dividend policy The Companyās credit facility under the Sprott Credit Agreement contains provisions that restrict its ability to pay dividends. For additional information see Note 9 - Debt, Net Warrants As described below, the Company had a total of 47,011,622 warrants outstanding as of June 30, 2020. Five-year Public Warrants The Company has 34,289,999 publicly-traded warrants outstanding which entitle holders to purchase one share of HYMC common stock at an exercise price of $11.50 per share for a period of five years from the May 29, 2020 Recapitalization Transaction. The Company has certain abilities to call such warrants if the last reported sale price of HYMC 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. See Note 3 - Recapitalization Transaction Seller Warrants As part of 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 āSeller Warrant Agreementā). Pursuant to the assumption of the Seller Warrant Agreement, the warrants issued thereunder (the āSeller Warrantsā) became exercisable into shares of HYMC common stock. As of the consummation of the Recapitalization Transaction, 3,210,213 shares of common stock may be issued upon exercise of Seller Warrants at an exercise price, determined as of July 1, 2020 pursuant to the Seller Warrant Agreement of $44.82 per share upon the exercise of 12,721,623 Seller Warrants, each currently exercisable into approximately 0.2523 shares of common stock, which exercise price and number of shares may fluctuate under the terms of the Seller Warrant Agreement. Seller Warrants have a seven-year term that expires in October 2022. | 11. Stockholdersā Equity Common stock In connection with the Companyās emergence from bankruptcy and as detailed in the plan of reorganization, the Companyās then-existing unsecured notes and general unsecured claims were canceled and holders of such claims received equity in the reorganized Company or received cash in amounts negotiated by the major creditor groups. The Company was required to issue 3.0 million new common shares to its creditors, but has not listed the new common shares for public trading and is not a reporting company with the United States Securities and Exchange Commission. Previous equity stockholders of the Company received warrants with a seven As of December 31, 2019, all bankruptcy claims had been settled and all 3.0 million shares had been issued. For additional information see Note 16 ā Fair Value Measurements $.001 Preferred stock In addition to common stock, the authorized share capital of the Company includes 10,000,000 shares of undesignated preferred stock with a par value of $0.001 per share, none of which has been issued. Treasury stock During the year ended December 31, 2019, the Company repurchased 37,428 shares of its common stock outstanding for a total purchase price of $1 (one dollar). During the year ended December 31, 2018, the Company repurchased 95,082 shares of its common stock outstanding for a total purchase price of $1 (one dollar). Dividend policy The Company has never paid dividends and currently has no intention to do so. The Companyās Convertible Notes, 1.5 Lien Notes, 1.25 Lien Notes and First Lien Agreement contain provisions that restrict its ability to pay dividends. For additional information see Note 9 ā Debt Warrant issuance at effective date: As discussed above , $5.20 as of December 31, 2019. The warrants were accounted for as a derivative instrument and included as of December 31, 2019 and 2018 in Other liabilities, non-current |
Gold and Silver Sales
Gold and Silver Sales | 12 Months Ended |
Dec. 31, 2019 | |
Gold and Silver Sales | |
Gold and Silver Sales | 12. Gold and Silver Sales The table below is a summary of the Companyās gold and silver sales (in thousands, except ounces sold): ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā ā 2019 ā 2018 ā ā ā ā ā Ounces ā ā ā ā Ounces ā Amount Sold Amount Sold Gold sales ā $ 12,803 ā 8,593 ā $ 178 145 Silver sales ā 906 ā 52,036 ā 2 124 Total gold and silver sales ā $ 13,709 ā ā ā ā $ 180 ā For the year ended December 31, 2019, gold and silver sales of $13.7 million were reported as Revenue Note 2 ā Summary of Significant Accounting Policies Care and maintenance, net Care and maintenance, net |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Stock-Based Compensation | ||
Stock-Based Compensation | 14. Stock-Based Compensation Performance and Incentive Pay Plan The Companyās Performance and Incentive Pay Plan (the āPIPPā), which was approved on February 20, 2019 and amended on May 29, 2020 in connection with the Recapitalization Transaction, is a stock-based compensation plan to attract, retain and motivate employees and directors while directly linking incentives to increases in stockholder value. Terms and conditions (including performance-based vesting criteria) of awards granted under the PIPP are established by the Board of Directors or the Compensation Committee of the Board of Directors, who administer the PIPP. Awards may be granted in a variety of forms, including restricted stock, restricted stock units, stock options, stock appreciation rights, performance awards, and other stock-based awards. The number of shares of common stock made available for award under the PIPP is equal to 5.0% of the issued and outstanding shares of HYMC common stock immediately after the close of the Recapitalization Transaction, or 2,508,002 shares. As of June 30, 2020, all awards granted under the PIPP were in the form of restricted stock units to employees of the Company. Restricted stock units granted under the PIPP without performance-based vesting criteria typically vest in equal annual installments over two two For restricted stock units granted in the first quarter of 2019, a price per share was not determined as of the grant date. The number of shares of common stock of the Company to be granted and issued upon vesting is to be calculated on the vesting date, which can be the closing date of the Recapitalization Transaction, June 1, 2020, or the second and third anniversary of the date of the grant or the annual date the compensation committee determines the achievement of the corporate performance targets. In connection with the closing of the Recapitalization Transaction on May 29, 2020, 78,565 restricted stock units, which were granted in 2019, vested at an average price of $12.65 per share, the closing price of HYMC common stock on the date of the Recapitalization Transaction, for a total fair value of $1.0 million. Additionally, on June 1, 2020, 70,238 restricted stock units vested at an average price of $11.50 per share, the closing price of HYMC common stock on such vesting date, for a total fair value of $0.8 million. During the three months ended June 30, 2020, the Company reclassified $1.8 million from Other liabilities, current Additional paid-in capital Other liabilities, current The fair value of restricted stock units is recognized as expense over the vesting period. During the three and six months ended June 30, 2020, the Company recognized $0.2 million and $0.6 million, respectively, in stock-based compensation cost related to previously granted restricted stock units. During the three and six months ended June 30, 2019, the Company recognized $0.3 million and $0.5 million, respectively, in stock-based compensation cost related to the issuance of the restricted stock units. Non-Employee Director Phantom Stock Plan Non-executive members of Sellerās Board of Directorās received phantom shares pursuant to the Hycroft Mining Corporation Non-Employee Director Phantom Stock Plan (the āPhantom Planā) as part of their annual compensation pursuant to phantom stock award agreements. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. The cash payments were to be made to participants upon certain Payment Events, as such term is defined in the Phantom Plan, which was triggered by the closing of the Recapitalization Transaction. In connection with the closing of the Recapitalization Transaction, a $1.8 million cash payment was made to the participants to satisfy the 1,237,500 phantom shares that were vested and outstanding. During the six months ended June 30, 2020 and 2019, non-employee members of Sellerās board of directors were granted a total of 157,500 and 315,000 phantom shares of stock, respectively, which vested upon grant. During the six months ended June 30, 2020 and 2019, the Company recorded $0.2 million and $0.5 million, respectively, in compensation expense related to the vesting of the phantom shares granted during each respective period, which are included in General and administrative Other liabilities, current Note 18 ā Fair Value Measurements | 13. Stock-Based Compensation The Company has a stock-based compensation plan, the Performance and Incentive Pay Plan (the āPIPPā), to attract, retain and motivate employees while directly linking incentives to increases in stockholder value. Terms and conditions (including performance-based vesting criteria) of awards granted under the PIPP are established by the Board of Directors or the Compensation Committee of the Board of Directors, who administer the plan. On February 20, 2019, the Board of Directors of the Company approved the PIPP, which makes available up to 4,277,000 shares of common stock for award. The awards may be granted in a variety of forms, including restricted stock, restricted stock units, stock options, stock appreciation rights, performance awards, and other stock-based awards. As of December 31, 2019, all awards granted under the PIPP were in the form of restricted stock units. Restricted stock units granted under the PIPP without performance-based vesting criteria typically vest in equal annual installments over two For the restricted stock units granted in 2019, 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 will be calculated on the vesting date based on the grant date value. The first tranche of restricted stock units will vest upon the closing of the MUDS transaction, which the Company expects to close in the first half of 2020. Restricted stock units set to vest during 2020 are convertible into shares of MUDS common stock as of December 31, 2020, if the MUDS transaction closes. The remainder of the restricted stock unites vest through March 2022. The restricted stock units are included in Other liabilities, current The fair value of restricted stock units is recognized as expense over the vesting period. During the year ended December 31, 2019, the Company recognized $1.2 million in stock-based compensation cost related to the issuance of the restricted stock units of which $0.1 million was capitalized to ore on leach pads. |
Income Taxes
Income Taxes | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Income Taxes | 15. Income Taxes For the three and six months ended June 30, 2020 and 2019, the Company recorded no income tax benefit or expense based upon the estimated annual effective tax rate of 0.0% for each period. The estimated annual effective tax rate for each period was driven by year-to-date net losses for each period along with the expectation of continued losses for the remainder of the years. The gain related to the Recapitalization Transaction was excluded from the estimated annual effective tax rate calculation for the 2020 period as it is considered a discrete item. The Company reversed a portion of the valuation allowance based on the net operating loss expected to be used, in order to offset Sellerās taxable gain related to the Recapitalization Transaction. The Company is subject to state income tax in Colorado, which is the location of its corporate office, but did not incur any income tax expense related to Colorado due to continued net operating losses. The Company is subject to mining taxes in Nevada, which are classified as income taxes as such taxes are based on a percentage of mining profits, but did not incur any mining tax expense due to continued mining losses. The Company is not subject to foreign income taxes as all of the Companyās operations and properties are located within the United States. As of December 31, 2019, the Company had $256.5 million of net deferred tax assets, which were primarily comprised of net operating losses and disallowed interest expense under IRC Sec. 163(j). The Company recorded a full valuation allowance of $256.5 million against its net deferred tax assets. Immediately prior to the Recapitalization Transaction, Seller had estimated net deferred tax assets of approximately $267.8 million, which were primarily comprised of net operating losses and offset by a full valuation allowance. As a result of the Recapitalization Transaction, Seller, which sold all of its issued and outstanding equity interests of its direct subsidiaries and substantially all of its other assets, to Acquisition Sub, which also assumed substantially all of the liabilities of Seller, had a taxable gain and cancellation of indebtedness of approximately $95.0 million before considering Sellerās net operating loss carryforwards. In connection with the Recapitalization Transaction, Seller used approximately $19.9 million of its deferred tax assets to offset the taxable gain in full, resulting in remaining net deferred tax assets of approximately $247.9 million immediately after the Recapitalization Transaction. The remaining net deferred tax assets balance of Seller did not transfer to the Company as a result of the Recapitalization Transaction. For U.S. tax purposes, the sale of Sellerās disregarded subsidiaries interests and other assets was considered a sale of assets. The acquired assets have a carryover basis for US GAAP purposes and the Company has stepped up the fair market value basis in the assets acquired for tax purposes, resulting in the Company having estimated net deferred tax assets of $94.2 million at June 30, 2020. The Company recorded a full valuation allowance of approximately $94.2 million as of June 30, 2020 against the net deferred tax assets, which were determined more likely than not to not be realized. As necessary, the Company provides a reserve against the benefits of uncertain tax positions taken in its tax filings that are more likely than not to not be sustained upon examination. Based on the weight of available evidence, the Company does not believe it has taken any uncertain tax positions that require the establishment of a reserve. The Company has not recorded any interest or penalties related to income tax liabilities as of June 30, 2020. | 14. Income Taxes The Companyās loss before income taxes was attributable solely to domestic operations in the United States. The components of the Companyās income tax expense (benefit) were as follows (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Current: ā ā Federal ā $ ā ā $ 145 Deferred: ā ā Federal ā (24,609) ā (18,842) Change in valuation allowance ā 24,609 ā 18,842 Income tax benefit ā $ ā ā $ 145 ā The following table provides a reconciliation of income taxes computed at the United States federal statutory tax rate of 21% in 2019 and 2018 to the income tax provision (in thousands): ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Loss before income taxes ā $ (98,895) ā $ (55,658) ā United States statutory income tax rate ā 21 % 21 % Income tax (benefit) at United States statutory income tax rate ā $ (20,768) ā $ (11,688) ā Change in valuation allowance ā 24,609 ā 18,842 ā Return to provision adjustment ā (2,624) ā (7,029) ā Tax rate changes ā (1,028) ā ā ā State tax benefit ā (195) ā ā ā Other ā 6 ā 20 ā Income tax benefit ā $ ā ā $ 145 ā ā For the year ended December 31, 2019, the effective tax rate was driven by an increase in the valuation allowance of $24.6 $2.6 $1.0 $0.2 For the year ended December 31, 2018, the effective tax rate was driven by return to provision adjustments of $7.0 $0.1 The components of the Companyās deferred tax assets are as follows (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Net operating loss ā $ 146,382 ā $ 126,143 Plant, equipment, and mine development ā 60,840 ā 65,760 Interest expense carryforward ā 24,369 ā 10,590 Inventories ā 12,289 ā 17,163 Reorganization costs ā 7,701 ā 7,437 Assets held-for-sale ā 3,149 ā 3,106 Asset retirement obligation ā 927 ā 1,225 Other liabilities ā 609 ā 490 Stock-based compensation ā 257 ā ā Credits and other ā (6) ā (6) Valuation allowance ā (256,517) ā (231,908) Total net deferred tax assets ā $ ā ā $ ā ā Based on the weight of evidence available as of both December 31, 2019, and 2018, which included recent operating results, future projections, and historical inability to generate operating cash flow, the Company concluded that it was more likely than not that the benefit of its net deferred tax assets would not be realized and, as such, recorded a full valuation allowance of $256.5 $231.9 The Company had net operating loss carryovers as of December 31, 2019 of $683.7 million for federal income tax and financial statement purposes. The Company also had net operating loss carryovers as of December 31, 2019 of $76.3 million for state income tax and financial statement purposes. Historical differences between the federal income tax purposes and financial statement purposes amounts were eliminated through fresh start accounting. Substantially all of the Companyās net operating loss carryovers expire in years 2036 through 2039. Additional analysis of the Internal Revenue Code (āIRCā) section 382 limitations will be done upon the release of the valuation allowance and could result in a change to the value of the net operating losses. The Company believes that the benefits of uncertain tax positions recorded in the calculation of the current year income tax benefit and on prior year tax returns did not exceed benefits calculated using the more likely than not threshold. As a result, the Company has not recorded any income tax reserves or related interest or penalties for the year ended December 31, 2019. With limited exception, the Company is no longer subject to U.S. federal income tax audits by taxing authorities for tax years 2015 and prior; however, net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Earnings (Loss) Per Share | ||
Earnings (Loss) Per Share | 16. Loss Per Share The table below shows our basic and diluted loss per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 Net loss ā $ (49,790) ā $ (21,947) ā $ (84,408) ā $ (45,387) ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted average shares outstanding ā ā ā ā ā ā ā ā ā ā ā ā Basic ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 Diluted ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 ā ā ā ā ā ā ā ā ā ā ā ā ā Basic loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) Diluted loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) ā The weighted-average shares of common stock outstanding for the three and six months ended June 30, 2019 have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). 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 2019 periods exclude the common share effects from certain of Sellerās debt instruments which are reflected in the 2020 periods. Due to the Companyās net loss during the three and six months ended June 30, 2020 and 2019, there was no dilutive effect of common stock equivalents because the effects of such would have been anti-dilutive. Using the treasury stock method, the weighted-average common stock equivalents excluded from diluted loss per share calculations were 37.6 million shares (37.5 million shares related to warrants, and 0.1 million shares related to restricted stock units), for both the three and six months ended June 30, 2020. For the three and six months ended June 30, 2019, the weighted-average common stock equivalents excluded from diluted loss per share calculations using the treasury stock method were 37.5 million shares related to warrants. Unvested restricted stock units were excluded from common stock equivalent calculations because the number of shares required to settle such stock-based compensation awards is not known until the future vesting date. | 15. Earnings (Loss) Per Share The table below shows our basic and diluted earnings (loss) per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Net loss ā $ (98,895) ā $ (55,803) Weighted average shares outstanding ā ā Basic ā 2,739,505 ā 2,645,194 Diluted ā 2,739,505 ā 2,645,194 Basic earnings per common share ā $ (36.10) ā $ (21.10) Diluted earnings per common share ā $ (36.10) ā $ (21.10) ā There was no dilutive effect of common stock equivalents for the twelve months ended December 31,2019 or 2018 because the effect of their inclusion would have been anti-dilutive. There was no dilutive effect of common stock equivalents for the years ended December 31, 2019 and 2018 because the effect of their inclusion would have been anti-dilutive. Using the treasury stock method, the weighted-average common stock equivalents excluded from diluted EPS were 152.2 million shares and 131.5 million shares for the years ended December 31, 2019 and 2018, respectively. The restricted stock units are not included in the common stock equivalents because the number of shares used to settle them in not known. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Measurements | ||
Fair Value Measurements | 18. Fair Value Measurements Recurring fair value measurements The following table sets forth by level within the fair value hierarchy, the Companyās liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā Hierarchy ā June 30, ā December 31, Liabilities: Level 2020 2019 Other liabilities, current ā ā Accrued compensation for phantom shares 3 ā $ ā ā $ 1,590 Other liabilities, non-current ā ā Warrant liability - Note 12 3 ā $ 18 ā $ 18 ā Accrued compensation for phantom shares Certain of Sellerās phantom shares, which were satisfied in full upon closing of the Recapitalization Transaction, were carried at fair value due to holders of such awards being entitled to variable cash payments based upon valuations of the Companyās common stock. The historical fair value of such obligation was computed using inputs and assumptions which were significant and unobservable as Seller was a privately held entity and, as such, were classified within Level 3 of the fair value hierarchy. The inputs and assumptions included estimates of consideration to be received by holders of phantom shares based on the estimated fair value of the consideration which may be allocated to such holders from the various financing transactions Seller was considering at such time based on the implied equity value. Warrant liability As part of the Recapitalization Transaction, the Company assumed Sellerās obligations under the Seller Warrant Agreement and the 12.7 million Seller Warrants outstanding became exercisable into shares of HYMC 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 model that requires a variety of inputs, including contractual terms, market prices, exercise prices, equity volatility and discount rates. As of June 30, 2020, Seller Warrants were carried at $18,000, which represents the historically computed fair value. The Company plans to update 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. Since equity volatility is a significant unobservable input to the valuation, the derivative instruments are classified within Level 3 of the fair value hierarchy. Seller Warrants have a seven-year term which expires in October 2022, an exercise price of $44.82 as of July 1, 2020, and are exercisable into approximately 0.2523 shares of HYMC common stock. Items disclosed at fair value Debt As of June 30, 2020, the fair value of the Companyās total current and non-current debt approximated its carrying value due to the short time period between the May 29, 2020 close of the Recapitalization Transaction and the end of the second quarter of 2020. As of December 31, 2019, Seller determined that certain of its debt instrumentsā carrying value exceeded the estimated fair value, which was based on the estimated fair value of the consideration which may be allocated to such debt instruments from the various financing transactions Seller was considering at such time. Accordingly, as of December 31, 2019, Seller estimated that the fair value of the 2.0 Lien Notes and 1.5 Lien Notes was approximately $262.4 million, compared to the carrying value of $345.5 million. Royalty obligation As of June 30, 2020, the estimated net present value of the Companyās royalty obligation $99.9 million, compared to the carrying value of $30.0 million. The net present value of the Companyās royalty obligation was modeled using the following level 3 inputs: (1) market consensus inputs for future gold and silver prices; (2) a precious metal industry consensus discount rate of 5.0%; and (3) estimates of the Hycroft Mineās life-of-mine gold and silver production volumes and timing. | 16. Fair Value Measurements Recurring fair value measurements ā The following table sets forth by level within the fair value hierarchy, the Companyās assets and liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā Hierarchy Level 2019 2018 Liabilities ā ā Accrued compensation for phantom shares 3 ā $ 1,590 ā $ 884 Derivative instruments: ā ā Warrant liability ā Note 11 2 ā $ 18 ā $ 18 ā Accrued compensation During each of the years ended December 31, 2019 and 2018, non-executive members of the Companyās board of directors were granted a total of 315,000 phantom shares of stock, which vested upon grant, pursuant to a Non-Employee Director Phantom Stock Plan. Under the grant agreements, the phantom shares entitle the participant to a cash payment equal to the greater of the (1) grant date fair value and (2) the fair market value of one share of common stock of the Company at the date of payment. The cash payments are to be made to a participant upon the first of the following to occur: (i) retirement from the Board; (ii) resignation from the Board; (iii) failure to stand for re-election as a non-employee director of the Board; (iv) removal from the board for reasons other than cause; (v) death of the participant; or (vi) a change of control. During 2017, the grant agreements with one of the non-executive members of the board of directors were amended to provide for the participant to receive one share of common stock of the Company for each phantom share at the date of payment instead of a cash payment. The non-executive member of the board of directors received 90,000 shares of the common stock of the Company upon resigning in January 2018. During 2019 and 2018, the Company performed fair value analyses of the phantom shares. A valuation of the Company based on negotiated financing arrangements with several unrelated parties was used to determine the value at both December 31, 2019 and December 31, 2018. The phantom shares issued during 2018 and 2019 were recorded at the grant date fair value and, pursuant to the grant agreements, cannot be written-down below the grant date fair value. During 2019, the fair market value of the 2015 and 2016 phantom shares issuances were increased by $0.2 million, which was recorded to General and administrative General and administrative The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process . Derivative instruments The fair values (as prescribed by GAAP) of the warrants, the Companyās only derivative instrument, were computed by independent third-party consultants (and validated by the Company) using models that require a variety of inputs, including contractual terms, market prices, exercise prices, and correlations of such inputs. In general, model inputs that are significant to the fair value measurements of the Companyās derivative instruments trade in active markets or are observable in markets that are not active, and, as such, derivative instruments are classified within Level 2 of the fair value hierarchy. The fair value of the Companyās warrant liability as of December 31, 2019 and 2018, for the warrants issued at the Effective Date, was determined using a Monte Carlo simulation-based valuation model. The warrants have a seven-year term and an initial exercise price of $8.40 per share. The assumptions used include a risk-free interest rate of 1.74%, an expected volatility of 70%, and a dividend rate of 0%. Items disclosed at fair value The carrying amount and fair value of the debt as of December 31, 2019 and 2018 are disclosed in the following table (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Carrying ā ā Carrying ā ā ā ā Amount ā Fair Value ā Amount ā Fair Value Total current and non-current debt ā $ 553,965 ā $ 471,890 ā $ 427,587 ā $ 350,000 ā As of December 31, 2019 and 2018, the fair value of the Companyās debt was determined using level 3 inputs and the phantom shares were marked to market based on level 3 inputs. There were no changes to the Companyās valuation techniques, and no transfers in or out of Levels 1, 2, or 3. During 2018, the Company considered various financing alternatives to finance the restart of the Hycroft Mine. In considering the financing alternatives the Company determined that as of December 31,2018 the fair value of the debt no longer approximated the carrying value. The Company determined the fair value of the debt at December 31, 2019 and 2018 using potential financing options that have been presented to the Company, which are considered level 3 inputs. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Information | ||
Supplemental Cash Flow Information | 19. Supplemental Cash Flow Information The following table provides supplemental cash flow information (in thousands): ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, ā 2020 2019 Cash paid for interest ā $ 5,366 ā $ 5,271 ā ā ā ā ā ā ā Significant non-cash financing and investing activities: ā ā ā ā ā ā Exchange of Sellerās 1.5 Lien Notes for HYMC common stock ā 160,254 ā ā Exchange of Sellerās 1.25 Lien Notes for Subordinated Notes ā 80,000 ā ā Exchange of Sellerās 1.25 Lien Notes for HYMC common stock ā 48,459 ā ā Allocate and write-off of Sellerās debt issuance costs ā 8,202 ā ā Plant, equipment, and mine development additions included in accounts payable ā 3,038 ā 2,592 ā In addition to the supplemental cash flow information shown above, Note - 3. Recapitalization Transaction Note 9 - Debt, Net | 17. Supplemental Cash Flow Information The following table provides supplemental cash flow information (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Cash paid for interest ā $ 10,239 ā $ 9,409 Significant non-cash financing and investing activities: ā ā Increase in Second Lien convertible notes from in-kind interest ā $ 28,537 ā $ 24,869 Increase in 1.5 Lien Notes from in-kind interest ā $ 18,780 ā $ 14,023 Increase in 1.25 Lien Notes from in-kind interest ā $ 5,212 ā $ ā Increase in the Promissory Note from in-kind interest ā $ 785 ā $ 117 Accrual of deferred future financing costs ā $ 1,029 ā $ 1,025 Plant and equipment additions ā $ 2,458 ā $ ā ā |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Employee Benefit Plans | |
Employee Benefit Plans | 18. Employee Benefit Plans 401(k) Plan The Hycroft Mining Corporation 401(k) Plan (the ā401(k) Planā) is a defined contribution plan that is available to all employees of the Company upon their date of hire and is sponsored by the Company. The 401(k) Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended, and Section 401(k) of the IRC. Administrative fees of the 401(k) Plan are paid by the Company. Participants in the 401(k) Plan exercise control and direct the investment of their contributions and account balances among various investment alternatives. The Company matches a percentage of employee deferrals to the 401(k) Plan up to certain limits. For the year ended December 31, 2019 and 2018, the Companyās matching contributions totaled $0.5 million and $0.2 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies | ||
Commitments and Contingencies | 20. Commitments and Contingencies From time to time, the Company is involved in various legal actions related to its business, some of which are class actions 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 Companyās financial statements, although a contingency could be material to the Companyās 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. On February 7, 2020, a purported class action complaint was filed by a purported holder of the Companyās warrants, in the Court of Chancery of the State of Delaware against the Company and MUDS. The complaint sought a declaratory judgment that the Recapitalization Transaction constitutes a āFundamental Changeā under the terms of the Seller Warrant Agreement and thereby requiring that Seller Warrants be assumed by MUDS as part of the Recapitalization Transaction, in addition to asserting claims for (1) breach or anticipatory breach of contract against Seller; (2) breach or anticipatory breach of the implied covenant of good faith and fair dealing against Seller; and (3) tortious interference with contractual relations against MUDS. The complaint sought unspecified money damages and also seeks an injunction enjoining the Company and MUDS from consummating the Recapitalization Transaction. On February 26, 2020, MUDS and Seller entered into an amendment to the Purchase Agreement whereby the Companyās liabilities and obligations under the Seller Warrant Agreement were included as a Parent Assumed Liability under the Purchase Agreement. On March 27, 2020, MUDS and Seller filed motions to dismiss the complaint. On May 15, 2020, a hearing was held and the complaint was dismissed. On May 21, 2020, Plaintiff filed a motion to alter or amend the Courtās order in order to retain jurisdiction in order to file application for a mootness fee, to which MUDS and Seller, while disputing factual assertions and characterizations, did not oppose. On June 30, 2020, the motion was granted and the Court retained jurisdiction over the action to hear any mootness fee application. Financial commitments not recorded in the financial statements As of June 30, 2020 and December 31, 2019, Sellerās off-balance sheet arrangements consisted of operating lease agreements, a net profit royalty arrangement, and a future purchase obligation for consignment inventory. Operating Leases During the first quarter of 2020, the Company signed a lease for mining equipment. The one-year operating lease for mobile mining equipment is used to supplement the Companyās own fleet. The lease term began during the second quarter of 2020 as all equipment was placed into service and has less than a year remaining as of June 30, 2020. The total remaining minimum lease payments was approximately $10.1 million as of June 30, 2020. The Company also holds an operating lease for the Companyās office space in Denver, Colorado. Rent expense for this office space is $0.1 million annually and expires in January 2022. The total remaining lease payments were $0.2 million as of June 30, 2020. As the Company has elected to take advantage of the extended transition period for complying with new or revised accounting standards, the liability for the Companyās operating leases will not be considered on the balance sheets until the new lease accounting rules apply to publicly traded emerging growth companies in accordance with the JOBS Act, or we no longer qualify as an emerging growth company. 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. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid $2.6 million through June 30, 2020, which is included in Prepaids and other Note 5 - Prepaids and Other Consignment Inventory During the first quarter of 2020, Hycroft entered into an agreement with a spare parts supplier that requires the supplier to maintain a specified inventory of replacement parts and components that are exclusively for purchase by Hycroft. Pursuant to the agreement, the Company is required to purchase all of the un-replenished consignment stock inventory, totaling $2.5 million, over the two-year life of the Inventory Consignment agreement. As of June 30, 2020, the Company had prepaid $0.9 million towards the un-replenished consignment stock inventory, which is included in Prepaids and other Note 2 - Summary of Significant Accounting Policies Note 5 - Prepaids and Other | 19. Commitments and Contingencies From time to time, the Company is involved in various legal actions related to its business, some of which are class actions 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 Companyās Consolidated Financial Statements, although a contingency could be material to the Companyās 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. Financial commitments not recorded in the 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. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid $2.5 million through December 31,2019. Transaction bonus plan The Company has entered into a bonus plan whereby, upon the consummation of a sale transaction or certain other transformative transactions as defined in the plan, the Company will be obligated to pay certain senior level employees a total of $5.8 million to $7.3 million, depending on the value of the transaction. |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Related Party Transactions | ||
Related Party Transactions | 21. Related Party Transactions Certain amounts of the Companyās indebtedness disclosed in Note 9 Debt, Net Related Party Disclosures Interest expense, net of capitalized interest Interest expense, net of capitalized interest $21.7 million, respectively, for the debt held by Related Parties. As of June 30, 2020 and December 31, 2019, the Related Parties held a total $67.8 million and $421.6 million, respectively, of debt. | 20. Related Party Transactions As disclosed in Note 9 ā Debt Aristeia Highbridge Mudrick Whitebox Management, LLC (ā Wolverine Related Party Disclosures The following table provides the recorded interest expense by Related Party (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Aristeia ā $ 5,993 ā $ 4,394 Highbridge ā 9,325 ā 6,934 Mudrick ā 23,743 ā 17,766 Whitebox ā ā 15,607 ā 11,444 Wolverine ā 2,906 ā 2,130 Total related party interest expense ā $ 57,574 ā $ 42,668 ā The following table provides debt balances by Related Party (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Aristeia ā $ 50,905 ā $ 35,939 Highbridge ā 80,930 ā 58,709 Mudrick ā 208,078 ā 152,757 Whitebox ā 132,559 ā 93,583 Wolverine ā 24,683 ā 23,998 Total related party debt ā $ 497,155 ā $ 364,986 ā |
Subsequent Events
Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Subsequent Events | ||
Subsequent Events | 22. Subsequent Events On July 1, 2020, the Companyās Board of Directors and Randy Buffington agreed that Mr. Buffington would depart from the Company effective July 1, 2020. In connection with Mr. Buffingtonās departure and in recognition of his successful efforts in developing a new process to economically and profitably recover gold from sulfide ores in a heap leach process and in restarting mining operations at the Hycroft Mine and to reward and compensate him for transition assistance, Mr. Buffington will receive continuation payments for a period of 24 months following his departure at an amount equal to his previous salary. Additionally, the Company and Mr. Buffington entered into a restricted stock unit agreement (time-vesting) pursuant to which the Company granted a special discretionary equity bonus in the form of $1.3 million in restricted stock units convertible into shares of common stock, in which 50.0% vests on the first anniversary of the date of grant, and 50.0% vests on the second anniversary of the date of grant. The liability for the restricted stock units will be included in Other liabilities, current The Compensation Committee and Board of Directors approved the following initial annual Director compensation arrangements for non-employee directors, in the form of: (i) an annual cash retainer of $55,000; (ii) annual committee chair fees of $12,500 for the Audit Committee, $10,000 for the Safety, Sustainability and Technical Committee, and $7,500 for each of the Nominating and Governance and Compensation Committees; (iii) annual committee member fees of $5,000 for the Audit Committee, $4,000 for the Safety, Sustainability and Technical Committee, and $2,500 for each of the Nominating and Governance and Compensation Committees; and (iv) $75,000 in annual equity awards in the form of restricted stock units. In addition, an initial equity award in the amount of $50,000 in form of restricted stock units will be granted to each director. Equity awards will be granted at each annual stockholder meeting of the Company unless otherwise determined by the Compensation Committee. | 21. Subsequent Events Issuance of Additional 1.25 Lien Notes On January 17, 2020 and February 7, 2020 additional 1.25 Lien Notes of $5.0 million and $10.0 million, respectively, were issued. The 1.25 Lien Notes issued in January and February have the same terms and security priority as the original issuance of 1.25 Lien Notes in February 2019. Extension of First Lien Agreement On January 31, 2020, the First Lien Agreement maturity was extended to May 31, 2020, as stated in Note 9 ā Debt Purchase Agreement Signed On January 13, 2020, ā Mudrick Capital Acquisition Corporation (āMUDSā), a publicly traded blank check company, and Hycroft entered into a definitive purchase agreement (the āPurchase Agreementā), under which Hycroft will sell substantially all of its assets to MUDS, and MUDS will discharge and pay or assume certain of Hycroftās liabilities. Following the closing of the transaction, Hycroft will be listed on the Nasdaq Stock Exchange under the ticker symbol āHYMCā. Pursuant to the terms of the transaction MUDS will have at least $50.0 million of unrestricted and available cash on hand at closing. Cash sources for the transaction include (A) a $110.0 million multi- tranche credit agreement arranged by Sprott Resource Lending Corp. (the āSprott Credit Agreementā), of which $70.0 million is expected to be drawn at closing, (B) a $30.0 million 1.5% net smelter royalty agreement arranged by Sprott Resource Lending Corp. and (C) consummation of the $25 million forward purchase of MUDS units and shares by Mudrick Capital Acquisition Holdings LLC, (d) a $65 million backstop agreement to purchase MUDS shares by certain existing stockholders of Hycroft and (e) the net cash remaining in MUDSā trust account following any stockholder redemptions. MUDS post-transaction indebtedness will include amounts drawn from the Sprott Credit Agreement plus newly issued subordinated notes not to exceed $80.0 million. All other indebtedness of Hycroft will be retired, exchanged for MUDS shares, converted into Hycroft shares or assumed by MUDS in the transaction. The transaction will be funded through a combination of stock consideration payable to Hycroft (which Hycroft will promptly distribute to is stockholders), cash and stock to repay certain Hycroft indebtedness and the assumption of certain Hycroft obligations. The boards of directors of MUDS and Hycroft have approved the transaction and recommend that their respective stockholders approve the transaction. Stockholders of Hycroft holding a majority of the outstanding stock of Hycroft have agreed to support approval of the transaction at any meeting of Hycroft stockholders, subject to customary exceptions. Completion of the proposed transaction, which is expected in the first half of 2020, is subject to customary and other closing conditions, including regulatory approvals and receipt of approvals from MUDS and Hycroft stockholders. On February 7, 2020, the Company became aware that a purported class action complaint was filed by Travus Pope, a purported holder of Company warrants, in the Court of Chancery of the State of Delaware against the Company and Mudrick Capital Acquisition Corporation (āMUDSā). As filed, the complaint seeks a declaratory judgment that the transactions contemplated under the Purchase Agreement constitute a āFundamental Changeā under the terms of that certain Warrant Agreement dated as of October 22, 2015 and thereby require that the warrants issued thereunder be assumed by MUDS as part of the transactions, in addition to asserting claims for (i) breach or anticipatory breach of contract against the Company, (ii) breach or anticipatory breach of the implied covenant of good faith and fair dealing against the Company, and (iii) tortious interference with contractual relations against MUDS. The complaint seeks unspecified money damages and also seeks an injunction enjoining the Company and MUDS from consummating the transactions. Other The Company has evaluated all subsequent events through February, 21, 2020, which is the date these Consolidated Financial Statements were available to be issued. There were no additional material subsequent events that required recognition or additional disclosure in these Consolidated Financial Statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Basis of Presentation | Basis of presentation These condensed consolidated interim financial statements have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (āGAAPā) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (āSECā). 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 financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements include all adjustments which are necessary for a fair presentation of the interim financial position, operating results and cash flows for the periods presented. Certain reclassifications have been made to the prior periods presented in these financial statements to conform to the current period presentation, which had no effect on previously reported total assets, liabilities, cash flows, or net loss. References to ā$ā refers to United States currency. Recapitalization Transaction with MUDS The Recapitalization Transaction (see Note 3 Recapitalization Transaction 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. The shares and net loss per common share prior to the Recapitalization Transaction, have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). See Note 3 ā Recapitalization Transaction | Basis of presentation The Consolidated Financial Statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (āGAAPā). Certain amounts in the 2018 Consolidated Financial Statements have been reclassified to conform to the 2019 presentation. References to ā$ā refers to United States dollars. |
Going concern | Going concern The financial statements of the Company have been prepared on a āgoing concernā 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 Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. For the six months ended June 30, 2020, the Company incurred a net loss of $84.4 million and the net cash used in operating activities was $57.6 million. As of June 30, 2020, the Company had available cash on hand of $47.3 million, working capital of $68.0 million, total liabilities of $195.4 million, and an accumulated deficit of $468.8 million. Although the Company recently completed the Recapitalization Transaction with MUDS, using its internal forecasts and cash flow projection models, it currently projects there will be insufficient cash to meet its future obligations as they become due as the Company continues to ramp up the Hycroft Mineās operations from current levels or to levels which are contemplated by the 2019 Hycroft Technical Report. Consistent with our financial reporting and accounting policies, and as part of the preparation of the second quarter 2020 financial statements, the Company performed routine quarter-end metallurgical balancing analysis, which is a process that estimates the remaining recoverable gold and silver ounces on the leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, leach pad and solution sampling, estimated recovery percentages based on ore type, domain, and oxidation levels achieved, and quantities of gold and silver actually recovered. During the second quarter of 2020, based on metallurgical balancing results, the Company determined that 6,512 ounces of gold that had been placed on the leach pads were no longer recoverable and wrote-off such ounces. The write-down of these ounces significantly reduced the Companyās projected revenues for the second half of 2020. The Company has been unsuccessful in achieving its operating and production costs targets at the Hycroft Mine. During the second quarter of 2020, the Companyās production costs, mine site period costs, and the cash portion of the write-down of production inventories totaled $29.7 million, which exceeded second quarter 2020 revenues of $7.6 million by $22.1 million. Higher than planned operating and production costs were the result of: (1) increased contractor support for technical and manpower shortages in crusher operations, mobile maintenance, and leach pad operations; (2) overuse of processing reagents used in the leach pad operations due to poor planning, monitoring, and execution; (3) higher operating costs in the crusher, due to higher than planned belt failures; and (4) higher maintenance costs for the owned mining fleet, due to unexpected timing of component failures. As a result of actual second quarter 2020 operating and production costs incurred, the Company has revised its future forecasts of production and operating cost estimates for the second half of 2020 which has reduced its estimated future cash flows. The Companyās ability to continue as a going concern is contingent upon achieving its sales, production, cost, and other operating targets, as well as the success of a future financing transaction to provide additional capital financing for working capital and construction of its leach pad. The Company has begun the process of speaking with its financial advisors and stakeholders about options and timing related to securing additional financing or capital that may permit it to complete the construction of its leach pad and continue to ramp up its operations. While the Company has received a non-binding letter of support from its two largest stakeholders, the Board of Directors of the Company intends to evaluate its options to ensure the necessary capital is raised on terms favorable to and in the best interests of all of its shareholders. The Company has no commitment from any party to provide additional financing, and there can be no assurance that any funding will be available, or if available, that its terms will be favorable or acceptable to the Company. At this time, the Company does not have an expected time frame for, or an expectation with respect to, securing additional financial capital, if at all. 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, stockholdersā equity) have been prepared in accordance with GAAP on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Companyās assets or managementās assessment of the Companyās overall enterprise or equity value. | Going concern The Consolidated Financial Statements of the Company have been prepared on a āgoing concernā basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. On March 10, 2015, the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā) in an effort to recapitalize the Companyās balance sheet by reducing its debt balances while concurrently providing additional liquidity. The Company continued to operate and produce gold and silver at its Hycroft Mine during the bankruptcy process. However, on July 8, 2015, the Company announced that it had suspended mining operations to maximize cash flow and minimize spending through the remainder of the Chapter 11 process. Effective October 22, 2015 (the āEffective Dateā), the Company completed its financial restructuring process and emerged from bankruptcy. From July 2015 through December 31, 2016, the Company produced gold and silver from its leach pads, actively running its processing facilities. The operation went into a care and maintenance mode as of January 1, 2017 when the Company stopped adding lime to the leach pads and wrote-down the remaining gold and silver on the leach pads to $0 due to the inability to economically recover the metal. As a result of going into care and maintenance, gold and silver production became a byproduct of maintaining the Hycroft Mine. Beginning January 1, 2017, the Company recorded all metal sales as a reduction to Care and maintenance, net Note 12 ā Gold and Silver Sales During 2019, the Company restarted open pit mining at the Hycroft Mine, and produced and sold gold and silver. However, based on the financial results for the year ended December 31, 2019, the significant debt burden and the need for additional cash to expand the operations, the Company believes its operations cannot currently generate enough cash to make scheduled principal and interest payments required by its debt obligations and/or cover operating and general and administrative costs necessary to operate the Company. These conditions raise substantial doubt about the Companyās ability to continue as a going concern, since the Company is reliant on receiving future cash flows from financing activities to meet its obligations. While the Company has entered into a purchase agreement with MUDS, (the āMUDS transactionā) (as discussed in Note 21 ā Subsequent Events The ability to continue as a going concern is contingent upon the Companyās ability to expand mining operations to an economic level and to refinance its existing debt obligations, which the MUDS transaction is designed to support. During August 2019, M3 Engineering and Technology Corp. in association with SRK Consulting US and the Company completed a feasibility study (the ā2019 Hycroft Technical Reportā). The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. The 2019 restart of mining operations through December 31, 2019 was funded by the issuance of $72.0 million in Senior Secured Notes due June 30, 2020 (the ā1.25 Lien Notesā), discussed below. Additional short-term funding continues to be required. See Note 21 ā Subsequent Events These Consolidated Financial Statements do not include any adjustments related to the recoverability and classification of recorded assets or any other adjustments that might be necessary should the Company be unable to continue as a going concern. |
Use of estimates | Use of estimates The preparation of the Companyās financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves; estimates of life-of-mine production timing and volumes; current and future mining and processing plans; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these financial statements, and such differences could be material. Accordingly, amounts presented in these financial statements are not indicative of results that may be expected for future periods. | Use of estimates The preparation of the Companyās Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these Consolidated Financial Statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these Consolidated Financial Statements, and such differences could be material. |
Principles of consolidation | Principles of consolidation The Consolidated Financial Statements include the accounts of HMC and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. | |
Cash | Cash Cash has historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of June 30, 2020 and December 31, 2019, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the Company held $39.6 million and $42.7 million in restricted cash, respectively. See Note 6 ā Restricted Cash | Cash Cash and cash equivalents have historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of December 31, 2019 and 2018, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the consolidated balance sheets. See Note 5 ā Restricted Cash |
Ore on leach pads and inventories | Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages; and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventories computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Write-downs of production inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. When a write-down is required, production-related inventories are adjusted to net realizable value with adjustments recorded as Write-down of production inventories Cost of sales Note 4 ā Inventories Mine site period costs The Company evaluates its mine site costs incurred, which are normally recorded to the carrying value of production-related inventories, to determine if any such costs are a result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, or other costs or activities which significantly increase the cost per ounce of production-related inventories and are considered unusual. If costs are determined to meet the criteria and, therefore, cannot be recorded to the carrying value of production-related inventories, then the Company recognizes such costs in the period incurred as Mine site period costs Depreciation and amortization mine site period costs Cost of sales Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 are transferred at an average cost per ounce of gold to precious metals inventory. Precious metals inventory Precious metals inventory consists of dorĆ© and loaded carbon containing both gold and silver, which is ready for offsite shipment and sale to a third party. As gold ounces are sold, costs are recognized in Production costs Depreciation and amortization Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. | Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages, and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventory quantities computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Losses that result from the application of the lower of cost or net realizable value accounting policy are recorded as a component of Cost of sales Note 3 ā Inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, production-related inventories would be adjusted to net realizable value and recorded as a component of Cost of sales Note 3 ā Inventories Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 or carbon in column processing method. As gold ounces are recovered using the Merrill-Crowe process, costs are transferred from in-process inventories at an average cost per ounce of gold to dorĆ© finished goods inventory. In-process inventories are valued at the average cost of the material fed into the process, plus the in-process conversion costs, including applicable depreciation and amortization relating to the process facilities incurred to that point in the process. Precious metals inventory Precious metals inventory consists of dorĆ© containing both gold and silver. While operations are actively producing gold and silver, and as the Company sells its in-process inventories, costs are recognized in Production costs Care and maintenance, net Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. |
