ITEM 1A. RISK FACTORS
The Company is subject to a variety of risks and uncertainties which, if any such risk actually occurs, could have a material adverse effect on the Company’s business, financial condition, results of operations and cash flow. You should carefully consider the risks presented in this section, together with the information included in other sections of this Annual Report. Such risks are not the only ones faced by the Company and additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect the Company’s business and the effect could be material.
Risk Factor Summary
The following is a summary of certain of the principal risks faced by the Company that could negatively impact our businesses, operating results, cash flows and/or financial condition :
Risks Related to the Çöpler Incident:
• As a result of the Çöpler Incident, the Company is subject to new and ongoing risks.
Risks Related to the Company’s Operations and Business:
• The Company’s production, development plans and cost estimates may vary and/or not be achieved.
• Changes in the market prices of gold, silver and other metals, which in the past have fluctuated widely, will affect the Company’s operations.
• The Company’s estimates of mineral reserves and mineral resources ( “ MRMR ” ) are based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated.
• The Company may be unable to replace its mineral reserves or acquire additional commercially mineable mineral rights.
• The Company faces intense competition in the mining industry.
• Increased operating and capital costs could affect the Company’s profitability.
• The Company is subject to supply chain disruptions and transportation risks.
• The Company’s operations may be adversely affected by rising energy prices or energy shortages.
• Continuation of the Company’s mining production is dependent on the availability of sufficient water supplies to support our mining operations.
• The Company may be exposed to future development risks.
• Land reclamation, mine closure and remediation requirements and costs may be burdensome and actual environmental and asset retirement obligations may exceed estimates and reserves.
• The Company is subject to information systems security threats and other risks.
• The Company’s joint venture interests are subject to risks.
• The Company’s interest in deferred consideration received from divestitures may not be fully realized.
• Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to the Company’s overall ability to advance its business and projects.
• The Company’s insurance coverage does not cover all of the Company’s potential losses, liabilities and damages related to its business and certain risks are uninsured and uninsurable.
• The Company is exposed to market and/or counterparty risks related to the sale of its concentrates and metals.
• Public health crises have, and could in the future, adversely affect the Company’s business.
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Financial Risks and Risks Related to Our Indebtedness:
• General economic conditions may adversely affect the Company’s growth and profitability.
• The Company may be adversely affected by fluctuations in foreign exchange rates.
• Inflation may have a material adverse effect on results of operations.
• The Company is subject to risks associated with hedging activities.
• Future funding requirements may affect the Company’s business.
• The Company may be unable to generate sufficient cash to fund its operations or service its debt.
• The Company’s indebtedness or lack of liquidity may impair the financial health of the Company.
Risks Related to Our Industry and the Jurisdictions in Which We Operate:
• Mining is inherently risky and subject to conditions and events beyond the Company’s control.
• Political or economic instability or unexpected regulatory change in the countries where the Company’s mineral properties are located could adversely affect its business.
• Suitable infrastructure may not be available or damage to existing infrastructure may occur.
• Mining companies are increasingly required to consider and provide benefits to the communities and countries in which they operate in order to maintain operations.
• Indigenous peoples’ title claims and rights to consultation and accommodation may affect the Company’s existing operations as well as development projects and future acquisitions.
• Civil disobedience in certain of the countries where the Company’s mining operations are located could adversely affect its business.
• The Company and the mining industry face geotechnical challenges, which could adversely impact our production and profitability.
Risks Related to Our Personnel:
• Certain of the Company’s directors and/or officers also serve, or may serve, as directors of other companies involved in natural resource exploration and development, and consequently there exists the possibility for these directors and/or officers to be in a position of conflict.
• The Company could be subject to potential labor unrest or other labor disturbances.
• The Company is dependent on its ability to recruit and retain qualified personnel.
• The Company relies on contractors to conduct a significant portion of its operations and construction projects.
Risks Related to Governmental Regulation and Legal Proceedings:
• The Company is subject to significant governmental regulations.
• The Company is subject to extensive permitting requirements.
• The Company’s activities are subject to environmental laws and regulations that may increase the Company’s costs and restrict its operations.
• Compliance with emerging climate change regulations could result in significant costs and climate change may present physical risks to a mining company’s operations.
• The Company may be required by human rights laws to take actions that delay the Company’s operations or the advancement of its projects.
• The Company’s mineral properties may be subject to uncertain title.
• The Company is subject to claims and legal proceedings that arise in the ordinary course of business.
• The Company is subject to assessment by taxation authorities in multiple jurisdictions that arise in the ordinary course of business.
Risks Related to Ownership of Company Equity:
• The Company’s common shares are publicly traded and are subject to various factors that have historically made the Company’s common share price volatile.
• Holders of our common shares may not receive dividends.
• Future sales or issuances of equity securities could decrease the value of the Company’s common shares, dilute investors’ voting power and reduce the Company’s earnings per share.
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Risks Related to the Çöpler Incident
As a result of the Çöpler Incident, we are exposed to a number of risks, described below, that will have an uncertain and potentially adverse impact on our business, consolidated results of operations, financial position and cash flows, which could be material. In addition, a number of existing risks identified in other sections of this report will be exacerbated as a result of the Çöpler Incident.
Actual and potential losses and liability resulting from the Çöpler Incident could have a material adverse effect on our financial condition, liquidity, cash flows and results of operations.
On February 13, 2024, the Company suspended operations at Çöpler as a result of a significant slip on the heap leach pad. We cannot determine at this time when operations will resume at Çöpler, if at all. The Çöpler Incident is expected to have a significant, ongoing impact on