Fair value measurements | Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Level 2 ā Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including Cash Restricted cash, Accounts receivable, Prepaids and other Accounts payable Other liabilities, current Note 18 - Fair Value Measurements | Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements Level 1 Level 2 Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including cash, prepaids and other, accounts payable, and other liabilities are carried at cost, which approximates their fair value due to the short-term nature of these instruments. |
Plant, equipment, and mine development | Plant, equipment, and mine development, net Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or the units-of-production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 7 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs, and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable mineral reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable mineral reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to production-related inventories to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable mineral reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable mineral reserves and estimated metal recoveries associated with those mineral reserves. Equipment not in use From time to time the Company may determine that certain of its property and equipment no longer fit into its strategic operating plans and commence activities to sell such identified assets. The Company evaluates equipment not in use for held-for-sale classification in accordance with ASC Topic 360 Property, Plant, and Equipment . Other assets, non-current | Plant, equipment, and mine development Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or using the units-of- production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 6 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recoveries associated with those reserves. |
Impairment of long-lived assets | Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment, and mine development. The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 7 ā Plant, Equipment, and Mine Development, Net During the three months ended June 30, 2020, the Company determined a triggering event had occurred, as it has been unsuccessful in achieving its operating and production costs targets. As a result, the Company performed a recoverability test at June 30, 2020, and no impairments were recorded. | Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment and mine development. The Company reviews and evaluates its long-lived assets for recoverability annually and at interim periods if triggering events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 6 ā Plant, Equipment, and Mine Development, Net |
Mineral properties | Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of June 30, 2020 and December 31, 2019, there was no recorded amounts for mineral properties as such values had been written-down to $0 in previous periods. | Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of December 31, 2019 and 2018, there was no value assigned to mineral properties as the value had been written-down to $0 in previous periods. |
Asset retirement obligation | Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion Mineral properties | Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion expense Mineral properties, net |
Derivative instruments | Derivative instruments The Company recognizes all derivatives as either assets or liabilities and measures those instruments at fair value. Changes in the fair value of derivative instruments, together with any gains or losses on derivative settlements and transactions, are recorded in earnings to Fair value adjustments As of June 30, 2020, the Companyās only recorded derivative was for warrants (see Note 18 - Fair Value Measurements | Derivative instruments The fair value of the Companyās derivative instruments is reflected as liabilities on the consolidated balance sheets. The Company does not hold derivative instruments for trading purposes. Derivative Instruments Not Designated as Hedges Previous equity stockholders of the Company received warrants with a seven-year term that represent 17.5% of the outstanding new common shares. These warrants were accounted for as a derivative instrument and included in Other liabilities, non-current Other, net See Note 11 ā Stockholdersā Equity Note 16 ā Fair Value Measurements |
Treasury Stock | Treasury Stock The Company records repurchases of common shares as Treasury stock at cost. | |
Revenue recognition | Revenue recognition The Company recognizes revenue for gold and silver sales when it satisfies the performance obligation of transferring inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon sales prices and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. The majority of sales are in the form of dorƩ bars, but the Company also sells loaded carbon and slag, a by-product. All sales are final. | Revenue recognition When actively operating, the Company recognizes revenue on gold and silver sales. During the year ended December 31, 2019, the Company began actively operating the Hycroft Mine and, as such, recorded gold and silver sales as Revenue Care and maintenance, net Care and maintenance, net The Company recognizes revenue for gold and silver production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon market price and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. All sales are final. |
Stock-Based Compensation | Stock-based compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant. Stock-based compensation costs are charged to General and administrative Note 14 - Stock-Based Compensation | Stock-Based Compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant and charged to expense over the requisite service period. The fair value of awards is determined using the stock price on either the date of grant (if subject only to service conditions) or the date that the Compensation Committee of the Board of Directors establishes applicable performance targets (if subject to performance conditions). The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date. See Note 13 ā Stock-Based Compensation |
Phantom shares | Phantom shares Non-employee members of Sellerās board of directors received phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. All phantom shares issued by Seller were terminated and paid in connection with the Recapitalization Transaction. See Note 14 - Stock-Based Compensation Note 18 ā Fair Value Measurements | Phantom shares Non-employee members of the Companyās board of directors receive phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment is equal to the fair market value of one share of common stock of the Company at the date of payment. Under the grant agreements, each phantom share vests on the date of grant and entitles the participant to a cash payment. For grants issued during 2019 and 2018, the cash payment is equal to the greater of the (1) grant date value and (2) the fair market value of one share of common stock of the Company at the date of payment. The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process. During the twelve months ended December 31, 2019, the Company recorded a $0.2 million increase in the value of phantom shares granted in 2015 and 2016, which is included in General and administrative General and administrative General and administrative Note 16 ā Fair Value Measurements |
Reorganization items, net | Reorganization items On March 10, 2015, a predecessor of the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā). Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items | Reorganization items, net Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items, net |
Income taxes | Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 15 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās condensed consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. | Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 14 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. |
Recent accounting pronouncements | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements | Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (āFASBā) issued Accounting Standards Update (āASUā) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 on January 1, 2019 using a modified retrospective approach. As there were no unfulfilled contracts outstanding as of December 31, 2018, there was no cumulative effect adjustment required to be recognized at January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements eliminated, while others were modified and there were some additions. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2018-13 in 2020, but will not have a material effect on the financial statement disclosures. |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Inventories | ||
Schedule of components of inventories and the estimated recoverable gold ounces therein | ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 5,043 ā ā $ 2,559 ā Merrill-Crowe in process ā 410 226 ā 1,004 691 Carbon column in-process ā 2,209 1,397 ā 478 474 DorĆ© finished goods ā 1,641 885 ā 412 278 Total ā $ 9,303 2,508 ā $ 4,453 1,443 | The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 2,559 ā ā $ 1,582 ā Merrill-Crowe in process ā 1,004 691 ā ā ā Carbon column in-process ā 478 474 ā 478 482 DorĆ© finished goods ā 412 278 ā ā ā Total ā $ 4,453 1,443 ā $ 2,060 482 |
Schedule of components of ore on leach pads and the estimated recoverable gold ounces therein | The following table summarizes ore on leach pads and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Ore on leach pads ā $ 22,062 17,019 ā $ ā ā |
Prepaids and Other Assets (Tabl
Prepaids and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaids and Other Assets | |
Schedule of prepaids and other assets | The following table provides the components of prepaids and other assets (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Prepaids and other ā ā Prepaids ā $ 2,109 ā $ 1,722 Deposits ā 539 ā 539 Total ā $ 2,648 ā $ 2,261 ā ā ā ā ā ā ā Other assets, non-current ā ā Deferred future financing costs ā 5,083 ā 1,158 Royalty ā advance payment ā 120 ā ā Total ā $ 5,203 ā $ 1,158 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Restricted Cash | ||
Schedule of restricted cash | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Asset retirement obligation surety bonds (collateralized obligation) ā $ 39,631 ā 39,477 First Lien Agreement restricted cash - Note 9 ā ā ā 3,270 Total ā $ 39,631 ā $ 42,747 | The following table provides the components of restricted cash (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 First Lien agreement restricted cash ā Note 9 ā 3,270 ā 5,030 Asset retirement obligation surety bonds (collateralized obligation) ā 39,477 ā 38,693 Total ā $ 42,747 ā $ 43,723 |
Plant, Equipment, and Mine De_2
Plant, Equipment, and Mine Development, Net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Plant, Equipment, and Mine Development, Net | ||
Schedule of components of plant, equipment, and mine development, net | ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā June 30, ā December 31, ā of Method 2020 2019 Process equipment 5 ā $ 15,809 ā $ 14,770 Leach pads Units-of-production ā 17,431 ā 17,419 Buildings and leasehold improvements 10 years ā 10,507 ā 10,507 Mine equipment 5 ā 4,898 ā 4,716 Vehicles 3 ā 730 ā 136 Furniture and office equipment 7 years ā 290 ā 129 Mine development Units-of-production ā 408 ā 119 Construction in progress and other ā ā ā 13,736 ā 936 ā ā ā ā $ 63,809 ā $ 48,732 Less: accumulated depreciation and amortization ā ā ā (21,537) ā (17,208) Total ā ā ā $ 42,272 ā $ 31,524 | The following table provides the components of plant, equipment, and mine development, net (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā December 31, ā of Method 2019 2018 Process equipment ā 5 ā 13 years ā $ 14,770 ā $ 6,759 Leach pads ā Units-of-production ā 11,190 ā 11,190 Buildings and leasehold improvements ā 10 years ā 10,507 ā 10,507 Restart leach pads ā 18 months ā 6,229 ā ā Mine equipment ā 5 ā 4,716 ā 3,905 Vehicles ā 3 ā 136 ā 41 Furniture and office equipment ā 7 years ā 129 ā 22 Mine development ā Units-of-production ā 119 ā ā Construction in progress and other ā ā ā 20,619 ā 20,750 ā ā ā ā ā $ 68,415 ā $ 53,174 Less: accumulated depreciation and amortization ā ā ā ā (17,208) ā (11,770) Total ā ā ā ā $ 51,207 ā $ 41,404 |
Mineral Properties, Net (Tables
Mineral Properties, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Mineral Properties, Net | |
Summary of changes in mineral properties | The following table summarizes changes in the Companyās mineral properties, net (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Balance, beginning of year ā $ ā ā $ 1,093 Amortization of asset retirement cost asset ā ā ā (61) Write-down of mineral property ā ā ā (1,032) Balance, end of year ā $ ā ā $ ā |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Other Liabilities | ||
Schedule of components of other liabilities | ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Other liabilities, current ā ā ā ā ā ā Other accrued compensation ā $ 1,784 ā $ 1,139 Restricted stock units - Note 14 ā 50 ā 1,210 Accrued compensation for phantom shares - Note 18 ā ā ā 1,590 Total ā $ 1,834 ā $ 3,939 ā ā ā ā ā ā ā Other liabilities, non-current ā ā ā ā ā ā Seller Warrant liability - Notes 12 and 18 ā $ 18 ā $ 18 Payroll Tax Liability ā 135 ā ā Total ā $ 153 ā $ 18 | ā ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Other liabilities, current ā ā Accrued compensation for phantom shares ā Note 16 ā $ 1,590 ā $ 884 Restricted stock units ā Note 13 ā 1,210 ā ā Other accrued compensation ā 1,139 ā 892 Other ā ā ā 14 Total ā $ 3,939 ā $ 1,790 ā ā ā ā ā ā ā Other liabilities, non-current ā ā Warrant liability ā Notes 11 and 16 ā $ 18 ā $ 18 |
Debt (Tables)
Debt (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt | ||
Schedule of components of debt | ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Debt, net, current: ā ā ā ā ā ā 2.0 Lien Notes ā $ ā ā $ 208,411 1.5 Lien Notes ā ā ā 137,050 First Lien Agreement ā ā ā 125,468 1.25 Lien Notes ā ā ā 77,212 Promissory Note ā ā ā 6,773 Less, debt issuance costs ā ā ā (949) ā ā $ ā ā $ 553,965 Debt, net, non-current: ā ā ā ā ā ā Subordinated Notes ā $ 80,711 ā $ ā Sprott Credit Agreement ā 63,114 ā ā Less, debt issuance costs ā (4,781) ā ā ā ā $ 139,044 ā $ ā | The following table summarizes the components of debt (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Debt, current: ā ā Convertible Notes ā $ 208,411 ā $ ā 1.5 Lien Notes ā 137,050 ā ā First Lien Agreement ā 125,468 ā 125,468 1.25 Lien Notes ā 77,212 ā ā Other Note payable ā 6,773 ā 5,989 Less debt issuance costs ā (949) ā (71) Total ā $ 553,965 ā $ 131,386 ā ā ā ā ā ā ā Debt, non-current: ā ā Convertible Notes ā $ ā ā $ 179,874 1.5 Lien Notes ā ā ā 118,270 Less debt issuance costs ā ā ā (1,943) Total ā $ ā ā $ 296,201 |
Summarize of note issuances and interest in kind | The following table summarizes the issuance of 1.5 Lien Notes bifurcated by Note issuances and interest in-kind during the years ended December 31, 2019, 2018, 2017 and 2016 (in thousands): ā ā ā ā ā ā ā ā ā ā Transaction Period Note Issuances Interest In-Kind Total Year ended December 31, 2016 ā $ 26,200 ā $ 1,535 ā $ 27,735 Year ended December 31, 2017 ā 41,000 ā 7,512 ā 48,512 Year ended December 31, 2018 ā 28,000 ā 14,023 ā 42,023 Year ended December 31, 2019 ā ā ā 18,780 ā 18,780 Total ā $ 95,200 ā $ 41,850 ā $ 137,050 | |
Schedule of components of recorded interest expense | Interest expense The following table summarizes the components of recorded interest expense (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Second Lien Convertible Notes ā $ 28,537 ā $ 24,923 1.5 Lien Notes ā 18,763 ā 14,012 First Lien Agreement ā 10,022 ā 9,589 1.25 Lien Notes ā 5,241 ā ā Amortization of debt issuance costs ā 2,047 ā 1,802 Promissory Note ā 785 ā 567 Capitalized interest ā (551) ā ā Total interest expense ā $ 64,844 ā $ 50,893 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Asset Retirement Obligation | ||
Summary of changes in the Company's ARO | ā ā ā ā ā ā ā ā ā 2020 2019 Balance at January 1, ā $ 4,374 ā $ 5,832 Accretion expense ā 187 ā 211 Balance at June 30, ā $ 4,561 ā $ 6,043 | The following table summarizes changes in the Companyās ARO (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Balance, beginning of year ā $ 5,832 ā $ 21,548 Accretion expense ā 422 ā 1,271 Changes in estimates ā (1,880) ā (16,987) Balance, end of year ā $ 4,374 ā $ 5,832 |
Gold and Silver Sales (Tables)
Gold and Silver Sales (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Gold and Silver Sales | |
Summary of the Company's gold and silver sales | The table below is a summary of the Companyās gold and silver sales (in thousands, except ounces sold): ā ā ā ā ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā ā 2019 ā 2018 ā ā ā ā ā Ounces ā ā ā ā Ounces ā Amount Sold Amount Sold Gold sales ā $ 12,803 ā 8,593 ā $ 178 145 Silver sales ā 906 ā 52,036 ā 2 124 Total gold and silver sales ā $ 13,709 ā ā ā ā $ 180 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Taxes | |
Schedule of Components of Income Tax Expense (Benefit) | The Companyās loss before income taxes was attributable solely to domestic operations in the United States. The components of the Companyās income tax expense (benefit) were as follows (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Current: ā ā Federal ā $ ā ā $ 145 Deferred: ā ā Federal ā (24,609) ā (18,842) Change in valuation allowance ā 24,609 ā 18,842 Income tax benefit ā $ ā ā $ 145 |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of income taxes computed at the United States federal statutory tax rate of 21% in 2019 and 2018 to the income tax provision (in thousands): ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Loss before income taxes ā $ (98,895) ā $ (55,658) ā United States statutory income tax rate ā 21 % 21 % Income tax (benefit) at United States statutory income tax rate ā $ (20,768) ā $ (11,688) ā Change in valuation allowance ā 24,609 ā 18,842 ā Return to provision adjustment ā (2,624) ā (7,029) ā Tax rate changes ā (1,028) ā ā ā State tax benefit ā (195) ā ā ā Other ā 6 ā 20 ā Income tax benefit ā $ ā ā $ 145 ā |
Schedule of Deferred Tax Assets | The components of the Companyās deferred tax assets are as follows (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Net operating loss ā $ 146,382 ā $ 126,143 Plant, equipment, and mine development ā 60,840 ā 65,760 Interest expense carryforward ā 24,369 ā 10,590 Inventories ā 12,289 ā 17,163 Reorganization costs ā 7,701 ā 7,437 Assets held-for-sale ā 3,149 ā 3,106 Asset retirement obligation ā 927 ā 1,225 Other liabilities ā 609 ā 490 Stock-based compensation ā 257 ā ā Credits and other ā (6) ā (6) Valuation allowance ā (256,517) ā (231,908) Total net deferred tax assets ā $ ā ā $ ā |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Earnings (Loss) Per Share | ||
Schedule of basic and diluted earnings (loss) per share calculations | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 Net loss ā $ (49,790) ā $ (21,947) ā $ (84,408) ā $ (45,387) ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted average shares outstanding ā ā ā ā ā ā ā ā ā ā ā ā Basic ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 Diluted ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 ā ā ā ā ā ā ā ā ā ā ā ā ā Basic loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) Diluted loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) | The table below shows our basic and diluted earnings (loss) per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Net loss ā $ (98,895) ā $ (55,803) Weighted average shares outstanding ā ā Basic ā 2,739,505 ā 2,645,194 Diluted ā 2,739,505 ā 2,645,194 Basic earnings per common share ā $ (36.10) ā $ (21.10) Diluted earnings per common share ā $ (36.10) ā $ (21.10) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Measurements | ||
Summary of assets and liabilities measured at fair value on a recurring basis | ā ā ā ā ā ā ā ā ā ā ā ā Hierarchy ā June 30, ā December 31, Liabilities: Level 2020 2019 Other liabilities, current ā ā Accrued compensation for phantom shares 3 ā $ ā ā $ 1,590 Other liabilities, non-current ā ā Warrant liability - Note 12 3 ā $ 18 ā $ 18 | ā The following table sets forth by level within the fair value hierarchy, the Companyās assets and liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā Hierarchy Level 2019 2018 Liabilities ā ā Accrued compensation for phantom shares 3 ā $ 1,590 ā $ 884 Derivative instruments: ā ā Warrant liability ā Note 11 2 ā $ 18 ā $ 18 |
Summary of carrying amount and fair value of the debt | The carrying amount and fair value of the debt as of December 31, 2019 and 2018 are disclosed in the following table (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Carrying ā ā Carrying ā ā ā ā Amount ā Fair Value ā Amount ā Fair Value Total current and non-current debt ā $ 553,965 ā $ 471,890 ā $ 427,587 ā $ 350,000 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Information | ||
Schedule of supplemental cash flow information | ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, ā 2020 2019 Cash paid for interest ā $ 5,366 ā $ 5,271 ā ā ā ā ā ā ā Significant non-cash financing and investing activities: ā ā ā ā ā ā Exchange of Sellerās 1.5 Lien Notes for HYMC common stock ā 160,254 ā ā Exchange of Sellerās 1.25 Lien Notes for Subordinated Notes ā 80,000 ā ā Exchange of Sellerās 1.25 Lien Notes for HYMC common stock ā 48,459 ā ā Allocate and write-off of Sellerās debt issuance costs ā 8,202 ā ā Plant, equipment, and mine development additions included in accounts payable ā 3,038 ā 2,592 | The following table provides supplemental cash flow information (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Cash paid for interest ā $ 10,239 ā $ 9,409 Significant non-cash financing and investing activities: ā ā Increase in Second Lien convertible notes from in-kind interest ā $ 28,537 ā $ 24,869 Increase in 1.5 Lien Notes from in-kind interest ā $ 18,780 ā $ 14,023 Increase in 1.25 Lien Notes from in-kind interest ā $ 5,212 ā $ ā Increase in the Promissory Note from in-kind interest ā $ 785 ā $ 117 Accrual of deferred future financing costs ā $ 1,029 ā $ 1,025 Plant and equipment additions ā $ 2,458 ā $ ā |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Summary of interest expense by Related Party | The following table provides the recorded interest expense by Related Party (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Aristeia ā $ 5,993 ā $ 4,394 Highbridge ā 9,325 ā 6,934 Mudrick ā 23,743 ā 17,766 Whitebox ā ā 15,607 ā 11,444 Wolverine ā 2,906 ā 2,130 Total related party interest expense ā $ 57,574 ā $ 42,668 |
Summary of debt balances by Related Party | The following table provides debt balances by Related Party (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Aristeia ā $ 50,905 ā $ 35,939 Highbridge ā 80,930 ā 58,709 Mudrick ā 208,078 ā 152,757 Whitebox ā 132,559 ā 93,583 Wolverine ā 24,683 ā 23,998 Total related party debt ā $ 497,155 ā $ 364,986 |
Company Overview (Details)
Company Overview (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | |
Nature of Operations [Line Items] | |||
Face amount of the debt | $ 95 | ||
Sprott Credit Agreement | |||
Nature of Operations [Line Items] | |||
Face amount of the debt | $ 110 | ||
Amount expected to be drawn at closing | 70 | ||
Assumed New Subordinated Notes | |||
Nature of Operations [Line Items] | |||
Face amount of the debt | 80 | ||
1.25 Lien Notes | |||
Nature of Operations [Line Items] | |||
Face amount of the debt | 18 | ||
Proceeds from issuance of notes | $ 18 | $ 77.2 | |
Minimum | |||
Nature of Operations [Line Items] | |||
Unrestricted and available cash on hand at closing | $ 50 | ||
Gold and Silver | Operating revenues | Product concentration | |||
Nature of Operations [Line Items] | |||
Concentration percentage | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 28, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2017 | |
Significant Accounting Policies [Line Items] | ||||||||
Ore on leach pads | $ 28,180,000 | $ 28,180,000 | $ 22,062,000 | $ 0 | $ 0 | |||
Cash equivalents | 0 | 0 | 0 | 0 | ||||
Mineral properties | 0 | 0 | $ 0 | $ 0 | ||||
Warrants term | 7 years | 7 years | ||||||
Warrants issued to previous equity stockholders represented as a percentage of outstanding new common shares | 17.50% | |||||||
Amount sold | 7,636,000 | $ 0 | 18,760,000 | $ 0 | $ 13,709,000 | $ 180,000 | ||
Loss before reorganization items and income taxes | 0 | 285,000 | 0 | 577,000 | 905,000 | 399,000 | ||
1.25 Lien Notes | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Proceeds from issuance of notes | $ 18,000,000 | 77,200,000 | ||||||
Proceeds from issuance of notes | 72,000,000 | |||||||
Phantom Share Units (PSUs) [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Increase (decrease) in value of awards granted | $ 200,000 | 400,000 | ||||||
Number of shares of common stock considered for cash payment of grants issued | 1 | |||||||
Compensation expense | 200,000 | 500,000 | $ 500,000 | 500,000 | ||||
Gold | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Amount sold | 7,284,000 | 0 | 17,612,000 | 0 | 12,803,000 | 178,000 | ||
Silver | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Amount sold | $ 352,000 | $ 0 | $ 1,148,000 | $ 0 | $ 906,000 | $ 2,000 | ||
Operating revenues | Gold | Product concentration | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Concentration percentage | 93.00% | 99.00% |
Inventories (Details)
Inventories (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020USD ($)oz | Dec. 31, 2019USD ($)oz | Jun. 30, 2020USD ($)oz | Dec. 31, 2019USD ($)oz | Dec. 31, 2018USD ($)oz | Jan. 01, 2017USD ($) | |
Inventories | ||||||
Materials and supplies, amount | $ 5,043,000 | $ 2,559,000 | $ 5,043,000 | $ 2,559,000 | $ 1,582,000 | |
Merrill-Crowe in process, amount | 410,000 | 1,004,000 | 410,000 | 1,004,000 | 0 | |
Carbon column in-process, amount | 2,209,000 | 478,000 | 2,209,000 | 478,000 | 478,000 | |
Dor finished goods, amount | 1,641,000 | 412,000 | 1,641,000 | 412,000 | 0 | |
Total | $ 9,303,000 | $ 4,453,000 | $ 9,303,000 | $ 4,453,000 | $ 2,060,000 | |
Materials and supplies (in gold ounces) | oz | 0 | 0 | 0 | 0 | 0 | |
Merrill-Crowe in process (in gold ounces) | oz | 226 | 691 | 226 | 691 | 0 | |
Carbon column in-process (in gold ounces) | oz | 1,397 | 474 | 1,397 | 474 | 482 | |
Dor finished goods (in gold ounces) | oz | 885 | 278 | 885 | 278 | 0 | |
Total inventories (in gold ounces) | oz | 2,508 | 1,443 | 2,508 | 1,443 | 482 | |
Capitalized depreciation and amortization costs | $ 200,000 | $ 100,000 | $ 200,000 | $ 100,000 | $ 0 | |
Ore on leach pads | $ 28,180,000 | $ 22,062,000 | $ 28,180,000 | $ 22,062,000 | $ 0 | $ 0 |
Ore on leach pads (in gold ounces) | oz | 17,825 | 17,019 | 17,825 | 17,019 | 0 | |
Capitalized depreciation and amortization costs | $ 1,900,000 | $ 1,800,000 | $ 1,900,000 | $ 1,800,000 | $ 0 | |
Ore on leach pads written off (in gold ounces) | oz | 6,512 | 11,680 | 10,492 | |||
Cash production costs on production inventories other than ore on leach pads written-off | 15,100,000 | |||||
Cash production costs ore on leach pads written-off | 2,000,000 | |||||
Capitalized depreciation and amortization costs on production inventories other than ore on leach pads written-off | 1,300,000 | |||||
Write-down of production inventories other than ore on leach pads | 16,400,000 | |||||
Production costs written off | $ 10,200,000 | $ 16,700,000 | 2,200,000 | |||
Capitalized depreciation and amortization costs, written off | $ 700,000 | $ 1,300,000 | 200,000 | |||
Write-down of ore on leach pads | $ 2,200,000 |
Prepaids and Other Assets (Deta
Prepaids and Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaids and other | |||
Prepaids | $ 4,283 | $ 2,109 | $ 1,722 |
Deposits | 539 | 539 | 539 |
Total | 4,822 | 2,648 | 2,261 |
Other assets, non-current | |||
Deferred future financing costs | 0 | 5,083 | 1,158 |
Royalty - advance payment | 240 | 120 | |
Total | $ 20,808 | $ 5,203 | $ 1,158 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Restricted Cash | ||||
First Lien Agreement restricted cash - Note 9 | $ 0 | $ 3,270 | $ 2,547 | $ 5,030 |
Asset retirement obligation surety bonds (collateralized obligation) | 39,631 | 39,477 | $ 38,924 | 38,693 |
Total | $ 39,631 | $ 42,747 | $ 43,723 |
Plant, Equipment, and Mine De_3
Plant, Equipment, and Mine Development, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | $ 63,809 | $ 68,415 | $ 53,174 |
Less: accumulated depreciation and amortization | (21,537) | (17,208) | (11,770) |
Total | 42,272 | 51,207 | 41,404 |
Impairment of Long-Lived Assets to be Disposed of | 100 | ||
Process equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | 14,770 | 6,759 | |
Leach Pads [Member] | |||
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | 17,431 | 11,190 | 11,190 |
Depreciation and amortization | $ 4,300 | ||
Buildings and leashold improvements | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 10 years | ||
Property and equipment, gross | $ 10,507 | 10,507 | |
Restart leach pads | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 18 months | ||
Property and equipment, gross | $ 6,229 | ||
Mine equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | 4,716 | 3,905 | |
Vehicles [Member] | |||
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | 730 | $ 136 | 41 |
Furniture and office equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 7 years | ||
Property and equipment, gross | $ 129 | 22 | |
Mine Development [Member] | |||
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | 408 | 119 | |
Construction in Progress [Member] | |||
Plant, Equipment, and Mine Development, Net | |||
Property and equipment, gross | $ 13,736 | 20,619 | 20,750 |
Plant, equipment and mine development | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation and amortization | $ 5,400 | $ 3,400 | |
Minimum | Process equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 5 years | ||
Minimum | Mine equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 5 years | ||
Minimum | Vehicles [Member] | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 3 years | 3 years | |
Maximum | Process equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 13 years | ||
Maximum | Mine equipment | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 7 years | ||
Maximum | Vehicles [Member] | |||
Plant, Equipment, and Mine Development, Net | |||
Depreciation Life | 5 years | 5 years |
Mineral Properties, Net - Chang
Mineral Properties, Net - Changes in Company's Mineral Properties (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Mineral Properties [Roll Forward] | ||||
Balance | $ 1,093 | |||
Amortization of asset retirement cost asset | (61) | |||
Write-down of mineral property | (1,032) | |||
Write-down of production inventories | $ 10,959 | $ 17,924 | $ 18,617 | $ 0 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | |
Other liabilities, current | |||
Accrued compensation for phantom shares - Note 16 | $ 1,590 | $ 884 | |
Other accrued compensation | 1,139 | 892 | |
Restricted stock units - Note 13 | 1,210 | ||
Other | 14 | ||
Total | 3,939 | 1,790 | $ 1,834 |
Other liabilities, non-current | |||
Warrant liability - Notes 11 and 16 | $ 18 | $ 18 |
Debt - Debt balances (Details)
Debt - Debt balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | |
Debt, current: | |||
Less: debt issuance costs | $ (949) | $ (71) | $ 0 |
Total | 553,965 | 131,386 | 0 |
Debt, non-current: | |||
Less debt issuance costs | 0 | (1,943) | $ (4,781) |
Total | 296,201 | ||
Convertible Notes | |||
Debt, current: | |||
Debt, current | 208,411 | ||
Debt, non-current: | |||
Debt, non-current | 179,874 | ||
1.5 Lien Notes | |||
Debt, current: | |||
Debt, current | 137,050 | ||
Debt, non-current: | |||
Debt, non-current | 118,270 | ||
1.25 Lien Notes | |||
Debt, current: | |||
Debt, current | 77,212 | ||
First Lien Agreement | |||
Debt, current: | |||
Debt, current | 125,468 | 125,468 | |
Other note payable | |||
Debt, current: | |||
Debt, current | $ 6,773 | $ 5,989 |
Debt - First lien term loan agr
Debt - First lien term loan agreement (Details) $ in Millions | Jan. 31, 2020 | Dec. 12, 2019 | Jan. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019USD ($)oz |
Debt | |||||
Face amount of the debt | $ 95 | ||||
First Lien Agreement | |||||
Debt | |||||
Cash balance to be maintained | 5 | ||||
Face amount of the debt | $ 126.7 | ||||
Minimum recoverable gold equivalent ounces on leach pads to be maintained | oz | 175,000 | ||||
Number of additional maturity amendments | 2 | 2 | |||
1.25 Lien Notes | |||||
Debt | |||||
Face amount of the debt | $ 18 | ||||
Additional debt amount committed to be purchased by holders of the 1.5 Lien Notes | 9 | ||||
1.5 Lien Notes | |||||
Debt | |||||
Reduction in the debt holdings of Bank of Nova Scotia | $ 5 | ||||
Reduction in the debt holdings of Bank of Nova Scotia, number of banking days | 2 days | ||||
LIBOR | First Lien Agreement | |||||
Debt | |||||
Spread on variable rate basis (as a percent) | 7.00% | 5.50% | |||
Alternate Base Rate Canada | First Lien Agreement | |||||
Debt | |||||
Spread on variable rate basis (as a percent) | 4.50% | 7.50% |
Debt - Second Lien Convertible
Debt - Second Lien Convertible Notes, 1.5 Lien Notes, 1.25 Lien Notes, Other notes payable (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | 48 Months Ended | ||||||
Jun. 30, 2019 | Feb. 28, 2019 | Aug. 31, 2018 | May 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2019 | |
Debt | |||||||||
Face amount of the debt | $ 95,000 | $ 95,000 | |||||||
Gain on retirement of debt - Note 9 | $ 3,321 | ||||||||
Convertible Notes | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 15.00% | 15.00% | |||||||
Proceeds from issuance of notes | $ 90,000 | ||||||||
Additional proceed from notes payable | $ 96,800 | ||||||||
Initial conversion price (in dollars per share) | $ 1.67 | $ 1.67 | |||||||
Face amount of the debt | $ 20,000 | $ 20,000 | |||||||
Amount paid to retire notes | $ 100 | ||||||||
Amount of notes retired | 3,400 | ||||||||
Gain on retirement of debt - Note 9 | $ 3,300 | ||||||||
Notes issued in satisfaction of a backstop put option payment | 5,000 | ||||||||
Interest amount prepaid | 300 | ||||||||
1.5 Lien Notes | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 15.00% | ||||||||
Proceeds from issuance of notes | $ 10,000 | 0 | 28,000 | $ 41,000 | $ 26,200 | 95,200 | |||
Repurchase price (as a percent) | 110.00% | ||||||||
Redemption price (as a percent) | 110.00% | ||||||||
Interest-in-kind | 18,780 | $ 14,023 | $ 7,512 | $ 1,535 | 41,850 | ||||
1.25 Lien Notes | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 15.00% | ||||||||
Proceeds from issuance of notes | $ 18,000 | 77,200 | |||||||
Face amount of the debt | 18,000 | $ 18,000 | |||||||
Interest in-kind notes | |||||||||
Debt | |||||||||
Proceeds from issuance of notes | $ 5,200 | ||||||||
Other note payable | |||||||||
Debt | |||||||||
Interest rate (as a percent) | 5.00% | ||||||||
Delayed payment fee (as a percent) | 5.50% | 2.00% | 2.00% | ||||||
Delayed payment fee | $ 100 | $ 100 |
Debt - Summary of issuances and
Debt - Summary of issuances and interest in-kind (Details) - 1.5 Lien Notes - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | 48 Months Ended | |||
May 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||||
Note Issuances | $ 10,000 | $ 0 | $ 28,000 | $ 41,000 | $ 26,200 | $ 95,200 |
Interest-in-kind | 18,780 | 14,023 | 7,512 | 1,535 | 41,850 | |
Total | $ 18,780 | $ 42,023 | $ 48,512 | $ 27,735 | $ 137,050 |
Debt - Components of recorded i
Debt - Components of recorded interest expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt | ||||||
Amortization of debt issuance costs | $ 635 | $ 503 | $ 1,307 | $ 1,002 | $ 2,047 | $ 1,802 |
Capitalized interest | (290) | (272) | (334) | (417) | (551) | 0 |
Interest expense - Note 9 | $ 15,072 | $ 15,641 | $ 34,959 | $ 30,039 | 64,844 | 50,893 |
Convertible Notes | ||||||
Debt | ||||||
Interest expense - Note 9 | 28,537 | 24,923 | ||||
1.5 Lien Notes | ||||||
Debt | ||||||
Interest expense - Note 9 | 18,763 | 14,012 | ||||
1.25 Lien Notes | ||||||
Debt | ||||||
Interest expense - Note 9 | 5,241 | 0 | ||||
First Lien Agreement | ||||||
Debt | ||||||
Interest expense - Note 9 | 10,022 | 9,589 | ||||
Other note payable | ||||||
Debt | ||||||
Interest expense - Note 9 | $ 785 | $ 567 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||
Balance at January 1, | $ 4,374 | $ 5,832 | $ 5,832 | $ 21,548 |
Accretion expense | 187 | 211 | 422 | 1,271 |
Changes in estimates | (1,880) | (16,987) | ||
Balance at March 31, | $ 4,561 | $ 6,043 | $ 4,374 | $ 5,832 |
Asset Retirement Obligation - A
Asset Retirement Obligation - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation | |
Estimated life of mine | 30 years |
Period of delay in reclamation expenditures | 25 years |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2020 | |
Stockholders' Equity | |||
New common shares required to be issued to creditors (in shares) | 3,000,000 | ||
Term of the warrants | 7 years | 7 years | |
Warrants issued to previous equity stockholders represented as a percentage of outstanding new common shares | 17.50% | ||
Common stock, shares issued to creditors (in shares) | 3,000,000 | ||
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Undesignated preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |
Undesignated preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.0001 | |
Undesignated preferred stock, shares issued (in shares) | 0 | 0 | |
Treasury stock (in shares) | 37,428 | 95,082 | |
Total purchase price | $ 1 | $ 1 | |
Warrants previously issued and outstanding (in shares) | 12,700,000 | 47,011,622 | |
Number of common stock called by each warrant (in shares) | 2,130,000 | ||
Number of common stock called by warrants (in shares) | 27,200,000 | ||
Exercise price of warrants (in dollars per share) | $ 5.20 | ||
Common Stock, Conversion Basis | one |
Gold and Silver Sales (Details)
Gold and Silver Sales (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020USD ($)oz | Jun. 30, 2019USD ($)oz | Jun. 30, 2020USD ($)oz | Jun. 30, 2019USD ($)oz | Dec. 31, 2019USD ($)oz | Dec. 31, 2018USD ($)oz | |
Product Information [Line Items] | ||||||
Amount sold | $ | $ 7,636 | $ 0 | $ 18,760 | $ 0 | $ 13,709 | $ 180 |
Ounces sold (in ounces) | oz | 0 | |||||
Gold | ||||||
Product Information [Line Items] | ||||||
Amount sold | $ | $ 7,284 | $ 0 | $ 17,612 | $ 0 | $ 12,803 | $ 178 |
Ounces sold (in ounces) | oz | 4,237 | 0 | 10,797 | 0 | 8,593 | 145 |
Silver | ||||||
Product Information [Line Items] | ||||||
Amount sold | $ | $ 352 | $ 0 | $ 1,148 | $ 0 | $ 906 | $ 2 |
Ounces sold (in ounces) | oz | 21,331 | 0 | 70,703 | 0 | 52,036 | 124 |
Gold and Silver Sales - Additio
Gold and Silver Sales - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Product Information [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 7,636 | $ 0 | $ 18,760 | $ 0 | $ 13,709 | $ 180 |
Care And Maintenance Net [Member] | ||||||
Product Information [Line Items] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 200 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2019 | Jun. 30, 2020 | [1] | Feb. 22, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock value | $ 3,000 | $ 5,000 | $ 3,000 | ||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award vesting Period | 3 years | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation arrangement by share based payment award vesting Period | 2 years | ||||
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common Stock value | $ 4,277,000 | ||||
Restricted stock expense | $ 1,200,000 | ||||
Share based compensation expense | $ 100,000 | ||||
[1] | Retroactively restated for the reverse recapitalization as described in Note 2 - Summary of Significant Accounting Policies . |
Income Taxes - Components of th
Income Taxes - Components of the Company's Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||||||
Federal | $ 0 | $ 145 | ||||
Deferred: | ||||||
Federal | (24,609) | (18,842) | ||||
Change in valuation allowance | 24,609 | 18,842 | ||||
Income Tax Expense (Benefit), Total | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 145 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||||||
Loss before income taxes | $ (49,790) | $ (21,947) | $ (84,408) | $ (45,387) | $ (98,895) | $ (55,658) |
United States statutory income tax rate | 21.00% | 21.00% | ||||
Income tax (benefit) at United States statutory income tax rate | $ (20,768) | $ (11,688) | ||||
Change in valuation allowance | 24,609 | 18,842 | ||||
Return to provision adjustment | (2,624) | (7,029) | ||||
Tax rate changes | (1,028) | 0 | ||||
State tax benefit | (195) | 0 | ||||
Other | 6 | 20 | ||||
Income Tax Expense (Benefit), Total | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 145 |
Income Taxes - Components of _2
Income Taxes - Components of the Company's Deferred Tax Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | May 29, 2020 | May 28, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Taxes | |||||
Net operating loss | $ 146,382 | $ 126,143 | |||
Plant, equipment, and mine development | 60,840 | 65,760 | |||
Interest expense carryforward | 24,369 | 10,590 | |||
Inventories | 12,289 | 17,163 | |||
Reorganization costs | 7,701 | 7,437 | |||
Assets held-for-sale | 3,149 | 3,106 | |||
Asset retirement obligation | 927 | 1,225 | |||
Other liabilities | 609 | 490 | |||
Stock-based compensation | 257 | 0 | |||
Credits and other | (6) | (6) | |||
Valuation allowance | $ (94,200) | (256,517) | (231,908) | ||
Deferred tax asset, net of allowance | $ 94,200 | $ 247,900 | $ 267,800 | $ 256,500 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Informaion (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes | ||||||
United States statutory income tax rate | 21.00% | 21.00% | ||||
Change in valuation allowance | $ 24,609 | $ 18,842 | ||||
Return to provision adjustment | (2,624) | (7,029) | ||||
Tax rate changes | (1,028) | 0 | ||||
State tax benefit | (195) | 0 | ||||
Income tax benefit or expense | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 145 |
Valuation allowance | $ (94,200) | $ (94,200) | (256,517) | $ (231,908) | ||
Net operating loss carryovers, federal | 683,700 | |||||
Net operating loss carryovers, state income tax | $ 76,300 |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |||||
Earnings (Loss) Per Share | ||||||||||||
Net loss | $ (49,790) | $ (34,618) | $ (21,947) | $ (23,440) | $ (84,408) | $ (45,387) | $ (98,895) | $ (55,803) | ||||
Weighted average shares outstanding | ||||||||||||
Basic | 18,395,983 | [1] | 299,780 | [1] | 9,359,655 | [1] | 299,001 | [1] | 2,739,505 | 2,645,194 | ||
Diluted | 18,395,983 | [1] | 299,780 | [1] | 9,359,655 | [1] | 299,001 | [1] | 2,739,505 | 2,645,194 | ||
Basic earnings per common share | $ (2.71) | $ (73.21) | $ (9.02) | $ (151.80) | $ (36.10) | $ (21.10) | ||||||
Diluted earnings per common share | $ (2.71) | $ (73.21) | $ (9.02) | $ (151.80) | $ (36.10) | $ (21.10) | ||||||
Antidilutive securities excluded from computation of diluted earning per share (in shares) | 37,600,000 | 37,600,000 | 152,200,000 | 131,500,000 | ||||||||
[1] | Retroactively restated for the reverse recapitalization. Refer to Note 2 - Summary of Significant Accounting Policies and Note 16 - Loss Per Share for further information. |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring fair value measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Accrued compensation for phantom shares | $ 1,590 | $ 884 | |
Derivative instruments - Warrant liability - Notes 7 and 10 | $ 18 | 18 | |
Level 3 | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Accrued compensation for phantom shares | 1,590 | 884 | |
Level 2 | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative instruments - Warrant liability - Notes 7 and 10 | $ 18 | $ 18 |
Fair Value Measurements - Accru
Fair Value Measurements - Accrued compensation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Non-employee | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares granted | 315,000 | 315,000 | |
Number of shares issued | 90,000 | ||
Phantom Share Units (PSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase (decrease) in value of awards granted | $ 0.2 | $ 0.4 |
Fair Value Measurements - Deriv
Fair Value Measurements - Derivative instruments (Details) $ / shares in Units, $ in Thousands | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018$ / shares |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value of the Company's warrant liability | $ | $ 18 | $ 18 | |
Warrants term | 7 years | 7 years | |
Warrant excercise price | $ / shares | $ 8.40 | $ 8.40 | |
Risk-free interest rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants measurement input | 1.74 | 1.74 | |
Expected volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants measurement input | 70 | 70 | |
Dividend rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants measurement input | 0 | 0 |
Fair Value Measurements - Items
Fair Value Measurements - Items disclosed at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total current and non-current debt | $ 553,965 | $ 427,587 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total current and non-current debt | $ 471,890 | $ 350,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Measurements | ||
Transfer from level 1 to 2 | $ 0 | $ 0 |
Transfer from level 2 to 1 | 0 | 0 |
Transfer in and out of level 3 | $ 0 | $ 0 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash paid for interest | $ 10,239 | $ 9,409 | ||
Significant non-cash financing and investing activities: | ||||
Accrual of deferred future financing costs | 1,029 | 1,025 | ||
Plant and equipment additions included in accounts payable | $ 3,038 | $ 2,592 | 2,458 | |
Second Lien Convertible Notes [Member] | ||||
Significant non-cash financing and investing activities: | ||||
Increase in notes from in-kind interest | 28,537 | 24,869 | ||
Lien Convertible Notes 1.5 [Member] | ||||
Significant non-cash financing and investing activities: | ||||
Increase in notes from in-kind interest | 18,780 | 14,023 | ||
Lien Convertible Notes 1.25 [Member] | ||||
Significant non-cash financing and investing activities: | ||||
Increase in notes from in-kind interest | 5,212 | |||
Promissory Note | ||||
Significant non-cash financing and investing activities: | ||||
Increase in notes from in-kind interest | $ 785 | $ 117 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Benefit Plans | ||
Company's matching contribution | $ 0.5 | $ 0.2 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Percentage of net profit royalty be paid | 4.00% | |
Annual advance payment for mining lease | $ 120,000 | |
Total payments due under the mining lease capped | $ 7,600,000 | 7,600,000 |
Total payments made under the mining lease | $ 2,600,000 | 2,500,000 |
Transaction bonus plan to be paid | 5,800,000 | |
Maximum | ||
Loss Contingencies [Line Items] | ||
Transaction bonus plan to be paid | $ 7,300,000 |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2019Institutiondirector | |
Related Party Transaction [Line Items] | |
Number of financial institutions to which tranches of debt is issued | Institution | 5 |
Percentage of common stock held by related party to have the right to nominate and designate one director | 10.00% |
Right to nominate number of director | director | 1 |
Aristeia | |
Related Party Transaction [Line Items] | |
Percentage of common stock held by related party | 5.00% |
Highbridge | |
Related Party Transaction [Line Items] | |
Percentage of common stock held by related party | 5.00% |
Mudrick | |
Related Party Transaction [Line Items] | |
Percentage of common stock held by related party | 5.00% |
Whitebox | |
Related Party Transaction [Line Items] | |
Percentage of common stock held by related party | 5.00% |
Wolverine | |
Related Party Transaction [Line Items] | |
Percentage of common stock held by related party | 5.00% |
Related Party Transactions - In
Related Party Transactions - Interest Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | ||||||
Total related party interest expense | $ 12,700 | $ 11,000 | $ 27,800 | $ 21,700 | $ 57,574 | $ 42,668 |
Aristeia | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party interest expense | 5,993 | 4,394 | ||||
Highbridge | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party interest expense | 9,325 | 6,934 | ||||
Mudrick | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party interest expense | 23,743 | 17,766 | ||||
Whitebox | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party interest expense | 15,607 | 11,444 | ||||
Wolverine | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party interest expense | $ 2,906 | $ 2,130 |
Related Party Transactions - De
Related Party Transactions - Debt Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | |||
Total related party debt | $ 67,800 | $ 497,155 | $ 364,986 |
Aristeia | |||
Related Party Transaction [Line Items] | |||
Total related party debt | 50,905 | 35,939 | |
Highbridge | |||
Related Party Transaction [Line Items] | |||
Total related party debt | 80,930 | 58,709 | |
Mudrick | |||
Related Party Transaction [Line Items] | |||
Total related party debt | 208,078 | 152,757 | |
Whitebox | |||
Related Party Transaction [Line Items] | |||
Total related party debt | 132,559 | 93,583 | |
Wolverine | |||
Related Party Transaction [Line Items] | |||
Total related party debt | $ 24,683 | $ 23,998 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 07, 2020 | Jan. 17, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Jan. 13, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||||
Aggregate principal amount | $ 95 | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Value per share | $ 12.65 | ||||||
Sprott Credit Agreement | |||||||
Subsequent Event [Line Items] | |||||||
Aggregate principal amount | $ 110 | ||||||
Amount expected to be drawn at closing | 70 | ||||||
Assumed New Subordinated Notes | |||||||
Subsequent Event [Line Items] | |||||||
Aggregate principal amount | 80 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Smelter royalty agreement, percent | 1.50% | ||||||
Smelter royalty agreement, amount | $ 30 | ||||||
Subsequent Event | 1.25 Lien Notes | |||||||
Subsequent Event [Line Items] | |||||||
Proceeds from issuance of notes | $ 10 | $ 5 | |||||
Forward purchase agreement | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Amount receivable from sale of MUDS units and shares | 25 | ||||||
Backstop agreement | Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Amount receivable from sale of MUDS units and shares | $ 65 | ||||||
Minimum | |||||||
Subsequent Event [Line Items] | |||||||
Unrestricted and available cash on hand at closing | $ 50 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 6,220,000 | |
Prepaid expenses | 2,109,000 | $ 1,722,000 |
Current assets | 38,750,000 | 18,489,000 |
Total assets | 134,637,000 | 99,744,000 |
Current Liabilities | ||
Current liabilities | 569,496,000 | 138,049,000 |
Total liabilities | 573,888,000 | 440,100,000 |
Commitments and Contingencies | ||
Stockholders' Equity: | ||
Common Stock, Value, Issued | 3,000 | 3,000 |
Additional paid-in capital | 5,184,000 | 5,184,000 |
Retained earnings | (444,438,000) | (345,543,000) |
Total stockholders' (deficit) | (439,251,000) | (340,356,000) |
Total liabilities and stockholders' equity | 134,637,000 | 99,744,000 |
Mudrick Capital Acquisition Corporation [Member] | ||
Current Assets | ||
Cash | 208,536 | 535,946 |
Prepaid income taxes | 95,275 | 0 |
Prepaid expenses | 3,966 | 52,295 |
Current assets | 307,777 | 588,241 |
Investments held in Trust Account | 215,385,757 | 212,916,691 |
Total assets | 215,693,534 | 213,504,932 |
Current Liabilities | ||
Accounts payable and accrued expenses | 334,619 | 201,392 |
Income taxes payable | 0 | 555,449 |
Current liabilities | 334,619 | 756,841 |
Deferred underwriting fees | 7,280,000 | 7,280,000 |
Total liabilities | 7,614,619 | 8,036,841 |
Commitments and Contingencies | ||
Class A common stock subject to possible redemption, $0.0001 par value; 5,571,215 and 20,106,823 shares as of March 31, 2020 and December 31, 2019, respectively (at redemption value of $10.10 per share) | 203,078,914 | 200,468,083 |
Stockholders' Equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding as of March 31, 2020 and December 31, 2019 | 0 | 0 |
Additional paid-in capital | 711,409 | 3,322,214 |
Retained earnings | 4,288,003 | 1,677,179 |
Total stockholders' (deficit) | 5,000,001 | 5,000,008 |
Total liabilities and stockholders' equity | 215,693,534 | 213,504,932 |
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | ||
Stockholders' Equity: | ||
Common Stock, Value, Issued | 69 | 95 |
Mudrick Capital Acquisition Corporation [Member] | Common Class B [Member] | ||
Stockholders' Equity: | ||
Common Stock, Value, Issued | $ 520 | $ 520 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Shares Authorized | 10,000,000 | |
Preferred Stock, Shares Issued | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Issued | 3,095,650 | 2,758,689 |
Common Stock, Shares, Outstanding | 2,897,568 | 2,598,035 |
Mudrick Capital Acquisition Corporation [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Temporary Equity, Shares Outstanding | 20,106,823 | 19,848,325 |
Temporary Equity, Redemption Price Per Share | $ 10.10 | $ 10.10 |
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 693,177 | 951,675 |
Common Stock, Shares, Outstanding | 693,177 | 951,675 |
Temporary Equity, Shares Outstanding | 20,106,823 | 19,848,325 |
Mudrick Capital Acquisition Corporation [Member] | Common Class B [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 5,200,000 | 5,200,000 |
Common Stock, Shares, Outstanding | 5,200,000 | 5,200,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
General and administrative expenses | $ 6,072,000 | $ 5,342,000 |
Loss from operations | (33,941,000) | (8,151,000) |
Other income: | ||
Loss before income taxes | (98,895,000) | (55,658,000) |
Provision for income taxes | 0 | (145,000) |
Net loss | (98,895,000) | (55,803,000) |
Mudrick Capital Acquisition Corporation [Member] | ||
General and administrative expenses | 875,900 | 609,581 |
Loss from operations | (875,900) | (609,581) |
Other income: | ||
Interest income | 6,634 | 8,302 |
Interest earned on investments held in Trust Account | 4,379,894 | 2,836,691 |
Other income | 4,386,528 | 2,844,993 |
Loss before income taxes | 3,510,628 | 2,235,412 |
Provision for income taxes | (899,804) | (555,449) |
Net loss | $ 2,610,824 | $ 1,679,963 |
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | ||
Other income: | ||
Weighted average shares outstanding | 20,800,000 | 20,800,000 |
Basic and diluted income (loss) per common share | $ 0.16 | $ 0.10 |
Mudrick Capital Acquisition Corporation [Member] | Common Class B [Member] | ||
Other income: | ||
Weighted average shares outstanding | 5,200,000 | 5,200,000 |
Basic and diluted income (loss) per common share | $ (0.13) | $ (0.08) |
CONDENSED STATEMENTS OF CHANGES
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Mudrick Capital Acquisition Corporation [Member]Class A common stockCommon stock | Mudrick Capital Acquisition Corporation [Member]Common Class B [Member]Common stock | Mudrick Capital Acquisition Corporation [Member]Additional Paid in Capital [Member] | Mudrick Capital Acquisition Corporation [Member]Retained Earnings/ (Accumulated Deficit) [Member] | Mudrick Capital Acquisition Corporation [Member] | Common stock | Additional Paid in Capital [Member] | Total | |||
Beginning Balance at Dec. 31, 2017 | $ 0 | $ 575 | $ 24,425 | $ (2,784) | $ 22,216 | $ 3,000 | $ 5,184,000 | $ (284,553,000) | |||
Beginning Balance (in shares) at Dec. 31, 2017 | 0 | 5,750,000 | 2,668,689 | ||||||||
Sale of 20,800,000 Units, net of underwriting discounts and offering expenses | $ 2,080 | $ 0 | 196,023,832 | 0 | 196,025,912 | ||||||
Sale of 20,800,000 Units, net of underwriting discounts and offering costs (in shares) | 20,800,000 | 0 | |||||||||
Sale of 7,740,000 Private Placement Warrants | $ 0 | $ 0 | 7,740,000 | 0 | 7,740,000 | ||||||
Forfeiture of founder shares | $ 0 | $ (55) | 55 | 0 | 0 | ||||||
Forfeiture of founder shares (in shares) | 0 | (550,000) | |||||||||
Common stock subject to possible redemption | $ (1,985) | $ 0 | (200,466,098) | 0 | (200,468,083) | ||||||
Common stock subject to possible redemption (in shares) | (19,848,325) | 0 | |||||||||
Net loss | $ 0 | $ 0 | 0 | 1,679,963 | 1,679,963 | (55,803,000) | |||||
Ending Balance at Dec. 31, 2018 | $ 95 | $ 520 | 3,322,214 | 1,677,179 | 5,000,008 | $ 3,000 | 5,184,000 | (340,356,000) | |||
Ending Balance (in shares) at Dec. 31, 2018 | 951,675 | 5,200,000 | 2,758,689 | ||||||||
Net loss | $ 0 | [1] | 0 | [1] | (23,440,000) | ||||||
Ending Balance at Mar. 31, 2019 | $ 0 | [1] | 5,187,000 | [1] | (363,796,000) | ||||||
Ending Balance (in shares) at Mar. 31, 2019 | [1] | 317,936 | |||||||||
Beginning Balance at Dec. 31, 2018 | $ 95 | $ 520 | 3,322,214 | 1,677,179 | 5,000,008 | $ 3,000 | 5,184,000 | (340,356,000) | |||
Beginning Balance (in shares) at Dec. 31, 2018 | 951,675 | 5,200,000 | 2,758,689 | ||||||||
Net loss | (45,387,000) | ||||||||||
Ending Balance at Jun. 30, 2019 | $ 0 | [1] | 5,187,000 | [1] | (385,743,000) | ||||||
Ending Balance (in shares) at Jun. 30, 2019 | [1] | 317,936 | |||||||||
Beginning Balance at Dec. 31, 2018 | $ 95 | $ 520 | 3,322,214 | 1,677,179 | 5,000,008 | $ 3,000 | 5,184,000 | (340,356,000) | |||
Beginning Balance (in shares) at Dec. 31, 2018 | 951,675 | 5,200,000 | 2,758,689 | ||||||||
Change in value of common stock subject to possible redemption | $ (26) | $ 0 | (2,610,805) | 0 | (2,610,831) | ||||||
Change in value of common stock subject to possible redemption (in shares) | (258,498) | 0 | |||||||||
Net loss | $ 0 | $ 0 | 0 | 2,610,824 | 2,610,824 | (98,895,000) | |||||
Ending Balance at Dec. 31, 2019 | $ 69 | $ 520 | 711,409 | 4,288,003 | 5,000,001 | $ 3,000 | 5,184,000 | (439,251,000) | |||
Ending Balance (in shares) at Dec. 31, 2019 | 693,177 | 5,200,000 | 3,095,650 | ||||||||
Beginning Balance at Mar. 31, 2019 | $ 0 | [1] | 5,187,000 | [1] | (363,796,000) | ||||||
Beginning Balance (in shares) at Mar. 31, 2019 | [1] | 317,936 | |||||||||
Net loss | $ 0 | [1] | 0 | [1] | (21,947,000) | ||||||
Ending Balance at Jun. 30, 2019 | $ 0 | [1] | 5,187,000 | [1] | (385,743,000) | ||||||
Ending Balance (in shares) at Jun. 30, 2019 | [1] | 317,936 | |||||||||
Beginning Balance at Dec. 31, 2019 | $ 69 | $ 520 | 711,409 | 4,288,003 | 5,000,001 | $ 3,000 | 5,184,000 | (439,251,000) | |||
Beginning Balance (in shares) at Dec. 31, 2019 | 693,177 | 5,200,000 | 3,095,650 | ||||||||
Net loss | $ 0 | [1] | 0 | [1] | (34,618,000) | ||||||
Ending Balance at Mar. 31, 2020 | $ 0 | [1] | 5,187,000 | [1] | (473,869,000) | ||||||
Ending Balance (in shares) at Mar. 31, 2020 | [1] | 345,431 | |||||||||
Beginning Balance at Dec. 31, 2019 | $ 69 | $ 520 | $ 711,409 | $ 4,288,003 | $ 5,000,001 | $ 3,000 | 5,184,000 | (439,251,000) | |||
Beginning Balance (in shares) at Dec. 31, 2019 | 693,177 | 5,200,000 | 3,095,650 | ||||||||
Net loss | (84,408,000) | ||||||||||
Ending Balance at Jun. 30, 2020 | $ 5,000 | [1] | 466,047,000 | [1] | (2,723,000) | ||||||
Ending Balance (in shares) at Jun. 30, 2020 | [1] | 50,160,042 | |||||||||
Beginning Balance at Mar. 31, 2020 | $ 0 | [1] | 5,187,000 | [1] | (473,869,000) | ||||||
Beginning Balance (in shares) at Mar. 31, 2020 | [1] | 345,431 | |||||||||
Net loss | $ 0 | [1] | 0 | [1] | (49,790,000) | ||||||
Ending Balance at Jun. 30, 2020 | $ 5,000 | [1] | $ 466,047,000 | [1] | $ (2,723,000) | ||||||
Ending Balance (in shares) at Jun. 30, 2020 | [1] | 50,160,042 | |||||||||
[1] | Retroactively restated for the reverse recapitalization as described in Note 2 - Summary of Significant Accounting Policies . |
CONDENSED STATEMENTS OF CHANG_2
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - Mudrick Capital Acquisition Corporation [Member] | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
Adjustments to Additional Paid in Capital, Warrant Issued | $ 7,740,000 |
Additional Paid in Capital [Member] | |
Adjustments to Additional Paid in Capital, Warrant Issued | $ 7,740,000 |
Class A common stock | Common stock | |
Stock Issued During Period, Shares, Other | shares | 20,800,000 |
Adjustments to Additional Paid in Capital, Warrant Issued | $ 0 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (98,895,000) | $ (55,803,000) |
Changes in operating assets and liabilities: | ||
Prepaid income taxes | (145,000) | |
Net cash used in operating activities | (59,771,000) | (26,925,000) |
Cash Flows from Investing Activities: | ||
Net cash used in investing activities | (12,296,000) | (1,146,000) |
Cash Flows from Financing Activities: | ||
Redemption of common stock | (1) | (1) |
Net cash provided by financing activities | 68,173,000 | 27,595,000 |
Cash - End of period | 6,220,000 | |
Mudrick Capital Acquisition Corporation [Member] | ||
Cash flows from operating activities: | ||
Net (loss) income | 2,610,824 | 1,679,963 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Interest earned on marketable securities held in Trust Account | (4,379,894) | (2,836,691) |
Changes in operating assets and liabilities: | ||
Prepaid income taxes | (95,275) | 0 |
Prepaid expenses | 48,329 | (52,295) |
Accounts payable and accrued expenses | 133,227 | 200,859 |
Income taxes payable | (555,449) | 555,449 |
Net cash used in operating activities | (2,238,238) | (452,715) |
Cash Flows from Investing Activities: | ||
Cash withdrawn from Trust Account to pay franchise taxes | 1,910,828 | 0 |
Investment of cash in Trust Account | 0 | (210,080,000) |
Net cash used in investing activities | 1,910,828 | (210,080,000) |
Cash Flows from Financing Activities: | ||
Proceeds from sale of Units, net of underwriting fees paid | 0 | 203,840,000 |
Proceeds from sale of Private Placement Warrants | 0 | 7,740,000 |
Repayment of promissory note ? related party | 0 | (242,331) |
Payment of offering costs | 0 | (293,953) |
Net cash provided by financing activities | 0 | 211,043,716 |
Net Change in Cash | (327,410) | 511,001 |
Cash - Beginning of period | 535,946 | 24,945 |
Cash - End of period | 208,536 | 535,946 |
Supplementary cash flow information: | ||
Cash paid for income taxes | 1,550,528 | 0 |
Non-Cash investing and financing activities: | ||
Initial classification of common stock subject to possible redemption | 0 | 198,787,536 |
Change in value of common stock subject to possible redemption | 2,610,831 | 1,680,547 |
Deferred underwriting fees charged to additional paid in capital | 0 | 7,280,000 |
Payment of deferred offering costs and expenses by Sponsor | $ 0 | $ 240,135 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 1. Company Overview Hycroft Mining Holding Corporation (formerly known as Mudrick Capital Acquisition Corporation (āMUDSā)) and its subsidiaries (collectively, āHycroftā, the āCompanyā, āweā, āusā, āourā, āitā, āHYMCā, etc.) is a U.S.-based gold producer that is focused on operating and developing its wholly-owned Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. Gold and silver sales represent 100% of the Companyās operating revenues and the market prices of gold and silver significantly impact the Companyās 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. During the second quarter of 2019, the Company restarted open pit mining operations at the Hycroft Mine, and, during the third quarter of 2019, produced and sold gold and silver which it has continued to do on an approximate weekly basis since restarting. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. During 2020, the Company continued to increase its operations by mining more tons, procuring additional mobile equipment rentals, and increasing its total headcount. Through May 29, 2020, the Company obtained all of its financing from related party debt issuances (see Note 21 Related Party Transactions M3 Engineering and Technology Corporation (āM3 Engineeringā), in conjunction with SRK Consulting (U.S.), Inc. (āSRKā) and the Company, completed the Hycroft Technical Report Summary, Heap Leaching Feasibility Study, prepared in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants, with an effective date of July 31, 2019 (the āHycroft Technical Reportā), for a two-stage, heap oxidation and subsequent leaching of transition and sulfide ores. The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand to levels presented in the 2019 Hycroft Technical Report. Recapitalization Transaction with MUDS As discussed in Note 3 Recapitalization Transaction For more information on the consummation of the Recapitalization Transaction with MUDS, see Note 3 ā Recapitalization Transaction Recent developments 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 of America. Efforts implemented by local and national governments, as well as businesses, including temporary closures, are expected to have adverse impacts on local, national and the global economies. The Company has implemented health and safety policies for employees that follow guidelines published by the Center for Disease Control (CDC) and the Mine Safety and Health Administration (MSHA). The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and continued spread of the outbreak, and the direct and indirect impacts on our employees, vendors and customers, all of which are uncertain and cannot be fully anticipated or predicted. Since the Companyās Hycroft Mine represents the entirety of its operations, any COVID-19 outbreak at the mine site could result in an entire shutdown of the Hycroft Mine itself which would negatively impact the Companyās financial position, operating results, and cash flows. As of the date of these financial statements, the extent to which COVID-19 may impact our financial condition. results of operations or cash flows is uncertain, but could be material and adverse. | |
Mudrick Capital Acquisition Corporation [Member] | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Mudrick Capital Acquisition Corporation (the āCompanyā) was incorporated in Delaware on August 28, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the āBusiness Combinationā). Although the Company is not limited to a particular industry or sector for purposes of consummating a Business Combination, the Company intends to focus its search on companies that have recently emerged from bankruptcy court protection. The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2019, the Company had not commenced any operations. All activity through December 31, 2019 relates to the Companyās formation, its Initial Public Offering, which is described below, identifying a target company for a Business Combination and activities in connection with the potential acquisition of Hycroft Mining Corporation, a Delaware corporation (āHycroftā) (see Note 5). The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company generates non-operating income in the form of interest income on cash and marketable securities from the proceeds derived from the Initial Public Offering, as defined below. The registration statement for the Companyās initial public offering (āInitial Public Offeringā) was declared effective on February 7, 2018. On February 12, 2018, the Company consummated the Initial Public Offering of 20,000,000 units (āUnitsā and, with respect to the Class A common stock included in the Units being offered, the āPublic Sharesā) at $10.00 per Unit, generating gross proceeds of $200,000,000, which is described in Note 3. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 7,500,000 warrants (the āPrivate Placement Warrantsā) at a price of $1.00 per Private Placement Warrant in a private placement to the Companyās sponsor, Mudrick Capital Acquisition Holdings LLC ($6,500,000) (the āSponsorā) and Cantor Fitzgerald & Co. ($1,000,000) (āCantorā), generating gross proceeds of $7,500,000, which is described in Note 4. Following the closing of the Initial Public Offering on February 12, 2018, an amount of $202,000,000 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the Private Placement Warrants was placed in a trust account (āTrust Accountā) and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the āInvestment Company Actā), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of paragraphs (d)(2), (d)(3) and (d)(4) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the distribution of the Trust Account, as described below. On February 28, 2018, in connection with the underwritersā election to partially exercise their over- allotment option, the Company consummated the sale of an additional 800,000 Units at $10.00 per Unit and the sale of an additional 240,000 Private Placement Warrants at $1.00 per warrant, generating total gross proceeds of $8,240,000. Following the closing, an additional $8,080,000 of net proceeds ($10.10 per Unit) was placed in the Trust Account, resulting in $210,080,000 ($10.10 per Unit) initially held in the Trust Account. Transaction costs amounted to $11,974,088, consisting of $4,160,000 of underwriting fees, $7,280,000 of deferred underwriting fees payable (which are held in the Trust Account) and $534,088 of other costs. In addition, as of December 31, 2019, cash of $208,536 was held outside of the Trust Account and is available for working capital purposes. As described in Note 5, the $7,280,000 deferred underwriting fees payable is contingent upon the consummation of a Business Combination. The Companyās management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete one or more initial Business Combinations having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. The Company will provide its holders of the outstanding shares of its Class A common stock, par value $0.0001, (āClass A common stockā), sold in the Initial Public Offering (the āpublic stockholdersā) with the opportunity to redeem all or a portion of their Public Shares (as defined below in Note 3) upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $10.10 per Public Share). The per- share amount to be distributed to public stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriters (as discussed in Note 5). In such case, the Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, as amended (the āAmended and Restated Certificate of Incorporationā), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (āSECā) and file tender offer documents with the SEC prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. Additionally, public stockholders may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction. If the Company seeks stockholder approval in connection with a Business Combination, the initial stockholders (as defined below) have agreed to vote their Founder Shares (as defined in Note 4) and any Public Shares held by them in favor of approving a Business Combination. In addition, the initial stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public Shares in connection with the completion of a Business Combination. Notwithstanding the foregoing, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a āgroupā (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the āExchange Actā)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Class A common stock sold in the Initial Public Offering, without the prior consent of the Company. The Sponsor and the Companyās officers and directors (the āinitial stockholdersā) have agreed not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) that would affect the substance or timing of the Companyās obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholdersā rights or pre-business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their shares of Class A common stock in conjunction with any such amendment. The Company initially had until February 12, 2020 to complete a Business Combination. If the Company is unable to complete a Business Combination by the Extended Termination Date (as defined below), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholdersā rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Companyās remaining stockholders and the Companyās board of directors, dissolve and liquidate, subject in each case to the Companyās obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. On February 10, 2020, the Companyās stockholders approved an amendment to its Amended and Restated Certificate of Incorporation (the āExtension Amendmentā) to extend the period of time for which the Company was required to consummate a Business Combination from February 12, 2020 to August 12, 2020 (the āExtended Termination Dateā). In connection with the Extension Amendment, stockholders elected to redeem an aggregate of 13,890,713 shares of the Companyās Class A common stock. As a result, an aggregate of approximately $144,218,760 (or approximately $10.38 per share) was removed from the Trust Account to pay such stockholders. The initial stockholders have agreed to waive their liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination by the Extended Termination Date. However, if the initial stockholders acquire Public Shares in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination by the Extended Termination Date. The underwriters have agreed to waive their rights to their deferred underwriting commission (see Note 5) held in the Trust Account in the event the Company does not complete a Business Combination by the Extended Termination Date and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund the redemption of the Public Shares. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including Trust Account assets) will be only $10.10 per share held in the Trust Account. In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account. This liability will not apply with respect to any claims by a third party who executed a waiver of any right, title, interest or claim of any kind in or to any monies held in the Trust Account or to any claims under the Companyās indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the āSecurities Actā). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the Companyās independent registered accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity and Going Concern As of December 31, 2019, the Company had a cash balance of approximately $209,000, which excludes interest income of approximately $5,306,000 from the Companyās investments in the Trust Account which is available to the Company for tax obligations. Subsequent to the redemption of common stock by the Companyās stockholders in connection with the Extension Amendment, there was approximately $71.7 million remaining in the Trust Account. During the year ended December 31, 2019, the Company withdrew approximately $1,911,000 of interest income from the Trust Account to pay its franchise and income taxes. The Company intends to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less taxes payable and deferred underwriting commissions) to complete its initial Business Combination. To the extent necessary, the Sponsor or an affiliate of the Sponsor, or certain of the Companyās officers and directors may, but are not obligated to, loan the Company funds as may be required, up to $1,500,000. Such loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants (see Note 4). If the Companyās estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to a Business Combination. Moreover, the Company may need to obtain additional financing either to complete a Business Combination or because it becomes obligated to redeem a significant number of its Public Shares upon completion of a Business Combination, in which case the Company may issue additional securities or incur debt in connection with such Business Combination. The liquidity condition and date for mandatory liquidation unless there is a Business Combination, the consummation of which is uncertain, raise substantial doubt about the Companyās ability to continue as a going concern through August 12, 2020, the scheduled liquidation date of the Company. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. In connection with the Companyās assessment of going concern considerations in accordance with Financial Accounting Standard Boardās Accounting Standards Update (āASUā) 2014-15, āDisclosures of Uncertainties about an Entityās Ability to Continue as a Going Concern,ā management has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Companyās ability to continue as a going concern. No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after August 12, 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Summary of Significant Accounting Policies Basis of presentation These condensed consolidated interim financial statements have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (āGAAPā) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (āSECā). 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 financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements include all adjustments which are necessary for a fair presentation of the interim financial position, operating results and cash flows for the periods presented. Certain reclassifications have been made to the prior periods presented in these financial statements to conform to the current period presentation, which had no effect on previously reported total assets, liabilities, cash flows, or net loss. References to ā$ā refers to United States currency. Recapitalization Transaction with MUDS The Recapitalization Transaction (see Note 3 Recapitalization Transaction 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. The shares and net loss per common share prior to the Recapitalization Transaction, have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). See Note 3 ā Recapitalization Transaction Going concern The financial statements of the Company have been prepared on a āgoing concernā 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 Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. For the six months ended June 30, 2020, the Company incurred a net loss of $84.4 million and the net cash used in operating activities was $57.6 million. As of June 30, 2020, the Company had available cash on hand of $47.3 million, working capital of $68.0 million, total liabilities of $195.4 million, and an accumulated deficit of $468.8 million. Although the Company recently completed the Recapitalization Transaction with MUDS, using its internal forecasts and cash flow projection models, it currently projects there will be insufficient cash to meet its future obligations as they become due as the Company continues to ramp up the Hycroft Mineās operations from current levels or to levels which are contemplated by the 2019 Hycroft Technical Report. Consistent with our financial reporting and accounting policies, and as part of the preparation of the second quarter 2020 financial statements, the Company performed routine quarter-end metallurgical balancing analysis, which is a process that estimates the remaining recoverable gold and silver ounces on the leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, leach pad and solution sampling, estimated recovery percentages based on ore type, domain, and oxidation levels achieved, and quantities of gold and silver actually recovered. During the second quarter of 2020, based on metallurgical balancing results, the Company determined that 6,512 ounces of gold that had been placed on the leach pads were no longer recoverable and wrote-off such ounces. The write-down of these ounces significantly reduced the Companyās projected revenues for the second half of 2020. The Company has been unsuccessful in achieving its operating and production costs targets at the Hycroft Mine. During the second quarter of 2020, the Companyās production costs, mine site period costs, and the cash portion of the write-down of production inventories totaled $29.7 million, which exceeded second quarter 2020 revenues of $7.6 million by $22.1 million. Higher than planned operating and production costs were the result of: (1) increased contractor support for technical and manpower shortages in crusher operations, mobile maintenance, and leach pad operations; (2) overuse of processing reagents used in the leach pad operations due to poor planning, monitoring, and execution; (3) higher operating costs in the crusher, due to higher than planned belt failures; and (4) higher maintenance costs for the owned mining fleet, due to unexpected timing of component failures. As a result of actual second quarter 2020 operating and production costs incurred, the Company has revised its future forecasts of production and operating cost estimates for the second half of 2020 which has reduced its estimated future cash flows. The Companyās ability to continue as a going concern is contingent upon achieving its sales, production, cost, and other operating targets, as well as the success of a future financing transaction to provide additional capital financing for working capital and construction of its leach pad. The Company has begun the process of speaking with its financial advisors and stakeholders about options and timing related to securing additional financing or capital that may permit it to complete the construction of its leach pad and continue to ramp up its operations. While the Company has received a non-binding letter of support from its two largest stakeholders, the Board of Directors of the Company intends to evaluate its options to ensure the necessary capital is raised on terms favorable to and in the best interests of all of its shareholders. The Company has no commitment from any party to provide additional financing, and there can be no assurance that any funding will be available, or if available, that its terms will be favorable or acceptable to the Company. At this time, the Company does not have an expected time frame for, or an expectation with respect to, securing additional financial capital, if at all. 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, stockholdersā equity) have been prepared in accordance with GAAP on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Companyās assets or managementās assessment of the Companyās overall enterprise or equity value. Use of estimates The preparation of the Companyās financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves; estimates of life-of-mine production timing and volumes; current and future mining and processing plans; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these financial statements, and such differences could be material. Accordingly, amounts presented in these financial statements are not indicative of results that may be expected for future periods. Cash Cash has historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of June 30, 2020 and December 31, 2019, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the Company held $39.6 million and $42.7 million in restricted cash, respectively. See Note 6 ā Restricted Cash Accounts receivable Accounts receivable consists of amounts due from customers for gold and silver sales. The Company has evaluated the customersā credit risk, payment history and financial condition and determined that no allowance for doubtful accounts is necessary. The entire accounts receivable balance is expected to be collected during the next 12 months. Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages; and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventories computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Write-downs of production inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. When a write-down is required, production-related inventories are adjusted to net realizable value with adjustments recorded as Write-down of production inventories Cost of sales Note 4 ā Inventories Mine site period costs The Company evaluates its mine site costs incurred, which are normally recorded to the carrying value of production-related inventories, to determine if any such costs are a result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, or other costs or activities which significantly increase the cost per ounce of production-related inventories and are considered unusual. If costs are determined to meet the criteria and, therefore, cannot be recorded to the carrying value of production-related inventories, then the Company recognizes such costs in the period incurred as Mine site period costs Depreciation and amortization mine site period costs Cost of sales Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 are transferred at an average cost per ounce of gold to precious metals inventory. Precious metals inventory Precious metals inventory consists of dorĆ© and loaded carbon containing both gold and silver, which is ready for offsite shipment and sale to a third party. As gold ounces are sold, costs are recognized in Production costs Depreciation and amortization Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Level 2 ā Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including Cash Restricted cash, Accounts receivable, Prepaids and other Accounts payable Other liabilities, current Note 18 - Fair Value Measurements Plant, equipment, and mine development, net Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or the units-of-production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 7 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs, and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable mineral reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable mineral reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to production-related inventories to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable mineral reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable mineral reserves and estimated metal recoveries associated with those mineral reserves. Equipment not in use From time to time the Company may determine that certain of its property and equipment no longer fit into its strategic operating plans and commence activities to sell such identified assets. The Company evaluates equipment not in use for held-for-sale classification in accordance with ASC Topic 360 Property, Plant, and Equipment . Other assets, non-current Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment, and mine development. The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 7 ā Plant, Equipment, and Mine Development, Net During the three months ended June 30, 2020, the Company determined a triggering event had occurred, as it has been unsuccessful in achieving its operating and production costs targets. As a result, the Company performed a recoverability test at June 30, 2020, and no impairments were recorded. Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of June 30, 2020 and December 31, 2019, there was no recorded amounts for mineral properties as such values had been written-down to $0 in previous periods. Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion Mineral properties Royalty obligation The Companyās royalty obligation is carried at amortized cost with reductions calculated by dividing actual gold and silver production by the estimated total life-of-mine production from proven and probable mineral reserves. Any updates to proven and probable mineral reserves or the estimated life-of-mine production profile would result in prospective adjustments to the amortization calculation used to reduce the carrying value of the royalty obligation. Amortization reductions to the royalty obligation are recorded to Production costs Cost of sales Derivative instruments The Company recognizes all derivatives as either assets or liabilities and measures those instruments at fair value. Changes in the fair value of derivative instruments, together with any gains or losses on derivative settlements and transactions, are recorded in earnings to Fair value adjustments As of June 30, 2020, the Companyās only recorded derivative was for warrants (see Note 18 - Fair Value Measurements Revenue recognition The Company recognizes revenue for gold and silver sales when it satisfies the performance obligation of transferring inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon sales prices and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. The majority of sales are in the form of dorĆ© bars, but the Company also sells loaded carbon and slag, a by-product. All sales are final. Stock-based compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant. Stock-based compensation costs are charged to General and administrative Note 14 - Stock-Based Compensation Phantom shares Non-employee members of Sellerās board of directors received phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. All phantom shares issued by Seller were terminated and paid in connection with the Recapitalization Transaction. See Note 14 - Stock-Based Compensation Note 18 ā Fair Value Measurements Reorganization items On March 10, 2015, a predecessor of the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā). Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 15 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās condensed consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements ā | 2. Summary of Significant Accounting Policies Basis of presentation The Consolidated Financial Statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (āGAAPā). Certain amounts in the 2018 Consolidated Financial Statements have been reclassified to conform to the 2019 presentation. References to ā$ā refers to United States dollars. Going concern The Consolidated Financial Statements of the Company have been prepared on a āgoing concernā basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. On March 10, 2015, the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā) in an effort to recapitalize the Companyās balance sheet by reducing its debt balances while concurrently providing additional liquidity. The Company continued to operate and produce gold and silver at its Hycroft Mine during the bankruptcy process. However, on July 8, 2015, the Company announced that it had suspended mining operations to maximize cash flow and minimize spending through the remainder of the Chapter 11 process. Effective October 22, 2015 (the āEffective Dateā), the Company completed its financial restructuring process and emerged from bankruptcy. From July 2015 through December 31, 2016, the Company produced gold and silver from its leach pads, actively running its processing facilities. The operation went into a care and maintenance mode as of January 1, 2017 when the Company stopped adding lime to the leach pads and wrote-down the remaining gold and silver on the leach pads to $0 due to the inability to economically recover the metal. As a result of going into care and maintenance, gold and silver production became a byproduct of maintaining the Hycroft Mine. Beginning January 1, 2017, the Company recorded all metal sales as a reduction to Care and maintenance, net Note 12 ā Gold and Silver Sales During 2019, the Company restarted open pit mining at the Hycroft Mine, and produced and sold gold and silver. However, based on the financial results for the year ended December 31, 2019, the significant debt burden and the need for additional cash to expand the operations, the Company believes its operations cannot currently generate enough cash to make scheduled principal and interest payments required by its debt obligations and/or cover operating and general and administrative costs necessary to operate the Company. These conditions raise substantial doubt about the Companyās ability to continue as a going concern, since the Company is reliant on receiving future cash flows from financing activities to meet its obligations. While the Company has entered into a purchase agreement with MUDS, (the āMUDS transactionā) (as discussed in Note 21 ā Subsequent Events The ability to continue as a going concern is contingent upon the Companyās ability to expand mining operations to an economic level and to refinance its existing debt obligations, which the MUDS transaction is designed to support. During August 2019, M3 Engineering and Technology Corp. in association with SRK Consulting US and the Company completed a feasibility study (the ā2019 Hycroft Technical Reportā). The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. The 2019 restart of mining operations through December 31, 2019 was funded by the issuance of $72.0 million in Senior Secured Notes due June 30, 2020 (the ā1.25 Lien Notesā), discussed below. Additional short-term funding continues to be required. See Note 21 ā Subsequent Events These Consolidated Financial Statements do not include any adjustments related to the recoverability and classification of recorded assets or any other adjustments that might be necessary should the Company be unable to continue as a going concern. Use of estimates The preparation of the Companyās Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these Consolidated Financial Statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these Consolidated Financial Statements, and such differences could be material. Principles of consolidation The Consolidated Financial Statements include the accounts of HMC and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Cash Cash and cash equivalents have historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of December 31, 2019 and 2018, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the consolidated balance sheets. See Note 5 ā Restricted Cash Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages, and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventory quantities computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Losses that result from the application of the lower of cost or net realizable value accounting policy are recorded as a component of Cost of sales Note 3 ā Inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, production-related inventories would be adjusted to net realizable value and recorded as a component of Cost of sales Note 3 ā Inventories Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 or carbon in column processing method. As gold ounces are recovered using the Merrill-Crowe process, costs are transferred from in-process inventories at an average cost per ounce of gold to dorĆ© finished goods inventory. In-process inventories are valued at the average cost of the material fed into the process, plus the in-process conversion costs, including applicable depreciation and amortization relating to the process facilities incurred to that point in the process. Precious metals inventory Precious metals inventory consists of dorĆ© containing both gold and silver. While operations are actively producing gold and silver, and as the Company sells its in-process inventories, costs are recognized in Production costs Care and maintenance, net Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements Level 1 Level 2 Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including cash, prepaids and other, accounts payable, and other liabilities are carried at cost, which approximates their fair value due to the short-term nature of these instruments. Plant, equipment, and mine development Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or using the units-of- production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 6 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recoveries associated with those reserves. Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment and mine development. The Company reviews and evaluates its long-lived assets for recoverability annually and at interim periods if triggering events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 6 ā Plant, Equipment, and Mine Development, Net Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of December 31, 2019 and 2018, there was no value assigned to mineral properties as the value had been written-down to $0 in previous periods. Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion expense Mineral properties, net Derivative instruments The fair value of the Companyās derivative instruments is reflected as liabilities on the consolidated balance sheets. The Company does not hold derivative instruments for trading purposes. Derivative Instruments Not Designated as Hedges Previous equity stockholders of the Company received warrants with a seven-year term that represent 17.5% of the outstanding new common shares. These warrants were accounted for as a derivative instrument and included in Other liabilities, non-current Other, net See Note 11 ā Stockholdersā Equity Note 16 ā Fair Value Measurements Treasury Stock The Company records repurchases of common shares as Treasury stock at cost. Revenue recognition When actively operating, the Company recognizes revenue on gold and silver sales. During the year ended December 31, 2019, the Company began actively operating the Hycroft Mine and, as such, recorded gold and silver sales as Revenue Care and maintenance, net Care and maintenance, net The Company recognizes revenue for gold and silver production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon market price and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. All sales are final. Stock-Based Compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant and charged to expense over the requisite service period. The fair value of awards is determined using the stock price on either the date of grant (if subject only to service conditions) or the date that the Compensation Committee of the Board of Directors establishes applicable performance targets (if subject to performance conditions). The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date. See Note 13 ā Stock-Based Compensation Phantom shares Non-employee members of the Companyās board of directors receive phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment is equal to the fair market value of one share of common stock of the Company at the date of payment. Under the grant agreements, each phantom share vests on the date of grant and entitles the participant to a cash payment. For grants issued during 2019 and 2018, the cash payment is equal to the greater of the (1) grant date value and (2) the fair market value of one share of common stock of the Company at the date of payment. The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process. During the twelve months ended December 31, 2019, the Company recorded a $0.2 million increase in the value of phantom shares granted in 2015 and 2016, which is included in General and administrative General and administrative General and administrative Note 16 ā Fair Value Measurements Reorganization items, net Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items, net Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 14 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (āFASBā) issued Accounting Standards Update (āASUā) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 on January 1, 2019 using a modified retrospective approach. As there were no unfulfilled contracts outstanding as of December 31, 2018, there was no cumulative effect adjustment required to be recognized at January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements eliminated, while others were modified and there were some additions. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2018-13 in 2020, but will not have a material effect on the financial statement disclosures. |
Mudrick Capital Acquisition Corporation [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (āGAAPā) and pursuant to the rules and regulations of the SEC. Emerging growth company The Company is an āemerging growth companyā as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the āJOBS Actā), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Companyās financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and cash equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2019 and 2018. Marketable securities held in Trust Account At December 31, 2019 and 2018, substantially all of the assets held in the Trust Account were held in money market funds. Common stock subject to possible redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in the Financial Accounting Standards Board (āFASBā) Accounting Standards Codification (āASCā) Topic 480 āDistinguishing Liabilities from Equity.ā Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companyās control) is classified as temporary equity. At all other times, common stock is classified as stockholdersā equity. The Companyās common stock features certain redemption rights that are considered to be outside of the Companyās control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2019 and 2018, common stock subject to possible redemption is presented as temporary equity, outside of the stockholdersā equity section of the Companyās balance sheets. Offering costs Offering costs consist principally of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $11,974,088 were charged to stockholdersā equity upon the completion of the Initial Public Offering. Income taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, āIncome Taxes.ā Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of and December 31, 2019 and 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. Net income (loss) per common share Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and Private Placement to purchase 28,540,000 shares of Class A common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The Companyās statement of operations includes a presentation of income (loss) per share for common shares subject to redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account (net of applicable franchise and income taxes of approximately $1,099,900 and $755,400 for the year ended December 31, 2019 and December 31, 2018, respectively, by the weighted average number of Class A redeemable common stock outstanding during the period. Net loss per common share, basic and diluted for Class A and Class B non-redeemable common stock is calculated by dividing the net income (loss), less income attributable to Class A redeemable common stock, by the weighted average number of Class A and Class B non-redeemable common stock outstanding for the period. Class A and Class B non-redeemable common stock includes the Founder Shares and the Placement Units as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income (loss) per common share: Redeemable Common Stock Numerator: Earnings allocable to Redeemable Common Stock ā ā ā ā ā ā ā ā ā Year Ended Year Ended ā ā December 31, ā December 31, ā ā 2019 ā 2018 Redeemable Common Stock ā ā Numerator: Earnings allocable to Redeemable Common Stock ā ā Interest Income ā $ 4,379,894 ā $ 2,836,691 Income and Franchise Tax ā $ (1,099,904) ā $ (744,449) Net Earnings ā $ 3,279,990 ā $ 2,081,242 Denominator: Weighted Average Redeemable Common Stock ā ā Redeemable Common Stock, Basic and Diluted ā 20,800,000 ā 20,800,000 Earnings/Basic and Diluted Redeemable Common Stock ā $ 0.16 ā $ 0.10 Non-Redeemable Common Stock ā ā Numerator: Net Loss minus Redeemable Net Earnings ā ā Net Income ā $ 2,610,824 ā $ 1,679,963 Redeemable Net Earnings ā $ (3,279,990) ā $ (2,081,242) Non-Redeemable Net Loss ā $ (669,166) ā $ (401,279) Denominator: Weighted Average Non-Redeemable Common Stock ā ā Non-Redeemable Common Stock, Basic and Diluted (1) ā 5,200,000 ā 5,200,000 Loss/Basic and Diluted Non-Redeemable Common Stock ā $ (0.13) ā $ (0.08) ā Note: As of December 31, 2019 and 2018, basic and diluted shares are the same as there are no securities that are dilutive to the Companyās common stockholders Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000. At December 31, 2019 and 2018, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair value of financial instruments The fair value of the Companyās assets and liabilities, which qualify as financial instruments under ASC Topic 820, āFair Value Measurements and Disclosures,ā approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Companyās financial statements. |
INITIAL PUBLIC OFFERING
INITIAL PUBLIC OFFERING | 12 Months Ended |
Dec. 31, 2019 | |
Mudrick Capital Acquisition Corporation [Member] | |
INITIAL PUBLIC OFFERING | 3. INITIAL PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 20,800,000 units at a price of $10.00 per Unit, inclusive of 800,000 Units sold on February 28, 2018 upon the underwritersā election to partially exercise their over-allotment option. Each Unit consists of one share of Class A common stock (such shares of Class A common stock included in the Units being offered, the āPublic Sharesā), and one redeemable warrant (each, a āPublic Warrantā). Each Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6). |
RELATED PARTY TRANSACTIONS_2
RELATED PARTY TRANSACTIONS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | 21. Related Party Transactions Certain amounts of the Companyās indebtedness disclosed in Note 9 Debt, Net Related Party Disclosures Interest expense, net of capitalized interest Interest expense, net of capitalized interest $21.7 million, respectively, for the debt held by Related Parties. As of June 30, 2020 and December 31, 2019, the Related Parties held a total $67.8 million and $421.6 million, respectively, of debt. | 20. Related Party Transactions As disclosed in Note 9 ā Debt Aristeia Highbridge Mudrick Whitebox Management, LLC (ā Wolverine Related Party Disclosures The following table provides the recorded interest expense by Related Party (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Aristeia ā $ 5,993 ā $ 4,394 Highbridge ā 9,325 ā 6,934 Mudrick ā 23,743 ā 17,766 Whitebox ā ā 15,607 ā 11,444 Wolverine ā 2,906 ā 2,130 Total related party interest expense ā $ 57,574 ā $ 42,668 ā The following table provides debt balances by Related Party (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Aristeia ā $ 50,905 ā $ 35,939 Highbridge ā 80,930 ā 58,709 Mudrick ā 208,078 ā 152,757 Whitebox ā 132,559 ā 93,583 Wolverine ā 24,683 ā 23,998 Total related party debt ā $ 497,155 ā $ 364,986 ā |
Mudrick Capital Acquisition Corporation [Member] | ||
RELATED PARTY TRANSACTIONS | 4. RELATED PARTY TRANSACTIONS Founder Shares On September 25, 2017, the Sponsor purchased 5,750,000 shares (the āFounder Sharesā) of the Companyās Class B common stock, par value $0.0001 (āClass B common stockā) for an aggregate price of $25,000. The Founder Shares will automatically convert into shares of Class A common stock at the time of the Companyās initial Business Combination and are subject to certain transfer restrictions, as described in Note 6. Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment, at any time. As a result of the underwritersā election to partially exercise their over-allotment option on February 28, 2018, 550,000 Founder Shares were forfeited. The initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the initial Business Combination or (B) subsequent to the initial Business Combination, (x) if the last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 30 Private Placement Warrants Concurrently with the closing of the Initial Public Offering, the Sponsor and Cantor purchased an aggregate of 7,500,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant (6,500,000 Private Placement Warrants by the Sponsor and 1,000,000 Private Placement Warrants by Cantor) for an aggregate purchase price of $7,500,000. On February 28, 2018, the Company consummated the sale of an additional 240,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, of which 200,000 Private Placement Warrants were purchased by the Sponsor and 40,000 Private Placement Warrants were purchased by Cantor, generating gross proceeds of $240,000. Each Private Placement Warrant is exercisable for one whole share of Class A common stock at a price of $11.50 per share. The proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination by the Extended Termination Date, the Private Placement Warrants will expire worthless. The Private Placement Warrants will be non- redeemable and exercisable on a cashless basis so long as they are held by the Sponsor, Cantor or their permitted transferees. The warrants will expire five years after the completion of the Companyās Business Combination or earlier upon redemption or liquidation. In addition, for as long as the Private Placement Warrants are held by Cantor or its designees or affiliates, they may not be exercised after five years from the effective date of the registration statement for the Initial Public Offering. The Private Placement Warrants have been deemed compensation by Financial Industry Regulatory Authority, or FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of the FINRA Manual commencing on the effective date of the registration statement for the Initial Public Offering. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statement for the Initial Public Offering. Additionally, the Private Placement Warrants purchased by Cantor may not be sold, transferred, assigned, pledged or hypothecated for 180 days following the effective date of the Initial Public Offering except to any selected dealer participating in the Initial Public Offering and the bona fide officers or partners of the underwriter and any such participating selected dealer. The Sponsor, Cantor and the Companyās officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the initial Business Combination. Related Party Loans On September 25, 2017, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Proposed Public Offering pursuant to a promissory Note (the āNoteā). The Note was non-interest bearing and payable on the earlier of March 31, 2018 or the completion of the Initial Public Offering. The Note was repaid upon the consummation of the Initial Public Offering. In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Companyās officers and directors may, but are not obligated to, loan the Company funds as may be required (āWorking Capital Loansā). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lenderās discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants. On January 2, 2020, the Company issued an unsecured promissory Note (the āPromissory Noteā) to the Sponsor in the aggregate amount of $1,500,000 in order to finance transaction costs in connection with a Business Combination. The Promissory Note is non-interest bearing and repayable by the Company to the Sponsor upon the consummation of a Business Combination. The Promissory Note will be forgiven if the Company is unable to consummate a Business Combination except to the extent of any funds held outside of the Trust Account. The Promissory Note may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant, other than in connection with the Hycroft Business Combination. The warrants would be identical to the Private Placement Warrants. Administrative Support Agreement The Company entered into an agreement whereby, commencing on February 8, 2018 through the earlier of the Companyās consummation of a Business Combination and its liquidation, the Company agreed to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the years ended December 31, 2019 and 2018, the Company incurred $120,000 and $110,000 of administrative service fees, respectively. At December 31, 2019 and 2018, $10,000 and $-0- of such fees are included in accounts payable and accrued expenses in the accompanying balance sheets. |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | 20. Commitments and Contingencies From time to time, the Company is involved in various legal actions related to its business, some of which are class actions 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 Companyās financial statements, although a contingency could be material to the Companyās 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. On February 7, 2020, a purported class action complaint was filed by a purported holder of the Companyās warrants, in the Court of Chancery of the State of Delaware against the Company and MUDS. The complaint sought a declaratory judgment that the Recapitalization Transaction constitutes a āFundamental Changeā under the terms of the Seller Warrant Agreement and thereby requiring that Seller Warrants be assumed by MUDS as part of the Recapitalization Transaction, in addition to asserting claims for (1) breach or anticipatory breach of contract against Seller; (2) breach or anticipatory breach of the implied covenant of good faith and fair dealing against Seller; and (3) tortious interference with contractual relations against MUDS. The complaint sought unspecified money damages and also seeks an injunction enjoining the Company and MUDS from consummating the Recapitalization Transaction. On February 26, 2020, MUDS and Seller entered into an amendment to the Purchase Agreement whereby the Companyās liabilities and obligations under the Seller Warrant Agreement were included as a Parent Assumed Liability under the Purchase Agreement. On March 27, 2020, MUDS and Seller filed motions to dismiss the complaint. On May 15, 2020, a hearing was held and the complaint was dismissed. On May 21, 2020, Plaintiff filed a motion to alter or amend the Courtās order in order to retain jurisdiction in order to file application for a mootness fee, to which MUDS and Seller, while disputing factual assertions and characterizations, did not oppose. On June 30, 2020, the motion was granted and the Court retained jurisdiction over the action to hear any mootness fee application. Financial commitments not recorded in the financial statements As of June 30, 2020 and December 31, 2019, Sellerās off-balance sheet arrangements consisted of operating lease agreements, a net profit royalty arrangement, and a future purchase obligation for consignment inventory. Operating Leases During the first quarter of 2020, the Company signed a lease for mining equipment. The one-year operating lease for mobile mining equipment is used to supplement the Companyās own fleet. The lease term began during the second quarter of 2020 as all equipment was placed into service and has less than a year remaining as of June 30, 2020. The total remaining minimum lease payments was approximately $10.1 million as of June 30, 2020. The Company also holds an operating lease for the Companyās office space in Denver, Colorado. Rent expense for this office space is $0.1 million annually and expires in January 2022. The total remaining lease payments were $0.2 million as of June 30, 2020. As the Company has elected to take advantage of the extended transition period for complying with new or revised accounting standards, the liability for the Companyās operating leases will not be considered on the balance sheets until the new lease accounting rules apply to publicly traded emerging growth companies in accordance with the JOBS Act, or we no longer qualify as an emerging growth company. 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. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid $2.6 million through June 30, 2020, which is included in Prepaids and other Note 5 - Prepaids and Other Consignment Inventory During the first quarter of 2020, Hycroft entered into an agreement with a spare parts supplier that requires the supplier to maintain a specified inventory of replacement parts and components that are exclusively for purchase by Hycroft. Pursuant to the agreement, the Company is required to purchase all of the un-replenished consignment stock inventory, totaling $2.5 million, over the two-year life of the Inventory Consignment agreement. As of June 30, 2020, the Company had prepaid $0.9 million towards the un-replenished consignment stock inventory, which is included in Prepaids and other Note 2 - Summary of Significant Accounting Policies Note 5 - Prepaids and Other | 19. Commitments and Contingencies From time to time, the Company is involved in various legal actions related to its business, some of which are class actions 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 Companyās Consolidated Financial Statements, although a contingency could be material to the Companyās 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. Financial commitments not recorded in the 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. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid $2.5 million through December 31,2019. Transaction bonus plan The Company has entered into a bonus plan whereby, upon the consummation of a sale transaction or certain other transformative transactions as defined in the plan, the Company will be obligated to pay certain senior level employees a total of $5.8 million to $7.3 million, depending on the value of the transaction. |
Mudrick Capital Acquisition Corporation [Member] | ||
COMMITMENTS AND CONTINGENCIES | 5. COMMITMENTS AND CONTINGENCIES Registration Rights Pursuant to a registration rights agreement entered into on February 7, 2018, the holders of Founder Shares, Private Placement Warrants, securities issuable pursuant to the Forward Purchase Contract (see below), and warrants that may be issued upon conversion of Working Capital Loans are entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock). These holders have certain demand and āpiggybackā registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriters were paid a cash underwriting discount of $0.20 per Unit, or $4,160,000 in the aggregate. In addition, the underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,280,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On February 12, 2020, the Company entered into an amendment (the āUA Amendmentā) to its underwriting agreement with Cantor, pursuant to which the deferred underwriting fees provided for by the underwriting agreement, which were originally payable by the Company to the underwriters in cash upon completion of an initial Business Combination, shall be payable upon completion of the Hycroft Business Combination (as defined below) through a combination of (i) $2,500,000, payable in cash and directly from the Trust Account, (ii) $2,000,000, payable in shares of Class A common stock, valued for these purposes at $10.00 per share and (iii) an amount up to $2,780,000, determined as follows: (A) if Third Party Equity Value (as defined in the UA Amendment) is less than or equal to $75,000,000, an amount payable in Class A common stock, valued for these purposes at $10.00 per share, equal to the product of (x) 2,780,000 and (y) a fraction, the numerator of which is the Third Party Equity Value and the denominator of which is $75,000,000 or (B) if Third Party Equity Value is greater than $75,000,000, $2,780,000 payable in cash and directly from the Trust Account (collectively, the āDeferred Underwriting Commissionā); provided, however, to the extent Cantor continues to beneficially own and hold for its own account the Specified Shares (as defined in the UA Amendment) on the date of the consummation of the Hycroft Business Combination (the āAcquisition Closing Dateā), (1) the Deferred Underwriting Commission payable in Class A common stock pursuant to clauses (ii) and (iii) above shall be reduced by an amount equal to the product of (x) $10.00 and (y) the number of Specified Shares beneficially owned and held by Cantor for its own account on the Acquisition Closing Date, and (2) the Deferred Underwriting Commission payable in cash and directly from the Trust Account pursuant to this sentence shall be increased by such same and equal amount. As of the opinion date the trust value was approximately $72,000,000 which is below the threshold for situation (A) as described above. Therefore, the amount payable for (iii) as of the opinion date would be approximately $2,670,000. The UA Amendment does not amend, modify or supplement any other terms of the underwriting agreement. Forward Purchase Contract On January 24, 2018, the Company entered into a forward purchase contract (the āForward Purchase Contractā) with the Sponsor, pursuant to which the Sponsor committed to purchase, in a private placement for gross proceeds of $25,000,000 to occur concurrently with the consummation of a Business Combination, 2,500,000 Units (the āForward Unitsā) on substantially the same terms as the sale of Units in Initial Public Offering at $10.00 per Unit, and 625,000 shares of Class A common stock. The funds from the sale of Forward Units will be used as part of the consideration to the sellers in a Business Combination; any excess funds from this private placement will be used for working capital purposes in the post-transaction company. This commitment is independent of the percentage of stockholders electing to redeem their Public Shares and provides the Company with a minimum funding level for a Business Combination. Purchase Agreement On January 13, 2020, the Company entered into a Purchase Agreement (as amended on February 26, 2020, and as may be further amended from time to time, the āPurchase Agreementā) with MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of Parent (āAcquisition Subā), and Hycroft, pursuant to which the parties thereto intend to consummate a business combination transaction (the āHycroft Business Combinationā) pursuant to which Hycroft will sell to Acquisition Sub, and Acquisition Sub will purchase from Hycroft, all of the issued and outstanding equity interests of Hycroftās subsidiaries and substantially all of Hycroftās other assets (collectively, the āTransferred Assetsā). In consideration for the Transferred Assets and in connection with the consummation of the Hycroft Business Combination, Acquisition Sub will deliver, or cause to be delivered on its behalf, to Hycroft (A) a number of shares of the Companyās Class A common stock equal to (i) (A) $325,000,000, plus (B) the Surrendered Shares Value (as defined in the Purchase Agreement), minus (C) the 1.5 Lien Share Payment Value (as defined in the Purchase Agreement), minus (D) the 1.5 Lien Cash Payment Amount (as defined in the Purchase Agreement), minus (E) the Excess Notes Share Payment Amount (as defined in the Purchase Agreement), minus (F) the Excess Notes Cash Payment Amount (as defined in the Purchase Agreement), divided by (ii) $10.00, which Hycroft will promptly distribute to its stockholders and (B) the Excess Notes (as defined in the Purchase Agreement) and Hycroftās 1.5 lien notes acquired by Acquisition Sub in connection with the consummation of the Hycroft Business Combination and pursuant to the transactions described in the Purchase Agreement. In addition, (x) the Company and Acquisition Sub will assume certain of Hycroftās liabilities, including the Companyās assumption of certain debt obligations of Hycroft and Hycroftās liabilities and obligations under its existing warrant agreement, and (y) Acquisition Sub will pay off, or cause to be paid off, Hycroftās other outstanding indebtedness for borrowed money, on Hycroftās behalf, including under Hycroftās first lien debt and promissory note. The Hycroft Business Combination will be consummated subject to the deliverables and provisions as further described in the Purchase Agreement. |
STOCKHOLDERS' EQUITY_2
STOCKHOLDERS' EQUITY | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
STOCKHOLDERS' EQUITY | 12. Stockholdersā Equity Following the May 29, 2020 Recapitalization Transaction, as of June 30, 2020, the total number of shares of all classes of capital stock which we have authority to issue is 410,000,000, of which 400,000,000 are common stock, par value $0.0001 per share, and 10,000,000 are preferred stock par value $0.0001 per share. The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect to each of our class of capital stock are discussed below. Common stock As of June 30, 2020, there were 50,160,042 shares of common stock issued and outstanding. Each holder of common stock is entitled to one vote for each share of common stock held by such holder. The holders of common stock are entitled to the payment of dividends and other distributions as may be declared from time to time by the Board in accordance with applicable law and to receive other distributions from the Company. Subject to the terms of the Recapitalization Transaction and as of May 29, 2020, certain new and existing holders of common stock of the Company, are subject to a lock-up periods, which ranged from six Preferred stock As of June 30, 2020, there were no shares of preferred stock issued and outstanding. Dividend policy The Companyās credit facility under the Sprott Credit Agreement contains provisions that restrict its ability to pay dividends. For additional information see Note 9 - Debt, Net Warrants As described below, the Company had a total of 47,011,622 warrants outstanding as of June 30, 2020. Five-year Public Warrants The Company has 34,289,999 publicly-traded warrants outstanding which entitle holders to purchase one share of HYMC common stock at an exercise price of $11.50 per share for a period of five years from the May 29, 2020 Recapitalization Transaction. The Company has certain abilities to call such warrants if the last reported sale price of HYMC 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. See Note 3 - Recapitalization Transaction Seller Warrants As part of 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 āSeller Warrant Agreementā). Pursuant to the assumption of the Seller Warrant Agreement, the warrants issued thereunder (the āSeller Warrantsā) became exercisable into shares of HYMC common stock. As of the consummation of the Recapitalization Transaction, 3,210,213 shares of common stock may be issued upon exercise of Seller Warrants at an exercise price, determined as of July 1, 2020 pursuant to the Seller Warrant Agreement of $44.82 per share upon the exercise of 12,721,623 Seller Warrants, each currently exercisable into approximately 0.2523 shares of common stock, which exercise price and number of shares may fluctuate under the terms of the Seller Warrant Agreement. Seller Warrants have a seven-year term that expires in October 2022. | 11. Stockholdersā Equity Common stock In connection with the Companyās emergence from bankruptcy and as detailed in the plan of reorganization, the Companyās then-existing unsecured notes and general unsecured claims were canceled and holders of such claims received equity in the reorganized Company or received cash in amounts negotiated by the major creditor groups. The Company was required to issue 3.0 million new common shares to its creditors, but has not listed the new common shares for public trading and is not a reporting company with the United States Securities and Exchange Commission. Previous equity stockholders of the Company received warrants with a seven As of December 31, 2019, all bankruptcy claims had been settled and all 3.0 million shares had been issued. For additional information see Note 16 ā Fair Value Measurements $.001 Preferred stock In addition to common stock, the authorized share capital of the Company includes 10,000,000 shares of undesignated preferred stock with a par value of $0.001 per share, none of which has been issued. Treasury stock During the year ended December 31, 2019, the Company repurchased 37,428 shares of its common stock outstanding for a total purchase price of $1 (one dollar). During the year ended December 31, 2018, the Company repurchased 95,082 shares of its common stock outstanding for a total purchase price of $1 (one dollar). Dividend policy The Company has never paid dividends and currently has no intention to do so. The Companyās Convertible Notes, 1.5 Lien Notes, 1.25 Lien Notes and First Lien Agreement contain provisions that restrict its ability to pay dividends. For additional information see Note 9 ā Debt Warrant issuance at effective date: As discussed above , $5.20 as of December 31, 2019. The warrants were accounted for as a derivative instrument and included as of December 31, 2019 and 2018 in Other liabilities, non-current |
Mudrick Capital Acquisition Corporation [Member] | ||
STOCKHOLDERS' EQUITY | 6. STOCKHOLDERSā EQUITY Common Stock Class A Common Stock issued outstanding Class B Common Stock Holders of Class A common stock and Class B common stock will vote together as a single class on all other matters submitted to a vote of stockholders except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to adjustment. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of the initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance, as is the case with the Hycroft Business Combination) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as- converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the initial Business Combination (excluding any shares or equity- linked securities issued, or to be issued, to any seller in the initial Business Combination, any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company or any securities issued pursuant to the Forward Purchase Contract (see Note 5)). Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time. Preferred Stock Warrants ā The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company may redeem the Public Warrants (except with respect to the Private Placement Warrants): ā in whole and not in part; ā at a price of $0.01 per warrant; ā at any time during the exercise period; ā upon a minimum of 30 days ā prior written notice of redemption; and ā if, and only if, the last sale price of the Companyās Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. ā If, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a ācashless basis,ā as described in the warrant agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination by the Extended Termination Date and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Companyās assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. |
INCOME TAX
INCOME TAX | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
INCOME TAX | 15. Income Taxes For the three and six months ended June 30, 2020 and 2019, the Company recorded no income tax benefit or expense based upon the estimated annual effective tax rate of 0.0% for each period. The estimated annual effective tax rate for each period was driven by year-to-date net losses for each period along with the expectation of continued losses for the remainder of the years. The gain related to the Recapitalization Transaction was excluded from the estimated annual effective tax rate calculation for the 2020 period as it is considered a discrete item. The Company reversed a portion of the valuation allowance based on the net operating loss expected to be used, in order to offset Sellerās taxable gain related to the Recapitalization Transaction. The Company is subject to state income tax in Colorado, which is the location of its corporate office, but did not incur any income tax expense related to Colorado due to continued net operating losses. The Company is subject to mining taxes in Nevada, which are classified as income taxes as such taxes are based on a percentage of mining profits, but did not incur any mining tax expense due to continued mining losses. The Company is not subject to foreign income taxes as all of the Companyās operations and properties are located within the United States. As of December 31, 2019, the Company had $256.5 million of net deferred tax assets, which were primarily comprised of net operating losses and disallowed interest expense under IRC Sec. 163(j). The Company recorded a full valuation allowance of $256.5 million against its net deferred tax assets. Immediately prior to the Recapitalization Transaction, Seller had estimated net deferred tax assets of approximately $267.8 million, which were primarily comprised of net operating losses and offset by a full valuation allowance. As a result of the Recapitalization Transaction, Seller, which sold all of its issued and outstanding equity interests of its direct subsidiaries and substantially all of its other assets, to Acquisition Sub, which also assumed substantially all of the liabilities of Seller, had a taxable gain and cancellation of indebtedness of approximately $95.0 million before considering Sellerās net operating loss carryforwards. In connection with the Recapitalization Transaction, Seller used approximately $19.9 million of its deferred tax assets to offset the taxable gain in full, resulting in remaining net deferred tax assets of approximately $247.9 million immediately after the Recapitalization Transaction. The remaining net deferred tax assets balance of Seller did not transfer to the Company as a result of the Recapitalization Transaction. For U.S. tax purposes, the sale of Sellerās disregarded subsidiaries interests and other assets was considered a sale of assets. The acquired assets have a carryover basis for US GAAP purposes and the Company has stepped up the fair market value basis in the assets acquired for tax purposes, resulting in the Company having estimated net deferred tax assets of $94.2 million at June 30, 2020. The Company recorded a full valuation allowance of approximately $94.2 million as of June 30, 2020 against the net deferred tax assets, which were determined more likely than not to not be realized. As necessary, the Company provides a reserve against the benefits of uncertain tax positions taken in its tax filings that are more likely than not to not be sustained upon examination. Based on the weight of available evidence, the Company does not believe it has taken any uncertain tax positions that require the establishment of a reserve. The Company has not recorded any interest or penalties related to income tax liabilities as of June 30, 2020. | 14. Income Taxes The Companyās loss before income taxes was attributable solely to domestic operations in the United States. The components of the Companyās income tax expense (benefit) were as follows (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Current: ā ā Federal ā $ ā ā $ 145 Deferred: ā ā Federal ā (24,609) ā (18,842) Change in valuation allowance ā 24,609 ā 18,842 Income tax benefit ā $ ā ā $ 145 ā The following table provides a reconciliation of income taxes computed at the United States federal statutory tax rate of 21% in 2019 and 2018 to the income tax provision (in thousands): ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Loss before income taxes ā $ (98,895) ā $ (55,658) ā United States statutory income tax rate ā 21 % 21 % Income tax (benefit) at United States statutory income tax rate ā $ (20,768) ā $ (11,688) ā Change in valuation allowance ā 24,609 ā 18,842 ā Return to provision adjustment ā (2,624) ā (7,029) ā Tax rate changes ā (1,028) ā ā ā State tax benefit ā (195) ā ā ā Other ā 6 ā 20 ā Income tax benefit ā $ ā ā $ 145 ā ā For the year ended December 31, 2019, the effective tax rate was driven by an increase in the valuation allowance of $24.6 $2.6 $1.0 $0.2 For the year ended December 31, 2018, the effective tax rate was driven by return to provision adjustments of $7.0 $0.1 The components of the Companyās deferred tax assets are as follows (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Net operating loss ā $ 146,382 ā $ 126,143 Plant, equipment, and mine development ā 60,840 ā 65,760 Interest expense carryforward ā 24,369 ā 10,590 Inventories ā 12,289 ā 17,163 Reorganization costs ā 7,701 ā 7,437 Assets held-for-sale ā 3,149 ā 3,106 Asset retirement obligation ā 927 ā 1,225 Other liabilities ā 609 ā 490 Stock-based compensation ā 257 ā ā Credits and other ā (6) ā (6) Valuation allowance ā (256,517) ā (231,908) Total net deferred tax assets ā $ ā ā $ ā ā Based on the weight of evidence available as of both December 31, 2019, and 2018, which included recent operating results, future projections, and historical inability to generate operating cash flow, the Company concluded that it was more likely than not that the benefit of its net deferred tax assets would not be realized and, as such, recorded a full valuation allowance of $256.5 $231.9 The Company had net operating loss carryovers as of December 31, 2019 of $683.7 million for federal income tax and financial statement purposes. The Company also had net operating loss carryovers as of December 31, 2019 of $76.3 million for state income tax and financial statement purposes. Historical differences between the federal income tax purposes and financial statement purposes amounts were eliminated through fresh start accounting. Substantially all of the Companyās net operating loss carryovers expire in years 2036 through 2039. Additional analysis of the Internal Revenue Code (āIRCā) section 382 limitations will be done upon the release of the valuation allowance and could result in a change to the value of the net operating losses. The Company believes that the benefits of uncertain tax positions recorded in the calculation of the current year income tax benefit and on prior year tax returns did not exceed benefits calculated using the more likely than not threshold. As a result, the Company has not recorded any income tax reserves or related interest or penalties for the year ended December 31, 2019. With limited exception, the Company is no longer subject to U.S. federal income tax audits by taxing authorities for tax years 2015 and prior; however, net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. |
Mudrick Capital Acquisition Corporation [Member] | ||
INCOME TAX | 7. INCOME TAX The Companyās net deferred tax assets are as follows: ā ā ā ā ā ā ā ā December 31, December 31, ā ā 2019 ā 2018 Deferred tax asset ā ā ā ā Organizational costs/Startup expenses ā $ 227,930 ā $ 86,012 Total deferred tax assets ā 227,930 ā ā 86,012 Valuation allowance ā (227,930) ā ā (86,012) Deferred tax asset, net of allowance ā $ ā ā $ ā ā The income tax provision consists of the following: ā ā ā ā ā ā ā ā Year Ended Year Ended ā ā December 31, ā December 31, ā ā 2019 ā 2018 Federal ā ā ā ā Current ā $ 899,804 ā $ 555,449 Deferred ā (141,918) ā ā (86,012) ā ā ā ā ā State ā ā ā ā Current ā ā ā ā ā Deferred ā ā ā ā ā Change in valuation allowance ā 141,918 ā ā 86,012 Income tax provision ā $ 899,804 ā $ 555,449 ā As of December 31, 2019, the Company had no U.S. federal and state net operating loss carryovers (āNOLsā) available to offset future taxable income. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Companyās NOLs may be subject to an annual limitation in the event of a change in control as defined under the regulations. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the years ended December 31, 2019 and 2018, the change in the valuation allowance was $141,918 and $86,012, respectively. A reconciliation of the federal income tax rate to the Companyās effective tax rate at December 31, 2019 sand 2018 is as follows: ā ā ā ā ā ā ā ā ā Year Ended ā ā Year Ended ā ā December 31, ā ā December 31, ā 2019 ā 2018 Statutory federal income tax rate ā 21.0 % ā 21.0 % State taxes, net of federal tax benefit ā 0.0 % ā 0.0 % True-ups ā 0.6 % ā 0.0 % Change in valuation allowance ā 4.0 % ā 3.8 % Income tax provision ā 25.6 % ā 24.8 % ā The Company files income tax returns in the U.S. federal jurisdiction and in various state and local jurisdictions and is subject to examination by the various taxing authorities. The Company considers New York to be a significant state tax jurisdiction. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
FAIR VALUE MEASUREMENTS | 18. Fair Value Measurements Recurring fair value measurements The following table sets forth by level within the fair value hierarchy, the Companyās liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā Hierarchy ā June 30, ā December 31, Liabilities: Level 2020 2019 Other liabilities, current ā ā Accrued compensation for phantom shares 3 ā $ ā ā $ 1,590 Other liabilities, non-current ā ā Warrant liability - Note 12 3 ā $ 18 ā $ 18 ā Accrued compensation for phantom shares Certain of Sellerās phantom shares, which were satisfied in full upon closing of the Recapitalization Transaction, were carried at fair value due to holders of such awards being entitled to variable cash payments based upon valuations of the Companyās common stock. The historical fair value of such obligation was computed using inputs and assumptions which were significant and unobservable as Seller was a privately held entity and, as such, were classified within Level 3 of the fair value hierarchy. The inputs and assumptions included estimates of consideration to be received by holders of phantom shares based on the estimated fair value of the consideration which may be allocated to such holders from the various financing transactions Seller was considering at such time based on the implied equity value. Warrant liability As part of the Recapitalization Transaction, the Company assumed Sellerās obligations under the Seller Warrant Agreement and the 12.7 million Seller Warrants outstanding became exercisable into shares of HYMC 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 model that requires a variety of inputs, including contractual terms, market prices, exercise prices, equity volatility and discount rates. As of June 30, 2020, Seller Warrants were carried at $18,000, which represents the historically computed fair value. The Company plans to update 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. Since equity volatility is a significant unobservable input to the valuation, the derivative instruments are classified within Level 3 of the fair value hierarchy. Seller Warrants have a seven-year term which expires in October 2022, an exercise price of $44.82 as of July 1, 2020, and are exercisable into approximately 0.2523 shares of HYMC common stock. Items disclosed at fair value Debt As of June 30, 2020, the fair value of the Companyās total current and non-current debt approximated its carrying value due to the short time period between the May 29, 2020 close of the Recapitalization Transaction and the end of the second quarter of 2020. As of December 31, 2019, Seller determined that certain of its debt instrumentsā carrying value exceeded the estimated fair value, which was based on the estimated fair value of the consideration which may be allocated to such debt instruments from the various financing transactions Seller was considering at such time. Accordingly, as of December 31, 2019, Seller estimated that the fair value of the 2.0 Lien Notes and 1.5 Lien Notes was approximately $262.4 million, compared to the carrying value of $345.5 million. Royalty obligation As of June 30, 2020, the estimated net present value of the Companyās royalty obligation $99.9 million, compared to the carrying value of $30.0 million. The net present value of the Companyās royalty obligation was modeled using the following level 3 inputs: (1) market consensus inputs for future gold and silver prices; (2) a precious metal industry consensus discount rate of 5.0%; and (3) estimates of the Hycroft Mineās life-of-mine gold and silver production volumes and timing. | 16. Fair Value Measurements Recurring fair value measurements ā The following table sets forth by level within the fair value hierarchy, the Companyās assets and liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā Hierarchy Level 2019 2018 Liabilities ā ā Accrued compensation for phantom shares 3 ā $ 1,590 ā $ 884 Derivative instruments: ā ā Warrant liability ā Note 11 2 ā $ 18 ā $ 18 ā Accrued compensation During each of the years ended December 31, 2019 and 2018, non-executive members of the Companyās board of directors were granted a total of 315,000 phantom shares of stock, which vested upon grant, pursuant to a Non-Employee Director Phantom Stock Plan. Under the grant agreements, the phantom shares entitle the participant to a cash payment equal to the greater of the (1) grant date fair value and (2) the fair market value of one share of common stock of the Company at the date of payment. The cash payments are to be made to a participant upon the first of the following to occur: (i) retirement from the Board; (ii) resignation from the Board; (iii) failure to stand for re-election as a non-employee director of the Board; (iv) removal from the board for reasons other than cause; (v) death of the participant; or (vi) a change of control. During 2017, the grant agreements with one of the non-executive members of the board of directors were amended to provide for the participant to receive one share of common stock of the Company for each phantom share at the date of payment instead of a cash payment. The non-executive member of the board of directors received 90,000 shares of the common stock of the Company upon resigning in January 2018. During 2019 and 2018, the Company performed fair value analyses of the phantom shares. A valuation of the Company based on negotiated financing arrangements with several unrelated parties was used to determine the value at both December 31, 2019 and December 31, 2018. The phantom shares issued during 2018 and 2019 were recorded at the grant date fair value and, pursuant to the grant agreements, cannot be written-down below the grant date fair value. During 2019, the fair market value of the 2015 and 2016 phantom shares issuances were increased by $0.2 million, which was recorded to General and administrative General and administrative The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process . Derivative instruments The fair values (as prescribed by GAAP) of the warrants, the Companyās only derivative instrument, were computed by independent third-party consultants (and validated by the Company) using models that require a variety of inputs, including contractual terms, market prices, exercise prices, and correlations of such inputs. In general, model inputs that are significant to the fair value measurements of the Companyās derivative instruments trade in active markets or are observable in markets that are not active, and, as such, derivative instruments are classified within Level 2 of the fair value hierarchy. The fair value of the Companyās warrant liability as of December 31, 2019 and 2018, for the warrants issued at the Effective Date, was determined using a Monte Carlo simulation-based valuation model. The warrants have a seven-year term and an initial exercise price of $8.40 per share. The assumptions used include a risk-free interest rate of 1.74%, an expected volatility of 70%, and a dividend rate of 0%. Items disclosed at fair value The carrying amount and fair value of the debt as of December 31, 2019 and 2018 are disclosed in the following table (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Carrying ā ā Carrying ā ā ā ā Amount ā Fair Value ā Amount ā Fair Value Total current and non-current debt ā $ 553,965 ā $ 471,890 ā $ 427,587 ā $ 350,000 ā As of December 31, 2019 and 2018, the fair value of the Companyās debt was determined using level 3 inputs and the phantom shares were marked to market based on level 3 inputs. There were no changes to the Companyās valuation techniques, and no transfers in or out of Levels 1, 2, or 3. During 2018, the Company considered various financing alternatives to finance the restart of the Hycroft Mine. In considering the financing alternatives the Company determined that as of December 31,2018 the fair value of the debt no longer approximated the carrying value. The Company determined the fair value of the debt at December 31, 2019 and 2018 using potential financing options that have been presented to the Company, which are considered level 3 inputs. |
Mudrick Capital Acquisition Corporation [Member] | ||
FAIR VALUE MEASUREMENTS | 8. FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re- measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re- measured and reported at fair value at least annually. The fair value of the Companyās financial assets and liabilities reflects managementās estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: ā ā Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. ā The following table presents information about the Companyās assets that are measured at fair value on a recurring basis at December 31, 2019 and 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: ā ā ā ā ā ā ā ā ā ā ā ā December 31, December 31, Description ā Level ā 2019 ā 2018 Assets: ā ā Trust Account ā U.S. Treasury Securities Money Market Fund 1 ā $ 215,385,757 ā $ 212,916,691 ā See Note 1 for details on the subsequent redemptions and adjustment to the Trust Account. |
SUBSEQUENT EVENTS_2
SUBSEQUENT EVENTS | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
SUBSEQUENT EVENTS | 22. Subsequent Events On July 1, 2020, the Companyās Board of Directors and Randy Buffington agreed that Mr. Buffington would depart from the Company effective July 1, 2020. In connection with Mr. Buffingtonās departure and in recognition of his successful efforts in developing a new process to economically and profitably recover gold from sulfide ores in a heap leach process and in restarting mining operations at the Hycroft Mine and to reward and compensate him for transition assistance, Mr. Buffington will receive continuation payments for a period of 24 months following his departure at an amount equal to his previous salary. Additionally, the Company and Mr. Buffington entered into a restricted stock unit agreement (time-vesting) pursuant to which the Company granted a special discretionary equity bonus in the form of $1.3 million in restricted stock units convertible into shares of common stock, in which 50.0% vests on the first anniversary of the date of grant, and 50.0% vests on the second anniversary of the date of grant. The liability for the restricted stock units will be included in Other liabilities, current The Compensation Committee and Board of Directors approved the following initial annual Director compensation arrangements for non-employee directors, in the form of: (i) an annual cash retainer of $55,000; (ii) annual committee chair fees of $12,500 for the Audit Committee, $10,000 for the Safety, Sustainability and Technical Committee, and $7,500 for each of the Nominating and Governance and Compensation Committees; (iii) annual committee member fees of $5,000 for the Audit Committee, $4,000 for the Safety, Sustainability and Technical Committee, and $2,500 for each of the Nominating and Governance and Compensation Committees; and (iv) $75,000 in annual equity awards in the form of restricted stock units. In addition, an initial equity award in the amount of $50,000 in form of restricted stock units will be granted to each director. Equity awards will be granted at each annual stockholder meeting of the Company unless otherwise determined by the Compensation Committee. | 21. Subsequent Events Issuance of Additional 1.25 Lien Notes On January 17, 2020 and February 7, 2020 additional 1.25 Lien Notes of $5.0 million and $10.0 million, respectively, were issued. The 1.25 Lien Notes issued in January and February have the same terms and security priority as the original issuance of 1.25 Lien Notes in February 2019. Extension of First Lien Agreement On January 31, 2020, the First Lien Agreement maturity was extended to May 31, 2020, as stated in Note 9 ā Debt Purchase Agreement Signed On January 13, 2020, ā Mudrick Capital Acquisition Corporation (āMUDSā), a publicly traded blank check company, and Hycroft entered into a definitive purchase agreement (the āPurchase Agreementā), under which Hycroft will sell substantially all of its assets to MUDS, and MUDS will discharge and pay or assume certain of Hycroftās liabilities. Following the closing of the transaction, Hycroft will be listed on the Nasdaq Stock Exchange under the ticker symbol āHYMCā. Pursuant to the terms of the transaction MUDS will have at least $50.0 million of unrestricted and available cash on hand at closing. Cash sources for the transaction include (A) a $110.0 million multi- tranche credit agreement arranged by Sprott Resource Lending Corp. (the āSprott Credit Agreementā), of which $70.0 million is expected to be drawn at closing, (B) a $30.0 million 1.5% net smelter royalty agreement arranged by Sprott Resource Lending Corp. and (C) consummation of the $25 million forward purchase of MUDS units and shares by Mudrick Capital Acquisition Holdings LLC, (d) a $65 million backstop agreement to purchase MUDS shares by certain existing stockholders of Hycroft and (e) the net cash remaining in MUDSā trust account following any stockholder redemptions. MUDS post-transaction indebtedness will include amounts drawn from the Sprott Credit Agreement plus newly issued subordinated notes not to exceed $80.0 million. All other indebtedness of Hycroft will be retired, exchanged for MUDS shares, converted into Hycroft shares or assumed by MUDS in the transaction. The transaction will be funded through a combination of stock consideration payable to Hycroft (which Hycroft will promptly distribute to is stockholders), cash and stock to repay certain Hycroft indebtedness and the assumption of certain Hycroft obligations. The boards of directors of MUDS and Hycroft have approved the transaction and recommend that their respective stockholders approve the transaction. Stockholders of Hycroft holding a majority of the outstanding stock of Hycroft have agreed to support approval of the transaction at any meeting of Hycroft stockholders, subject to customary exceptions. Completion of the proposed transaction, which is expected in the first half of 2020, is subject to customary and other closing conditions, including regulatory approvals and receipt of approvals from MUDS and Hycroft stockholders. On February 7, 2020, the Company became aware that a purported class action complaint was filed by Travus Pope, a purported holder of Company warrants, in the Court of Chancery of the State of Delaware against the Company and Mudrick Capital Acquisition Corporation (āMUDSā). As filed, the complaint seeks a declaratory judgment that the transactions contemplated under the Purchase Agreement constitute a āFundamental Changeā under the terms of that certain Warrant Agreement dated as of October 22, 2015 and thereby require that the warrants issued thereunder be assumed by MUDS as part of the transactions, in addition to asserting claims for (i) breach or anticipatory breach of contract against the Company, (ii) breach or anticipatory breach of the implied covenant of good faith and fair dealing against the Company, and (iii) tortious interference with contractual relations against MUDS. The complaint seeks unspecified money damages and also seeks an injunction enjoining the Company and MUDS from consummating the transactions. Other The Company has evaluated all subsequent events through February, 21, 2020, which is the date these Consolidated Financial Statements were available to be issued. There were no additional material subsequent events that required recognition or additional disclosure in these Consolidated Financial Statements. |
Mudrick Capital Acquisition Corporation [Member] | ||
SUBSEQUENT EVENTS | 9. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements. On February 7, 2020, a purported class action complaint was filed by a purported holder of warrants, of Hycroft Mining Corporation (āSellerā), in the Court of Chancery of the State of Delaware against the Company and Seller. The complaint seeks a declaratory judgment that the transactions contemplated under the Purchase Agreement constitute a āFundamental Changeā under the terms of Seller warrant agreement and thereby requiring that Seller warrants be assumed by the Company as part of the Recapitalization Transaction, in addition to asserting claims for (i) breach or anticipatory breach of contract against Seller, (ii) breach or anticipatory breach of the implied covenant of good faith and fair dealing against Seller, and (iii) tortious interference with contractual relations against the Company. The complaint seeks unspecified money damages and also seeks an injunction enjoining Seller and the Company from consummating the Recapitalization Transaction. On February 26, 2020, the Company and Seller entered into an Amendment to the Purchase Agreement whereby Sellerās liabilities and obligations under Seller warrant agreement shall be included as Parent Assumed Liability under the Purchase Agreement. |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Basis of presentation | Basis of presentation These condensed consolidated interim financial statements have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (āGAAPā) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (āSECā). 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 financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements include all adjustments which are necessary for a fair presentation of the interim financial position, operating results and cash flows for the periods presented. Certain reclassifications have been made to the prior periods presented in these financial statements to conform to the current period presentation, which had no effect on previously reported total assets, liabilities, cash flows, or net loss. References to ā$ā refers to United States currency. Recapitalization Transaction with MUDS The Recapitalization Transaction (see Note 3 Recapitalization Transaction 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. The shares and net loss per common share prior to the Recapitalization Transaction, have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). See Note 3 ā Recapitalization Transaction | Basis of presentation The Consolidated Financial Statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (āGAAPā). Certain amounts in the 2018 Consolidated Financial Statements have been reclassified to conform to the 2019 presentation. References to ā$ā refers to United States dollars. |
Use of estimates | Use of estimates The preparation of the Companyās financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves; estimates of life-of-mine production timing and volumes; current and future mining and processing plans; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these financial statements, and such differences could be material. Accordingly, amounts presented in these financial statements are not indicative of results that may be expected for future periods. | Use of estimates The preparation of the Companyās Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these Consolidated Financial Statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these Consolidated Financial Statements, and such differences could be material. |
Cash and cash equivalents | Cash Cash has historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of June 30, 2020 and December 31, 2019, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the Company held $39.6 million and $42.7 million in restricted cash, respectively. See Note 6 ā Restricted Cash | Cash Cash and cash equivalents have historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of December 31, 2019 and 2018, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the consolidated balance sheets. See Note 5 ā Restricted Cash |
Income taxes | Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 15 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās condensed consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. | Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 14 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. |
Recent accounting pronouncements | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements | Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (āFASBā) issued Accounting Standards Update (āASUā) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 on January 1, 2019 using a modified retrospective approach. As there were no unfulfilled contracts outstanding as of December 31, 2018, there was no cumulative effect adjustment required to be recognized at January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements eliminated, while others were modified and there were some additions. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2018-13 in 2020, but will not have a material effect on the financial statement disclosures. |
Mudrick Capital Acquisition Corporation [Member] | ||
Basis of presentation | Basis of presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (āGAAPā) and pursuant to the rules and regulations of the SEC. | |
Emerging growth company | Emerging growth company The Company is an āemerging growth companyā as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the āJOBS Actā), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes- Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Companyās financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | |
Cash and cash equivalents | Cash and cash equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2019 and 2018. | |
Marketable securities held in Trust Account | Marketable securities held in Trust Account At December 31, 2019 and 2018, substantially all of the assets held in the Trust Account were held in money market funds. | |
Common stock subject to possible redemption | Common stock subject to possible redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in the Financial Accounting Standards Board (āFASBā) Accounting Standards Codification (āASCā) Topic 480 āDistinguishing Liabilities from Equity.ā Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Companyās control) is classified as temporary equity. At all other times, common stock is classified as stockholdersā equity. The Companyās common stock features certain redemption rights that are considered to be outside of the Companyās control and subject to occurrence of uncertain future events. Accordingly, at December 31, 2019 and 2018, common stock subject to possible redemption is presented as temporary equity, outside of the stockholdersā equity section of the Companyās balance sheets. | |
Offering costs | Offering costs Offering costs consist principally of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the Initial Public Offering. Offering costs amounting to $11,974,088 were charged to stockholdersā equity upon the completion of the Initial Public Offering. | |
Income taxes | Income taxes The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, āIncome Taxes.ā Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of and December 31, 2019 and 2018. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. | |
Net income (loss) per common share | Net income (loss) per common share Net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and Private Placement to purchase 28,540,000 shares of Class A common stock in the calculation of diluted income (loss) per share, since the exercise of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. The Companyās statement of operations includes a presentation of income (loss) per share for common shares subject to redemption in a manner similar to the two-class method of income per share. Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account (net of applicable franchise and income taxes of approximately $1,099,900 and $755,400 for the year ended December 31, 2019 and December 31, 2018, respectively, by the weighted average number of Class A redeemable common stock outstanding during the period. Net loss per common share, basic and diluted for Class A and Class B non-redeemable common stock is calculated by dividing the net income (loss), less income attributable to Class A redeemable common stock, by the weighted average number of Class A and Class B non-redeemable common stock outstanding for the period. Class A and Class B non-redeemable common stock includes the Founder Shares and the Placement Units as these shares do not have any redemption features and do not participate in the income earned on the Trust Account. The following table reflects the calculation of basic and diluted net income (loss) per common share: Redeemable Common Stock Numerator: Earnings allocable to Redeemable Common Stock ā ā ā ā ā ā ā ā ā Year Ended Year Ended ā ā December 31, ā December 31, ā ā 2019 ā 2018 Redeemable Common Stock ā ā Numerator: Earnings allocable to Redeemable Common Stock ā ā Interest Income ā $ 4,379,894 ā $ 2,836,691 Income and Franchise Tax ā $ (1,099,904) ā $ (744,449) Net Earnings ā $ 3,279,990 ā $ 2,081,242 Denominator: Weighted Average Redeemable Common Stock ā ā Redeemable Common Stock, Basic and Diluted ā 20,800,000 ā 20,800,000 Earnings/Basic and Diluted Redeemable Common Stock ā $ 0.16 ā $ 0.10 Non-Redeemable Common Stock ā ā Numerator: Net Loss minus Redeemable Net Earnings ā ā Net Income ā $ 2,610,824 ā $ 1,679,963 Redeemable Net Earnings ā $ (3,279,990) ā $ (2,081,242) Non-Redeemable Net Loss ā $ (669,166) ā $ (401,279) Denominator: Weighted Average Non-Redeemable Common Stock ā ā Non-Redeemable Common Stock, Basic and Diluted (1) ā 5,200,000 ā 5,200,000 Loss/Basic and Diluted Non-Redeemable Common Stock ā $ (0.13) ā $ (0.08) ā Note: As of December 31, 2019 and 2018, basic and diluted shares are the same as there are no securities that are dilutive to the Companyās common stockholders | |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal Depository Insurance Coverage of $250,000. At December 31, 2019 and 2018, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | |
Fair value of financial instruments | Fair value of financial instruments The fair value of the Companyās assets and liabilities, which qualify as financial instruments under ASC Topic 820, āFair Value Measurements and Disclosures,ā approximates the carrying amounts represented in the accompanying balance sheets, primarily due to their short-term nature. | |
Recent accounting pronouncements | Recent accounting pronouncements Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Companyās financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Schedule of the calculation of basic and diluted net income (loss) per common share | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 Net loss ā $ (49,790) ā $ (21,947) ā $ (84,408) ā $ (45,387) ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted average shares outstanding ā ā ā ā ā ā ā ā ā ā ā ā Basic ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 Diluted ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 ā ā ā ā ā ā ā ā ā ā ā ā ā Basic loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) Diluted loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) | The table below shows our basic and diluted earnings (loss) per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Net loss ā $ (98,895) ā $ (55,803) Weighted average shares outstanding ā ā Basic ā 2,739,505 ā 2,645,194 Diluted ā 2,739,505 ā 2,645,194 Basic earnings per common share ā $ (36.10) ā $ (21.10) Diluted earnings per common share ā $ (36.10) ā $ (21.10) |
Mudrick Capital Acquisition Corporation [Member] | ||
Schedule of the calculation of basic and diluted net income (loss) per common share | The following table reflects the calculation of basic and diluted net income (loss) per common share: ā ā ā ā ā ā ā ā ā Year Ended Year Ended ā ā December 31, ā December 31, ā ā 2019 ā 2018 Redeemable Common Stock ā ā Numerator: Earnings allocable to Redeemable Common Stock ā ā Interest Income ā $ 4,379,894 ā $ 2,836,691 Income and Franchise Tax ā $ (1,099,904) ā $ (744,449) Net Earnings ā $ 3,279,990 ā $ 2,081,242 Denominator: Weighted Average Redeemable Common Stock ā ā Redeemable Common Stock, Basic and Diluted ā 20,800,000 ā 20,800,000 Earnings/Basic and Diluted Redeemable Common Stock ā $ 0.16 ā $ 0.10 Non-Redeemable Common Stock ā ā Numerator: Net Loss minus Redeemable Net Earnings ā ā Net Income ā $ 2,610,824 ā $ 1,679,963 Redeemable Net Earnings ā $ (3,279,990) ā $ (2,081,242) Non-Redeemable Net Loss ā $ (669,166) ā $ (401,279) Denominator: Weighted Average Non-Redeemable Common Stock ā ā Non-Redeemable Common Stock, Basic and Diluted (1) ā 5,200,000 ā 5,200,000 Loss/Basic and Diluted Non-Redeemable Common Stock ā $ (0.13) ā $ (0.08) |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Deferred Tax Assets and Liabilities | The components of the Companyās deferred tax assets are as follows (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Net operating loss ā $ 146,382 ā $ 126,143 Plant, equipment, and mine development ā 60,840 ā 65,760 Interest expense carryforward ā 24,369 ā 10,590 Inventories ā 12,289 ā 17,163 Reorganization costs ā 7,701 ā 7,437 Assets held-for-sale ā 3,149 ā 3,106 Asset retirement obligation ā 927 ā 1,225 Other liabilities ā 609 ā 490 Stock-based compensation ā 257 ā ā Credits and other ā (6) ā (6) Valuation allowance ā (256,517) ā (231,908) Total net deferred tax assets ā $ ā ā $ ā |
Schedule of Components of Income Tax Expense (Benefit) | The Companyās loss before income taxes was attributable solely to domestic operations in the United States. The components of the Companyās income tax expense (benefit) were as follows (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Current: ā ā Federal ā $ ā ā $ 145 Deferred: ā ā Federal ā (24,609) ā (18,842) Change in valuation allowance ā 24,609 ā 18,842 Income tax benefit ā $ ā ā $ 145 |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of income taxes computed at the United States federal statutory tax rate of 21% in 2019 and 2018 to the income tax provision (in thousands): ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Loss before income taxes ā $ (98,895) ā $ (55,658) ā United States statutory income tax rate ā 21 % 21 % Income tax (benefit) at United States statutory income tax rate ā $ (20,768) ā $ (11,688) ā Change in valuation allowance ā 24,609 ā 18,842 ā Return to provision adjustment ā (2,624) ā (7,029) ā Tax rate changes ā (1,028) ā ā ā State tax benefit ā (195) ā ā ā Other ā 6 ā 20 ā Income tax benefit ā $ ā ā $ 145 ā |
Mudrick Capital Acquisition Corporation [Member] | |
Schedule of Deferred Tax Assets and Liabilities | The Companyās net deferred tax assets are as follows: ā ā ā ā ā ā ā ā December 31, December 31, ā ā 2019 ā 2018 Deferred tax asset ā ā ā ā Organizational costs/Startup expenses ā $ 227,930 ā $ 86,012 Total deferred tax assets ā 227,930 ā ā 86,012 Valuation allowance ā (227,930) ā ā (86,012) Deferred tax asset, net of allowance ā $ ā ā $ ā |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision consists of the following: ā ā ā ā ā ā ā ā Year Ended Year Ended ā ā December 31, ā December 31, ā ā 2019 ā 2018 Federal ā ā ā ā Current ā $ 899,804 ā $ 555,449 Deferred ā (141,918) ā ā (86,012) ā ā ā ā ā State ā ā ā ā Current ā ā ā ā ā Deferred ā ā ā ā ā Change in valuation allowance ā 141,918 ā ā 86,012 Income tax provision ā $ 899,804 ā $ 555,449 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the federal income tax rate to the Companyās effective tax rate at December 31, 2019 sand 2018 is as follows: ā ā ā ā ā ā ā ā ā Year Ended ā ā Year Ended ā ā December 31, ā ā December 31, ā 2019 ā 2018 Statutory federal income tax rate ā 21.0 % ā 21.0 % State taxes, net of federal tax benefit ā 0.0 % ā 0.0 % True-ups ā 0.6 % ā 0.0 % Change in valuation allowance ā 4.0 % ā 3.8 % Income tax provision ā 25.6 % ā 24.8 % |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of assets that are measured at fair value on a recurring basis | The following table presents information about the Companyās assets that are measured at fair value on a recurring basis at December 31, 2019 and 2018, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: ā ā ā ā ā ā ā ā ā ā ā ā December 31, December 31, Description ā Level ā 2019 ā 2018 Assets: ā ā Trust Account ā U.S. Treasury Securities Money Market Fund 1 ā $ 215,385,757 ā $ 212,916,691 |
Mudrick Capital Acquisition Corporation [Member] | |
Schedule of assets that are measured at fair value on a recurring basis | ā ā ā ā ā ā ā ā ā ā ā ā December 31, December 31, Description ā Level ā 2019 ā 2018 Assets: ā ā Trust Account ā U.S. Treasury Securities Money Market Fund 1 ā $ 215,385,757 ā $ 212,916,691 |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) - USD ($) | May 29, 2020 | Feb. 10, 2019 | Feb. 28, 2018 | Feb. 12, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | May 28, 2020 | Jan. 02, 2020 | Dec. 31, 2017 |
Shares Issued, Price Per Share | $ 10.10 | |||||||||||||
Stock Issued During Period, Value, New Issues | $ 0 | |||||||||||||
Assets Held-in-trust | $ 210,080,000 | |||||||||||||
Cash | $ 68,900,000 | $ 47,293,000 | $ 12,576,000 | $ 47,293,000 | $ 12,576,000 | $ 6,220,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Investment Income, Interest | $ 35,000 | $ 110,000 | $ 147,000 | $ 226,000 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.20 | |||||||||||||
Aggregate principal amount | $ 95,000,000 | |||||||||||||
Private Placement [Member] | ||||||||||||||
Shares Issued, Price Per Share | $ 10 | |||||||||||||
Stock Issued During Period, Shares, New Issues | 7,600,000 | |||||||||||||
Stock Issued During Period, Value, New Issues | $ 75,963,000 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | ||||||||||||||
Assets Held-in-trust | $ 202,000,000 | |||||||||||||
Sale of Stock, Price Per Share | $ 10.10 | $ 10.10 | ||||||||||||
Payments to Acquire Investments | $ 8,080,000 | 0 | $ 210,080,000 | |||||||||||
Stock Issued, Transaction Costs | 11,974,088 | |||||||||||||
Stock Issued, underwriting fees | 4,160,000 | |||||||||||||
Deferred underwriting fees, Noncurrent | $ 7,280,000 | 7,280,000 | ||||||||||||
Business Acquisition Percentage Of Trust Account Assets | 80.00% | |||||||||||||
Other Ownership Interests, Offering Costs | $ 534,088 | |||||||||||||
Cash | 208,536 | 535,946 | $ 10,400,000 | $ 24,945 | ||||||||||
Minimum Net Tangible Assets Required for Business Combinations | 5,000,001 | |||||||||||||
Investment Income, Interest | 6,634 | 8,302 | ||||||||||||
Business Combination, Consideration Transferred | $ 1,500,000 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1 | |||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 50.00% | |||||||||||||
Investments held in Trust Account | $ 215,385,757 | $ 212,916,691 | ||||||||||||
Limitation on Redemption upon Completion of Initial Business Combination Description | 15% | |||||||||||||
Conversion price per warrant | $ 1 | $ 1 | ||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Sponsor [Member] | ||||||||||||||
Sale of Stock, Price Per Share | $ 12 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Investment In Trust Account [Member] | ||||||||||||||
Cash | $ 209,000 | |||||||||||||
Common Stock, Redemption Price Per Share | $ 10.10 | |||||||||||||
Investment Income, Interest | $ 5,306,000 | |||||||||||||
Amount remaining in the trust account | 71,700,000 | |||||||||||||
Interest Income (Expense), Net | $ 1,911,000 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | ||||||||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||||||||||||
Common Stock, Redemption Price Per Share | $ 10.38 | 10.10 | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | |||||||||||||
Stock Redeemed or Called During Period Shares | 13,890,713 | |||||||||||||
Stock Redeemed or Called During Period Value | $ 144,218,760 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | IPO [Member] | ||||||||||||||
Capital Units, Authorized | 20,000,000 | |||||||||||||
Shares Issued, Price Per Share | $ 10 | $ 10 | ||||||||||||
Stock Issued During Period, Shares, New Issues | 200,000,000 | 20,800,000 | ||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Over-Allotment Option [Member] | ||||||||||||||
Shares Issued, Price Per Share | $ 10 | |||||||||||||
Stock Issued During Period, Shares, New Issues | 800,000 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Private Placement [Member] | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ 8,240,000 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Private Placement [Member] | Warrant [Member] | ||||||||||||||
Shares Issued, Price Per Share | $ 1 | $ 1 | ||||||||||||
Stock Issued During Period, Shares, New Issues | 240,000 | 7,500,000 | ||||||||||||
Stock Issued During Period, Value, New Issues | $ 240,000 | $ 7,500,000 | ||||||||||||
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 | ||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Private Placement [Member] | Warrant [Member] | Sponsor [Member] | ||||||||||||||
Stock Issued During Period, Shares, New Issues | 200,000 | 6,500,000 | ||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Private Placement [Member] | Sponsor | Warrant [Member] | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ 6,500,000 | |||||||||||||
Mudrick Capital Acquisition Corporation [Member] | Private Placement [Member] | Cantor Fitzgerald Co. [Member] | Warrant [Member] | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Mudrick Capital Acquisition Corporation [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Class A common stock | ||
Numerator: Earnings allocable to Redeemable Common Stock | ||
Interest Income | $ 4,379,894 | $ 2,836,691 |
Income and Franchise Tax | (1,099,904) | (744,449) |
Net Earnings | $ 3,279,990 | $ 2,081,242 |
Denominator: Weighted Average Redeemable Common Stock | ||
Weighted average shares outstanding | 20,800,000 | 20,800,000 |
Basic and diluted income (loss) per common share | $ 0.16 | $ 0.10 |
Numerator: Net Loss minus Redeemable Net Earnings | ||
Redeemable Net Earnings | $ 3,279,990 | $ 2,081,242 |
Denominator: Weighted Average Non-Redeemable Common Stock | ||
Non-Redeemable Common Stock, Basic and Diluted | 20,800,000 | 20,800,000 |
Loss/Basic and Diluted Non-Redeemable Common Stock | $ 0.16 | $ 0.10 |
Common Class B [Member] | ||
Numerator: Earnings allocable to Redeemable Common Stock | ||
Net Earnings | $ (3,279,990) | $ (2,081,242) |
Denominator: Weighted Average Redeemable Common Stock | ||
Weighted average shares outstanding | 5,200,000 | 5,200,000 |
Basic and diluted income (loss) per common share | $ (0.13) | $ (0.08) |
Numerator: Net Loss minus Redeemable Net Earnings | ||
Net (Loss) Income | $ 2,610,824 | $ 1,679,963 |
Redeemable Net Earnings | (3,279,990) | (2,081,242) |
Non-Redeemable Net Loss | $ (669,166) | $ (401,279) |
Denominator: Weighted Average Non-Redeemable Common Stock | ||
Non-Redeemable Common Stock, Basic and Diluted | 5,200,000 | 5,200,000 |
Loss/Basic and Diluted Non-Redeemable Common Stock | $ (0.13) | $ (0.08) |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ 7,281,000 | ||
Mudrick Capital Acquisition Corporation [Member] | |||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ 11,974,088 | ||
Cash, FDIC Insured Amount | 250,000 | ||
Unrecognized Tax Benefits | 0 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $ 0 | ||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | |||
Warrants To Purchase Common Stock Shares | 28,540,000 | ||
Income and Franchise Tax | $ 1,099,900 | $ 755,400 |
INITIAL PUBLIC OFFERING (Detail
INITIAL PUBLIC OFFERING (Details) - $ / shares | Feb. 28, 2018 | Feb. 12, 2018 | Dec. 31, 2019 |
Shares Issued, Price Per Share | $ 10.10 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.20 | ||
Mudrick Capital Acquisition Corporation [Member] | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1 | ||
Mudrick Capital Acquisition Corporation [Member] | IPO [Member] | |||
Stock Issued During Period, Shares, New Issues | 200,000,000 | 20,800,000 | |
Shares Issued, Price Per Share | $ 10 | $ 10 | |
Mudrick Capital Acquisition Corporation [Member] | Over-Allotment Option [Member] | |||
Stock Issued During Period, Shares, New Issues | 800,000 | ||
Shares Issued, Price Per Share | $ 10 | ||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 |
RELATED PARTY TRANSACTIONS (D_2
RELATED PARTY TRANSACTIONS (Details) | May 29, 2020$ / sharesshares | Feb. 28, 2018USD ($)$ / sharesshares | Feb. 12, 2018USD ($)$ / sharesshares | Sep. 25, 2017USD ($)$ / sharesshares | Jun. 30, 2020USD ($)$ / shares | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | Jan. 02, 2020USD ($)$ / shares |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Stock Issued During Period, Value, New Issues | $ | $ 0 | ||||||||
Term of the warrants | 7 years | 7 years | |||||||
Shares Issued, Price Per Share | $ 10.10 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.20 | ||||||||
Debt Instrument, Face Amount | $ | $ 95,000,000 | ||||||||
Private Placement [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | shares | 7,600,000 | ||||||||
Stock Issued During Period, Value, New Issues | $ | $ 75,963,000 | ||||||||
Shares Issued, Price Per Share | $ 10 | ||||||||
Mudrick Capital Acquisition Corporation [Member] | |||||||||
Sale of Stock, Price Per Share | $ 10.10 | $ 10.10 | |||||||
Threshold trading days within any consecutive trading period, the price of common stock equals or exceeds specified price | 20 days | ||||||||
Consecutive trading period to determine threshold trading days, the price of common stock equals or exceeds specified price | 30 days | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1 | ||||||||
Threshold Period After Business Combination, For Not To Assign, Transfer Or Sell Warrants | 30 days | ||||||||
Debt Instrument, Convertible, Number of Equity Instruments | $ | 1,500,000 | ||||||||
Debt Instrument, Convertible, Conversion Price | $ 1 | $ 1 | |||||||
Operating Leases, Rent Expense | $ | $ 10,000 | ||||||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | $ | $ 120,000 | $ 110,000 | |||||||
Mudrick Capital Acquisition Corporation [Member] | Unsecured Debt [Member] | |||||||||
Debt Instrument, Face Amount | $ | $ 1,500,000 | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Private Placement [Member] | |||||||||
Stock Issued During Period, Value, New Issues | $ | $ 8,240,000 | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Warrant [Member] | |||||||||
Warrant Expiry Period | 5 years | ||||||||
Threshold Period After Business Combination, For Not To Assign, Transfer Or Sell Warrants | 30 days | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Warrant [Member] | Private Placement [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | shares | 240,000 | 7,500,000 | |||||||
Common Stock, Par or Stated Value Per Share | $ 1 | $ 1 | |||||||
Stock Issued During Period, Value, New Issues | $ | $ 240,000 | $ 7,500,000 | |||||||
Term of the warrants | 5 years | ||||||||
Shares Issued, Price Per Share | $ 1 | $ 1 | |||||||
Threshold Period After Business Combination, For Not To Assign, Transfer Or Sell Warrants | 30 days | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Accounts Payable and Accrued Liabilities [Member] | |||||||||
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party | $ | $ 10,000 | $ 0 | |||||||
Mudrick Capital Acquisition Corporation [Member] | Sponsor [Member] | |||||||||
Sale of Stock, Price Per Share | $ 12 | ||||||||
Proceeds from Related Party Debt | $ | $ 300,000 | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Sponsor [Member] | Warrant [Member] | Private Placement [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | shares | 200,000 | 6,500,000 | |||||||
Mudrick Capital Acquisition Corporation [Member] | Cantor Fitzgerald Co. [Member] | Warrant [Member] | Private Placement [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | shares | 40,000 | 1,000,000 | |||||||
Term of the warrants | 5 years | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | |||||||||
Common Stock, Par or Stated Value Per Share | 0.0001 | $ 0.0001 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 11.50 | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Common Class B [Member] | |||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | |||||||
Mudrick Capital Acquisition Corporation [Member] | Common Class B [Member] | Sponsor [Member] | |||||||||
Stock Issued During Period, Shares, New Issues | shares | 5,750,000 | ||||||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | ||||||||
Stock Issued During Period, Value, New Issues | $ | $ 25,000 | ||||||||
Common Stock, Number of Shares Forfeited | shares | 550,000 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details) | Feb. 12, 2020USD ($)$ / shares | Jan. 13, 2020USD ($)$ / shares | Jan. 24, 2018USD ($)$ / sharesshares | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($)$ / item | Dec. 31, 2018USD ($) | Feb. 28, 2018$ / shares |
Stock Issued During Period, Value, New Issues | $ 0 | ||||||
Shares Issued, Price Per Share | $ / shares | $ 10.10 | ||||||
Mudrick Capital Acquisition Corporation [Member] | |||||||
Cash Underwriting Discount, Per Unit | $ / item | 0.20 | ||||||
Cash Underwriting Discount | $ 4,160,000 | ||||||
Deferred underwriting fees, Per Share | $ / item | 0.35 | ||||||
Deferred underwriting fees, Noncurrent | $ 7,280,000 | $ 7,280,000 | |||||
Mudrick Capital Acquisition Corporation [Member] | Hycroft Business Combination [Member] | |||||||
Payments to Acquire Businesses, Gross | $ 2,500,000 | ||||||
Business Acquisition, value of common stock issued | $ 2,000,000 | ||||||
Business Acquisition, Share Price | $ / shares | $ 10 | ||||||
Business Combination, Amount payable based on conditions | $ 2,780,000 | ||||||
Minimum amount for the issue of common stock | 75,000,000 | ||||||
Denominator value for the calculation of issuance of common stock | 75,000,000 | ||||||
Minimum amount based on which amount payable in cash | 75,000,000 | ||||||
Amount of cash payable on satisfying the condition | 2,780,000 | ||||||
Amount for the issue of common stock | 72,000,000 | ||||||
Amount of cash payable on non-satisfying the condition | $ 2,670,000 | ||||||
Mudrick Capital Acquisition Corporation [Member] | MUDS Acquisition Sub [Member] | Hycroft Business Combination [Member] | |||||||
Payments to Acquire Businesses, Gross | $ 325,000,000 | ||||||
Business Acquisition, Share Price | $ / shares | $ 10 | ||||||
Mudrick Capital Acquisition Corporation [Member] | Forward Purchase Contract [Member] | Sponsor [Member] | |||||||
Stock Issued During Period, Value, New Issues | $ 25,000,000 | ||||||
Stock Issued During Period, Shares, New Issues | shares | 2,500,000 | ||||||
Shares Issued, Price Per Share | $ / shares | $ 10 | ||||||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | Forward Purchase Contract [Member] | Sponsor [Member] | |||||||
Stock Issued During Period, Value, New Issues | $ 625,000 |
STOCKHOLDERS' EQUITY (Details_2
STOCKHOLDERS' EQUITY (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2020 | May 29, 2020 | Dec. 31, 2018 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 | 400,000,000 | |
Common Stock, Shares, Issued | 3,095,650 | 50,160,042 | 50,160,042 | 2,758,689 |
Common Stock, Shares, Outstanding | 2,897,568 | 50,160,042 | 50,160,042 | 2,598,035 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.0001 | ||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | ||
Preferred Stock, Shares Issued | 0 | 0 | ||
Mudrick Capital Acquisition Corporation [Member] | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | ||
Preferred Stock, Shares Issued | 0 | 0 | ||
Preferred Stock, Shares Outstanding | 0 | 0 | ||
Class of Warrant, Redemption Price | $ 0.01 | |||
Converted Basis, Number of Outstanding Shares Upon the Completion of Initial Public Offering, Percentage | 20.00% | |||
Temporary Equity, Shares Outstanding | 20,106,823 | 19,848,325 | ||
Maximum share price to redeem public warrants | $ 18 | |||
Threshold Period After Business Combination, For Not To Assign, Transfer Or Sell Warrants | 30 days | |||
Threshold notice period required for redemption | 30 days | |||
Threshold trading days within any consecutive trading period, the price of common stock equals or exceeds specified price | 20 days | |||
Consecutive trading period to determine threshold trading days, the price of common stock equals or exceeds specified price | 30 days | |||
Mudrick Capital Acquisition Corporation [Member] | Warrant [Member] | ||||
Warrant Expiry Period | 5 years | |||
Threshold Period After Business Combination, For Not To Assign, Transfer Or Sell Warrants | 30 days | |||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | ||
Common Stock, Shares, Issued | 693,177 | 951,675 | ||
Common Stock, Shares, Outstanding | 693,177 | 951,675 | ||
Temporary Equity, Shares Outstanding | 20,106,823 | 19,848,325 | ||
Mudrick Capital Acquisition Corporation [Member] | Common Class B [Member] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 | ||
Common Stock, Shares, Issued | 5,200,000 | 5,200,000 | ||
Common Stock, Shares, Outstanding | 5,200,000 | 5,200,000 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | Jun. 30, 2020 | May 29, 2020 | May 28, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax asset | |||||
Valuation allowance | $ (94,200,000) | $ (256,517,000) | $ (231,908,000) | ||
Deferred tax asset, net of allowance | $ 94,200,000 | $ 247,900,000 | $ 267,800,000 | 256,500,000 | 0 |
Mudrick Capital Acquisition Corporation [Member] | |||||
Deferred tax asset | |||||
Organizational costs/Startup expenses | 227,930 | 86,012 | |||
Total deferred tax assets | 227,930 | 86,012 | |||
Valuation allowance | (227,930) | (86,012) | |||
Deferred tax asset, net of allowance | $ 0 | $ 0 |
INCOME TAX - Income tax provisi
INCOME TAX - Income tax provision (benefit) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Federal | ||||||
Current | $ 0 | $ 145,000 | ||||
Deferred | (24,609,000) | (18,842,000) | ||||
State | ||||||
Income taxes - Note 15 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 145,000 |
Mudrick Capital Acquisition Corporation [Member] | ||||||
Federal | ||||||
Current | 899,804 | 555,449 | ||||
Deferred | (141,918) | (86,012) | ||||
State | ||||||
Current | 0 | 0 | ||||
Deferred | 0 | 0 | ||||
Change in valuation allowance | 141,918 | 86,012 | ||||
Income taxes - Note 15 | $ 899,804 | $ 555,449 |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of federal income tax rate (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statutory federal income tax rate | 21.00% | 21.00% | ||||
Income tax provision | 0.00% | 0.00% | 0.00% | 0.00% | ||
Mudrick Capital Acquisition Corporation [Member] | ||||||
Statutory federal income tax rate | 21.00% | 21.00% | ||||
State taxes, net of federal tax benefit | 0.00% | 0.00% | ||||
True-ups | 0.60% | 0.00% | ||||
Change in valuation allowance | 4.00% | 3.80% | ||||
Income tax provision | 25.60% | 24.80% |
INCOME TAX - Additional Informa
INCOME TAX - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Mudrick Capital Acquisition Corporation [Member] | ||
Change in valuation allowance | $ 141,918 | $ 86,012 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Mudrick Capital Acquisition Corporation [Member] | Recurring | Fair Value, Inputs, Level 1 [Member] | ||
Trust Account - U.S. Treasury Securities Money Market Fund | $ 215,385,757 | $ 212,916,691 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | |
Assets: | |||
Cash | $ 47,293,000 | $ 6,220,000 | |
Accounts receivable | 372,000 | 97,000 | |
Inventories - Note 4 | 9,303,000 | 4,453,000 | |
Ore on leach pads - Note 4 | 28,180,000 | 22,062,000 | |
Prepaids and other - Note 5 | 4,822,000 | 2,648,000 | |
Restricted cash - Note 6 | 0 | 3,270,000 | |
Current assets | 89,970,000 | 38,750,000 | |
Other assets, non-current - Note 5 | 20,808,000 | 5,203,000 | |
Plant, equipment, and mine development, net - Note 7 | 42,272,000 | 51,207,000 | |
Restricted cash - Note 6 | 39,631,000 | 39,477,000 | |
Total assets | 192,681,000 | 134,637,000 | |
Liabilities: | |||
Accounts payable | 19,817,000 | 10,746,000 | |
Other liabilities, current - Note 8 | 1,834,000 | 3,939,000 | |
Royalty obligation, current - Note 10 | 296,000 | ||
Interest payable | 846,000 | ||
Debt, net, current - Note 9 | 553,965,000 | ||
Current liabilities | 21,947,000 | 569,496,000 | |
Other liabilities, non-current - Note 8 | 153,000 | 18,000 | |
Debt, net, non-current - Note 9 | 139,044,000 | 0 | |
Royalty obligation, non-current - Note 10 | 29,699,000 | ||
Asset retirement obligation, non-current - Note 11 | 4,561,000 | 4,374,000 | |
Total liabilities | 195,404,000 | 573,888,000 | |
Commitments and contingencies - Note 20 | |||
Stockholders' (deficit) equity:(1) - Note 12 | |||
Common stock, $0.0001 par value; 400,000,000 shares authorized; 50,160,042 issued and outstanding at June 30, 2020; and 345,431 issued and 323,328 outstanding at December 31, 2019 | 5,000 | [1] | 3,000 |
Additional paid-in capital | 466,047,000 | 5,184,000 | |
Accumulated deficit | (468,775,000) | (444,438,000) | |
Total stockholders' (deficit) | (2,723,000) | (439,251,000) | |
Total liabilities and stockholders' equity | $ 192,681,000 | 134,637,000 | |
Restatement Adjustment | |||
Assets: | |||
Other assets, non-current - Note 5 | 24,886,000 | ||
Plant, equipment, and mine development, net - Note 7 | 31,524,000 | ||
Stockholders' (deficit) equity:(1) - Note 12 | |||
Additional paid-in capital | $ 5,187,000 | ||
[1] | Retroactively restated for the reverse recapitalization as described in Note 2 - Summary of Significant Accounting Policies . |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares | Jun. 30, 2020 | May 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | |
Common stock, shares issued (in shares) | 50,160,042 | 50,160,042 | 3,095,650 | 2,758,689 |
Common stock, shares outstanding (in shares) | 50,160,042 | 50,160,042 | 2,897,568 | 2,598,035 |
Restatement Adjustment | ||||
Common stock, shares issued (in shares) | 345,431 | |||
Common stock, shares outstanding (in shares) | 323,328 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | ||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Revenues - Note 13 | $ 7,636 | $ 18,760 | $ 0 | |
Cost of sales: | ||||
Production costs | 7,486 | 16,421 | ||
Mine site period costs - Note 4 | 11,996 | 18,630 | ||
Depreciation and amortization mine site period costs | 874 | 1,432 | ||
Depreciation and amortization | 548 | 1,324 | ||
Write-down of production inventories - Note 4 | 10,959 | 17,924 | ||
Total cost of sales | 31,863 | 55,731 | 0 | |
Operating expenses: | ||||
General and administrative | 10,432 | 12,438 | 3,161 | |
Accretion - Note 11 | 94 | 187 | 211 | |
Project and development | 6,790 | |||
Pre-production depreciation and amortization | 1,065 | |||
Care and maintenance | 3,770 | |||
Loss from operations | (34,753) | (49,596) | (14,997) | |
Other income (expense): | ||||
Interest expense, net of capitalized interest of $290, $272, $334, and $417 respectively - Note 9 | (15,072) | (34,959) | (30,039) | |
Interest income | 35 | 147 | 226 | |
Loss before reorganization items and income taxes | (49,790) | (84,408) | (44,810) | |
Reorganization items | 0 | 0 | (577) | |
Loss before income taxes | (49,790) | (84,408) | (45,387) | |
Income taxes - Note 15 | 0 | 0 | 0 | |
Net loss | $ (49,790) | $ (84,408) | $ (45,387) | |
Loss per share: | ||||
Basic - Note 16 | $ (2.71) | $ (9.02) | $ (151.80) | |
Diluted - Note 16 | $ (2.71) | $ (9.02) | $ (151.80) | |
Weighted average shares outstanding(1): | ||||
Basic - Note 16 | [1] | 18,395,983 | 9,359,655 | 299,001 |
Diluted - Note 16 | [1] | 18,395,983 | 9,359,655 | 299,001 |
[1] | Retroactively restated for the reverse recapitalization. Refer to Note 2 - Summary of Significant Accounting Policies and Note 16 - Loss Per Share for further information. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
Interest cost capitalized | $ 290 | $ 272 | $ 334 | $ 417 | $ 551 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||||||
Net loss | $ (49,790,000) | $ (21,947,000) | $ (84,408,000) | $ (45,387,000) | $ (98,895,000) | $ (55,803,000) |
Adjustments to reconcile net loss for the period to net cash used in operating activities: | ||||||
Non-cash portion of interest expense - Note 9 | 30,376,000 | 24,981,000 | 54,810,000 | 40,839,000 | ||
Write-down of production inventories - Note 4 | 10,959,000 | 17,924,000 | 18,617,000 | 0 | ||
Depreciation and amortization | 2,758,000 | 1,065,000 | 2,078,000 | 3,472,000 | ||
Stock-based compensation - Note 14 | 592,000 | 516,000 | 1,102,000 | |||
Accretion - Note 11 | 94,000 | 105,000 | 187,000 | 211,000 | 422,000 | 1,271,000 |
Phantom share compensation | 225,000 | 525,000 | 181,000 | (391,000) | ||
Amortization of royalty obligation - Note 10 | (5,300) | (5,300) | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (275,000) | (97,000) | ||||
Production-related inventories | (24,787,000) | (7,613,000) | (38,627,000) | (138,000) | ||
Materials and supplies inventories | (2,484,000) | (425,000) | (977,000) | (182,000) | ||
Prepaids and other | (3,761,000) | 535,000 | (387,000) | 947,000 | ||
Other assets, non-current | (1,005,000) | (120,000) | (120,000) | |||
Accounts payable | 7,807,000 | 1,720,000 | 3,384,000 | 271,000 | ||
Other liabilities | (103,000) | 93,000 | ||||
Interest payable | (818,000) | (236,000) | (203,000) | 548,000 | ||
Other liabilities, non-current | 135,000 | |||||
Net cash used in operating activities | (57,642,000) | (24,135,000) | (59,771,000) | (26,925,000) | ||
Cash flows used in investing activities: | ||||||
Additions to plant, equipment, and mine development | (11,704,000) | (9,725,000) | (12,296,000) | (1,146,000) | ||
Net cash used in investing activities | (11,704,000) | (9,725,000) | (12,296,000) | (1,146,000) | ||
Cash flows from financing activities: | ||||||
Proceeds from debt | 71,831,000 | 27,881,000 | ||||
Proceeds from royalty obligation - Note 3 and 10 | 30,000,000 | |||||
Proceeds from Recapitalization Transaction - Note 3 | 10,419,000 | |||||
Transaction and issuance costs - Note 19 | (15,138,000) | (1,881,000) | ||||
Net cash provided by financing activities | 107,303,000 | 35,046,000 | 68,173,000 | 27,595,000 | ||
Net increase in cash and restricted cash | 37,957,000 | 1,186,000 | (3,894,000) | (476,000) | ||
Cash and restricted cash, beginning of period | 48,967,000 | 52,861,000 | 52,861,000 | |||
Cash, end of period | 86,924,000 | 54,047,000 | 86,924,000 | 54,047,000 | 48,967,000 | 52,861,000 |
Reconciliation of cash and restricted cash: | ||||||
Cash | 47,293,000 | 12,576,000 | 47,293,000 | 12,576,000 | 6,220,000 | |
First Lien Agreement restricted cash - Note 9 | 0 | 2,547,000 | 0 | 2,547,000 | 3,270,000 | 5,030,000 |
Asset retirement obligation surety bonds (collateralized obligation) | 39,631,000 | 38,924,000 | 39,631,000 | 38,924,000 | 39,477,000 | 38,693,000 |
Total cash and restricted cash | $ 86,924,000 | $ 54,047,000 | 86,924,000 | 54,047,000 | $ 48,967,000 | $ 52,861,000 |
Sprott Credit Agreement | ||||||
Cash flows from financing activities: | ||||||
Proceeds from debt | 68,600,000 | |||||
The 1.25 Lien Notes [Member] | ||||||
Cash flows from financing activities: | ||||||
Proceeds from debt | 44,841,000 | $ 36,927,000 | ||||
First Lien Agreement [Member] | ||||||
Cash flows from financing activities: | ||||||
Repayment of debt | (125,468,000) | |||||
Promissory Note | ||||||
Cash flows from financing activities: | ||||||
Repayment of debt | (6,914,000) | |||||
Private Placement [Member] | ||||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of equity | 75,963,000 | |||||
Forward purchase agreement | ||||||
Cash flows from financing activities: | ||||||
Proceeds from issuance of equity | $ 25,000,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' (Deficit) Equity (Unaudited) - USD ($) | Restatement AdjustmentCommon stock | [1] | Restatement AdjustmentTreasury Stock | [1] | Restatement AdjustmentAdditional Paid in Capital [Member] | [1] | Conversion of 2.0 Lien Notes to Common Stock [Member]Common stock | [2] | Conversion of 2.0 Lien Notes to Common Stock [Member]Treasury Stock | Conversion of 2.0 Lien Notes to Common Stock [Member]Additional Paid in Capital [Member] | [1],[2] | Conversion of 2.0 Lien Notes to Common Stock [Member]Accumulated Deficit | Conversion of 2.0 Lien Notes to Common Stock [Member] | [2] | Conversion of 1.5 Lien Notes into Common Stock [Member]Common stock | Conversion of 1.5 Lien Notes into Common Stock [Member]Treasury Stock | Conversion of 1.5 Lien Notes into Common Stock [Member]Additional Paid in Capital [Member] | [1] | Conversion of 1.5 Lien Notes into Common Stock [Member]Accumulated Deficit | Conversion of 1.5 Lien Notes into Common Stock [Member] | Conversion of 1.25 Lien Notes into Common Stock [Member]Common stock | Conversion of 1.25 Lien Notes into Common Stock [Member]Treasury Stock | Conversion of 1.25 Lien Notes into Common Stock [Member]Additional Paid in Capital [Member] | [1] | Conversion of 1.25 Lien Notes into Common Stock [Member]Accumulated Deficit | Conversion of 1.25 Lien Notes into Common Stock [Member] | Private Placement [Member]Common stock | Private Placement [Member]Treasury Stock | Private Placement [Member]Additional Paid in Capital [Member] | [1] | Private Placement [Member]Accumulated Deficit | Private Placement [Member] | Conversion from Class B Common Stock to Common Stock [Member]Common stock | Conversion from Class B Common Stock to Common Stock [Member]Treasury Stock | Conversion from Class B Common Stock to Common Stock [Member]Additional Paid in Capital [Member] | [1] | Conversion from Class B Common Stock to Common Stock [Member]Accumulated Deficit | Conversion from Class B Common Stock to Common Stock [Member] | Common stock | Treasury Stock | Additional Paid in Capital [Member] | Accumulated Deficit | Total | |||||||||||||
Beginning Balance (in shares) at Dec. 31, 2017 | 2,668,689 | 65,572 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2017 | $ 3,000 | $ 5,184,000 | $ (289,740,000) | $ (284,553,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued (in shares) | 90,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (55,803,000) | (55,803,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2018 | 307,831 | 17,927 | 2,758,689 | 160,654 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Dec. 31, 2018 | $ 5,187,000 | $ 3,000 | 5,184,000 | (345,543,000) | (340,356,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued (in shares) | [1] | 10,105 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued | $ 0 | [1] | $ 0 | [1] | 0 | [1] | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (23,440,000) | (23,440,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Mar. 31, 2019 | [1] | 317,936 | 17,927 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Mar. 31, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (368,983,000) | (363,796,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 307,831 | 17,927 | 2,758,689 | 160,654 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2018 | 5,187,000 | $ 3,000 | 5,184,000 | (345,543,000) | (340,356,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (45,387,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2019 | [1] | 317,936 | 22,103 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Jun. 30, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (390,930,000) | (385,743,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2018 | 307,831 | 17,927 | 2,758,689 | 160,654 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2018 | 5,187,000 | $ 3,000 | 5,184,000 | (345,543,000) | (340,356,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued (in shares) | 336,961 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (98,895,000) | (98,895,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2019 | 345,431 | 22,103 | 3,095,650 | 198,082 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Dec. 31, 2019 | 5,187,000 | $ 3,000 | 5,184,000 | (444,438,000) | (439,251,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance (in shares) at Mar. 31, 2019 | [1] | 317,936 | 17,927 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Mar. 31, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (368,983,000) | (363,796,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (21,947,000) | (21,947,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Share repurchased (in shares) | [1] | 0 | 4,176 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share repurchased | $ 0 | [1] | $ 0 | [1] | 0 | [1] | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2019 | [1] | 317,936 | 22,103 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Jun. 30, 2019 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (390,930,000) | (385,743,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 345,431 | 22,103 | 3,095,650 | 198,082 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2019 | 5,187,000 | $ 3,000 | 5,184,000 | (444,438,000) | (439,251,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (34,618,000) | (34,618,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Mar. 31, 2020 | [1] | 345,431 | 22,103 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Mar. 31, 2020 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (479,056,000) | (473,869,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance (in shares) at Dec. 31, 2019 | 345,431 | 22,103 | 3,095,650 | 198,082 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Dec. 31, 2019 | $ 5,187,000 | $ 3,000 | 5,184,000 | (444,438,000) | (439,251,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (84,408,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2020 | [1] | 50,160,042 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Jun. 30, 2020 | $ 5,000 | [1] | $ 0 | [1] | 466,047,000 | [1] | (468,775,000) | (2,723,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance (in shares) at Mar. 31, 2020 | [1] | 345,431 | 22,103 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Beginning Balance at Mar. 31, 2020 | $ 0 | [1] | $ 0 | [1] | 5,187,000 | [1] | (479,056,000) | (473,869,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued (in shares) | [1] | 7,596,309 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued | $ 1,000 | [1] | $ 0 | [1] | $ 75,962,000 | $ 0 | $ 75,963,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ 0 | [1] | $ 0 | [1] | 0 | [1] | (49,790,000) | (49,790,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Seller's 2.0 Lien Notes to common shares of Seller and distribution of HYMC common stock(2) (in shares) | [1] | 14,795,153 | 16,025,316 | 0 | 4,845,920 | 0 | 4,813,180 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Seller's 2.0 Lien Notes to common shares of Seller and distribution of HYMC common stock(2) | $ 2,000 | [1] | $ 0 | [1],[2] | $ 146,217,000 | $ 220,859,000 | $ 2,000 | [1] | $ 0 | [1] | $ 160,252,000 | $ 145,685,000 | $ 0 | [1] | $ 0 | [1] | $ 48,459,000 | $ 0 | $ 48,459,000 | $ 0 | [1] | $ 0 | [1] | $ 25,000,000 | $ 0 | $ 25,000,000 | ||||||||||||||||||||||||||||||
Conversion of Seller's 2.0 Lien Notes to common shares of Seller and distribution of HYMC common stock(2) (in shares) | [1],[2] | (22,103) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Seller's 2.0 Lien Notes to common shares of Seller and distribution of HYMC common stock(2) | [2] | $ 74,640,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued, debt conversion and stock issuance | $ (14,569,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unredeemed SPAC shares of MUDS public stockholders (in shares) | [1] | 1,197,704 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Unredeemed SPAC shares of MUDS public stockholders | $ 0 | [1] | $ 0 | [1] | 3,723,000 | [1] | 0 | 3,723,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued pursuant to Sprott Credit Agreement (in shares) | [1] | 496,634 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued pursuant to Sprott Credit Agreement | $ 0 | [1] | $ 0 | [1] | 6,282,000 | [1] | 0 | 6,282,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued to underwriter (in shares) | [1] | 44,395 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued to underwriter | $ 0 | [1] | $ 0 | [1] | 444,000 | [1] | 0 | 444,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted stock(3) | [3] | 0 | [1] | 0 | [1] | 1,802,000 | [1] | 0 | 1,802,000 | |||||||||||||||||||||||||||||||||||||||||||||||
Equity issuance costs | $ 0 | [1] | $ 0 | [1] | (7,281,000) | [1] | 0 | (7,281,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance (in shares) at Jun. 30, 2020 | [1] | 50,160,042 | 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Ending Balance at Jun. 30, 2020 | $ 5,000 | [1] | $ 0 | [1] | $ 466,047,000 | [1] | $ (468,775,000) | $ (2,723,000) | ||||||||||||||||||||||||||||||||||||||||||||||||
[1] | Retroactively restated for the reverse recapitalization as described in Note 2 - Summary of Significant Accounting Policies . | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
[2] | Includes 3,511,820 shares of HYMC common stock received by Seller which were surrendered by the Company (formerly known as Mudrick Capital Acquisition Corporation). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
[3] | As of June 30, 2020 there were 148,803 unissued shares underlying restricted stock units which had vested. |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' (Deficit) Equity (Unaudited) (Parentheticals) | 3 Months Ended |
Jun. 30, 2020shares | |
Conversion of 2.0 Lien Notes to Common Stock [Member] | |
Shares surrendered (in shares) | 3,511,820 |
Unissued shares (in shares) | 148,803 |
Note 1 - Company Overview
Note 1 - Company Overview | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Company Overview | 1. Company Overview Hycroft Mining Holding Corporation (formerly known as Mudrick Capital Acquisition Corporation (āMUDSā)) and its subsidiaries (collectively, āHycroftā, the āCompanyā, āweā, āusā, āourā, āitā, āHYMCā, etc.) is a U.S.-based gold producer that is focused on operating and developing its wholly-owned Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. Gold and silver sales represent 100% of the Companyās operating revenues and the market prices of gold and silver significantly impact the Companyās 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. During the second quarter of 2019, the Company restarted open pit mining operations at the Hycroft Mine, and, during the third quarter of 2019, produced and sold gold and silver which it has continued to do on an approximate weekly basis since restarting. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. During 2020, the Company continued to increase its operations by mining more tons, procuring additional mobile equipment rentals, and increasing its total headcount. Through May 29, 2020, the Company obtained all of its financing from related party debt issuances (see Note 21 Related Party Transactions M3 Engineering and Technology Corporation (āM3 Engineeringā), in conjunction with SRK Consulting (U.S.), Inc. (āSRKā) and the Company, completed the Hycroft Technical Report Summary, Heap Leaching Feasibility Study, prepared in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants, with an effective date of July 31, 2019 (the āHycroft Technical Reportā), for a two-stage, heap oxidation and subsequent leaching of transition and sulfide ores. The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand to levels presented in the 2019 Hycroft Technical Report. Recapitalization Transaction with MUDS As discussed in Note 3 Recapitalization Transaction For more information on the consummation of the Recapitalization Transaction with MUDS, see Note 3 ā Recapitalization Transaction Recent developments 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 of America. Efforts implemented by local and national governments, as well as businesses, including temporary closures, are expected to have adverse impacts on local, national and the global economies. The Company has implemented health and safety policies for employees that follow guidelines published by the Center for Disease Control (CDC) and the Mine Safety and Health Administration (MSHA). The extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and continued spread of the outbreak, and the direct and indirect impacts on our employees, vendors and customers, all of which are uncertain and cannot be fully anticipated or predicted. Since the Companyās Hycroft Mine represents the entirety of its operations, any COVID-19 outbreak at the mine site could result in an entire shutdown of the Hycroft Mine itself which would negatively impact the Companyās financial position, operating results, and cash flows. As of the date of these financial statements, the extent to which COVID-19 may impact our financial condition. results of operations or cash flows is uncertain, but could be material and adverse. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of presentation These condensed consolidated interim financial statements have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (āGAAPā) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (āSECā). 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 financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements include all adjustments which are necessary for a fair presentation of the interim financial position, operating results and cash flows for the periods presented. Certain reclassifications have been made to the prior periods presented in these financial statements to conform to the current period presentation, which had no effect on previously reported total assets, liabilities, cash flows, or net loss. References to ā$ā refers to United States currency. Recapitalization Transaction with MUDS The Recapitalization Transaction (see Note 3 Recapitalization Transaction 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. The shares and net loss per common share prior to the Recapitalization Transaction, have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). See Note 3 ā Recapitalization Transaction Going concern The financial statements of the Company have been prepared on a āgoing concernā 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 Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. For the six months ended June 30, 2020, the Company incurred a net loss of $84.4 million and the net cash used in operating activities was $57.6 million. As of June 30, 2020, the Company had available cash on hand of $47.3 million, working capital of $68.0 million, total liabilities of $195.4 million, and an accumulated deficit of $468.8 million. Although the Company recently completed the Recapitalization Transaction with MUDS, using its internal forecasts and cash flow projection models, it currently projects there will be insufficient cash to meet its future obligations as they become due as the Company continues to ramp up the Hycroft Mineās operations from current levels or to levels which are contemplated by the 2019 Hycroft Technical Report. Consistent with our financial reporting and accounting policies, and as part of the preparation of the second quarter 2020 financial statements, the Company performed routine quarter-end metallurgical balancing analysis, which is a process that estimates the remaining recoverable gold and silver ounces on the leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, leach pad and solution sampling, estimated recovery percentages based on ore type, domain, and oxidation levels achieved, and quantities of gold and silver actually recovered. During the second quarter of 2020, based on metallurgical balancing results, the Company determined that 6,512 ounces of gold that had been placed on the leach pads were no longer recoverable and wrote-off such ounces. The write-down of these ounces significantly reduced the Companyās projected revenues for the second half of 2020. The Company has been unsuccessful in achieving its operating and production costs targets at the Hycroft Mine. During the second quarter of 2020, the Companyās production costs, mine site period costs, and the cash portion of the write-down of production inventories totaled $29.7 million, which exceeded second quarter 2020 revenues of $7.6 million by $22.1 million. Higher than planned operating and production costs were the result of: (1) increased contractor support for technical and manpower shortages in crusher operations, mobile maintenance, and leach pad operations; (2) overuse of processing reagents used in the leach pad operations due to poor planning, monitoring, and execution; (3) higher operating costs in the crusher, due to higher than planned belt failures; and (4) higher maintenance costs for the owned mining fleet, due to unexpected timing of component failures. As a result of actual second quarter 2020 operating and production costs incurred, the Company has revised its future forecasts of production and operating cost estimates for the second half of 2020 which has reduced its estimated future cash flows. The Companyās ability to continue as a going concern is contingent upon achieving its sales, production, cost, and other operating targets, as well as the success of a future financing transaction to provide additional capital financing for working capital and construction of its leach pad. The Company has begun the process of speaking with its financial advisors and stakeholders about options and timing related to securing additional financing or capital that may permit it to complete the construction of its leach pad and continue to ramp up its operations. While the Company has received a non-binding letter of support from its two largest stakeholders, the Board of Directors of the Company intends to evaluate its options to ensure the necessary capital is raised on terms favorable to and in the best interests of all of its shareholders. The Company has no commitment from any party to provide additional financing, and there can be no assurance that any funding will be available, or if available, that its terms will be favorable or acceptable to the Company. At this time, the Company does not have an expected time frame for, or an expectation with respect to, securing additional financial capital, if at all. 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, stockholdersā equity) have been prepared in accordance with GAAP on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Companyās assets or managementās assessment of the Companyās overall enterprise or equity value. Use of estimates The preparation of the Companyās financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves; estimates of life-of-mine production timing and volumes; current and future mining and processing plans; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these financial statements, and such differences could be material. Accordingly, amounts presented in these financial statements are not indicative of results that may be expected for future periods. Cash Cash has historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of June 30, 2020 and December 31, 2019, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the Company held $39.6 million and $42.7 million in restricted cash, respectively. See Note 6 ā Restricted Cash Accounts receivable Accounts receivable consists of amounts due from customers for gold and silver sales. The Company has evaluated the customersā credit risk, payment history and financial condition and determined that no allowance for doubtful accounts is necessary. The entire accounts receivable balance is expected to be collected during the next 12 months. Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages; and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventories computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Write-downs of production inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. When a write-down is required, production-related inventories are adjusted to net realizable value with adjustments recorded as Write-down of production inventories Cost of sales Note 4 ā Inventories Mine site period costs The Company evaluates its mine site costs incurred, which are normally recorded to the carrying value of production-related inventories, to determine if any such costs are a result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, or other costs or activities which significantly increase the cost per ounce of production-related inventories and are considered unusual. If costs are determined to meet the criteria and, therefore, cannot be recorded to the carrying value of production-related inventories, then the Company recognizes such costs in the period incurred as Mine site period costs Depreciation and amortization mine site period costs Cost of sales Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 are transferred at an average cost per ounce of gold to precious metals inventory. Precious metals inventory Precious metals inventory consists of dorĆ© and loaded carbon containing both gold and silver, which is ready for offsite shipment and sale to a third party. As gold ounces are sold, costs are recognized in Production costs Depreciation and amortization Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Level 2 ā Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including Cash Restricted cash, Accounts receivable, Prepaids and other Accounts payable Other liabilities, current Note 18 - Fair Value Measurements Plant, equipment, and mine development, net Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or the units-of-production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 7 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs, and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable mineral reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable mineral reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to production-related inventories to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable mineral reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable mineral reserves and estimated metal recoveries associated with those mineral reserves. Equipment not in use From time to time the Company may determine that certain of its property and equipment no longer fit into its strategic operating plans and commence activities to sell such identified assets. The Company evaluates equipment not in use for held-for-sale classification in accordance with ASC Topic 360 Property, Plant, and Equipment . Other assets, non-current Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment, and mine development. The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 7 ā Plant, Equipment, and Mine Development, Net During the three months ended June 30, 2020, the Company determined a triggering event had occurred, as it has been unsuccessful in achieving its operating and production costs targets. As a result, the Company performed a recoverability test at June 30, 2020, and no impairments were recorded. Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of June 30, 2020 and December 31, 2019, there was no recorded amounts for mineral properties as such values had been written-down to $0 in previous periods. Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion Mineral properties Royalty obligation The Companyās royalty obligation is carried at amortized cost with reductions calculated by dividing actual gold and silver production by the estimated total life-of-mine production from proven and probable mineral reserves. Any updates to proven and probable mineral reserves or the estimated life-of-mine production profile would result in prospective adjustments to the amortization calculation used to reduce the carrying value of the royalty obligation. Amortization reductions to the royalty obligation are recorded to Production costs Cost of sales Derivative instruments The Company recognizes all derivatives as either assets or liabilities and measures those instruments at fair value. Changes in the fair value of derivative instruments, together with any gains or losses on derivative settlements and transactions, are recorded in earnings to Fair value adjustments As of June 30, 2020, the Companyās only recorded derivative was for warrants (see Note 18 - Fair Value Measurements Revenue recognition The Company recognizes revenue for gold and silver sales when it satisfies the performance obligation of transferring inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon sales prices and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. The majority of sales are in the form of dorĆ© bars, but the Company also sells loaded carbon and slag, a by-product. All sales are final. Stock-based compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant. Stock-based compensation costs are charged to General and administrative Note 14 - Stock-Based Compensation Phantom shares Non-employee members of Sellerās board of directors received phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. All phantom shares issued by Seller were terminated and paid in connection with the Recapitalization Transaction. See Note 14 - Stock-Based Compensation Note 18 ā Fair Value Measurements Reorganization items On March 10, 2015, a predecessor of the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā). Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 15 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās condensed consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements ā | 2. Summary of Significant Accounting Policies Basis of presentation The Consolidated Financial Statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (āGAAPā). Certain amounts in the 2018 Consolidated Financial Statements have been reclassified to conform to the 2019 presentation. References to ā$ā refers to United States dollars. Going concern The Consolidated Financial Statements of the Company have been prepared on a āgoing concernā basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. On March 10, 2015, the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā) in an effort to recapitalize the Companyās balance sheet by reducing its debt balances while concurrently providing additional liquidity. The Company continued to operate and produce gold and silver at its Hycroft Mine during the bankruptcy process. However, on July 8, 2015, the Company announced that it had suspended mining operations to maximize cash flow and minimize spending through the remainder of the Chapter 11 process. Effective October 22, 2015 (the āEffective Dateā), the Company completed its financial restructuring process and emerged from bankruptcy. From July 2015 through December 31, 2016, the Company produced gold and silver from its leach pads, actively running its processing facilities. The operation went into a care and maintenance mode as of January 1, 2017 when the Company stopped adding lime to the leach pads and wrote-down the remaining gold and silver on the leach pads to $0 due to the inability to economically recover the metal. As a result of going into care and maintenance, gold and silver production became a byproduct of maintaining the Hycroft Mine. Beginning January 1, 2017, the Company recorded all metal sales as a reduction to Care and maintenance, net Note 12 ā Gold and Silver Sales During 2019, the Company restarted open pit mining at the Hycroft Mine, and produced and sold gold and silver. However, based on the financial results for the year ended December 31, 2019, the significant debt burden and the need for additional cash to expand the operations, the Company believes its operations cannot currently generate enough cash to make scheduled principal and interest payments required by its debt obligations and/or cover operating and general and administrative costs necessary to operate the Company. These conditions raise substantial doubt about the Companyās ability to continue as a going concern, since the Company is reliant on receiving future cash flows from financing activities to meet its obligations. While the Company has entered into a purchase agreement with MUDS, (the āMUDS transactionā) (as discussed in Note 21 ā Subsequent Events The ability to continue as a going concern is contingent upon the Companyās ability to expand mining operations to an economic level and to refinance its existing debt obligations, which the MUDS transaction is designed to support. During August 2019, M3 Engineering and Technology Corp. in association with SRK Consulting US and the Company completed a feasibility study (the ā2019 Hycroft Technical Reportā). The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. The 2019 restart of mining operations through December 31, 2019 was funded by the issuance of $72.0 million in Senior Secured Notes due June 30, 2020 (the ā1.25 Lien Notesā), discussed below. Additional short-term funding continues to be required. See Note 21 ā Subsequent Events These Consolidated Financial Statements do not include any adjustments related to the recoverability and classification of recorded assets or any other adjustments that might be necessary should the Company be unable to continue as a going concern. Use of estimates The preparation of the Companyās Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these Consolidated Financial Statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these Consolidated Financial Statements, and such differences could be material. Principles of consolidation The Consolidated Financial Statements include the accounts of HMC and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Cash Cash and cash equivalents have historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of December 31, 2019 and 2018, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the consolidated balance sheets. See Note 5 ā Restricted Cash Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages, and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventory quantities computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Losses that result from the application of the lower of cost or net realizable value accounting policy are recorded as a component of Cost of sales Note 3 ā Inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, production-related inventories would be adjusted to net realizable value and recorded as a component of Cost of sales Note 3 ā Inventories Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 or carbon in column processing method. As gold ounces are recovered using the Merrill-Crowe process, costs are transferred from in-process inventories at an average cost per ounce of gold to dorĆ© finished goods inventory. In-process inventories are valued at the average cost of the material fed into the process, plus the in-process conversion costs, including applicable depreciation and amortization relating to the process facilities incurred to that point in the process. Precious metals inventory Precious metals inventory consists of dorĆ© containing both gold and silver. While operations are actively producing gold and silver, and as the Company sells its in-process inventories, costs are recognized in Production costs Care and maintenance, net Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements Level 1 Level 2 Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including cash, prepaids and other, accounts payable, and other liabilities are carried at cost, which approximates their fair value due to the short-term nature of these instruments. Plant, equipment, and mine development Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or using the units-of- production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 6 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recoveries associated with those reserves. Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment and mine development. The Company reviews and evaluates its long-lived assets for recoverability annually and at interim periods if triggering events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 6 ā Plant, Equipment, and Mine Development, Net Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of December 31, 2019 and 2018, there was no value assigned to mineral properties as the value had been written-down to $0 in previous periods. Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion expense Mineral properties, net Derivative instruments The fair value of the Companyās derivative instruments is reflected as liabilities on the consolidated balance sheets. The Company does not hold derivative instruments for trading purposes. Derivative Instruments Not Designated as Hedges Previous equity stockholders of the Company received warrants with a seven-year term that represent 17.5% of the outstanding new common shares. These warrants were accounted for as a derivative instrument and included in Other liabilities, non-current Other, net See Note 11 ā Stockholdersā Equity Note 16 ā Fair Value Measurements Treasury Stock The Company records repurchases of common shares as Treasury stock at cost. Revenue recognition When actively operating, the Company recognizes revenue on gold and silver sales. During the year ended December 31, 2019, the Company began actively operating the Hycroft Mine and, as such, recorded gold and silver sales as Revenue Care and maintenance, net Care and maintenance, net The Company recognizes revenue for gold and silver production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon market price and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. All sales are final. Stock-Based Compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant and charged to expense over the requisite service period. The fair value of awards is determined using the stock price on either the date of grant (if subject only to service conditions) or the date that the Compensation Committee of the Board of Directors establishes applicable performance targets (if subject to performance conditions). The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date. See Note 13 ā Stock-Based Compensation Phantom shares Non-employee members of the Companyās board of directors receive phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment is equal to the fair market value of one share of common stock of the Company at the date of payment. Under the grant agreements, each phantom share vests on the date of grant and entitles the participant to a cash payment. For grants issued during 2019 and 2018, the cash payment is equal to the greater of the (1) grant date value and (2) the fair market value of one share of common stock of the Company at the date of payment. The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process. During the twelve months ended December 31, 2019, the Company recorded a $0.2 million increase in the value of phantom shares granted in 2015 and 2016, which is included in General and administrative General and administrative General and administrative Note 16 ā Fair Value Measurements Reorganization items, net Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items, net Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 14 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (āFASBā) issued Accounting Standards Update (āASUā) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 on January 1, 2019 using a modified retrospective approach. As there were no unfulfilled contracts outstanding as of December 31, 2018, there was no cumulative effect adjustment required to be recognized at January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements eliminated, while others were modified and there were some additions. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2018-13 in 2020, but will not have a material effect on the financial statement disclosures. |
Note 3 - Recapitalization Trans
Note 3 - Recapitalization Transaction | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Recapitalization Transaction | 3. Recapitalization Transaction Recapitalization Transaction On May 29, 2020, the Company, formerly known as Mudrick Capital Acquisition Corporation (āMUDSā) and now known and referred to herein as HYMC, consummated a business combination transaction (the āRecapitalization Transactionā) as contemplated by a purchase agreement dated January 13, 2020, as amended on February 26, 2020 (the āPurchase Agreementā), by and among the Company, MUDS Acquisition Sub, Inc. (āAcquisition Subā) and Hycroft Mining Corporation (āSellerā). 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 conjunction with the Recapitalization Transaction, Sellerās indebtedness existing prior to the Recapitalization Transaction was either repaid, exchanged for indebtedness of HYMC, exchanged for shares of HYMC common stock or converted into shares of Seller common stock, and the Companyās post-Recapitalization Transaction indebtedness included amounts drawn under the Sprott Credit Agreement and the assumption of the newly issued Subordinated Notes (as such are defined herein). Upon closing of the Recapitalization Transaction, the Companyās unrestricted cash available for use totaled $68.9 million, the number of shares of HYMC common stock issued and outstanding totaled 50,160,042. In addition, the Company had 34,289,999 outstanding warrants to purchase an equal number of shares of HYMC common stock at $11.50 per share and 12,721,623 warrants to purchase 3,210,213 shares of HYMC common stock at a price of $44.82 per share. Prior to the Recapitalization Transaction, MUDS was a blank check special purpose acquisition corporation (āSPACā) with no business operations and prior to the Recapitalization Transaction on May 29, 2020 had assets and liabilities consisting primarily of $10.4 million of cash and $8.9 million of liabilities for accounts payable, accrued expenses, and deferred underwriting fees. As described in Note 2 - Summary of Significant Accounting Policies The material financial effects and actions arising from the Recapitalization Transaction, which are described in detail elsewhere in these financial statements, were as follows (the defined terms that follow are included elsewhere in these financial statements): Common stock and warrant transactions a. The Company issued, in a private placement transaction, an aggregate of 7.6 million shares of HYMC common stock and 3.25 million warrants to purchase shares of HYMC common stock at a price of $10.00 per share for aggregate gross cash proceeds of $76.0 million. b. Pursuant to a forward purchase contract, the Company issued 3.125 million shares of HYMC common stock and 2.5 million warrants to purchase shares of HYMC common stock having substantially the same terms as the private placement warrants for gross cash proceeds of $25.0 million. The Company also converted 5.2 million shares of MUDS Class B common stock into the same number of shares of HYMC common stock, of which 3.5 million shares were surrendered to Seller as transaction consideration. c. The Company received $10.4 million of cash proceeds from the SPAC trust associated with the 1.2 million shares of MUDS Class A common stock which were not redeemed by MUDS public stockholders. Additionally, the Company has 28.5 million warrants to purchase shares of HYMC common stock at a price of $11.50 per share which were issued to MUDS public stockholders at the time of the SPACās initial public offering (see Note 12 ā Stockholdersā Equity) . d. The Company assumed the obligations with respect to 12.7 million Seller Warrants (as defined herein), which Seller Warrants became exercisable to purchase shares of HYMC common stock at an exercise price as of July 1, 2020, of $44.82 per share (see Note 12 ā Stockholdersā Equity) . As of July 1, 2020, each Seller Warrant was exercisable into approximately 0.2523 shares of HYMC common stock for a total of 3,210,213 shares of HYMC Common Stock. Sellerās pre-Recapitalization Transaction indebtedness a. Sellerās $125.5 million First Lien Agreement with the Bank of Nova Scotia, as agent, and $6.9 million Promissory Note plus accrued and unpaid interest were repaid with cash (see Note 9 - Debt, Net ). b. $48.5 million of Sellerās 1.25 Lien Notes were exchanged, and subsequently cancelled, for 4.85 million shares of HYMC common stock and the remaining $80.0 million of Sellerās 1.25 Lien Notes were exchanged for $80.0 million in aggregate principal of new Subordinated Notes of the Company (see Note 9 - Debt, Net ). c. After giving effect to the 1.5 Lien Notesā 110% repurchase feature, $145.7 million of Sellerās 1.5 Lien Notes plus accrued and unpaid interest were exchanged, and subsequently cancelled, for 16.0 million shares of HYMC common stock (see Note 9 - Debt, Net ). d. Prior to close, a total of $221.3 million of Sellerās 2.0 Lien Notes were converted into 132.8 million shares of Seller common stock and, together with the existing 2.9 million shares of Sellerās common stock issued and outstanding, received transaction consideration of 15.1 million shares of HYMC common stock distributed by Seller, including 3.5 million surrendered shares received by Seller from MUDS (see Note 9 - Debt, Net ). The consideration initially received by Seller was promptly distributed to the its stockholders on a pro rata basis pursuant to Hycroft Mining Corporationās plan of dissolution. Sprott entity transactions a. The Company assumed the amended Sprott Credit Agreement and was advanced $70.0 million of cash, subject to an original issue discount of 2.0% (see Note 9 - Debt, Net ). Pursuant to the Sprott Credit Agreement, the Company issued 0.5 million shares of HYMC common stock to the Lender, which was equal to 1.0% of the Companyās post-closing shares of HYMC common stock issued and outstanding. b. The Company entered into the Sprott Royalty Agreement, pursuant to which the Company received $30.0 million of cash proceeds and incurred a 1.5% net smelter royalty payment obligation, payable monthly, relating to the Hycroft Mineās monthly production (see Note 10 ā Royalty Obligation ). Other items a. Seller retained a reserve of $2.3 million in cash for use in the dissolution of Hycroft Mining Corporation. b. A $2.5 million cash payment was made and 0.04 million shares of HYMC common stock were issued to the Companyās underwriter, Cantor Fitzgerald & Co. (āCantorā), pursuant to an underwriting agreement. Additionally, a $2.0 million payment was made to Cantor at closing in connection with shares of HYMC common stock held by Cantor which were not redeemed from the SPAC trust balance prior to closing. c. The Company remitted $1.8 million of cash to holders of Sellerās deferred phantom units (see Note 18 ā Fair Value Measurements) and paid $7.4 million of cash for additional transaction costs. Upon closing of the Recapitalization Transaction and after giving effect to the terms of the business combination, the former holders of Sellerās indebtedness and common stock, including affiliated entities of such former holders, owned approximately 96.5% of the issued and outstanding HYMC common stock. The following table summarizes the ownership of the Companyās common stock issued and outstanding upon closing of the Recapitalization Transaction: ā ā ā ā ā ā ā ā Shares Ownership % ā Former Seller stockholders and affiliated entities 48,421,309 96.5 % Former MUDS public stockholders(1) 1,197,704 2.4 % Lender to Sprott Credit Agreement 496,634 1.0 % Cantor Fitzgerald & Co. 44,395 0.1 % Total shares issued and outstanding 50,160,042 100.0 % (1) Includes 200,000 shares held by Cantor . |
Note 4 - Inventories
Note 4 - Inventories | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Inventories | 4. Inventories The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 5,043 ā ā $ 2,559 ā Merrill-Crowe in process ā 410 226 ā 1,004 691 Carbon column in-process ā 2,209 1,397 ā 478 474 DorĆ© finished goods ā 1,641 885 ā 412 278 Total ā $ 9,303 2,508 ā $ 4,453 1,443 ā As of June 30, 2020 and December 31, 2019, in-process Inventories The following table summarizes Ore on leach pads ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Ore on leach pads ā $ 28,180 17,825 ā $ 22,062 17,019 ā As of June 30, 2020 and December 31, 2019 (including write-downs discussed below), Ore on leach pads 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). During the three and six months ended June 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 wrote-off these ounces. As a result, the Company recognized a Write-down of production inventories Mine site period costs During the three and six months ended June 30, 2020, the Company incurred $12.9 million and $20.1 million, respectively, of Mine site period costs | 3. Inventories The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 2,559 ā ā $ 1,582 ā Merrill-Crowe in process ā 1,004 691 ā ā ā Carbon column in-process ā 478 474 ā 478 482 DorĆ© finished goods ā 412 278 ā ā ā Total ā $ 4,453 1,443 ā $ 2,060 482 ā As of December 31, 2019 and 2018, in-process Inventories The following table summarizes ore on leach pads and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Ore on leach pads ā $ 22,062 17,019 ā $ ā ā ā As of December 31, 2019 (including the both write-downs discussed below) and 2018, Ore on leach pads Write-down of production inventories As discussed in Note 2 ā Summary of Significant Accounting Policies Write-down of production inventories In addition to the write-down related to metallurgical balancing during 2019, the Company performed its lower of cost or net realizable value test for the Ore on leach pads Write-down of production inventories |
Note 5 - Prepaids and Other
Note 5 - Prepaids and Other | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Prepaids and Other | 5. Prepaids and Other The following table provides the components of prepaids and other (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Prepaids and other ā ā Prepaids ā $ 4,283 ā $ 2,109 Deposits ā 539 ā 539 Total ā $ 4,822 ā $ 2,648 ā ā ā ā ā ā ā Other assets, non-current ā ā Equipment not in use ā $ 19,683 ā $ 19,683 Prepaid supplies inventory ā 885 ā ā Royalty - advance payment ā 240 ā 120 Deferred future financing costs ā ā ā 5,083 Total ā $ 20,808 ā $ 24,886 ā As of June 30, 2020 and December 31, 2019, equipment not in use in Other assets, non-current Other assets, non-current The Company has an inventory consignment agreement with a supplier of crusher parts, requiring 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 agreement, 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, non-current Inventories. | 4. Prepaids and Other Assets The following table provides the components of prepaids and other assets (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Prepaids and other ā ā Prepaids ā $ 2,109 ā $ 1,722 Deposits ā 539 ā 539 Total ā $ 2,648 ā $ 2,261 ā ā ā ā ā ā ā Other assets, non-current ā ā Deferred future financing costs ā 5,083 ā 1,158 Royalty ā advance payment ā 120 ā ā Total ā $ 5,203 ā $ 1,158 ā |
Note 6 - Restricted Cash
Note 6 - Restricted Cash | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Restricted Cash | 6. Restricted Cash The following table provides the components of restricted cash (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Asset retirement obligation surety bonds (collateralized obligation) ā $ 39,631 ā 39,477 First Lien Agreement restricted cash - Note 9 ā ā ā 3,270 Total ā $ 39,631 ā $ 42,747 ā As of June 30, 2020, the Companyās asset retirement obligation was secured with surety bonds totaling $59.9 million, which were partially collateralized by the restricted cash shown above. Restricted cash from the Companyās First Lien Agreement was released on May 29, 2020 when such indebtedness was repaid in conjunction with the Recapitalization Transaction (see Note 3 - Recapitalization Transaction | 5. Restricted Cash The following table provides the components of restricted cash (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 First Lien agreement restricted cash ā Note 9 ā 3,270 ā 5,030 Asset retirement obligation surety bonds (collateralized obligation) ā 39,477 ā 38,693 Total ā $ 42,747 ā $ 43,723 ā |
Note 7 - Plant, Equipment, and
Note 7 - Plant, Equipment, and Mine Development, Net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Property, Plant and Equipment Disclosure [Text Block] | 7. Plant, Equipment, and Mine Development, Net The following table provides the components of plant, equipment, and mine development, net (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā June 30, ā December 31, ā of Method 2020 2019 Process equipment 5 ā $ 15,809 ā $ 14,770 Leach pads Units-of-production ā 17,431 ā 17,419 Buildings and leasehold improvements 10 years ā 10,507 ā 10,507 Mine equipment 5 ā 4,898 ā 4,716 Vehicles 3 ā 730 ā 136 Furniture and office equipment 7 years ā 290 ā 129 Mine development Units-of-production ā 408 ā 119 Construction in progress and other ā ā ā 13,736 ā 936 ā ā ā ā $ 63,809 ā $ 48,732 Less: accumulated depreciation and amortization ā ā ā (21,537) ā (17,208) Total ā ā ā $ 42,272 ā $ 31,524 ā During the six months ended June 30, 2020, new processing equipment was placed into service, construction of the restart leach pads was completed, and construction of a new larger leach pad began, which comprised substantially all of the construction in progress as of June 30, 2020. | 6. Plant, Equipment, and Mine Development, Net The following table provides the components of plant, equipment, and mine development, net (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā December 31, ā of Method 2019 2018 Process equipment ā 5 ā 13 years ā $ 14,770 ā $ 6,759 Leach pads ā Units-of-production ā 11,190 ā 11,190 Buildings and leasehold improvements ā 10 years ā 10,507 ā 10,507 Restart leach pads ā 18 months ā 6,229 ā ā Mine equipment ā 5 ā 4,716 ā 3,905 Vehicles ā 3 ā 136 ā 41 Furniture and office equipment ā 7 years ā 129 ā 22 Mine development ā Units-of-production ā 119 ā ā Construction in progress and other ā ā ā 20,619 ā 20,750 ā ā ā ā ā $ 68,415 ā $ 53,174 Less: accumulated depreciation and amortization ā ā ā ā (17,208) ā (11,770) Total ā ā ā ā $ 51,207 ā $ 41,404 ā During the year ended December 31, 2019, leach pads were constructed and used for the restart of mining operations. New processing equipment was also placed into service. For the years ended December 31, 2019 and 2018, the Company recorded depreciation and amortization related to plant, equipment and mine development of $5.4 million and $3.4 million, respectively. The Company capitalized $4.3 million of depreciation and amortization during 2019 to Ore on leach pads Impairment of long-lived assets During the years ended December 31, 2019, the Company recorded impairments of long-lived assets of $0.1 million. The impairment recorded during 2019 related to a leach pad expansion project that the Company determined it would not utilize and, therefore, did not complete. |
Note 8 - Other Liabilities
Note 8 - Other Liabilities | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Other Liabilities Disclosure [Text Block] | 8. Other Liabilities The following table summarizes the components of other liabilities, current and non-current (in thousands): ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Other liabilities, current ā ā ā ā ā ā Other accrued compensation ā $ 1,784 ā $ 1,139 Restricted stock units - Note 14 ā 50 ā 1,210 Accrued compensation for phantom shares - Note 18 ā ā ā 1,590 Total ā $ 1,834 ā $ 3,939 ā ā ā ā ā ā ā Other liabilities, non-current ā ā ā ā ā ā Seller Warrant liability - Notes 12 and 18 ā $ 18 ā $ 18 Payroll Tax Liability ā 135 ā ā Total ā $ 153 ā $ 18 ā | 8. Other Liabilities The following table summarizes the components of other liabilities, current and non-current (in thousands): ā ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Other liabilities, current ā ā Accrued compensation for phantom shares ā Note 16 ā $ 1,590 ā $ 884 Restricted stock units ā Note 13 ā 1,210 ā ā Other accrued compensation ā 1,139 ā 892 Other ā ā ā 14 Total ā $ 3,939 ā $ 1,790 ā ā ā ā ā ā ā Other liabilities, non-current ā ā Warrant liability ā Notes 11 and 16 ā $ 18 ā $ 18 ā |
Note 9 - Debt, Net
Note 9 - Debt, Net | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Debt Disclosure [Text Block] | 9. Debt, Net Debt covenants The Companyās 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 defined herein) 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. The Sprott Credit Agreement requires the Company to ensure that, at all times, both its Working Capital and Unrestricted Cash is at least $10.0 million, and that at least every six months from May 29, 2020 (or earlier as required per the terms of the Sprott Credit Agreement) it demonstrates its ability to repay and meet all present and future obligations as they become due with a financial Model that uses consensus gold and silver 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 June 30, 2020, the Company was in compliance with all covenants. Debt balances The following table summarizes the components of debt (in thousands): ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Debt, net, current: ā ā ā ā ā ā 2.0 Lien Notes ā $ ā ā $ 208,411 1.5 Lien Notes ā ā ā 137,050 First Lien Agreement ā ā ā 125,468 1.25 Lien Notes ā ā ā 77,212 Promissory Note ā ā ā 6,773 Less, debt issuance costs ā ā ā (949) ā ā $ ā ā $ 553,965 Debt, net, non-current: ā ā ā ā ā ā Subordinated Notes ā $ 80,711 ā $ ā Sprott Credit Agreement ā 63,114 ā ā Less, debt issuance costs ā (4,781) ā ā ā ā $ 139,044 ā $ ā ā As it relates to the $62.3 million initially recorded for the Sprott Credit Agreement on the May 29, 2020 closing of the Recapitalization Transaction, the Company recorded $70.0 million for the stated amount of the borrowing itself, $9.3 million for the additional interest payment obligation, and a $17.0 million discount (inclusive of the $1.4 million original issuance discount) which will be amortized to Interest expense, net Additional paid-in capital Sprott Credit Agreement On October 4, 2019, the Company, as borrower, certain subsidiaries of the Company, as guarantors, and Sprott Private Resource Lending II (Collector), LP. (āLenderā), as arranger, executed a secured multi-advance term credit facility pursuant to which Lender committed to make, subject to certain conditions set forth therein, term loans in an aggregate principal amount up to $110.0 million. On May 29, 2020, the Company entered into the Amended and Restated Credit Agreement (the āSprott Credit Agreementā) to update the conditions precedent and effect certain other changes to conform to the details of the business combination. On May 29, 2020, at the consummation of the business combination, the Company borrowed $70.0 million under the Sprott Credit Agreement, which was equal to the amount available under the first and second tranches, and issued to Lender 496,634 shares of HYMC common stock, which was equal to 1.0% of the Companyās post-closing shares of common stock outstanding. The Company paid an original issuance discount equal to 2.0% ($1.4 million) of the amount borrowed. The Company does not believe it is currently able to borrow under the third and final $40.0 million tranche of the Sprott Credit Agreement due to its inability to satisfy applicable conditions and production milestones required by certain conditions precedent to borrowing. Advances under the Sprott Credit Agreement bear interest monthly at a floating rate equal to 7.0% plus the greater of (i) US Dollar three-month LIBOR and (ii) 1.5%, per annum, accruing daily and compounded monthly. For a period of twelve (12) months following the May 29, 2020 initial advance date, no cash payments of interest or principal will be due, with 100% of interest accruing and being capitalized on a monthly basis to the outstanding principal balance of the Sprott Credit Agreement. Additionally, for each three-month period commencing on February 28, 2021 and ending on the maturity date, the Company shall pay Lender additional interest on the last business day of such three-month period, calculated according to a formula set forth in the Sprott Credit Agreement and currently equal to $0.5 million per quarter ($9.3 million in total over the life of the Sprott Credit Agreement). Upon the prepayment of the entire Sprott Credit Agreement, all remaining additional interest payments and all remaining and yet unpaid additional interest must be prepaid as well. The Company is required to make principal repayments beginning on August 31, 2021 and on the last business day of each calendar quarter thereafter. The first four (4) principal repayments are equal to two and one-half percent (2.5%) of the outstanding principal amount of the Sprott Credit Agreement on May 31, 2021 (including all capitalized interest thereon, if any, but excluding the principal repayment then due). All subsequent principal repayments are equal to seven and one-half (7.5%) of the outstanding principal amount of the Sprott Credit Agreement on May 31, 2021 (including all capitalized interest thereon, if any, but excluding the principal repayment then due). The entire outstanding balance of the Sprott Credit Agreement, together with all unpaid interest and fees (including all capitalized interest, if any), is due on the day that is five years from the last day of the month of the initial closing date, which shall be no later than May 31, 2025, the maturity date. The Company reviewed the features of the Sprott Credit Agreement for embedded derivatives, and determined no such instruments exist. The Sprott Credit Agreement may be repaid in whole or in part, at any time prior to the maturity date. Each prepayment or cancellation of the Sprott Credit Agreement (including capitalized interest, if any), whether in whole or in part, voluntarily or mandatory, subject to certain exceptions, that occurs on or prior to the fourth anniversary of the date of the initial advance is subject to a prepayment premium between 3.0% and 5.0%. The obligations of the Company under the Sprott Credit Agreement are guaranteed by Credit Parties and secured by a lien on all properties and assets now owned, leased or hereafter acquired or leased by any Credit Party, as such terms are defined and further detailed in the Sprott Credit Agreement. Subordinated Notes In connection with the business combination and pursuant to a 1.25 Lien Exchange Agreement, on May 29, 2020, the Company assumed $80.0 million in aggregate principal amount of Sellerās 1.25 Lien Notes that were exchanged as part of the Recapitalization Transaction (the Subordinated Notesā). The Subordinated Notes are secured and subordinate in priority to the obligations under the Sprott Credit Agreement. The Subordinated Notes bear interest at a rate of 10.0% per annum, payable in kind on a quarterly basis. The principal on the New Subordinated Notes is due December 1, 2025. 2.0 Lien Notes As discussed in Note 3 - Recapitalization Transaction 1.5 Lien Notes As discussed in Note 3 - Recapitalization Transaction 1.25 Lien Notes As discussed in Note 3 - Recapitalization Transaction First Lien Agreement As discussed in Note 3 - Recapitalization Transaction Note 6 - Restricted Cash Promissory Note As discussed in Note 3 - Recapitalization Transaction Interest expense, net The following table summarizes the components of recorded interest expense (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 2.0 Lien Notes ā $ 5,085 ā $ 6,997 ā $ 12,901 ā $ 13,743 1.5 Lien Notes ā 3,496 ā 4,601 ā 8,635 ā 9,034 1.25 Lien Notes ā 2,866 ā 852 ā 6,218 ā 1,130 First Lien Agreement ā 1,708 ā 2,547 ā 4,575 ā 5,058 Sprott Credit Agreement ā 796 ā ā ā 796 ā ā Subordinated Notes ā 711 ā ā ā 711 ā ā Amortization of debt issuance costs ā 635 ā 503 ā 1,307 ā 1,002 Promissory Note ā 57 ā 413 ā 142 ā 489 Capitalized interest ā (290) ā (272) ā (334) ā (417) Other interest expense ā 8 ā ā ā 8 ā ā ā ā $ 15,072 ā $ 15,641 ā $ 34,959 ā $ 30,039 ā The Company capitalizes interest to Plant, equipment, and mine development, net Interest | 9. Debt Debt covenants The Companyās debt agreements contain representations and warranties, events of default, and covenants that are customary for agreements of these types. The Companyās First Lien Term Loan Credit Agreement (the āFirst Lien Agreementā) contains financial covenants that, among other things, restrict or limit the ability of the Company to enter into liens, dispose of its assets, enter into hedging arrangements, pay dividends, purchase or redeem shares, incur or guarantee additional indebtedness, and make capital expenditures. The Second Lien Convertible Notes (the āConvertible Notesā), the Senior Secured Notes due June 30, 2020 (the ā1.5 Lien Notesā) and the 1.25 Lien Notes contain provisions that, among other things, restrict or limit the ability of the Company to incur or guarantee additional debt, pay dividends, enter into liens, or dispose of its assets. The Companyās First Lien Agreement, the Convertible Notes, the 1.5 Lien Notes and the 1.25 Lien Notes 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 December 31, 2019, we believe we were in compliance with all covenants related to the debt obligations. Debt balances The following table summarizes the components of debt (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Debt, current: ā ā Convertible Notes ā $ 208,411 ā $ ā 1.5 Lien Notes ā 137,050 ā ā First Lien Agreement ā 125,468 ā 125,468 1.25 Lien Notes ā 77,212 ā ā Other Note payable ā 6,773 ā 5,989 Less debt issuance costs ā (949) ā (71) Total ā $ 553,965 ā $ 131,386 ā ā ā ā ā ā ā Debt, non-current: ā ā Convertible Notes ā $ ā ā $ 179,874 1.5 Lien Notes ā ā ā 118,270 Less debt issuance costs ā ā ā (1,943) Total ā $ ā ā $ 296,201 ā Debt issued at the Effective Date First lien term loan agreement The Company entered into the First Lien Agreement on the Effective Date for an aggregate principal amount of $126.7 million. The First Lien Agreement originally matured March 31, 2017 and now matures on May 31, 2020. For the period from December 13, 2019 through January 31, 2020 the First Lien Agreement bore interest at either LIBOR plus 7.0% or an Alternate Base Rate Canada, as defined in the First Lien Agreement, plus 7.0% and thereafter increased to either LIBOR plus 7.5% or an Alternate Base Rate Canada plus 7.5%. Prior to December 13, 2019, the First Lien Agreement bore interest at either LIBOR plus 5.5% or an Alternate Base Rate Canada plus 4.5%. Fifty percent of the monthly Excess Cash Flow, as defined in the First Lien Agreement and subject to minimum cash balance restrictions, is required to be paid to reduce the outstanding amount under the First Lien Agreement. The maximum outstanding amount under the First Lien Agreement was initially determined by a Borrowing Base (as defined in the First Lien Agreement) that is based upon 80% of the net realizable value of the gold and silver in the Companyās ore on leach pads, in- process and finished goods inventories less estimated selling and processing costs. The repayment of the First Lien Agreement and other obligations under the First Lien Agreement are guaranteed by all of the direct and indirect domestic subsidiaries of the Company. The First Lien Agreement, the guarantees by the guarantors in respect thereof and all obligations under the First Lien Agreement, and such guarantees are secured by liens on substantially all of the assets of the Company and its subsidiaries. After a series of short-term maturity extensions through July 14, 2017, the Company amended the First Lien Agreement to provide for a maturity of January 31, 2019. After several short-term maturity extensions through February 22, 2019, the First Lien Agreement maturity was extended to December 13, 2019 (the āFebruary 2019 Extensionā). The extended amendment requires that the Company will maintain at all times a cash balance of $5.0 million, including a balance in a segregated account sufficient to pay projected First Lien Agreement interest payments for the succeeding three months. In conjunction with the close of the February 2019 Extension, the Company issued $18.0 million of 1.25 Lien Notes (discussed below). Pursuant to the February 2019 Extension, the Company obtained commitments from the holders of the 1.5 Lien Notes to purchase an additional $9.0 million of 1.25 Lien Notes during 2019, which was fulfilled in May 2019. Additionally, pursuant to the February 2019 Extension, the maximum outstanding amount under the First Lien Agreement is no longer determined by the Borrowing Base, however, the Company is to maintain at all times at least 175,000 recoverable gold equivalent ounces on the leach pads. The Company has agreed to certain operational and reporting milestones during the remaining life of the First Lien Agreement. Also, the Company agreed that it will ensure that the holders of the 1.5 Lien Notes or other parties acceptable to the Administrative Agent (as defined in the First Lien Agreement) will reduce the Bank of Nova Scotiaās holdings under the First Lien Agreement by $5.0 million within two The Company completed two additional maturity amendments in December 2019 and January 2020. As stated above, the First Lien Agreement now matures May 31, 2020. In connection with these two amendments, the Company has agreed to certain operational and reporting milestones during the remaining life of the First Lien Agreement. Second lien convertible notes The Company issued $95.0 million of Convertible Notes on the Effective Date pursuant to the Indenture. Of the initial $95.0 million in Convertible Notes issued, $90.0 million was received by the Company in cash. The remaining $5.0 million in Convertible Notes were issued in satisfaction of a backstop put option payment. Certain lenders provided a backstop to the commitments in respect of the Convertible Notes to the extent there was a shortfall (in such capacity, collectively, the āBackstop Note Lendersā) in exchange for a backstop put option payment. Each of the Backstop Note Lenders received a portion of the backstop put option payment of $5.0 million. Since the initial issuance of the $95.0 million in Convertible Notes, the Company issued, pursuant to the Indenture, an additional $20.0 million in aggregate principal amount of Convertible Notes upon substantially the same terms and conditions as those issued on October 22, 2015. In August 2018, the Company paid $0.1 million to retire $3.4 million of Convertible Notes resulting in a gain of $3.3 million. The Convertible Notes mature on October 22, 2020 and bear interest at a rate of 15% per annum, payable in-kind on a quarterly basis. The issuance of an additional $96.8 million in Convertible Notes has been made through December 2019, representing interest payments on the outstanding Convertible Notes, including $0.3 million that was prepaid upon issuance of additional notes. The Convertible Notes are convertible at an initial conversion price of $1.67 per share, subject to anti- dilution protection. There was no beneficial conversion feature as it was determined that the conversion price was equal to the commitment date value of the common stock. The obligations under the Convertible Notes and the guarantees by the guarantors in respect thereof are secured by liens on substantially all assets of the Company and the guarantors, subject to the priority of the liens that secure the obligations under the First Lien Agreement, the 1.25 Lien Notes and the 1.5 Lien Notes. In connection with the issuance of the Convertible Notes, an Intercreditor Agreement was entered into by and among the agent under the First Lien Agreement and the trustee under the Indenture. Additional debt issued 1.5 Lien Notes In May, 2016, the Company issued $10.0 million of the 1.5 Lien Notes, pursuant to a Note Purchase Agreement (the āNote Purchase Agreementā). The 1.5 Lien Notes bear interest at a rate of 15% per annum, which is payable in-kind on a quarterly basis, and mature June 30, 2020. The obligations under the 1.5 Lien Notes and the guarantees by the guarantors in respect thereof are secured by liens on substantially all assets of the Company and the guarantors, subject to the priority of the liens that secure the obligations of the First Lien Agreement and the 1.25 Lien Notes but superior in priority to the liens that secure the obligations of the Convertible Notes and the unsecured obligations of the Company. In connection with the issuance of the 1.5 Lien Notes, an Intercreditor Agreement was entered into by and among the agent under the First Lien Agreement and the collateral agent under the Note Purchase Agreement. Additionally, an Intercreditor Agreement was entered into by and among the collateral agent under the Note Purchase Agreement and the trustee under the Indenture. The following table summarizes the issuance of 1.5 Lien Notes bifurcated by Note issuances and interest in-kind during the years ended December 31, 2019, 2018, 2017 and 2016 (in thousands): ā ā ā ā ā ā ā ā ā ā Transaction Period Note Issuances Interest In-Kind Total Year ended December 31, 2016 ā $ 26,200 ā $ 1,535 ā $ 27,735 Year ended December 31, 2017 ā 41,000 ā 7,512 ā 48,512 Year ended December 31, 2018 ā 28,000 ā 14,023 ā 42,023 Year ended December 31, 2019 ā ā ā 18,780 ā 18,780 Total ā $ 95,200 ā $ 41,850 ā $ 137,050 ā While each 1.5 Lien Notes issuance is pursuant to a new Note purchase agreement, all the 1.5 Lien Notes have the same terms and security priority as the original issuance in May 2016. The 1.5 Lien Notes provide the holders the right upon a change of control, as defined in the Note Purchase Agreement, to require the Company to repurchase all of the holderās notes for 110% of the outstanding principal balance, plus accrued and unpaid interest. Furthermore, the 1.5 Lien Notes give the Company the right upon a change of control, as defined in the Note Purchase Agreement, to redeem the notes for 110% of the outstanding principal balance, plus accrued and unpaid interest. 1.25 Lien Notes On February 22, 2019, the Company issued $18.0 million of the 1.25 Lien Notes, pursuant to a Note Purchase Agreement (the ā1.25 Note Purchase Agreementā). The 1.25 Lien Notes bear interest at a rate of 15% per annum, which is payable in-kind on a quarterly basis, and mature June 30, 2020. The obligations under the 1.25 Lien Notes and the guarantees by the guarantors in respect thereof are secured by liens on substantially all assets of the Company and the guarantors, subject to the priority of the liens that secure the obligations of the First Lien Agreement but superior in priority to the liens that secure the obligations of the 1.5 Lien Notes, the Convertible Notes and the unsecured obligations of the Company. In connection with the issuance of the 1.25 Lien Notes, an Intercreditor Agreement was entered into by and among the agent under the First Lien Agreement and the collateral agent under the 1.25 Note Purchase Agreement, and an Intercreditor Agreement was entered into by and among the collateral agent under the Note Purchase Agreement and the collateral agent under the 1.25 Note Purchase Agreement. Additionally, an Intercreditor Agreement was entered into by and among the collateral agent under the 1.25 Note Purchase Agreement and the trustee under the Indenture. Additional 1.25 Lien Notes were issued in 2019 pursuant to new Note purchase agreements. All of the 1.25 Lien Notes have the same terms and security priority as the original issuance in February 2019. A total of $77.2 million of 1.25 Lien Notes were issued during 2019, including $5.2 million of interest in-kind notes. Other notes payable On October 15, 2014, the Company entered into a Release and Settlement Agreement (the āSettlement Agreementā) and a Promissory Note (the āPromissory Noteā) resolving and settling any and all disputes between Jacobs Field Services North America and the Company. A First Amendment to the Settlement Agreement was executed on April 5, 2016, a Second Amendment was executed on October 6, 2016, a Third Amendment was executed on December 21, 2017 (the āThird Amendmentā), a Fourth Amendment was executed on December 31, 2018 (the āFourth Amendmentā) and a Fifth Amendment was executed on June 27, 2019 (the āFifth Amendmentā). The Fourth Amendment amended the Promissory Note to begin accruing interest January 1, 2019, at the rate of 5% per annum, to be added to the principal of the Promissory Note. Interest for 2018 was prepaid coincident with the execution of the Third Amendment. Pursuant to the Fourth Amendment, a delayed payment fee of 5.5% of the principal balance as of June 30, 2019, including accrued interest, was added to the principal balance of the Promissory Note. The due date of the Promissory Note was extended to December 31, 2019, pursuant to the Fifth Amendment. A Sixth Amendment was executed on December 19, 2019 (the āSixth Amendmentā), which extended the Promissory Note due date to June 30, 2020. On each of December 31, 2019 and 2018, coincident with the execution of the Sixth Amendment and Fourth Amendment, delayed payment fees of 2% of the principal balance at each date, or $0.1 million and $0.1 million, respectively, were added to the principal balance of the Promissory Note. Interest expense The following table summarizes the components of recorded interest expense (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Second Lien Convertible Notes ā $ 28,537 ā $ 24,923 1.5 Lien Notes ā 18,763 ā 14,012 First Lien Agreement ā 10,022 ā 9,589 1.25 Lien Notes ā 5,241 ā ā Amortization of debt issuance costs ā 2,047 ā 1,802 Promissory Note ā 785 ā 567 Capitalized interest ā (551) ā ā Total interest expense ā $ 64,844 ā $ 50,893 ā We capitalize interest to Property and equipment, net Interest |
Note 10 - Royalty Obligation
Note 10 - Royalty Obligation | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Royalty Obligations [Text Block] | 10. Royalty Obligation On May 29, 2020, the closing date of the Recapitalization Transaction, the Company and Sprott Private Resource Lending II (Co) Inc. (the āPayeeā) entered into a royalty agreement with respect to the Hycroft Mine (the āSprott Royalty Agreementā) 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 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 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 both the three and six months ended June 30, 2020, the Company recorded amortization of the royalty obligation of approximately $5,300. As of June 30, 2020, $0.3 million of the royalty obligation was recorded as a current liability based upon 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. |
Note 11 - Asset Retirement Obli
Note 11 - Asset Retirement Obligation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Asset Retirement Obligation Disclosure [Text Block] | 11. Asset Retirement Obligation The following table summarizes changes in the Companyās ARO (in thousands): ā ā ā ā ā ā ā ā ā 2020 2019 Balance at January 1, ā $ 4,374 ā $ 5,832 Accretion expense ā 187 ā 211 Balance at June 30, ā $ 4,561 ā $ 6,043 ā | 10. Asset Retirement Obligation The following table summarizes changes in the Companyās ARO (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Balance, beginning of year ā $ 5,832 ā $ 21,548 Accretion expense ā 422 ā 1,271 Changes in estimates ā (1,880) ā (16,987) Balance, end of year ā $ 4,374 ā $ 5,832 ā Changes in estimates during the year ended December 31, 2019 were driven by increased equipment and diesel costs but were more than offset by an increase in our credit-adjusted risk free rate, which is used to discount the future reclamation costs. Changes in estimate during 2018 were primarily a result of the Company extending the life-of-mine estimate to 30 years. Due to the extended life of mine, reclamation expenditures are delayed by approximately 25 years from the prior estimated schedule. As of December 31, 2019, the Company estimated that no significant reclamation expenditures will be made until 2047 and that reclamation work will be completed by the end of 2065. |
Note 12 - Stockholders' Equity
Note 12 - Stockholders' Equity | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Stockholders' Equity Note Disclosure [Text Block] | 12. Stockholdersā Equity Following the May 29, 2020 Recapitalization Transaction, as of June 30, 2020, the total number of shares of all classes of capital stock which we have authority to issue is 410,000,000, of which 400,000,000 are common stock, par value $0.0001 per share, and 10,000,000 are preferred stock par value $0.0001 per share. The designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect to each of our class of capital stock are discussed below. Common stock As of June 30, 2020, there were 50,160,042 shares of common stock issued and outstanding. Each holder of common stock is entitled to one vote for each share of common stock held by such holder. The holders of common stock are entitled to the payment of dividends and other distributions as may be declared from time to time by the Board in accordance with applicable law and to receive other distributions from the Company. Subject to the terms of the Recapitalization Transaction and as of May 29, 2020, certain new and existing holders of common stock of the Company, are subject to a lock-up periods, which ranged from six Preferred stock As of June 30, 2020, there were no shares of preferred stock issued and outstanding. Dividend policy The Companyās credit facility under the Sprott Credit Agreement contains provisions that restrict its ability to pay dividends. For additional information see Note 9 - Debt, Net Warrants As described below, the Company had a total of 47,011,622 warrants outstanding as of June 30, 2020. Five-year Public Warrants The Company has 34,289,999 publicly-traded warrants outstanding which entitle holders to purchase one share of HYMC common stock at an exercise price of $11.50 per share for a period of five years from the May 29, 2020 Recapitalization Transaction. The Company has certain abilities to call such warrants if the last reported sale price of HYMC 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. See Note 3 - Recapitalization Transaction Seller Warrants As part of 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 āSeller Warrant Agreementā). Pursuant to the assumption of the Seller Warrant Agreement, the warrants issued thereunder (the āSeller Warrantsā) became exercisable into shares of HYMC common stock. As of the consummation of the Recapitalization Transaction, 3,210,213 shares of common stock may be issued upon exercise of Seller Warrants at an exercise price, determined as of July 1, 2020 pursuant to the Seller Warrant Agreement of $44.82 per share upon the exercise of 12,721,623 Seller Warrants, each currently exercisable into approximately 0.2523 shares of common stock, which exercise price and number of shares may fluctuate under the terms of the Seller Warrant Agreement. Seller Warrants have a seven-year term that expires in October 2022. | 11. Stockholdersā Equity Common stock In connection with the Companyās emergence from bankruptcy and as detailed in the plan of reorganization, the Companyās then-existing unsecured notes and general unsecured claims were canceled and holders of such claims received equity in the reorganized Company or received cash in amounts negotiated by the major creditor groups. The Company was required to issue 3.0 million new common shares to its creditors, but has not listed the new common shares for public trading and is not a reporting company with the United States Securities and Exchange Commission. Previous equity stockholders of the Company received warrants with a seven As of December 31, 2019, all bankruptcy claims had been settled and all 3.0 million shares had been issued. For additional information see Note 16 ā Fair Value Measurements $.001 Preferred stock In addition to common stock, the authorized share capital of the Company includes 10,000,000 shares of undesignated preferred stock with a par value of $0.001 per share, none of which has been issued. Treasury stock During the year ended December 31, 2019, the Company repurchased 37,428 shares of its common stock outstanding for a total purchase price of $1 (one dollar). During the year ended December 31, 2018, the Company repurchased 95,082 shares of its common stock outstanding for a total purchase price of $1 (one dollar). Dividend policy The Company has never paid dividends and currently has no intention to do so. The Companyās Convertible Notes, 1.5 Lien Notes, 1.25 Lien Notes and First Lien Agreement contain provisions that restrict its ability to pay dividends. For additional information see Note 9 ā Debt Warrant issuance at effective date: As discussed above , $5.20 as of December 31, 2019. The warrants were accounted for as a derivative instrument and included as of December 31, 2019 and 2018 in Other liabilities, non-current |
Note 13 - Revenue
Note 13 - Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Revenue from Contract with Customer [Text Block] | 13. Revenues The table below is a summary of the Companyās gold and silver sales (in thousands, except ounces sold): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā ā 2020 ā 2019 ā 2020 ā 2019 ā ā ā ā ā Ounces ā ā ā ā Ounces ā ā ā ā Ounces ā ā ā ā Ounces ā Amount Sold Amount Sold Amount Sold Amount Sold Gold sales ā $ 7,284 4,237 ā $ ā ā ā $ 17,612 10,797 ā $ ā ā Silver sales ā 352 21,331 ā ā ā ā 1,148 70,703 ā ā ā Total ā $ 7,636 ā ā ā $ ā ā ā ā $ 18,760 ā ā ā $ ā ā ā ā During the second quarter of 2019, the Company began actively operating the Hycroft Mine, but no ounces of gold or silver were sold. While the Company is not obligated to sell all of its gold and silver to one customer, the vast majority of gold and silver sales during 2020 were to the same customer. During the first six months of 2020, approximately 95.1% of revenue was attributable to sales to one customer. |
Note 14 - Stock-based Compensat
Note 14 - Stock-based Compensation | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Share-based Payment Arrangement [Text Block] | 14. Stock-Based Compensation Performance and Incentive Pay Plan The Companyās Performance and Incentive Pay Plan (the āPIPPā), which was approved on February 20, 2019 and amended on May 29, 2020 in connection with the Recapitalization Transaction, is a stock-based compensation plan to attract, retain and motivate employees and directors while directly linking incentives to increases in stockholder value. Terms and conditions (including performance-based vesting criteria) of awards granted under the PIPP are established by the Board of Directors or the Compensation Committee of the Board of Directors, who administer the PIPP. Awards may be granted in a variety of forms, including restricted stock, restricted stock units, stock options, stock appreciation rights, performance awards, and other stock-based awards. The number of shares of common stock made available for award under the PIPP is equal to 5.0% of the issued and outstanding shares of HYMC common stock immediately after the close of the Recapitalization Transaction, or 2,508,002 shares. As of June 30, 2020, all awards granted under the PIPP were in the form of restricted stock units to employees of the Company. Restricted stock units granted under the PIPP without performance-based vesting criteria typically vest in equal annual installments over two two For restricted stock units granted in the first quarter of 2019, a price per share was not determined as of the grant date. The number of shares of common stock of the Company to be granted and issued upon vesting is to be calculated on the vesting date, which can be the closing date of the Recapitalization Transaction, June 1, 2020, or the second and third anniversary of the date of the grant or the annual date the compensation committee determines the achievement of the corporate performance targets. In connection with the closing of the Recapitalization Transaction on May 29, 2020, 78,565 restricted stock units, which were granted in 2019, vested at an average price of $12.65 per share, the closing price of HYMC common stock on the date of the Recapitalization Transaction, for a total fair value of $1.0 million. Additionally, on June 1, 2020, 70,238 restricted stock units vested at an average price of $11.50 per share, the closing price of HYMC common stock on such vesting date, for a total fair value of $0.8 million. During the three months ended June 30, 2020, the Company reclassified $1.8 million from Other liabilities, current Additional paid-in capital Other liabilities, current The fair value of restricted stock units is recognized as expense over the vesting period. During the three and six months ended June 30, 2020, the Company recognized $0.2 million and $0.6 million, respectively, in stock-based compensation cost related to previously granted restricted stock units. During the three and six months ended June 30, 2019, the Company recognized $0.3 million and $0.5 million, respectively, in stock-based compensation cost related to the issuance of the restricted stock units. Non-Employee Director Phantom Stock Plan Non-executive members of Sellerās Board of Directorās received phantom shares pursuant to the Hycroft Mining Corporation Non-Employee Director Phantom Stock Plan (the āPhantom Planā) as part of their annual compensation pursuant to phantom stock award agreements. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. The cash payments were to be made to participants upon certain Payment Events, as such term is defined in the Phantom Plan, which was triggered by the closing of the Recapitalization Transaction. In connection with the closing of the Recapitalization Transaction, a $1.8 million cash payment was made to the participants to satisfy the 1,237,500 phantom shares that were vested and outstanding. During the six months ended June 30, 2020 and 2019, non-employee members of Sellerās board of directors were granted a total of 157,500 and 315,000 phantom shares of stock, respectively, which vested upon grant. During the six months ended June 30, 2020 and 2019, the Company recorded $0.2 million and $0.5 million, respectively, in compensation expense related to the vesting of the phantom shares granted during each respective period, which are included in General and administrative Other liabilities, current Note 18 ā Fair Value Measurements | 13. Stock-Based Compensation The Company has a stock-based compensation plan, the Performance and Incentive Pay Plan (the āPIPPā), to attract, retain and motivate employees while directly linking incentives to increases in stockholder value. Terms and conditions (including performance-based vesting criteria) of awards granted under the PIPP are established by the Board of Directors or the Compensation Committee of the Board of Directors, who administer the plan. On February 20, 2019, the Board of Directors of the Company approved the PIPP, which makes available up to 4,277,000 shares of common stock for award. The awards may be granted in a variety of forms, including restricted stock, restricted stock units, stock options, stock appreciation rights, performance awards, and other stock-based awards. As of December 31, 2019, all awards granted under the PIPP were in the form of restricted stock units. Restricted stock units granted under the PIPP without performance-based vesting criteria typically vest in equal annual installments over two For the restricted stock units granted in 2019, 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 will be calculated on the vesting date based on the grant date value. The first tranche of restricted stock units will vest upon the closing of the MUDS transaction, which the Company expects to close in the first half of 2020. Restricted stock units set to vest during 2020 are convertible into shares of MUDS common stock as of December 31, 2020, if the MUDS transaction closes. The remainder of the restricted stock unites vest through March 2022. The restricted stock units are included in Other liabilities, current The fair value of restricted stock units is recognized as expense over the vesting period. During the year ended December 31, 2019, the Company recognized $1.2 million in stock-based compensation cost related to the issuance of the restricted stock units of which $0.1 million was capitalized to ore on leach pads. |
Note 15 - Income Taxes
Note 15 - Income Taxes | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Income Tax Disclosure [Text Block] | 15. Income Taxes For the three and six months ended June 30, 2020 and 2019, the Company recorded no income tax benefit or expense based upon the estimated annual effective tax rate of 0.0% for each period. The estimated annual effective tax rate for each period was driven by year-to-date net losses for each period along with the expectation of continued losses for the remainder of the years. The gain related to the Recapitalization Transaction was excluded from the estimated annual effective tax rate calculation for the 2020 period as it is considered a discrete item. The Company reversed a portion of the valuation allowance based on the net operating loss expected to be used, in order to offset Sellerās taxable gain related to the Recapitalization Transaction. The Company is subject to state income tax in Colorado, which is the location of its corporate office, but did not incur any income tax expense related to Colorado due to continued net operating losses. The Company is subject to mining taxes in Nevada, which are classified as income taxes as such taxes are based on a percentage of mining profits, but did not incur any mining tax expense due to continued mining losses. The Company is not subject to foreign income taxes as all of the Companyās operations and properties are located within the United States. As of December 31, 2019, the Company had $256.5 million of net deferred tax assets, which were primarily comprised of net operating losses and disallowed interest expense under IRC Sec. 163(j). The Company recorded a full valuation allowance of $256.5 million against its net deferred tax assets. Immediately prior to the Recapitalization Transaction, Seller had estimated net deferred tax assets of approximately $267.8 million, which were primarily comprised of net operating losses and offset by a full valuation allowance. As a result of the Recapitalization Transaction, Seller, which sold all of its issued and outstanding equity interests of its direct subsidiaries and substantially all of its other assets, to Acquisition Sub, which also assumed substantially all of the liabilities of Seller, had a taxable gain and cancellation of indebtedness of approximately $95.0 million before considering Sellerās net operating loss carryforwards. In connection with the Recapitalization Transaction, Seller used approximately $19.9 million of its deferred tax assets to offset the taxable gain in full, resulting in remaining net deferred tax assets of approximately $247.9 million immediately after the Recapitalization Transaction. The remaining net deferred tax assets balance of Seller did not transfer to the Company as a result of the Recapitalization Transaction. For U.S. tax purposes, the sale of Sellerās disregarded subsidiaries interests and other assets was considered a sale of assets. The acquired assets have a carryover basis for US GAAP purposes and the Company has stepped up the fair market value basis in the assets acquired for tax purposes, resulting in the Company having estimated net deferred tax assets of $94.2 million at June 30, 2020. The Company recorded a full valuation allowance of approximately $94.2 million as of June 30, 2020 against the net deferred tax assets, which were determined more likely than not to not be realized. As necessary, the Company provides a reserve against the benefits of uncertain tax positions taken in its tax filings that are more likely than not to not be sustained upon examination. Based on the weight of available evidence, the Company does not believe it has taken any uncertain tax positions that require the establishment of a reserve. The Company has not recorded any interest or penalties related to income tax liabilities as of June 30, 2020. | 14. Income Taxes The Companyās loss before income taxes was attributable solely to domestic operations in the United States. The components of the Companyās income tax expense (benefit) were as follows (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Current: ā ā Federal ā $ ā ā $ 145 Deferred: ā ā Federal ā (24,609) ā (18,842) Change in valuation allowance ā 24,609 ā 18,842 Income tax benefit ā $ ā ā $ 145 ā The following table provides a reconciliation of income taxes computed at the United States federal statutory tax rate of 21% in 2019 and 2018 to the income tax provision (in thousands): ā ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Loss before income taxes ā $ (98,895) ā $ (55,658) ā United States statutory income tax rate ā 21 % 21 % Income tax (benefit) at United States statutory income tax rate ā $ (20,768) ā $ (11,688) ā Change in valuation allowance ā 24,609 ā 18,842 ā Return to provision adjustment ā (2,624) ā (7,029) ā Tax rate changes ā (1,028) ā ā ā State tax benefit ā (195) ā ā ā Other ā 6 ā 20 ā Income tax benefit ā $ ā ā $ 145 ā ā For the year ended December 31, 2019, the effective tax rate was driven by an increase in the valuation allowance of $24.6 $2.6 $1.0 $0.2 For the year ended December 31, 2018, the effective tax rate was driven by return to provision adjustments of $7.0 $0.1 The components of the Companyās deferred tax assets are as follows (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Net operating loss ā $ 146,382 ā $ 126,143 Plant, equipment, and mine development ā 60,840 ā 65,760 Interest expense carryforward ā 24,369 ā 10,590 Inventories ā 12,289 ā 17,163 Reorganization costs ā 7,701 ā 7,437 Assets held-for-sale ā 3,149 ā 3,106 Asset retirement obligation ā 927 ā 1,225 Other liabilities ā 609 ā 490 Stock-based compensation ā 257 ā ā Credits and other ā (6) ā (6) Valuation allowance ā (256,517) ā (231,908) Total net deferred tax assets ā $ ā ā $ ā ā Based on the weight of evidence available as of both December 31, 2019, and 2018, which included recent operating results, future projections, and historical inability to generate operating cash flow, the Company concluded that it was more likely than not that the benefit of its net deferred tax assets would not be realized and, as such, recorded a full valuation allowance of $256.5 $231.9 The Company had net operating loss carryovers as of December 31, 2019 of $683.7 million for federal income tax and financial statement purposes. The Company also had net operating loss carryovers as of December 31, 2019 of $76.3 million for state income tax and financial statement purposes. Historical differences between the federal income tax purposes and financial statement purposes amounts were eliminated through fresh start accounting. Substantially all of the Companyās net operating loss carryovers expire in years 2036 through 2039. Additional analysis of the Internal Revenue Code (āIRCā) section 382 limitations will be done upon the release of the valuation allowance and could result in a change to the value of the net operating losses. The Company believes that the benefits of uncertain tax positions recorded in the calculation of the current year income tax benefit and on prior year tax returns did not exceed benefits calculated using the more likely than not threshold. As a result, the Company has not recorded any income tax reserves or related interest or penalties for the year ended December 31, 2019. With limited exception, the Company is no longer subject to U.S. federal income tax audits by taxing authorities for tax years 2015 and prior; however, net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used. |
Note 16 - Loss Per Share
Note 16 - Loss Per Share | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Earnings Per Share [Text Block] | 16. Loss Per Share The table below shows our basic and diluted loss per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 Net loss ā $ (49,790) ā $ (21,947) ā $ (84,408) ā $ (45,387) ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted average shares outstanding ā ā ā ā ā ā ā ā ā ā ā ā Basic ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 Diluted ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 ā ā ā ā ā ā ā ā ā ā ā ā ā Basic loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) Diluted loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) ā The weighted-average shares of common stock outstanding for the three and six months ended June 30, 2019 have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). 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 2019 periods exclude the common share effects from certain of Sellerās debt instruments which are reflected in the 2020 periods. Due to the Companyās net loss during the three and six months ended June 30, 2020 and 2019, there was no dilutive effect of common stock equivalents because the effects of such would have been anti-dilutive. Using the treasury stock method, the weighted-average common stock equivalents excluded from diluted loss per share calculations were 37.6 million shares (37.5 million shares related to warrants, and 0.1 million shares related to restricted stock units), for both the three and six months ended June 30, 2020. For the three and six months ended June 30, 2019, the weighted-average common stock equivalents excluded from diluted loss per share calculations using the treasury stock method were 37.5 million shares related to warrants. Unvested restricted stock units were excluded from common stock equivalent calculations because the number of shares required to settle such stock-based compensation awards is not known until the future vesting date. | 15. Earnings (Loss) Per Share The table below shows our basic and diluted earnings (loss) per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Net loss ā $ (98,895) ā $ (55,803) Weighted average shares outstanding ā ā Basic ā 2,739,505 ā 2,645,194 Diluted ā 2,739,505 ā 2,645,194 Basic earnings per common share ā $ (36.10) ā $ (21.10) Diluted earnings per common share ā $ (36.10) ā $ (21.10) ā There was no dilutive effect of common stock equivalents for the twelve months ended December 31,2019 or 2018 because the effect of their inclusion would have been anti-dilutive. There was no dilutive effect of common stock equivalents for the years ended December 31, 2019 and 2018 because the effect of their inclusion would have been anti-dilutive. Using the treasury stock method, the weighted-average common stock equivalents excluded from diluted EPS were 152.2 million shares and 131.5 million shares for the years ended December 31, 2019 and 2018, respectively. The restricted stock units are not included in the common stock equivalents because the number of shares used to settle them in not known. |
Note 17 - Segment Information
Note 17 - Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Notes to Financial Statements | |
Segment Reporting Disclosure [Text Block] | 17. Segment Information The Companyās reportable segments are comprised of operating units which have revenues, earnings or losses, or assets exceeding 10% of the respective consolidated totals, each of which is reviewed by the executive decision-making group to make decisions about resources to be allocated to the segments and to assess their performance. The tables below summarize segment information: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended June 30, ā Six months ended June 30, ā ā Hycroft ā Corporate ā ā ā ā Hycroft ā Corporate ā ā ā ā Mine and Other Total Mine and Other Total 2020 ā ā ā ā ā ā Revenue - Note 13 ā $ 7,636 ā $ ā ā $ 7,636 ā $ 18,760 ā $ ā ā $ 18,760 Cost of sales ā 31,863 ā ā ā 31,863 ā 55,731 ā ā ā 55,731 Other operating costs ā 94 ā 10,432 ā 10,526 ā 187 ā 12,438 ā 12,625 Loss from operations ā 24,321 ā 10,432 ā 34,753 ā 37,158 ā 12,438 ā 49,596 Interest expense - Note 9 ā 56 ā 15,016 ā 15,072 ā 141 ā 34,818 ā 34,959 Interest income ā (35) ā ā ā (35) ā (147) ā ā ā (147) Loss before reorganization items and income taxes ā 24,342 ā 25,448 ā 49,790 ā 37,152 ā 47,256 ā 84,408 Reorganization items ā ā ā ā ā ā ā ā ā ā ā ā Loss before income taxes ā $ 24,342 ā $ 25,448 ā $ 49,790 ā $ 37,152 ā $ 47,256 ā $ 84,408 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revenue - Note 13 ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā Cost of sales ā ā ā ā ā ā ā ā ā ā ā ā Other operating costs ā 4,917 ā 1,214 ā 6,131 ā 11,836 ā 3,161 ā 14,997 Loss from operations ā 4,917 ā 1,214 ā 6,131 ā 11,836 ā 3,161 ā 14,997 Interest expense - Note 9 ā 414 ā 15,227 ā 15,641 ā 489 ā 29,550 ā 30,039 Interest income ā (110) ā ā ā (110) ā (226) ā ā ā (226) Loss before reorganization items and income taxes ā 5,221 ā 16,441 ā 21,662 ā 12,099 ā 32,711 ā 44,810 Reorganization items ā ā ā 285 ā 285 ā ā ā 577 ā 577 Loss before income taxes ā $ 5,221 ā $ 16,726 ā $ 21,947 ā $ 12,099 ā $ 33,288 ā $ 45,387 ā |
Note 18 - Fair Value Measuremen
Note 18 - Fair Value Measurements | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Fair Value Disclosures [Text Block] | 18. Fair Value Measurements Recurring fair value measurements The following table sets forth by level within the fair value hierarchy, the Companyās liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā Hierarchy ā June 30, ā December 31, Liabilities: Level 2020 2019 Other liabilities, current ā ā Accrued compensation for phantom shares 3 ā $ ā ā $ 1,590 Other liabilities, non-current ā ā Warrant liability - Note 12 3 ā $ 18 ā $ 18 ā Accrued compensation for phantom shares Certain of Sellerās phantom shares, which were satisfied in full upon closing of the Recapitalization Transaction, were carried at fair value due to holders of such awards being entitled to variable cash payments based upon valuations of the Companyās common stock. The historical fair value of such obligation was computed using inputs and assumptions which were significant and unobservable as Seller was a privately held entity and, as such, were classified within Level 3 of the fair value hierarchy. The inputs and assumptions included estimates of consideration to be received by holders of phantom shares based on the estimated fair value of the consideration which may be allocated to such holders from the various financing transactions Seller was considering at such time based on the implied equity value. Warrant liability As part of the Recapitalization Transaction, the Company assumed Sellerās obligations under the Seller Warrant Agreement and the 12.7 million Seller Warrants outstanding became exercisable into shares of HYMC 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 model that requires a variety of inputs, including contractual terms, market prices, exercise prices, equity volatility and discount rates. As of June 30, 2020, Seller Warrants were carried at $18,000, which represents the historically computed fair value. The Company plans to update 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. Since equity volatility is a significant unobservable input to the valuation, the derivative instruments are classified within Level 3 of the fair value hierarchy. Seller Warrants have a seven-year term which expires in October 2022, an exercise price of $44.82 as of July 1, 2020, and are exercisable into approximately 0.2523 shares of HYMC common stock. Items disclosed at fair value Debt As of June 30, 2020, the fair value of the Companyās total current and non-current debt approximated its carrying value due to the short time period between the May 29, 2020 close of the Recapitalization Transaction and the end of the second quarter of 2020. As of December 31, 2019, Seller determined that certain of its debt instrumentsā carrying value exceeded the estimated fair value, which was based on the estimated fair value of the consideration which may be allocated to such debt instruments from the various financing transactions Seller was considering at such time. Accordingly, as of December 31, 2019, Seller estimated that the fair value of the 2.0 Lien Notes and 1.5 Lien Notes was approximately $262.4 million, compared to the carrying value of $345.5 million. Royalty obligation As of June 30, 2020, the estimated net present value of the Companyās royalty obligation $99.9 million, compared to the carrying value of $30.0 million. The net present value of the Companyās royalty obligation was modeled using the following level 3 inputs: (1) market consensus inputs for future gold and silver prices; (2) a precious metal industry consensus discount rate of 5.0%; and (3) estimates of the Hycroft Mineās life-of-mine gold and silver production volumes and timing. | 16. Fair Value Measurements Recurring fair value measurements ā The following table sets forth by level within the fair value hierarchy, the Companyās assets and liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā Hierarchy Level 2019 2018 Liabilities ā ā Accrued compensation for phantom shares 3 ā $ 1,590 ā $ 884 Derivative instruments: ā ā Warrant liability ā Note 11 2 ā $ 18 ā $ 18 ā Accrued compensation During each of the years ended December 31, 2019 and 2018, non-executive members of the Companyās board of directors were granted a total of 315,000 phantom shares of stock, which vested upon grant, pursuant to a Non-Employee Director Phantom Stock Plan. Under the grant agreements, the phantom shares entitle the participant to a cash payment equal to the greater of the (1) grant date fair value and (2) the fair market value of one share of common stock of the Company at the date of payment. The cash payments are to be made to a participant upon the first of the following to occur: (i) retirement from the Board; (ii) resignation from the Board; (iii) failure to stand for re-election as a non-employee director of the Board; (iv) removal from the board for reasons other than cause; (v) death of the participant; or (vi) a change of control. During 2017, the grant agreements with one of the non-executive members of the board of directors were amended to provide for the participant to receive one share of common stock of the Company for each phantom share at the date of payment instead of a cash payment. The non-executive member of the board of directors received 90,000 shares of the common stock of the Company upon resigning in January 2018. During 2019 and 2018, the Company performed fair value analyses of the phantom shares. A valuation of the Company based on negotiated financing arrangements with several unrelated parties was used to determine the value at both December 31, 2019 and December 31, 2018. The phantom shares issued during 2018 and 2019 were recorded at the grant date fair value and, pursuant to the grant agreements, cannot be written-down below the grant date fair value. During 2019, the fair market value of the 2015 and 2016 phantom shares issuances were increased by $0.2 million, which was recorded to General and administrative General and administrative The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process . Derivative instruments The fair values (as prescribed by GAAP) of the warrants, the Companyās only derivative instrument, were computed by independent third-party consultants (and validated by the Company) using models that require a variety of inputs, including contractual terms, market prices, exercise prices, and correlations of such inputs. In general, model inputs that are significant to the fair value measurements of the Companyās derivative instruments trade in active markets or are observable in markets that are not active, and, as such, derivative instruments are classified within Level 2 of the fair value hierarchy. The fair value of the Companyās warrant liability as of December 31, 2019 and 2018, for the warrants issued at the Effective Date, was determined using a Monte Carlo simulation-based valuation model. The warrants have a seven-year term and an initial exercise price of $8.40 per share. The assumptions used include a risk-free interest rate of 1.74%, an expected volatility of 70%, and a dividend rate of 0%. Items disclosed at fair value The carrying amount and fair value of the debt as of December 31, 2019 and 2018 are disclosed in the following table (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Carrying ā ā Carrying ā ā ā ā Amount ā Fair Value ā Amount ā Fair Value Total current and non-current debt ā $ 553,965 ā $ 471,890 ā $ 427,587 ā $ 350,000 ā As of December 31, 2019 and 2018, the fair value of the Companyās debt was determined using level 3 inputs and the phantom shares were marked to market based on level 3 inputs. There were no changes to the Companyās valuation techniques, and no transfers in or out of Levels 1, 2, or 3. During 2018, the Company considered various financing alternatives to finance the restart of the Hycroft Mine. In considering the financing alternatives the Company determined that as of December 31,2018 the fair value of the debt no longer approximated the carrying value. The Company determined the fair value of the debt at December 31, 2019 and 2018 using potential financing options that have been presented to the Company, which are considered level 3 inputs. |
Note 19 - Supplemental Cash Flo
Note 19 - Supplemental Cash Flow Information | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Cash Flow, Supplemental Disclosures [Text Block] | 19. Supplemental Cash Flow Information The following table provides supplemental cash flow information (in thousands): ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, ā 2020 2019 Cash paid for interest ā $ 5,366 ā $ 5,271 ā ā ā ā ā ā ā Significant non-cash financing and investing activities: ā ā ā ā ā ā Exchange of Sellerās 1.5 Lien Notes for HYMC common stock ā 160,254 ā ā Exchange of Sellerās 1.25 Lien Notes for Subordinated Notes ā 80,000 ā ā Exchange of Sellerās 1.25 Lien Notes for HYMC common stock ā 48,459 ā ā Allocate and write-off of Sellerās debt issuance costs ā 8,202 ā ā Plant, equipment, and mine development additions included in accounts payable ā 3,038 ā 2,592 ā In addition to the supplemental cash flow information shown above, Note - 3. Recapitalization Transaction Note 9 - Debt, Net | 17. Supplemental Cash Flow Information The following table provides supplemental cash flow information (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Cash paid for interest ā $ 10,239 ā $ 9,409 Significant non-cash financing and investing activities: ā ā Increase in Second Lien convertible notes from in-kind interest ā $ 28,537 ā $ 24,869 Increase in 1.5 Lien Notes from in-kind interest ā $ 18,780 ā $ 14,023 Increase in 1.25 Lien Notes from in-kind interest ā $ 5,212 ā $ ā Increase in the Promissory Note from in-kind interest ā $ 785 ā $ 117 Accrual of deferred future financing costs ā $ 1,029 ā $ 1,025 Plant and equipment additions ā $ 2,458 ā $ ā ā |
Note 20 - Commitments and Conti
Note 20 - Commitments and Contingencies | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Commitments and Contingencies Disclosure [Text Block] | 20. Commitments and Contingencies From time to time, the Company is involved in various legal actions related to its business, some of which are class actions 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 Companyās financial statements, although a contingency could be material to the Companyās 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. On February 7, 2020, a purported class action complaint was filed by a purported holder of the Companyās warrants, in the Court of Chancery of the State of Delaware against the Company and MUDS. The complaint sought a declaratory judgment that the Recapitalization Transaction constitutes a āFundamental Changeā under the terms of the Seller Warrant Agreement and thereby requiring that Seller Warrants be assumed by MUDS as part of the Recapitalization Transaction, in addition to asserting claims for (1) breach or anticipatory breach of contract against Seller; (2) breach or anticipatory breach of the implied covenant of good faith and fair dealing against Seller; and (3) tortious interference with contractual relations against MUDS. The complaint sought unspecified money damages and also seeks an injunction enjoining the Company and MUDS from consummating the Recapitalization Transaction. On February 26, 2020, MUDS and Seller entered into an amendment to the Purchase Agreement whereby the Companyās liabilities and obligations under the Seller Warrant Agreement were included as a Parent Assumed Liability under the Purchase Agreement. On March 27, 2020, MUDS and Seller filed motions to dismiss the complaint. On May 15, 2020, a hearing was held and the complaint was dismissed. On May 21, 2020, Plaintiff filed a motion to alter or amend the Courtās order in order to retain jurisdiction in order to file application for a mootness fee, to which MUDS and Seller, while disputing factual assertions and characterizations, did not oppose. On June 30, 2020, the motion was granted and the Court retained jurisdiction over the action to hear any mootness fee application. Financial commitments not recorded in the financial statements As of June 30, 2020 and December 31, 2019, Sellerās off-balance sheet arrangements consisted of operating lease agreements, a net profit royalty arrangement, and a future purchase obligation for consignment inventory. Operating Leases During the first quarter of 2020, the Company signed a lease for mining equipment. The one-year operating lease for mobile mining equipment is used to supplement the Companyās own fleet. The lease term began during the second quarter of 2020 as all equipment was placed into service and has less than a year remaining as of June 30, 2020. The total remaining minimum lease payments was approximately $10.1 million as of June 30, 2020. The Company also holds an operating lease for the Companyās office space in Denver, Colorado. Rent expense for this office space is $0.1 million annually and expires in January 2022. The total remaining lease payments were $0.2 million as of June 30, 2020. As the Company has elected to take advantage of the extended transition period for complying with new or revised accounting standards, the liability for the Companyās operating leases will not be considered on the balance sheets until the new lease accounting rules apply to publicly traded emerging growth companies in accordance with the JOBS Act, or we no longer qualify as an emerging growth company. 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. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid $2.6 million through June 30, 2020, which is included in Prepaids and other Note 5 - Prepaids and Other Consignment Inventory During the first quarter of 2020, Hycroft entered into an agreement with a spare parts supplier that requires the supplier to maintain a specified inventory of replacement parts and components that are exclusively for purchase by Hycroft. Pursuant to the agreement, the Company is required to purchase all of the un-replenished consignment stock inventory, totaling $2.5 million, over the two-year life of the Inventory Consignment agreement. As of June 30, 2020, the Company had prepaid $0.9 million towards the un-replenished consignment stock inventory, which is included in Prepaids and other Note 2 - Summary of Significant Accounting Policies Note 5 - Prepaids and Other | 19. Commitments and Contingencies From time to time, the Company is involved in various legal actions related to its business, some of which are class actions 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 Companyās Consolidated Financial Statements, although a contingency could be material to the Companyās 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. Financial commitments not recorded in the 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. The total payments due under the mining lease are capped at $7.6 million, of which the Company has paid $2.5 million through December 31,2019. Transaction bonus plan The Company has entered into a bonus plan whereby, upon the consummation of a sale transaction or certain other transformative transactions as defined in the plan, the Company will be obligated to pay certain senior level employees a total of $5.8 million to $7.3 million, depending on the value of the transaction. |
Note 21 - Related Party Transac
Note 21 - Related Party Transactions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Related Party Transactions Disclosure [Text Block] | 21. Related Party Transactions Certain amounts of the Companyās indebtedness disclosed in Note 9 Debt, Net Related Party Disclosures Interest expense, net of capitalized interest Interest expense, net of capitalized interest $21.7 million, respectively, for the debt held by Related Parties. As of June 30, 2020 and December 31, 2019, the Related Parties held a total $67.8 million and $421.6 million, respectively, of debt. | 20. Related Party Transactions As disclosed in Note 9 ā Debt Aristeia Highbridge Mudrick Whitebox Management, LLC (ā Wolverine Related Party Disclosures The following table provides the recorded interest expense by Related Party (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Aristeia ā $ 5,993 ā $ 4,394 Highbridge ā 9,325 ā 6,934 Mudrick ā 23,743 ā 17,766 Whitebox ā ā 15,607 ā 11,444 Wolverine ā 2,906 ā 2,130 Total related party interest expense ā $ 57,574 ā $ 42,668 ā The following table provides debt balances by Related Party (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Aristeia ā $ 50,905 ā $ 35,939 Highbridge ā 80,930 ā 58,709 Mudrick ā 208,078 ā 152,757 Whitebox ā 132,559 ā 93,583 Wolverine ā 24,683 ā 23,998 Total related party debt ā $ 497,155 ā $ 364,986 ā |
Note 22 - Subsequent Events
Note 22 - Subsequent Events | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes to Financial Statements | ||
Subsequent Events [Text Block] | 22. Subsequent Events On July 1, 2020, the Companyās Board of Directors and Randy Buffington agreed that Mr. Buffington would depart from the Company effective July 1, 2020. In connection with Mr. Buffingtonās departure and in recognition of his successful efforts in developing a new process to economically and profitably recover gold from sulfide ores in a heap leach process and in restarting mining operations at the Hycroft Mine and to reward and compensate him for transition assistance, Mr. Buffington will receive continuation payments for a period of 24 months following his departure at an amount equal to his previous salary. Additionally, the Company and Mr. Buffington entered into a restricted stock unit agreement (time-vesting) pursuant to which the Company granted a special discretionary equity bonus in the form of $1.3 million in restricted stock units convertible into shares of common stock, in which 50.0% vests on the first anniversary of the date of grant, and 50.0% vests on the second anniversary of the date of grant. The liability for the restricted stock units will be included in Other liabilities, current The Compensation Committee and Board of Directors approved the following initial annual Director compensation arrangements for non-employee directors, in the form of: (i) an annual cash retainer of $55,000; (ii) annual committee chair fees of $12,500 for the Audit Committee, $10,000 for the Safety, Sustainability and Technical Committee, and $7,500 for each of the Nominating and Governance and Compensation Committees; (iii) annual committee member fees of $5,000 for the Audit Committee, $4,000 for the Safety, Sustainability and Technical Committee, and $2,500 for each of the Nominating and Governance and Compensation Committees; and (iv) $75,000 in annual equity awards in the form of restricted stock units. In addition, an initial equity award in the amount of $50,000 in form of restricted stock units will be granted to each director. Equity awards will be granted at each annual stockholder meeting of the Company unless otherwise determined by the Compensation Committee. | 21. Subsequent Events Issuance of Additional 1.25 Lien Notes On January 17, 2020 and February 7, 2020 additional 1.25 Lien Notes of $5.0 million and $10.0 million, respectively, were issued. The 1.25 Lien Notes issued in January and February have the same terms and security priority as the original issuance of 1.25 Lien Notes in February 2019. Extension of First Lien Agreement On January 31, 2020, the First Lien Agreement maturity was extended to May 31, 2020, as stated in Note 9 ā Debt Purchase Agreement Signed On January 13, 2020, ā Mudrick Capital Acquisition Corporation (āMUDSā), a publicly traded blank check company, and Hycroft entered into a definitive purchase agreement (the āPurchase Agreementā), under which Hycroft will sell substantially all of its assets to MUDS, and MUDS will discharge and pay or assume certain of Hycroftās liabilities. Following the closing of the transaction, Hycroft will be listed on the Nasdaq Stock Exchange under the ticker symbol āHYMCā. Pursuant to the terms of the transaction MUDS will have at least $50.0 million of unrestricted and available cash on hand at closing. Cash sources for the transaction include (A) a $110.0 million multi- tranche credit agreement arranged by Sprott Resource Lending Corp. (the āSprott Credit Agreementā), of which $70.0 million is expected to be drawn at closing, (B) a $30.0 million 1.5% net smelter royalty agreement arranged by Sprott Resource Lending Corp. and (C) consummation of the $25 million forward purchase of MUDS units and shares by Mudrick Capital Acquisition Holdings LLC, (d) a $65 million backstop agreement to purchase MUDS shares by certain existing stockholders of Hycroft and (e) the net cash remaining in MUDSā trust account following any stockholder redemptions. MUDS post-transaction indebtedness will include amounts drawn from the Sprott Credit Agreement plus newly issued subordinated notes not to exceed $80.0 million. All other indebtedness of Hycroft will be retired, exchanged for MUDS shares, converted into Hycroft shares or assumed by MUDS in the transaction. The transaction will be funded through a combination of stock consideration payable to Hycroft (which Hycroft will promptly distribute to is stockholders), cash and stock to repay certain Hycroft indebtedness and the assumption of certain Hycroft obligations. The boards of directors of MUDS and Hycroft have approved the transaction and recommend that their respective stockholders approve the transaction. Stockholders of Hycroft holding a majority of the outstanding stock of Hycroft have agreed to support approval of the transaction at any meeting of Hycroft stockholders, subject to customary exceptions. Completion of the proposed transaction, which is expected in the first half of 2020, is subject to customary and other closing conditions, including regulatory approvals and receipt of approvals from MUDS and Hycroft stockholders. On February 7, 2020, the Company became aware that a purported class action complaint was filed by Travus Pope, a purported holder of Company warrants, in the Court of Chancery of the State of Delaware against the Company and Mudrick Capital Acquisition Corporation (āMUDSā). As filed, the complaint seeks a declaratory judgment that the transactions contemplated under the Purchase Agreement constitute a āFundamental Changeā under the terms of that certain Warrant Agreement dated as of October 22, 2015 and thereby require that the warrants issued thereunder be assumed by MUDS as part of the transactions, in addition to asserting claims for (i) breach or anticipatory breach of contract against the Company, (ii) breach or anticipatory breach of the implied covenant of good faith and fair dealing against the Company, and (iii) tortious interference with contractual relations against MUDS. The complaint seeks unspecified money damages and also seeks an injunction enjoining the Company and MUDS from consummating the transactions. Other The Company has evaluated all subsequent events through February, 21, 2020, which is the date these Consolidated Financial Statements were available to be issued. There were no additional material subsequent events that required recognition or additional disclosure in these Consolidated Financial Statements. |
Significant Accounting Policies
Significant Accounting Policies (Policies) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies | ||
Basis of Accounting, Policy [Policy Text Block] | Basis of presentation These condensed consolidated interim financial statements have been prepared, without audit, in accordance with U.S. generally accepted accounting principles (āGAAPā) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (āSECā). 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 financial statements do not include all information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated unaudited interim financial statements include all adjustments which are necessary for a fair presentation of the interim financial position, operating results and cash flows for the periods presented. Certain reclassifications have been made to the prior periods presented in these financial statements to conform to the current period presentation, which had no effect on previously reported total assets, liabilities, cash flows, or net loss. References to ā$ā refers to United States currency. Recapitalization Transaction with MUDS The Recapitalization Transaction (see Note 3 Recapitalization Transaction 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. The shares and net loss per common share prior to the Recapitalization Transaction, have been retroactively restated as shares reflecting the exchange ratio established in the Recapitalization Transaction to effect the reverse recapitalization (1 Seller share for 0.112 HYMC share). See Note 3 ā Recapitalization Transaction | Basis of presentation The Consolidated Financial Statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (āGAAPā). Certain amounts in the 2018 Consolidated Financial Statements have been reclassified to conform to the 2019 presentation. References to ā$ā refers to United States dollars. |
Going Concern Policy [Policy Text Block] | Going concern The financial statements of the Company have been prepared on a āgoing concernā 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 Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. For the six months ended June 30, 2020, the Company incurred a net loss of $84.4 million and the net cash used in operating activities was $57.6 million. As of June 30, 2020, the Company had available cash on hand of $47.3 million, working capital of $68.0 million, total liabilities of $195.4 million, and an accumulated deficit of $468.8 million. Although the Company recently completed the Recapitalization Transaction with MUDS, using its internal forecasts and cash flow projection models, it currently projects there will be insufficient cash to meet its future obligations as they become due as the Company continues to ramp up the Hycroft Mineās operations from current levels or to levels which are contemplated by the 2019 Hycroft Technical Report. Consistent with our financial reporting and accounting policies, and as part of the preparation of the second quarter 2020 financial statements, the Company performed routine quarter-end metallurgical balancing analysis, which is a process that estimates the remaining recoverable gold and silver ounces on the leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, leach pad and solution sampling, estimated recovery percentages based on ore type, domain, and oxidation levels achieved, and quantities of gold and silver actually recovered. During the second quarter of 2020, based on metallurgical balancing results, the Company determined that 6,512 ounces of gold that had been placed on the leach pads were no longer recoverable and wrote-off such ounces. The write-down of these ounces significantly reduced the Companyās projected revenues for the second half of 2020. The Company has been unsuccessful in achieving its operating and production costs targets at the Hycroft Mine. During the second quarter of 2020, the Companyās production costs, mine site period costs, and the cash portion of the write-down of production inventories totaled $29.7 million, which exceeded second quarter 2020 revenues of $7.6 million by $22.1 million. Higher than planned operating and production costs were the result of: (1) increased contractor support for technical and manpower shortages in crusher operations, mobile maintenance, and leach pad operations; (2) overuse of processing reagents used in the leach pad operations due to poor planning, monitoring, and execution; (3) higher operating costs in the crusher, due to higher than planned belt failures; and (4) higher maintenance costs for the owned mining fleet, due to unexpected timing of component failures. As a result of actual second quarter 2020 operating and production costs incurred, the Company has revised its future forecasts of production and operating cost estimates for the second half of 2020 which has reduced its estimated future cash flows. The Companyās ability to continue as a going concern is contingent upon achieving its sales, production, cost, and other operating targets, as well as the success of a future financing transaction to provide additional capital financing for working capital and construction of its leach pad. The Company has begun the process of speaking with its financial advisors and stakeholders about options and timing related to securing additional financing or capital that may permit it to complete the construction of its leach pad and continue to ramp up its operations. While the Company has received a non-binding letter of support from its two largest stakeholders, the Board of Directors of the Company intends to evaluate its options to ensure the necessary capital is raised on terms favorable to and in the best interests of all of its shareholders. The Company has no commitment from any party to provide additional financing, and there can be no assurance that any funding will be available, or if available, that its terms will be favorable or acceptable to the Company. At this time, the Company does not have an expected time frame for, or an expectation with respect to, securing additional financial capital, if at all. 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, stockholdersā equity) have been prepared in accordance with GAAP on a historical-cost basis, as required, which do not reflect or approximate the current fair value of the Companyās assets or managementās assessment of the Companyās overall enterprise or equity value. | Going concern The Consolidated Financial Statements of the Company have been prepared on a āgoing concernā basis, which means that the continuation of the Company is presumed even though events and conditions exist that, when considered in the aggregate, raise substantial doubt about the Companyās ability to continue as a going concern because it is probable that, without additional capital injections, the Company will be unable to meet its obligations as they become due within one year after the date that these financial statements were issued. On March 10, 2015, the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā) in an effort to recapitalize the Companyās balance sheet by reducing its debt balances while concurrently providing additional liquidity. The Company continued to operate and produce gold and silver at its Hycroft Mine during the bankruptcy process. However, on July 8, 2015, the Company announced that it had suspended mining operations to maximize cash flow and minimize spending through the remainder of the Chapter 11 process. Effective October 22, 2015 (the āEffective Dateā), the Company completed its financial restructuring process and emerged from bankruptcy. From July 2015 through December 31, 2016, the Company produced gold and silver from its leach pads, actively running its processing facilities. The operation went into a care and maintenance mode as of January 1, 2017 when the Company stopped adding lime to the leach pads and wrote-down the remaining gold and silver on the leach pads to $0 due to the inability to economically recover the metal. As a result of going into care and maintenance, gold and silver production became a byproduct of maintaining the Hycroft Mine. Beginning January 1, 2017, the Company recorded all metal sales as a reduction to Care and maintenance, net Note 12 ā Gold and Silver Sales During 2019, the Company restarted open pit mining at the Hycroft Mine, and produced and sold gold and silver. However, based on the financial results for the year ended December 31, 2019, the significant debt burden and the need for additional cash to expand the operations, the Company believes its operations cannot currently generate enough cash to make scheduled principal and interest payments required by its debt obligations and/or cover operating and general and administrative costs necessary to operate the Company. These conditions raise substantial doubt about the Companyās ability to continue as a going concern, since the Company is reliant on receiving future cash flows from financing activities to meet its obligations. While the Company has entered into a purchase agreement with MUDS, (the āMUDS transactionā) (as discussed in Note 21 ā Subsequent Events The ability to continue as a going concern is contingent upon the Companyās ability to expand mining operations to an economic level and to refinance its existing debt obligations, which the MUDS transaction is designed to support. During August 2019, M3 Engineering and Technology Corp. in association with SRK Consulting US and the Company completed a feasibility study (the ā2019 Hycroft Technical Reportā). The 2019 Hycroft Technical Report projects the economic viability and potential future cash flows for the Hycroft Mine when mining operations expand. As part of the 2019 restart of mining operations, existing equipment was re-commissioned, including haul trucks, shovels and a loader, upgrades were made to the crushing system and new leach pad space was added to the existing leach pads. The 2019 restart of mining operations through December 31, 2019 was funded by the issuance of $72.0 million in Senior Secured Notes due June 30, 2020 (the ā1.25 Lien Notesā), discussed below. Additional short-term funding continues to be required. See Note 21 ā Subsequent Events These Consolidated Financial Statements do not include any adjustments related to the recoverability and classification of recorded assets or any other adjustments that might be necessary should the Company be unable to continue as a going concern. |
Use of Estimates, Policy [Policy Text Block] | Use of estimates The preparation of the Companyās financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these financial statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to: recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; estimates of mineral reserves; estimates of life-of-mine production timing and volumes; current and future mining and processing plans; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these financial statements, and such differences could be material. Accordingly, amounts presented in these financial statements are not indicative of results that may be expected for future periods. | Use of estimates The preparation of the Companyās Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in these Consolidated Financial Statements and accompanying notes. The more significant areas requiring the use of management estimates and assumptions relate to recoverable gold and silver on the leach pads and in-process inventories; the useful lives of long-lived assets; probabilities of future expansion projects; environmental reclamation and closure costs; deferred taxes and related valuation allowances; and estimates of fair value for asset impairments and financial instruments. The Company bases its estimates on historical experience and various assumptions that are believed to be reasonable at the time the estimate is made. Actual results may differ from amounts estimated in these Consolidated Financial Statements, and such differences could be material. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash Cash has historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of June 30, 2020 and December 31, 2019, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the condensed consolidated balance sheets. As of June 30, 2020 and December 31, 2019, the Company held $39.6 million and $42.7 million in restricted cash, respectively. See Note 6 ā Restricted Cash | Cash Cash and cash equivalents have historically consisted of cash balances and highly liquid investments with an original maturity of three months or less. The Company has not experienced any losses on cash balances and believes that no significant risk of loss exists with respect to its cash. As of December 31, 2019 and 2018, the Company held no cash equivalents. Restricted cash is excluded from cash and is listed separately on the consolidated balance sheets. See Note 5 ā Restricted Cash |
Accounts Receivable [Policy Text Block] | Accounts receivable Accounts receivable consists of amounts due from customers for gold and silver sales. The Company has evaluated the customersā credit risk, payment history and financial condition and determined that no allowance for doubtful accounts is necessary. The entire accounts receivable balance is expected to be collected during the next 12 months. | |
Inventory, Policy [Policy Text Block] | Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages; and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventories computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Write-downs of production inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. When a write-down is required, production-related inventories are adjusted to net realizable value with adjustments recorded as Write-down of production inventories Cost of sales Note 4 ā Inventories Mine site period costs The Company evaluates its mine site costs incurred, which are normally recorded to the carrying value of production-related inventories, to determine if any such costs are a result of recurring or significant downtime or delays, unusually high levels of repairs, inefficient operations, overuse of processing reagents, or other costs or activities which significantly increase the cost per ounce of production-related inventories and are considered unusual. If costs are determined to meet the criteria and, therefore, cannot be recorded to the carrying value of production-related inventories, then the Company recognizes such costs in the period incurred as Mine site period costs Depreciation and amortization mine site period costs Cost of sales Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 are transferred at an average cost per ounce of gold to precious metals inventory. Precious metals inventory Precious metals inventory consists of dorĆ© and loaded carbon containing both gold and silver, which is ready for offsite shipment and sale to a third party. As gold ounces are sold, costs are recognized in Production costs Depreciation and amortization Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. | Ore on leach pads and inventories The Companyās production-related inventories include: ore on leach pads; in-process inventories; and dorĆ© finished goods. Production-related inventories are carried at the lower of average cost or net realizable value. Cost includes mining (ore and waste); processing; refining costs incurred during production stages, and mine site overhead and depreciation and amortization relating to mining and processing operations. Net realizable value represents the estimated future sales price of production-related inventory quantities computed using the London Bullion Market Associationās (āLBMAā) quoted period-end metal prices, less any further estimated processing, refining, and selling costs. Losses that result from the application of the lower of cost or net realizable value accounting policy are recorded as a component of Cost of sales Note 3 ā Inventories The recovery of gold and silver at the Hycroft Mine is accomplished through a heap leaching process, the nature of which limits the Companyās ability to precisely determine the recoverable gold ounces in ore on leach pads. The Company estimates the quantity of recoverable gold ounces in ore on leach pads using surveyed volumes of material, ore grades determined through sampling and assaying of blastholes, crushed ore sampling, solution sampling, and estimated recovery percentages based on ore type and domain. The estimated recoverable gold ounces placed on the leach pads are periodically reconciled by comparing the related ore gold contents to the actual gold ounces recovered (metallurgical balancing). Changes in recovery rate estimates from metallurgical balancing that do not result in write-downs are accounted for on a prospective basis. If a write-down is required, production-related inventories would be adjusted to net realizable value and recorded as a component of Cost of sales Note 3 ā Inventories Ore on leach pads Ore on leach pads represents ore that is being treated with a chemical solution to dissolve the contained gold. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. As gold-bearing materials are further processed, costs are transferred from ore on leach pads at an average cost per estimated recoverable ounce of gold to in-process inventories. 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 or carbon in column processing method. As gold ounces are recovered using the Merrill-Crowe process, costs are transferred from in-process inventories at an average cost per ounce of gold to dorĆ© finished goods inventory. In-process inventories are valued at the average cost of the material fed into the process, plus the in-process conversion costs, including applicable depreciation and amortization relating to the process facilities incurred to that point in the process. Precious metals inventory Precious metals inventory consists of dorĆ© containing both gold and silver. While operations are actively producing gold and silver, and as the Company sells its in-process inventories, costs are recognized in Production costs Care and maintenance, net Materials and supplies Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight. |
Fair Value Measurement, Policy [Policy Text Block] | Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Level 2 ā Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including Cash Restricted cash, Accounts receivable, Prepaids and other Accounts payable Other liabilities, current Note 18 - Fair Value Measurements | Fair value measurements Accounting Standards Codification (āASCā) Topic 820, Fair Value Measurements Level 1 Level 2 Level 3 ā Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including cash, prepaids and other, accounts payable, and other liabilities are carried at cost, which approximates their fair value due to the short-term nature of these instruments. |
Property, Plant and Equipment, Policy [Policy Text Block] | Plant, equipment, and mine development, net Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or the units-of-production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 7 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs, and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable mineral reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable mineral reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to production-related inventories to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable mineral reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable mineral reserves and estimated metal recoveries associated with those mineral reserves. Equipment not in use From time to time the Company may determine that certain of its property and equipment no longer fit into its strategic operating plans and commence activities to sell such identified assets. The Company evaluates equipment not in use for held-for-sale classification in accordance with ASC Topic 360 Property, Plant, and Equipment . Other assets, non-current | Plant, equipment, and mine development Expenditures for new facilities and equipment, and expenditures that extend the useful lives or increase the capacity of existing facilities or equipment are capitalized and recorded at cost. Such costs are depreciated using either the straight-line method over the estimated productive lives of such assets or using the units-of- production method (when actively operating) at rates sufficient to depreciate such costs over the estimated proven and probable reserves as gold ounces are recovered. See Note 6 ā Plant, Equipment, and Mine Development, Net Mine development Mine development costs include the cost of engineering and metallurgical studies, drilling and assaying costs to delineate an ore body, environmental costs and the building of infrastructure. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. Any of the above costs incurred before mineralization is classified as proven and probable reserves are expensed. During the second half of 2019, the Company established proven and probable reserves. Drilling, engineering, metallurgical, and other related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body, converting non-reserve mineralization to proven and probable reserves, infrastructure planning, or supporting the environmental impact statement. All other drilling costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs to be included as a component of Total cost of sales Mine development costs are amortized using the units-of-production method based upon estimated recoverable ounces in proven and probable reserves. To the extent such capitalized costs benefit an entire ore body, they are amortized over the estimated life of that ore body. Capitalized costs that benefit specific ore blocks or areas are amortized over the estimated life of that specific ore block or area. Recoverable ounces are determined by the Company based upon its proven and probable reserves and estimated metal recoveries associated with those reserves. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment, and mine development. The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 7 ā Plant, Equipment, and Mine Development, Net During the three months ended June 30, 2020, the Company determined a triggering event had occurred, as it has been unsuccessful in achieving its operating and production costs targets. As a result, the Company performed a recoverability test at June 30, 2020, and no impairments were recorded. | Impairment of long-lived assets The Companyās long-lived assets consist of plant, equipment and mine development. The Company reviews and evaluates its long-lived assets for recoverability annually and at interim periods if triggering events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Events that may trigger a test for recoverability include, but are not limited to, significant adverse changes to projected revenues, costs, or future expansion plans or changes to federal and state regulations (with which the Company must comply) that may adversely impact the Companyās current or future operations. An impairment is determined to exist if the total projected future cash flows on an undiscounted basis are less than the carrying amount of a long-lived asset group. An impairment loss is measured and recorded based on the excess carrying value of the impaired long-lived asset group over fair value. To determine fair value, the Company uses a discounted cash flow model based on quantities of estimated recoverable minerals and incorporates projections and probabilities involving metal prices (considering current and historical prices, price trends, and related factors), production levels, operating and production costs, and the timing and capital costs of expansion and sustaining projects, all of which are based on life-of-mine plans. The term ārecoverable mineralsā refers to the estimated amount of gold and silver that will be sold after taking into account losses during ore processing and treatment. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Companyās estimates of future cash flows are based on numerous assumptions, which are consistent or reasonable in relation to internal budgets and projections, and actual future cash flows may be significantly different than the estimates, as actual future quantities of recoverable gold and silver, metal prices, operating and production costs, and the timing and capital costs of expansion and sustaining projects are each subject to significant risks and uncertainties. See Note 6 ā Plant, Equipment, and Mine Development, Net |
Oil and Gas Properties Policy [Policy Text Block] | Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of June 30, 2020 and December 31, 2019, there was no recorded amounts for mineral properties as such values had been written-down to $0 in previous periods. | Mineral properties Mineral properties are tangible assets recorded at cost and include royalty interests, asset retirement costs, and land and mineral rights to explore and extract minerals from properties. Once a property is in the production phase, mineral property costs are amortized using the units-of-production method based upon the estimated recoverable gold ounces in proven and probable reserves at such properties. Costs to maintain mineral properties are expensed in the period they are incurred. As of December 31, 2019 and 2018, there was no value assigned to mineral properties as the value had been written-down to $0 in previous periods. |
Asset Retirement Obligation [Policy Text Block] | Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion Mineral properties | Asset retirement obligation The Companyās mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. The Companyās asset retirement obligation (āAROā), consisting of estimated future mine reclamation and closure costs, may increase or decrease significantly in the future as a result of changes in regulations, mine plans, estimates, or other factors. The Companyās ARO relates to its operating property, the Hycroft Mine, and was recognized as a liability at fair value in the period incurred. An ARO, which is initially estimated based on discounted cash flow estimates, is accreted to full value over time through charges to Accretion expense Mineral properties, net |
Royalty Obligation, Policy [Policy Text Block] | Royalty obligation The Companyās royalty obligation is carried at amortized cost with reductions calculated by dividing actual gold and silver production by the estimated total life-of-mine production from proven and probable mineral reserves. Any updates to proven and probable mineral reserves or the estimated life-of-mine production profile would result in prospective adjustments to the amortization calculation used to reduce the carrying value of the royalty obligation. Amortization reductions to the royalty obligation are recorded to Production costs Cost of sales | |
Derivatives, Policy [Policy Text Block] | Derivative instruments The Company recognizes all derivatives as either assets or liabilities and measures those instruments at fair value. Changes in the fair value of derivative instruments, together with any gains or losses on derivative settlements and transactions, are recorded in earnings to Fair value adjustments As of June 30, 2020, the Companyās only recorded derivative was for warrants (see Note 18 - Fair Value Measurements | Derivative instruments The fair value of the Companyās derivative instruments is reflected as liabilities on the consolidated balance sheets. The Company does not hold derivative instruments for trading purposes. Derivative Instruments Not Designated as Hedges Previous equity stockholders of the Company received warrants with a seven-year term that represent 17.5% of the outstanding new common shares. These warrants were accounted for as a derivative instrument and included in Other liabilities, non-current Other, net See Note 11 ā Stockholdersā Equity Note 16 ā Fair Value Measurements |
Revenue from Contract with Customer [Policy Text Block] | Revenue recognition The Company recognizes revenue for gold and silver sales when it satisfies the performance obligation of transferring inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon sales prices and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. The majority of sales are in the form of dorƩ bars, but the Company also sells loaded carbon and slag, a by-product. All sales are final. | Revenue recognition When actively operating, the Company recognizes revenue on gold and silver sales. During the year ended December 31, 2019, the Company began actively operating the Hycroft Mine and, as such, recorded gold and silver sales as Revenue Care and maintenance, net Care and maintenance, net The Company recognizes revenue for gold and silver production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs when the refiner notifies the customer that gold has been credited or irrevocably pledged to their account at which point the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset. The transaction amount is determined based on the agreed upon market price and the number of ounces delivered. Concurrently, the payment date is agreed upon, which is usually within one week. All sales are final. |
Compensation Related Costs, Policy [Policy Text Block] | Stock-based compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant. Stock-based compensation costs are charged to General and administrative Note 14 - Stock-Based Compensation | Stock-Based Compensation Stock-based compensation costs for eligible employees are measured at fair value on the date of grant and charged to expense over the requisite service period. The fair value of awards is determined using the stock price on either the date of grant (if subject only to service conditions) or the date that the Compensation Committee of the Board of Directors establishes applicable performance targets (if subject to performance conditions). The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods through the final vesting date. See Note 13 ā Stock-Based Compensation |
Phantom Shares, Policy [Policy Text Block] | Phantom shares Non-employee members of Sellerās board of directors received phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment was equal to the fair market value of one share of common stock of Seller at the date of payment. Under the grant agreements, each phantom share vested on the date of grant and entitled the participant to a cash payment. For grants issued during 2020, 2019 and 2018, the cash payment was equal to the greater of the (1) grant date value, and (2) the fair market value of one share of common stock of Seller at the date of payment. All phantom shares issued by Seller were terminated and paid in connection with the Recapitalization Transaction. See Note 14 - Stock-Based Compensation Note 18 ā Fair Value Measurements | Phantom shares Non-employee members of the Companyās board of directors receive phantom shares of stock pursuant to a Non-Employee Director Phantom Stock Plan. For grants issued during the years ended 2015 and 2016, the cash payment is equal to the fair market value of one share of common stock of the Company at the date of payment. Under the grant agreements, each phantom share vests on the date of grant and entitles the participant to a cash payment. For grants issued during 2019 and 2018, the cash payment is equal to the greater of the (1) grant date value and (2) the fair market value of one share of common stock of the Company at the date of payment. The fair market value at date of grant of the phantom shares was based upon the valuation of the Company determined in the bankruptcy process. During the twelve months ended December 31, 2019, the Company recorded a $0.2 million increase in the value of phantom shares granted in 2015 and 2016, which is included in General and administrative General and administrative General and administrative Note 16 ā Fair Value Measurements |
Reorganization Items, Net, Policy [Policy Text Block] | Reorganization items On March 10, 2015, a predecessor of the Company filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware (the āBankruptcy Courtā). Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items | Reorganization items, net Expenses directly associated with finalizing the Chapter 11 cases before the Bankruptcy Court are reported as Reorganization items, net |
Income Tax, Policy [Policy Text Block] | Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 15 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās condensed consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. | Income taxes The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Companyās liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect at the anticipated time of reversal. The Company derives its deferred income tax provision or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. See Note 14 ā Income Taxes The Companyās deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. Evidence evaluated includes past operating results, forecasted earnings, estimated future taxable income, and prudent and feasible tax planning strategies. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying business. As necessary, the Company also provides reserves against the benefits of uncertain tax positions taken on its tax filings. The necessity for and amount of a reserve is established by determining, based on the weight of available evidence, the amount of benefit which is more likely than not to be sustained upon audit for each uncertain tax position. The difference, if any, between the full benefit recorded on the tax return and the amount more likely than not to be sustained is recorded as a liability on the Companyās consolidated balance sheets unless the additional tax expense that would result from the disallowance of the tax position can be offset by a net operating loss, a similar tax loss, or a tax credit carryforward. In that case, the reserve is recorded as a reduction to the deferred tax asset associated with the applicable net operating loss, similar tax loss, or tax credit carryforward. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements | Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (āFASBā) issued Accounting Standards Update (āASUā) No. 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 on January 1, 2019 using a modified retrospective approach. As there were no unfulfilled contracts outstanding as of December 31, 2018, there was no cumulative effect adjustment required to be recognized at January 1, 2019. In February 2016, the FASB issued ASU No. 2016-02, Leases In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework ā Changes to the Disclosure Requirements for Fair Value Measurements eliminated, while others were modified and there were some additions. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019. The Company will adopt ASU 2018-13 in 2020, but will not have a material effect on the financial statement disclosures. |
Note 3 - Recapitalization Tra_2
Note 3 - Recapitalization Transaction (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes Tables | |
Ownership of Entity's Common Stock [Table Text Block] | ā ā ā ā ā ā ā ā Shares Ownership % ā Former Seller stockholders and affiliated entities 48,421,309 96.5 % Former MUDS public stockholders(1) 1,197,704 2.4 % Lender to Sprott Credit Agreement 496,634 1.0 % Cantor Fitzgerald & Co. 44,395 0.1 % Total shares issued and outstanding 50,160,042 100.0 % (1) Includes 200,000 shares held by Cantor . |
Note 4 - Inventories (Tables)
Note 4 - Inventories (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Schedule of Inventory, Current [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 5,043 ā ā $ 2,559 ā Merrill-Crowe in process ā 410 226 ā 1,004 691 Carbon column in-process ā 2,209 1,397 ā 478 474 DorĆ© finished goods ā 1,641 885 ā 412 278 Total ā $ 9,303 2,508 ā $ 4,453 1,443 | The following table provides the components of inventories and the estimated recoverable gold ounces therein (in thousands, except ounces): ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2019 ā December 31, 2018 ā Amount Gold Ounces Amount Gold Ounces Materials and supplies ā $ 2,559 ā ā $ 1,582 ā Merrill-Crowe in process ā 1,004 691 ā ā ā Carbon column in-process ā 478 474 ā 478 482 DorĆ© finished goods ā 412 278 ā ā ā Total ā $ 4,453 1,443 ā $ 2,060 482 |
Schedule of Inventory Ore on Leach Pads [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, 2020 ā December 31, 2019 ā Amount Gold Ounces Amount Gold Ounces Ore on leach pads ā $ 28,180 17,825 ā $ 22,062 17,019 |
Note 5 - Prepaids and Other (Ta
Note 5 - Prepaids and Other (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes Tables | |
Prepaids and Other Assets [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Prepaids and other ā ā Prepaids ā $ 4,283 ā $ 2,109 Deposits ā 539 ā 539 Total ā $ 4,822 ā $ 2,648 ā ā ā ā ā ā ā Other assets, non-current ā ā Equipment not in use ā $ 19,683 ā $ 19,683 Prepaid supplies inventory ā 885 ā ā Royalty - advance payment ā 240 ā 120 Deferred future financing costs ā ā ā 5,083 Total ā $ 20,808 ā $ 24,886 |
Note 6 - Restricted Cash (Table
Note 6 - Restricted Cash (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Restrictions on Cash and Cash Equivalents [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Asset retirement obligation surety bonds (collateralized obligation) ā $ 39,631 ā 39,477 First Lien Agreement restricted cash - Note 9 ā ā ā 3,270 Total ā $ 39,631 ā $ 42,747 | The following table provides the components of restricted cash (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 First Lien agreement restricted cash ā Note 9 ā 3,270 ā 5,030 Asset retirement obligation surety bonds (collateralized obligation) ā 39,477 ā 38,693 Total ā $ 42,747 ā $ 43,723 |
Note 7 - Plant, Equipment, an_2
Note 7 - Plant, Equipment, and Mine Development, Net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Property, Plant and Equipment [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā June 30, ā December 31, ā of Method 2020 2019 Process equipment 5 ā $ 15,809 ā $ 14,770 Leach pads Units-of-production ā 17,431 ā 17,419 Buildings and leasehold improvements 10 years ā 10,507 ā 10,507 Mine equipment 5 ā 4,898 ā 4,716 Vehicles 3 ā 730 ā 136 Furniture and office equipment 7 years ā 290 ā 129 Mine development Units-of-production ā 408 ā 119 Construction in progress and other ā ā ā 13,736 ā 936 ā ā ā ā $ 63,809 ā $ 48,732 Less: accumulated depreciation and amortization ā ā ā (21,537) ā (17,208) Total ā ā ā $ 42,272 ā $ 31,524 | The following table provides the components of plant, equipment, and mine development, net (in thousands): ā ā ā ā ā ā ā ā ā ā ā ā Depreciation Life ā December 31, ā of Method 2019 2018 Process equipment ā 5 ā 13 years ā $ 14,770 ā $ 6,759 Leach pads ā Units-of-production ā 11,190 ā 11,190 Buildings and leasehold improvements ā 10 years ā 10,507 ā 10,507 Restart leach pads ā 18 months ā 6,229 ā ā Mine equipment ā 5 ā 4,716 ā 3,905 Vehicles ā 3 ā 136 ā 41 Furniture and office equipment ā 7 years ā 129 ā 22 Mine development ā Units-of-production ā 119 ā ā Construction in progress and other ā ā ā 20,619 ā 20,750 ā ā ā ā ā $ 68,415 ā $ 53,174 Less: accumulated depreciation and amortization ā ā ā ā (17,208) ā (11,770) Total ā ā ā ā $ 51,207 ā $ 41,404 |
Note 8 - Other Liabilities (Tab
Note 8 - Other Liabilities (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Other Liabilities [Table Text Block] | ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Other liabilities, current ā ā ā ā ā ā Other accrued compensation ā $ 1,784 ā $ 1,139 Restricted stock units - Note 14 ā 50 ā 1,210 Accrued compensation for phantom shares - Note 18 ā ā ā 1,590 Total ā $ 1,834 ā $ 3,939 ā ā ā ā ā ā ā Other liabilities, non-current ā ā ā ā ā ā Seller Warrant liability - Notes 12 and 18 ā $ 18 ā $ 18 Payroll Tax Liability ā 135 ā ā Total ā $ 153 ā $ 18 | ā ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Other liabilities, current ā ā Accrued compensation for phantom shares ā Note 16 ā $ 1,590 ā $ 884 Restricted stock units ā Note 13 ā 1,210 ā ā Other accrued compensation ā 1,139 ā 892 Other ā ā ā 14 Total ā $ 3,939 ā $ 1,790 ā ā ā ā ā ā ā Other liabilities, non-current ā ā Warrant liability ā Notes 11 and 16 ā $ 18 ā $ 18 |
Note 9 - Debt, Net (Tables)
Note 9 - Debt, Net (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Schedule of Debt [Table Text Block] | ā ā ā ā ā ā ā ā ā ā June 30, ā December 31, ā 2020 2019 Debt, net, current: ā ā ā ā ā ā 2.0 Lien Notes ā $ ā ā $ 208,411 1.5 Lien Notes ā ā ā 137,050 First Lien Agreement ā ā ā 125,468 1.25 Lien Notes ā ā ā 77,212 Promissory Note ā ā ā 6,773 Less, debt issuance costs ā ā ā (949) ā ā $ ā ā $ 553,965 Debt, net, non-current: ā ā ā ā ā ā Subordinated Notes ā $ 80,711 ā $ ā Sprott Credit Agreement ā 63,114 ā ā Less, debt issuance costs ā (4,781) ā ā ā ā $ 139,044 ā $ ā | The following table summarizes the components of debt (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Debt, current: ā ā Convertible Notes ā $ 208,411 ā $ ā 1.5 Lien Notes ā 137,050 ā ā First Lien Agreement ā 125,468 ā 125,468 1.25 Lien Notes ā 77,212 ā ā Other Note payable ā 6,773 ā 5,989 Less debt issuance costs ā (949) ā (71) Total ā $ 553,965 ā $ 131,386 ā ā ā ā ā ā ā Debt, non-current: ā ā Convertible Notes ā $ ā ā $ 179,874 1.5 Lien Notes ā ā ā 118,270 Less debt issuance costs ā ā ā (1,943) Total ā $ ā ā $ 296,201 |
Schedule of Interest Expense [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 2.0 Lien Notes ā $ 5,085 ā $ 6,997 ā $ 12,901 ā $ 13,743 1.5 Lien Notes ā 3,496 ā 4,601 ā 8,635 ā 9,034 1.25 Lien Notes ā 2,866 ā 852 ā 6,218 ā 1,130 First Lien Agreement ā 1,708 ā 2,547 ā 4,575 ā 5,058 Sprott Credit Agreement ā 796 ā ā ā 796 ā ā Subordinated Notes ā 711 ā ā ā 711 ā ā Amortization of debt issuance costs ā 635 ā 503 ā 1,307 ā 1,002 Promissory Note ā 57 ā 413 ā 142 ā 489 Capitalized interest ā (290) ā (272) ā (334) ā (417) Other interest expense ā 8 ā ā ā 8 ā ā ā ā $ 15,072 ā $ 15,641 ā $ 34,959 ā $ 30,039 |
Note 11 - Asset Retirement Ob_2
Note 11 - Asset Retirement Obligation (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Schedule of Change in Asset Retirement Obligation [Table Text Block] | ā ā ā ā ā ā ā ā ā 2020 2019 Balance at January 1, ā $ 4,374 ā $ 5,832 Accretion expense ā 187 ā 211 Balance at June 30, ā $ 4,561 ā $ 6,043 | The following table summarizes changes in the Companyās ARO (in thousands): ā ā ā ā ā ā ā ā ā December 31, ā 2019 2018 Balance, beginning of year ā $ 5,832 ā $ 21,548 Accretion expense ā 422 ā 1,271 Changes in estimates ā (1,880) ā (16,987) Balance, end of year ā $ 4,374 ā $ 5,832 |
Note 13 - Revenue (Tables)
Note 13 - Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes Tables | |
Disaggregation of Revenue [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā ā 2020 ā 2019 ā 2020 ā 2019 ā ā ā ā ā Ounces ā ā ā ā Ounces ā ā ā ā Ounces ā ā ā ā Ounces ā Amount Sold Amount Sold Amount Sold Amount Sold Gold sales ā $ 7,284 4,237 ā $ ā ā ā $ 17,612 10,797 ā $ ā ā Silver sales ā 352 21,331 ā ā ā ā 1,148 70,703 ā ā ā Total ā $ 7,636 ā ā ā $ ā ā ā ā $ 18,760 ā ā ā $ ā ā ā |
Note 16 - Loss Per Share (Table
Note 16 - Loss Per Share (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended June 30, ā Six Months Ended June 30, ā 2020 2019 2020 2019 Net loss ā $ (49,790) ā $ (21,947) ā $ (84,408) ā $ (45,387) ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted average shares outstanding ā ā ā ā ā ā ā ā ā ā ā ā Basic ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 Diluted ā 18,395,983 ā 299,780 ā 9,359,655 ā 299,001 ā ā ā ā ā ā ā ā ā ā ā ā ā Basic loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) Diluted loss per common share ā $ (2.71) ā $ (73.21) ā $ (9.02) ā $ (151.80) | The table below shows our basic and diluted earnings (loss) per share calculations (in thousands, except share and per share amounts): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Net loss ā $ (98,895) ā $ (55,803) Weighted average shares outstanding ā ā Basic ā 2,739,505 ā 2,645,194 Diluted ā 2,739,505 ā 2,645,194 Basic earnings per common share ā $ (36.10) ā $ (21.10) Diluted earnings per common share ā $ (36.10) ā $ (21.10) |
Note 17 - Segment Information (
Note 17 - Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Notes Tables | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three months ended June 30, ā Six months ended June 30, ā ā Hycroft ā Corporate ā ā ā ā Hycroft ā Corporate ā ā ā ā Mine and Other Total Mine and Other Total 2020 ā ā ā ā ā ā Revenue - Note 13 ā $ 7,636 ā $ ā ā $ 7,636 ā $ 18,760 ā $ ā ā $ 18,760 Cost of sales ā 31,863 ā ā ā 31,863 ā 55,731 ā ā ā 55,731 Other operating costs ā 94 ā 10,432 ā 10,526 ā 187 ā 12,438 ā 12,625 Loss from operations ā 24,321 ā 10,432 ā 34,753 ā 37,158 ā 12,438 ā 49,596 Interest expense - Note 9 ā 56 ā 15,016 ā 15,072 ā 141 ā 34,818 ā 34,959 Interest income ā (35) ā ā ā (35) ā (147) ā ā ā (147) Loss before reorganization items and income taxes ā 24,342 ā 25,448 ā 49,790 ā 37,152 ā 47,256 ā 84,408 Reorganization items ā ā ā ā ā ā ā ā ā ā ā ā Loss before income taxes ā $ 24,342 ā $ 25,448 ā $ 49,790 ā $ 37,152 ā $ 47,256 ā $ 84,408 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2019 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Revenue - Note 13 ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā ā $ ā Cost of sales ā ā ā ā ā ā ā ā ā ā ā ā Other operating costs ā 4,917 ā 1,214 ā 6,131 ā 11,836 ā 3,161 ā 14,997 Loss from operations ā 4,917 ā 1,214 ā 6,131 ā 11,836 ā 3,161 ā 14,997 Interest expense - Note 9 ā 414 ā 15,227 ā 15,641 ā 489 ā 29,550 ā 30,039 Interest income ā (110) ā ā ā (110) ā (226) ā ā ā (226) Loss before reorganization items and income taxes ā 5,221 ā 16,441 ā 21,662 ā 12,099 ā 32,711 ā 44,810 Reorganization items ā ā ā 285 ā 285 ā ā ā 577 ā 577 Loss before income taxes ā $ 5,221 ā $ 16,726 ā $ 21,947 ā $ 12,099 ā $ 33,288 ā $ 45,387 |
Note 18 - Fair Value Measurem_2
Note 18 - Fair Value Measurements (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | ā ā ā ā ā ā ā ā ā ā ā ā Hierarchy ā June 30, ā December 31, Liabilities: Level 2020 2019 Other liabilities, current ā ā Accrued compensation for phantom shares 3 ā $ ā ā $ 1,590 Other liabilities, non-current ā ā Warrant liability - Note 12 3 ā $ 18 ā $ 18 | ā The following table sets forth by level within the fair value hierarchy, the Companyās assets and liabilities measured at fair value on a recurring basis (in thousands). ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, ā Hierarchy Level 2019 2018 Liabilities ā ā Accrued compensation for phantom shares 3 ā $ 1,590 ā $ 884 Derivative instruments: ā ā Warrant liability ā Note 11 2 ā $ 18 ā $ 18 |
Note 19 - Supplemental Cash F_2
Note 19 - Supplemental Cash Flow Information (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Notes Tables | ||
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | ā ā ā ā ā ā ā ā ā ā Six Months Ended June 30, ā 2020 2019 Cash paid for interest ā $ 5,366 ā $ 5,271 ā ā ā ā ā ā ā Significant non-cash financing and investing activities: ā ā ā ā ā ā Exchange of Sellerās 1.5 Lien Notes for HYMC common stock ā 160,254 ā ā Exchange of Sellerās 1.25 Lien Notes for Subordinated Notes ā 80,000 ā ā Exchange of Sellerās 1.25 Lien Notes for HYMC common stock ā 48,459 ā ā Allocate and write-off of Sellerās debt issuance costs ā 8,202 ā ā Plant, equipment, and mine development additions included in accounts payable ā 3,038 ā 2,592 | The following table provides supplemental cash flow information (in thousands): ā ā ā ā ā ā ā ā ā Year Ended December 31, ā 2019 2018 Cash paid for interest ā $ 10,239 ā $ 9,409 Significant non-cash financing and investing activities: ā ā Increase in Second Lien convertible notes from in-kind interest ā $ 28,537 ā $ 24,869 Increase in 1.5 Lien Notes from in-kind interest ā $ 18,780 ā $ 14,023 Increase in 1.25 Lien Notes from in-kind interest ā $ 5,212 ā $ ā Increase in the Promissory Note from in-kind interest ā $ 785 ā $ 117 Accrual of deferred future financing costs ā $ 1,029 ā $ 1,025 Plant and equipment additions ā $ 2,458 ā $ ā |
Note 1 - Company Overview (Deta
Note 1 - Company Overview (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | ||||
Jun. 30, 2020 | May 29, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Cash, Ending Balance | $ 47,293 | $ 68,900 | $ 6,220 | $ 12,576 | |
Common stock, shares issued (in shares) | 50,160,042 | 50,160,042 | 3,095,650 | 2,758,689 | |
Warrants previously issued and outstanding (in shares) | 47,011,622 | 12,700,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 5.20 | ||||
Warrants to purchase shares of common stock | 27,200,000 | ||||
Common stock, shares outstanding (in shares) | 50,160,042 | 50,160,042 | 2,897,568 | 2,598,035 | |
Warrants with Exercise Price of 11.50 Issued under Recapitalization Transaction [Member] | |||||
Warrants previously issued and outstanding (in shares) | 34,289,999 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 11.50 | ||||
Warrants with Exercise Price of 44.82 Issued under Recapitalization Transaction [Member] | |||||
Warrants previously issued and outstanding (in shares) | 12,721,623 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | ||||
Warrants to purchase shares of common stock | 3,210,213 | ||||
Gold and Silver | Revenue from Contract with Customer Benchmark [Member] | Product concentration | |||||
Concentration percentage | 100.00% |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies (Details) | May 29, 2020USD ($) | Jun. 30, 2020USD ($)oz | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($)oz | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)oz | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2016shares | Jun. 30, 2020USD ($)shares |
Reverse Recapitalization, Conversion Ratio | 0.112 | |||||||||||
Net (loss) income | $ (49,790,000) | $ (34,618,000) | $ (21,947,000) | $ (23,440,000) | $ (84,408,000) | $ (45,387,000) | $ (98,895,000) | $ (55,803,000) | ||||
Net Cash Provided by (Used in) Operating Activities, Total | (57,642,000) | (24,135,000) | (59,771,000) | (26,925,000) | ||||||||
Cash, Ending Balance | $ 68,900,000 | 47,293,000 | $ 6,220,000 | 12,576,000 | 47,293,000 | 12,576,000 | 6,220,000 | $ 47,293,000 | ||||
Working Capital | 68,000,000 | 68,000,000 | 68,000,000 | |||||||||
Liabilities, Total | 195,404,000 | 573,888,000 | 195,404,000 | 573,888,000 | 440,100,000 | 195,404,000 | ||||||
Accumulated deficit | $ (468,775,000) | $ (444,438,000) | $ (468,775,000) | (444,438,000) | (345,543,000) | (468,775,000) | ||||||
Ore on leach pads written off (in gold ounces) | oz | 6,512 | 11,680 | 10,492 | |||||||||
Cost of Goods and Services Sold, Total | $ 31,863,000 | $ 55,731,000 | 0 | 30,669,000 | ||||||||
Revenues - Note 13 | 7,636,000 | $ 0 | 18,760,000 | $ 0 | 13,709,000 | 180,000 | ||||||
Excess of Cost of Goods and Services Sold over Revenues | 22,100,000 | |||||||||||
Cash Equivalents, at Carrying Value, Total | 0 | $ 0 | 0 | 0 | 0 | 0 | ||||||
Restricted Cash, Total | 39,631,000 | 42,747,000 | 39,631,000 | 42,747,000 | 43,723,000 | 39,631,000 | ||||||
Asset Impairment Charges, Total | 0 | |||||||||||
Mineral Properties, Gross | 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Non-Employee Director Phantom Stock Plan [Member] | ||||||||||||
Number of Shares of Common Stock Considered for Cash Payment of Grants Issued (in shares) | shares | 1 | 1 | ||||||||||
Production Costs, Mine-site Period Costs, and Cash Portion of Production Inventory [Member] | ||||||||||||
Cost of Goods and Services Sold, Total | 29,700,000 | |||||||||||
Revenues - Note 13 | $ 7,600,000 |
Note 3 - Recapitalization Tra_3
Note 3 - Recapitalization Transaction (Details) - USD ($) | May 29, 2020 | May 31, 2016 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 01, 2020 | May 28, 2020 | Feb. 28, 2018 | Dec. 31, 2017 |
Cash, Ending Balance | $ 68,900,000 | $ 47,293,000 | $ 47,293,000 | $ 12,576,000 | $ 6,220,000 | ||||||
Common stock, shares issued (in shares) | 50,160,042 | 50,160,042 | 50,160,042 | 3,095,650 | 2,758,689 | ||||||
Warrants previously issued and outstanding (in shares) | 47,011,622 | 47,011,622 | 12,700,000 | ||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 5.20 | ||||||||||
Warrants to purchase shares of common stock | 27,200,000 | ||||||||||
Liabilities, Total | $ 195,404,000 | $ 195,404,000 | $ 573,888,000 | $ 440,100,000 | |||||||
Shares Issued, Price Per Share (in dollars per share) | $ 10.10 | ||||||||||
Proceeds from Recapitalization Transaction | $ 10,400,000 | $ 10,419,000 | |||||||||
Number of common stock called by each warrant (in shares) | 2,130,000 | ||||||||||
Stock Surrendered During Period, Shares (in shares) | 3,500,000 | ||||||||||
Proceeds from debt | $ 71,831,000 | $ 27,881,000 | |||||||||
Common shares issued pursuant to Sprott Credit Agreement (in shares) | 496,634 | ||||||||||
Stock Issued During Period, Percentage, Issued to Creditors | 1.00% | 496634.00% | |||||||||
Proceeds from Royalty Obligation | $ 30,000,000 | $ 30,000,000 | |||||||||
Smelter Royalty Obligation, Net, Percent | 1.50% | ||||||||||
Cash in Reserve for Dissolution | $ 2,300,000 | ||||||||||
Payments for Underwriter Fees | $ 2,500,000 | ||||||||||
Common shares issued to underwriter (in shares) | 40,000 | ||||||||||
Payments for Additional Underwriter Fees | $ 2,000,000 | ||||||||||
Stock and Warrants Issuance, Cash Remitted to Holders of Seller's Deferred Phantom Units | 1,800,000 | ||||||||||
Stock and Warrant Issuance, Cash Paid for Additional Transaction Costs | $ 7,400,000 | ||||||||||
Common stock, shares outstanding (in shares) | 50,160,042 | 50,160,042 | 50,160,042 | 2,897,568 | 2,598,035 | ||||||
Former Seller Stockholders and Affiliated Entities [Member] | |||||||||||
Common Stock Shares Outstanding Percentage, Related Affiliates | 96.50% | ||||||||||
Common stock, shares outstanding (in shares) | 48,421,309 | ||||||||||
Cantor Fitzgerald and Co. Portion of Former MUDS Public Stockholders [Member] | |||||||||||
Common stock, shares outstanding (in shares) | 200,000 | ||||||||||
Conversion of 1.25 Lien Notes to Common Stock [Member] | |||||||||||
Debt Conversion, Original Debt, Amount | $ 48,500,000 | $ 48,459,000 | 0 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 4,845,920 | ||||||||||
Debt Conversion, Converted Instrument, Amount | $ 80,000,000 | ||||||||||
Conversion of 1.25 Lien Notes to New Subordinated Notes [Member] | |||||||||||
Debt Conversion, Original Debt, Amount | 80,000,000 | ||||||||||
Debt Conversion, Converted Instrument, Amount | 80,000,000 | ||||||||||
The 1.5 Lien Notes [Member] | |||||||||||
Repurchase price (as a percent) | 110.00% | ||||||||||
Conversion of 1.5 Lien Notes to Common Stock [Member] | |||||||||||
Debt Conversion, Original Debt, Amount | $ 145,700,000 | 160,254,000 | $ 0 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 16,025,316 | ||||||||||
Conversion of 2.0 Lien Notes to Common Stock [Member] | |||||||||||
Debt Conversion, Original Debt, Amount | $ 221,300,000 | ||||||||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 132,800,000 | ||||||||||
Stock Surrendered During Period, Shares (in shares) | 3,511,820 | ||||||||||
First Lien Agreement [Member] | |||||||||||
Repayments of Long-term Debt, Total | $ 125,500,000 | 125,468,000 | |||||||||
Promissory Note | |||||||||||
Repayments of Long-term Debt, Total | 6,900,000 | 6,914,000 | |||||||||
Sprott Credit Agreement | |||||||||||
Proceeds from debt | $ 70,000,000 | 68,600,000 | |||||||||
Debt Instrument, Original Issue Discount, Percentage | 2.00% | ||||||||||
Hycroft Mining Corporation [Member] | |||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares (in shares) | 3,500,000 | ||||||||||
Conversion from Class B Common Stock to Common Stock [Member] | |||||||||||
Conversion of Stock, Shares Converted (in shares) | 5,200,000 | ||||||||||
Conversion of Seller Stock to HYMC Stock [Member] | |||||||||||
Conversion of Stock, Shares Issued (in shares) | 15,100,000 | ||||||||||
Private Placement [Member] | |||||||||||
Shares issued (in shares) | 7,600,000 | ||||||||||
Shares Issued, Price Per Share (in dollars per share) | $ 10 | ||||||||||
Proceeds from issuance of equity | $ 76,000,000 | $ 75,963,000 | |||||||||
Mudrick Capital Acquisition Corporation [Member] | |||||||||||
Cash, Ending Balance | $ 208,536 | $ 535,946 | $ 10,400,000 | $ 24,945 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 1 | ||||||||||
Liabilities, Total | $ 7,614,619 | $ 8,036,841 | $ 8,900,000 | ||||||||
Mudrick Capital Acquisition Corporation [Member] | Class A common stock | |||||||||||
Common stock, shares issued (in shares) | 693,177 | 951,675 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 11.50 | ||||||||||
Unredeemed SPAC shares of MUDS public stockholders (in shares) | 1,200,000 | ||||||||||
Common stock, shares outstanding (in shares) | 693,177 | 951,675 | |||||||||
Hycroft Mining Corporation [Member] | |||||||||||
Common stock, shares issued (in shares) | 2,900,000 | ||||||||||
Common stock, shares outstanding (in shares) | 2,900,000 | ||||||||||
Warrants with Exercise Price of 11.50 Issued under Recapitalization Transaction [Member] | |||||||||||
Warrants previously issued and outstanding (in shares) | 34,289,999 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 11.50 | ||||||||||
Warrants with Exercise Price of 44.82 Issued under Recapitalization Transaction [Member] | |||||||||||
Warrants previously issued and outstanding (in shares) | 12,721,623 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | ||||||||||
Warrants to purchase shares of common stock | 3,210,213 | ||||||||||
Warrants with Exercise Price of 44.82 Issued under Recapitalization Transaction [Member] | Subsequent Event | |||||||||||
Warrants previously issued and outstanding (in shares) | 12,721,623 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | ||||||||||
Warrants to purchase shares of common stock | 3,210,213 | ||||||||||
Number of common stock called by each warrant (in shares) | 0.2523 | ||||||||||
Private Placement Warrants [Member] | |||||||||||
Class of Warrant or Right, Issued During Period (in shares) | 3,250,000 | ||||||||||
Warrants Issued in Connection with Forward Purchase Contract [Member] | Forward Purchase Contract [Member] | |||||||||||
Shares issued (in shares) | 3,125,000 | ||||||||||
Class of Warrant or Right, Issued During Period (in shares) | 2,500,000 | ||||||||||
Proceeds from issuance of equity | $ 25,000,000 | ||||||||||
Warrants Issued in Connection with MUDS IPO [Member] | |||||||||||
Warrants previously issued and outstanding (in shares) | 28,500,000 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 11.50 | ||||||||||
Seller Warrants [Member] | |||||||||||
Warrants previously issued and outstanding (in shares) | 12,700,000 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | $ 44.82 | |||||||||
Number of common stock called by each warrant (in shares) | 0.2523 | 0.2523 |
Note 3 - Recapitalization Tra_4
Note 3 - Recapitalization Transaction - Ownership of the Company's Common Stock Issued and Outstanding Upon Closing of the Recapitalization Transaction (Details) - shares | Jun. 30, 2020 | May 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Common stock, shares outstanding (in shares) | 50,160,042 | 50,160,042 | 2,897,568 | 2,598,035 | |
Ownership percentage | 100.00% | ||||
Former Seller Stockholders and Affiliated Entities [Member] | |||||
Common stock, shares outstanding (in shares) | 48,421,309 | ||||
Ownership percentage | 96.50% | ||||
Former MUDS Public Stockholders [Member] | |||||
Common stock, shares outstanding (in shares) | [1] | 1,197,704 | |||
Ownership percentage | [1] | 2.40% | |||
Lender to Sprott Credit Agreement [Member] | |||||
Common stock, shares outstanding (in shares) | 496,634 | ||||
Ownership percentage | 1.00% | ||||
Cantor Fitzgerald and Co. [Member] | |||||
Common stock, shares outstanding (in shares) | 44,395 | ||||
Ownership percentage | 0.10% | ||||
[1] | Includes 200,000 shares held by Cantor |
Note 4 - Inventories (Details)
Note 4 - Inventories (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)oz | Dec. 31, 2019USD ($)oz | Jun. 30, 2020USD ($)oz | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Note To Financial Statement Details Textual | |||||
Capitalized depreciation and amortization costs | $ 200,000 | $ 100,000 | $ 200,000 | $ 100,000 | $ 0 |
Capitalized depreciation and amortization costs | $ 1,900,000 | $ 1,800,000 | $ 1,900,000 | 1,800,000 | $ 0 |
Ore on leach pads written off (in gold ounces) | oz | 6,512 | 11,680 | 10,492 | ||
Production costs written off | $ 10,200,000 | $ 16,700,000 | 2,200,000 | ||
Capitalized depreciation and amortization costs, written off | 700,000 | 1,300,000 | $ 200,000 | ||
Mine Site Costs, Gross | $ 12,900,000 | $ 20,100,000 |
Note 4 - Inventories - Componen
Note 4 - Inventories - Components of Inventory (Details) $ in Thousands | Jun. 30, 2020USD ($)oz | Dec. 31, 2019USD ($)oz | Dec. 31, 2018USD ($)oz |
Note 4 - Inventories - Components of Inventory (Details) | |||
Materials and supplies | $ | $ 5,043 | $ 2,559 | $ 1,582 |
Materials and supplies, gold ounces (Ounce) | oz | 0 | 0 | 0 |
Merrill-Crowe in process | $ | $ 410 | $ 1,004 | $ 0 |
Merrill-Crowe in process (Ounce) | oz | 226 | 691 | 0 |
Carbon column in-process | $ | $ 2,209 | $ 478 | $ 478 |
Carbon column in-process (Ounce) | oz | 1,397 | 474 | 482 |
Dore finished goods | $ | $ 1,641 | $ 412 | $ 0 |
Dore finished goods (Ounce) | oz | 885 | 278 | 0 |
Total | $ | $ 9,303 | $ 4,453 | $ 2,060 |
Total (Ounce) | oz | 2,508 | 1,443 | 482 |
Note 4 - Inventories - Ore on L
Note 4 - Inventories - Ore on Leach Pads (Details) | Jun. 30, 2020USD ($)oz | Dec. 31, 2019USD ($)oz | Dec. 31, 2018USD ($)oz | Jan. 01, 2017USD ($) |
Note 4 - Inventories - Ore on Leach Pads (Details) | ||||
Ore on leach pads | $ | $ 28,180,000 | $ 22,062,000 | $ 0 | $ 0 |
Ore on leach pads, gold ounces (Ounce) | oz | 17,825 | 17,019 | 0 |
Note 5 - Prepaids and Other - P
Note 5 - Prepaids and Other - Prepaids and Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaids | $ 4,283 | $ 2,109 | $ 1,722 |
Deposits | 539 | 539 | 539 |
Total | 4,822 | 2,648 | 2,261 |
Equipment not in use | 19,683 | 19,683 | |
Prepaid supplies inventory | 885 | 0 | |
Royalty - advance payment | 240 | 120 | |
Deferred future financing costs | 0 | 5,083 | 1,158 |
Total | $ 20,808 | 5,203 | $ 1,158 |
Restatement Adjustment | |||
Total | $ 24,886 |
Note 6 - Restricted Cash (Detai
Note 6 - Restricted Cash (Details Textual) (Imported) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Asset Retirement Obligation, Ending Balance | $ 4,561 | $ 4,374 | $ 6,043 | $ 5,832 | $ 21,548 |
Surety Bond [Member] | |||||
Asset Retirement Obligation, Ending Balance | $ 59,900 |
Note 6 - Restricted Cash - Comp
Note 6 - Restricted Cash - Components of restricted cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Note 6 - Restricted Cash (Details) | ||||
Asset retirement obligation surety bonds (collateralized obligation) | $ 39,631 | $ 39,477 | $ 38,924 | $ 38,693 |
First Lien Agreement restricted cash - Note 9 | 0 | 3,270 | $ 2,547 | 5,030 |
Total | $ 39,631 | $ 42,747 | $ 43,723 |
Note 7 - Plant, Equipment, an_3
Note 7 - Plant, Equipment, and Mine Development, Net - Plant, Equipment, and Mine Development, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment, Gross | $ 63,809 | $ 68,415 | $ 53,174 |
Less: accumulated depreciation and amortization | (21,537) | (17,208) | (11,770) |
Total | 42,272 | 51,207 | 41,404 |
Processing Equipment [Member] | |||
Property, Plant and Equipment, Gross | 15,809 | 14,770 | |
Leach Pads [Member] | |||
Property, Plant and Equipment, Gross | $ 17,431 | 11,190 | 11,190 |
Building and Building Improvements [Member] | |||
Depreciation Life | 10 years | ||
Property, Plant and Equipment, Gross | $ 10,507 | 10,507 | |
Mine Equipment [Member] | |||
Property, Plant and Equipment, Gross | 4,898 | 4,716 | |
Vehicles [Member] | |||
Property, Plant and Equipment, Gross | $ 730 | 136 | 41 |
Furniture and Fixtures [Member] | |||
Depreciation Life | 7 years | ||
Property, Plant and Equipment, Gross | $ 290 | 129 | |
Mine Development [Member] | |||
Property, Plant and Equipment, Gross | 408 | 119 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment, Gross | $ 13,736 | $ 20,619 | $ 20,750 |
Minimum | Processing Equipment [Member] | |||
Depreciation Life | 5 years | ||
Minimum | Mine Equipment [Member] | |||
Depreciation Life | 5 years | ||
Minimum | Vehicles [Member] | |||
Depreciation Life | 3 years | 3 years | |
Maximum | Processing Equipment [Member] | |||
Depreciation Life | 13 years | ||
Maximum | Mine Equipment [Member] | |||
Depreciation Life | 7 years | ||
Maximum | Vehicles [Member] | |||
Depreciation Life | 5 years | 5 years | |
Restatement Adjustment | |||
Property, Plant and Equipment, Gross | $ 48,732 | ||
Total | 31,524 | ||
Restatement Adjustment | Leach Pads [Member] | |||
Property, Plant and Equipment, Gross | 17,419 | ||
Restatement Adjustment | Construction in Progress [Member] | |||
Property, Plant and Equipment, Gross | $ 936 |
Note 8 - Other Liabilities - Ot
Note 8 - Other Liabilities - Other Liabilities, Current and Non-current (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Other accrued compensation | $ 1,784 | $ 1,139 | |
Other liabilities, current - Note 8 | 1,834 | 3,939 | $ 1,790 |
Warrants and Rights Outstanding | 18 | 18 | |
Payroll Tax Liability | 135 | 0 | |
Other liabilities, non-current - Note 8 | 153 | 18 | $ 18 |
Restricted Stock Units (RSUs) [Member] | |||
Accrued compensation | 50 | 1,210 | |
Phantom Share Units (PSUs) [Member] | |||
Accrued compensation | $ 0 | $ 1,590 |
Note 9 - Debt, Net (Details)
Note 9 - Debt, Net (Details) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2020 | May 31, 2016 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 04, 2019 | Feb. 22, 2019 |
Share Price (in dollars per share) | $ 12.65 | |||||||
Stock Issued During Period, Shares, Issued to Creditors (in shares) | 496,634 | |||||||
Proceeds from debt | $ 71,831 | $ 27,881 | ||||||
Stock Issued During Period, Percentage, Issued to Creditors | 1.00% | 496634.00% | ||||||
Restricted cash - Note 6 | $ 0 | $ 2,547 | $ 3,270 | $ 5,030 | ||||
Assumed New Subordinated Notes | ||||||||
Interest rate (as a percent) | 10.00% | |||||||
Conversion of 1.25 Lien Notes for New Subordinated Notes [Member] | ||||||||
Debt Conversion, Original Debt, Amount | $ 80,000 | 0 | ||||||
Conversion of 2.0 Lien Notes to Common Stock [Member] | ||||||||
Debt Conversion, Original Debt, Amount | $ 221,300 | |||||||
Gain (Loss) on Debt Conversion | $ 74,600 | |||||||
Debt Conversion, Converted Instrument, Shares Distributed (in shares) | 14,817,256 | |||||||
Initial conversion price (in dollars per share) | $ 1.67 | |||||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 132,800,000 | |||||||
Conversion of 1.5 Lien Notes to Common Stock [Member] | ||||||||
Interest rate (as a percent) | 15.00% | |||||||
Debt Conversion, Original Debt, Amount | $ 145,700 | 160,254 | 0 | |||||
Gain (Loss) on Debt Conversion | $ 14,600 | |||||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 16,025,316 | |||||||
Debt Instrument, Percentage of Total Principal Amount | 10.00% | |||||||
Conversion of 1.25 Lien Notes to Common Stock [Member] | ||||||||
Debt Conversion, Original Debt, Amount | $ 48,500 | 48,459 | 0 | |||||
Debt Conversion, Converted Instrument, Shares Issued (in shares) | 4,845,920 | |||||||
Debt Instrument, Percentage of Total Principal Amount | 10.00% | |||||||
Debt Conversion, Converted Instrument, Amount | $ 80,000 | |||||||
Conversion of 1.25 Lien Notes to New Subordinated Notes [Member] | ||||||||
Debt Conversion, Original Debt, Amount | 80,000 | |||||||
Debt Conversion, Converted Instrument, Amount | 80,000 | |||||||
Sprott Credit Agreement | ||||||||
Debt Instrument, Covenant, Minimum Working Capital | $ 10,000 | |||||||
Gold and Silver Price Discounted Rate | 5.00% | |||||||
Long-term Line of Credit, Total | 62,300 | $ 70,000 | ||||||
Interest Payable | 9,300 | 9,300 | ||||||
Debt Instrument, Unamortized Discount, Total | 17,000 | |||||||
Debt Instrument, Unamortized Original Issue Discount | $ 1,400 | |||||||
Debt Instrument, Interest Rate, Effective Percentage | 8.50% | |||||||
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature | $ 6,300 | |||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 110,000 | |||||||
Proceeds from debt | $ 70,000 | 68,600 | ||||||
Debt Instrument, Original Issue Discount, Percentage | 2.00% | |||||||
Debt Instrument, Original Issue Discount Amount | $ (1,400) | |||||||
Line of Credit Facility, Remaining Borrowing Capacity | 40,000 | |||||||
Debt Instrument, Percentage of Interest Capitalized | 100.00% | |||||||
Debt Instrument, Quarterly Interest Payable | $ 500 | |||||||
Debt Instrument, First Four Principal Repayments, Percentage of Total Outstanding Principal Amount | (2.50%) | |||||||
Debt Instrument, Subsequent Principal Repayments, Percentage of Total Outstanding Principal Amount | (7.50%) | |||||||
Debt Instrument, Term (Year) | 5 years | |||||||
Sprott Credit Agreement | Minimum | ||||||||
Debt Instrument, Early Repayment Premium, Percentage | 3.00% | |||||||
Sprott Credit Agreement | Maximum | ||||||||
Debt Instrument, Early Repayment Premium, Percentage | 5.00% | |||||||
Sprott Credit Agreement | LIBOR | ||||||||
Spread on variable rate basis (as a percent) | 1.50% | |||||||
First Lien Agreement [Member] | ||||||||
Interest rate (as a percent) | 7.00% | |||||||
Repayments of Long-term Debt, Total | $ 125,500 | $ 125,468 | ||||||
Restricted cash - Note 6 | $ 3,300 | |||||||
First Lien Agreement [Member] | LIBOR | ||||||||
Spread on variable rate basis (as a percent) | 7.50% | |||||||
First Lien Agreement [Member] | Alternative Base Rate Canada [Member] | ||||||||
Spread on variable rate basis (as a percent) | 7.50% | |||||||
The 2.0 Lien Notes [Member] | ||||||||
Interest rate (as a percent) | 15.00% | |||||||
The 1.5 Lien Notes [Member] | ||||||||
Interest rate (as a percent) | 15.00% | |||||||
Repurchase price (as a percent) | 110.00% | |||||||
The 1.25 Lien Notes [Member] | ||||||||
Proceeds from debt | $ 44,841 | $ 36,927 | ||||||
Interest rate (as a percent) | 15.00% | |||||||
New Subordinated Notes [Member] | Conversion of 1.25 Lien Notes for New Subordinated Notes [Member] | ||||||||
Debt Conversion, Original Debt, Amount | $ 80,000 | 80,000 | ||||||
New Subordinated Notes [Member] | Conversion of 1.25 Lien Notes to Common Stock [Member] | ||||||||
Debt Conversion, Original Debt, Amount | 48,500 | |||||||
Promissory Note | ||||||||
Repayments of Long-term Debt, Total | $ 6,900 | $ 6,914 |
Note 9 - Debt, Net - Components
Note 9 - Debt, Net - Components of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Less: debt issuance costs | $ 0 | $ (949) | $ (71) |
Debt, Current | 0 | 553,965 | 131,386 |
Less debt issuance costs | (4,781) | 0 | (1,943) |
Debt, net, non-current - Note 9 | 139,044 | 0 | $ 296,201 |
The 2.0 Lien Notes [Member] | |||
Debt, gross | 0 | 208,411 | |
The 1.5 Lien Notes [Member] | |||
Debt, gross | 0 | 137,050 | |
First Lien Agreement [Member] | |||
Debt, gross | 0 | 125,468 | |
The 1.25 Lien Note [Member] | |||
Debt, gross | 0 | 77,212 | |
Promissory Note | |||
Debt, gross | 0 | 6,773 | |
Subordinated Notes [Member] | |||
Debt, gross | 80,711 | 0 | |
Sprott Credit Agreement | |||
Debt, gross | $ 63,114 | $ 0 |
Note 9 - Debt, Net - Componen_2
Note 9 - Debt, Net - Components of Recorded Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest Expense, Debt | $ 15,072 | $ 15,641 | $ 34,959 | $ 30,039 | $ 64,844 | $ 50,893 |
Amortization of Debt Issuance Costs | 635 | 503 | 1,307 | 1,002 | 2,047 | 1,802 |
Capitalized interest | (290) | (272) | (334) | (417) | $ (551) | $ 0 |
Other interest expense | 8 | 0 | 8 | 0 | ||
The 2.0 Lien Notes [Member] | ||||||
Interest Expense, Debt | 5,085 | 6,997 | 12,901 | 13,743 | ||
The 1.5 Lien Notes [Member] | ||||||
Interest Expense, Debt | 3,496 | 4,601 | 8,635 | 9,034 | ||
The 1.25 Lien Note [Member] | ||||||
Interest Expense, Debt | 2,866 | 852 | 6,218 | 1,130 | ||
First Lien Agreement [Member] | ||||||
Interest Expense, Debt | 1,708 | 2,547 | 4,575 | 5,058 | ||
Sprott Credit Agreement | ||||||
Interest Expense, Debt | 796 | 0 | 796 | 0 | ||
Subordinated Notes [Member] | ||||||
Interest Expense, Debt | 711 | 0 | 711 | 0 | ||
Promissory Note | ||||||
Interest Expense, Debt | $ 57 | $ 413 | $ 142 | $ 489 |
Note 10 - Royalty Obligation (D
Note 10 - Royalty Obligation (Details) - USD ($) | May 29, 2020 | Jun. 30, 2020 | Jun. 30, 2020 |
Note To Financial Statement Details Textual | |||
Proceeds from Royalty Obligation | $ 30,000,000 | $ 30,000,000 | |
Smelter Royalty Obligation, Net, Percent | 1.50% | ||
Smelter Royalty Obligation, Percentage of Royalty with Right to Purchase | 33.30% | ||
Smelter Royalty Obligation, Right to Repurchase, Percentage of Net Smelter Returns | 0.50% | ||
Royalty Obligation, Amortization | $ 5,300 | 5,300 | |
Royalty obligation, current - Note 10 | $ 296,000 | $ 296,000 |
Note 11 - Asset Retirement Ob_3
Note 11 - Asset Retirement Obligation - Changes in the Company's ARO (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Note 11 - Asset Retirement Obligation - Changes in the Company's ARO (Details) | ||||
Balance at January 1, | $ 4,374 | $ 5,832 | $ 5,832 | $ 21,548 |
Accretion expense | 187 | 211 | 422 | 1,271 |
Balance at March 31, | $ 4,561 | $ 6,043 | $ 4,374 | $ 5,832 |
Note 12 - Stockholders' Equity
Note 12 - Stockholders' Equity (Details) - $ / shares | 6 Months Ended | ||||
Jun. 30, 2020 | Jul. 01, 2020 | May 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares Authorized (in shares) | 410,000,000 | ||||
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 | 400,000,000 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Undesignated preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.0001 | $ 0.001 | |||
Common stock, shares issued (in shares) | 50,160,042 | 50,160,042 | 3,095,650 | 2,758,689 | |
Preferred Stock, Shares Issued, Total (in shares) | 0 | 0 | |||
Warrants previously issued and outstanding (in shares) | 47,011,622 | 12,700,000 | |||
Warrants to purchase shares of common stock | 27,200,000 | ||||
Number of common stock called by each warrant (in shares) | 2,130,000 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 5.20 | ||||
Warrants and Rights Outstanding, Term (Year) | 7 years | 7 years | |||
Common stock, shares outstanding (in shares) | 50,160,042 | 50,160,042 | 2,897,568 | 2,598,035 | |
Five-year Public Warrants [Member] | |||||
Warrants to purchase shares of common stock | 34,289,999 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 11.50 | ||||
Warrants and Rights Outstanding, Term (Year) | 5 years | ||||
Share Price Threshold to Call Warrants (in dollars per share) | $ 18 | ||||
Warrants with Exercise Price of 44.82 Issued under Recapitalization Transaction [Member] | |||||
Warrants previously issued and outstanding (in shares) | 12,721,623 | ||||
Warrants to purchase shares of common stock | 3,210,213 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | ||||
Warrants with Exercise Price of 44.82 Issued under Recapitalization Transaction [Member] | Subsequent Event | |||||
Warrants previously issued and outstanding (in shares) | 12,721,623 | ||||
Warrants to purchase shares of common stock | 3,210,213 | ||||
Number of common stock called by each warrant (in shares) | 0.2523 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | ||||
Warrants and Rights Outstanding, Term (Year) | 7 years | ||||
Minimum | |||||
Common Stock, Lock Up Period (Month) | 6 months | ||||
Maximum | |||||
Common Stock, Lock Up Period (Month) | 12 months |
Note 13 - Revenue (Details)
Note 13 - Revenue (Details) - oz | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2020 | |
Volume of Sales (Ounce) | 0 | |
One Customer [Member] | ||
Percentage of Revenue | 95.10% |
Note 13 - Revenue - Summary of
Note 13 - Revenue - Summary of the Company's Gold and Silver Sales (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020USD ($)oz | Jun. 30, 2019USD ($)oz | Jun. 30, 2020USD ($)oz | Jun. 30, 2019USD ($)oz | Dec. 31, 2019USD ($)oz | Dec. 31, 2018USD ($)oz | |
Amount sold | $ | $ 7,636 | $ 0 | $ 18,760 | $ 0 | $ 13,709 | $ 180 |
Ounces sold (in ounces) | oz | 0 | |||||
Gold | ||||||
Amount sold | $ | $ 7,284 | $ 0 | $ 17,612 | $ 0 | $ 12,803 | $ 178 |
Ounces sold (in ounces) | oz | 4,237 | 0 | 10,797 | 0 | 8,593 | 145 |
Silver | ||||||
Amount sold | $ | $ 352 | $ 0 | $ 1,148 | $ 0 | $ 906 | $ 2 |
Ounces sold (in ounces) | oz | 21,331 | 0 | 70,703 | 0 | 52,036 | 124 |
Note 14 - Stock-based Compens_2
Note 14 - Stock-based Compensation (Details) - USD ($) | Jun. 01, 2020 | May 29, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 0.8 | |||||||
Other liabilities, current - Note 8 | $ 1,834,000 | $ 1,834,000 | $ 3,939,000 | $ 1,790,000 | ||||
Payments for Vesting of Phantom Shares | $ 1,800,000 | |||||||
Additional paid-in capital | 466,047,000 | 466,047,000 | $ 5,184,000 | 5,184,000 | ||||
Reclassification for Vested Restricted Stock Units [Member] | ||||||||
Other liabilities, current - Note 8 | 1,800,000 | 1,800,000 | ||||||
Minimum | ||||||||
Share based compensation arrangement by share based payment award vesting Period | 2 years | |||||||
Maximum | ||||||||
Share based compensation arrangement by share based payment award vesting Period | 3 years | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares) | 70,238 | 78,565 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value (in dollars per share) | $ 11.50 | $ 12.65 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 1,000,000 | |||||||
Share based compensation expense | $ 200,000 | $ 300,000 | $ 600,000 | $ 500,000 | ||||
Phantom Share Units (PSUs) [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 157,500 | 315,000 | 157,500 | 315,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares) | 1,237,500 | |||||||
Share based compensation expense | $ 200,000 | $ 500,000 | $ 500,000 | $ 500,000 | ||||
Performance and Incentive Pay Plan [Member] | ||||||||
Percentage of Issued and Outstanding Shares of Common Stock | 5.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares) | 2,508,002 | |||||||
Performance and Incentive Pay Plan [Member] | Restricted Stock Units (RSUs) [Member] | Minimum | ||||||||
Share based compensation arrangement by share based payment award vesting Period | 2 years | |||||||
Performance and Incentive Pay Plan [Member] | Restricted Stock Units (RSUs) [Member] | Maximum | ||||||||
Share based compensation arrangement by share based payment award vesting Period | 3 years | |||||||
Performance and Incentive Pay Plan [Member] | Performance Shares [Member] | Minimum | ||||||||
Share based compensation arrangement by share based payment award vesting Period | 2 years | |||||||
Performance and Incentive Pay Plan [Member] | Performance Shares [Member] | Maximum | ||||||||
Share based compensation arrangement by share based payment award vesting Period | 3 years |
Note 15 - Income Taxes (Details
Note 15 - Income Taxes (Details) - USD ($) $ in Thousands | May 29, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | May 28, 2020 |
Income taxes - Note 15 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 145 | ||
Effective income tax rate | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Deferred Tax Assets, Net of Valuation Allowance, Total | $ 247,900 | $ 94,200 | $ 94,200 | 256,500 | 0 | $ 267,800 | ||
Deferred Tax Assets, Valuation Allowance, Total | 94,200 | 94,200 | $ 256,517 | $ 231,908 | ||||
Gain (Loss) on Recapitalization | 95,000 | |||||||
Deferred Tax Asset, Recapitalization | $ 19,900 | |||||||
State and Local Jurisdiction [Member] | Colorado Department of Revenue [Member] | ||||||||
Income taxes - Note 15 | 0 | $ 0 | 0 | $ 0 | ||||
State and Local Jurisdiction [Member] | Nevada Department of Taxation [Member] | ||||||||
Income taxes - Note 15 | $ 0 | $ 0 | $ 0 | $ 0 |
Note 16 - Loss Per Share (Detai
Note 16 - Loss Per Share (Details) shares in Millions | May 29, 2020 | Jun. 30, 2020shares | Jun. 30, 2019shares | Jun. 30, 2020shares | Jun. 30, 2019shares | Dec. 31, 2019shares | Dec. 31, 2018shares |
Reverse Recapitalization, Conversion Ratio | 0.112 | ||||||
Antidilutive securities excluded from computation of diluted earning per share (in shares) | 37.6 | 37.6 | 152.2 | 131.5 | |||
Warrant [Member] | |||||||
Antidilutive securities excluded from computation of diluted earning per share (in shares) | 37.5 | 37.5 | 37.5 | ||||
Restricted Stock Units (RSUs) [Member] | |||||||
Antidilutive securities excluded from computation of diluted earning per share (in shares) | 0.1 | 0.1 |
Note 16 - Loss Per Share - Basi
Note 16 - Loss Per Share - Basic and Diluted Earnings (Loss) per Share Calculations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |||||
Note 16 - Loss Per Share - Basic and Diluted Earnings (Loss) per Share Calculations (Details) | ||||||||||||
Net Income (Loss) Attributable to Parent | $ (49,790) | $ (34,618) | $ (21,947) | $ (23,440) | $ (84,408) | $ (45,387) | $ (98,895) | $ (55,803) | ||||
Basic - Note 16 | 18,395,983 | [1] | 299,780 | [1] | 9,359,655 | [1] | 299,001 | [1] | 2,739,505 | 2,645,194 | ||
Diluted - Note 16 | 18,395,983 | [1] | 299,780 | [1] | 9,359,655 | [1] | 299,001 | [1] | 2,739,505 | 2,645,194 | ||
Basic - Note 16 | $ (2.71) | $ (73.21) | $ (9.02) | $ (151.80) | $ (36.10) | $ (21.10) | ||||||
Diluted - Note 16 | $ (2.71) | $ (73.21) | $ (9.02) | $ (151.80) | $ (36.10) | $ (21.10) | ||||||
[1] | Retroactively restated for the reverse recapitalization. Refer to Note 2 - Summary of Significant Accounting Policies and Note 16 - Loss Per Share for further information. |
Note 17 - Segment Information -
Note 17 - Segment Information - Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer, Excluding Assessed Tax | $ 7,636 | $ 0 | $ 18,760 | $ 0 | $ 13,709 | $ 180 |
Cost of Goods and Services Sold, Total | 31,863 | 55,731 | 0 | 30,669 | ||
Other operating costs | 10,526 | 6,131 | 12,625 | 14,997 | ||
Loss from operations | 34,753 | 6,131 | 49,596 | 14,997 | 33,941 | 8,151 |
Interest expense - Note 9 | 15,072 | 15,641 | 34,959 | 30,039 | 64,844 | 50,893 |
Interest income | (35) | (110) | (147) | (226) | ||
Loss before reorganization items and income taxes | 49,790 | 21,662 | 84,408 | 44,810 | 97,990 | 55,259 |
Reorganization Items | 0 | 285 | 0 | 577 | 905 | 399 |
Loss before income taxes | 49,790 | 21,947 | 84,408 | 45,387 | $ 98,895 | $ 55,658 |
Hycroft Mine [Member] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 7,636 | 0 | 18,760 | 0 | ||
Cost of Goods and Services Sold, Total | 31,863 | 0 | 55,731 | 0 | ||
Other operating costs | 94 | 4,917 | 187 | 11,836 | ||
Loss from operations | 24,321 | 4,917 | 37,158 | 11,836 | ||
Interest expense - Note 9 | 56 | 414 | 141 | 489 | ||
Interest income | (35) | (110) | (147) | (226) | ||
Loss before reorganization items and income taxes | 24,342 | 5,221 | 37,152 | 12,099 | ||
Reorganization Items | 0 | 0 | 0 | 0 | ||
Loss before income taxes | 24,342 | 5,221 | 37,152 | 12,099 | ||
Corporate and Other [Member] | ||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | 0 | 0 | ||
Cost of Goods and Services Sold, Total | 0 | 0 | 0 | 0 | ||
Other operating costs | 10,432 | 1,214 | 12,438 | 3,161 | ||
Loss from operations | 10,432 | 1,214 | 12,438 | 3,161 | ||
Interest expense - Note 9 | 15,016 | 15,227 | 34,818 | 29,550 | ||
Interest income | 0 | 0 | 0 | 0 | ||
Loss before reorganization items and income taxes | 25,448 | 16,441 | 47,256 | 32,711 | ||
Reorganization Items | 0 | 285 | 0 | 577 | ||
Loss before income taxes | $ 25,448 | $ 16,726 | $ 47,256 | $ 33,288 |
Note 18 - Fair Value Measurem_3
Note 18 - Fair Value Measurements (Details) - USD ($) | Jun. 30, 2020 | May 29, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Warrants previously issued and outstanding (in shares) | 47,011,622 | 12,700,000 | ||
Warrants and Rights Outstanding, Term (Year) | 7 years | 7 years | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 5.20 | |||
Number of common stock called by each warrant (in shares) | 2,130,000 | |||
Royalty Obligation, Metal Price Discount Rate | 5.00% | |||
Royalty Obligation [Member] | ||||
Accrued Royalties, Fair Value Disclosure | $ 99,900,000 | |||
Accrued Royalties | 30,000,000 | |||
The 2.0 Lien Notes and the 1.5 Lien Notes [Member] | ||||
Long-term Debt, Fair Value | $ 262,400,000 | |||
Long-term Debt, Gross | $ 345,500,000 | |||
Seller Warrants [Member] | ||||
Warrants previously issued and outstanding (in shares) | 12,700,000 | |||
Derivative Liability, Total | $ 18,000 | |||
Warrants and Rights Outstanding, Term (Year) | 7 years | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ 44.82 | |||
Number of common stock called by each warrant (in shares) | 0.2523 |
Note 18 - Fair Value Measurem_4
Note 18 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - Level 3 - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued compensation for phantom shares | $ 0 | $ 1,590 |
Warrant liability - Note 12 | $ 18 | $ 18 |
Note 19 - Supplemental Cash F_3
Note 19 - Supplemental Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | May 29, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Cash paid for interest | $ 5,366 | $ 5,271 | ||
Significant non-cash financing and investing activities: | ||||
Allocate and write-off of Seller's debt issuance costs | 8,202 | 0 | ||
Capital Expenditures Incurred but Not yet Paid | 3,038 | 2,592 | $ 2,458 | |
Conversion of 1.5 Lien Notes to Common Stock [Member] | ||||
Significant non-cash financing and investing activities: | ||||
Exchange of Seller's 1.5 Lien Notes for HYMC common stock | $ 145,700 | 160,254 | 0 | |
Conversion of 1.25 Lien Notes for New Subordinated Notes [Member] | ||||
Significant non-cash financing and investing activities: | ||||
Exchange of Seller's 1.5 Lien Notes for HYMC common stock | 80,000 | 0 | ||
Conversion of 1.25 Lien Notes to Common Stock [Member] | ||||
Significant non-cash financing and investing activities: | ||||
Exchange of Seller's 1.5 Lien Notes for HYMC common stock | $ 48,500 | $ 48,459 | $ 0 |
Note 20 - Commitments and Con_2
Note 20 - Commitments and Contingencies (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Royalty Payment, Percentage of Net Profit | 4.00% | |
Royalty Payment, Annual Advance | $ 120,000 | |
Total payments due under the mining lease capped | 7,600,000 | $ 7,600,000 |
Total payments made under the mining lease | 2,600,000 | $ 2,500,000 |
Inventories [Member] | ||
Unrecorded Unconditional Purchase Obligation, Total | $ 2,500,000 | |
Unrecorded Unconditional Purchase Obligation, Term (Year) | 2 years | |
Unrecorded Unconditional Purchase Obligation, Purchases | $ 900,000 | |
Mobile Mining Equipment [member] | ||
Lessee, Operating Lease, Term of Contract (Year) | 1 year | |
Lessee, Operating Lease, Liability, to be Paid, Total | $ 10,100,000 | |
Office Space in Denver, Colorado [Member] | ||
Lessee, Operating Lease, Liability, to be Paid, Total | 200,000 | |
Lessee Operating Lease, Annual Rent Expense | $ 100,000 |
Note 21 - Related Party Trans_2
Note 21 - Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)item | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | May 29, 2020USD ($) | |
Face amount of the debt | $ 95,000 | ||||||
Related Party Transaction, Number of Financial Institutions, Debt Issued | item | 5 | 5 | |||||
Related Party Transaction, Number of Financial Institutions Considered Related Party | item | 3 | ||||||
Related Party Transaction, Minimum Percentage of Common Stock Held by Related Party, Right to Nominate One Director | 10.00% | 10.00% | |||||
Total related party interest expense | $ 12,700 | $ 11,000 | $ 27,800 | $ 21,700 | 57,574 | $ 42,668 | |
Total related party debt | $ 67,800 | $ 67,800 | 497,155 | $ 364,986 | |||
Assumed New Subordinated Notes [Member] | |||||||
Face amount of the debt | $ 80,000 | ||||||
Restatement Adjustment | |||||||
Total related party debt | $ 421,600 |
Note 22 - Subsequent Events (De
Note 22 - Subsequent Events (Details) - Subsequent Event shares in Millions | Jul. 01, 2020USD ($)shares |
Former Chairman, President, and CEO [Member] | |
Consulting Agreement, Payment Per Month | $ 25,000 |
Consulting Agreement, Period (Month) | 24 months |
Former Chairman, President, and CEO [Member] | Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) | shares | 1.3 |
Former Chairman, President, and CEO [Member] | Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Tranche One [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% |
Former Chairman, President, and CEO [Member] | Restricted Stock Units (RSUs) [Member] | Share-based Payment Arrangement, Tranche Two [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 50.00% |
Non-employee Director [Member] | |
Annual Cash Retainer | $ 55,000 |
Annual Committee Chair Fees for Audit Committee | 12,500 |
Annual Committee Chair Fees for Safety, Sustainability, and Technical Committee | 10,000 |
Annual Committee Chair Fees for Nominating and Governance and Compensation Committee | 7,500 |
Annual Committee Member Fees for Audit Committee | 5,000 |
Annual Committee Member Fees for Safety, Sustainability, and Technical Committee | 4,000 |
Annual Committee Member Fees for Nominating and Governance and Compensation Committee | 2,500 |
Non-employee Director [Member] | Restricted Stock Units (RSUs) [Member] | |
Annual Equity Awards | 75,000 |
Initial Equity Awards Granted | $ 50,000 |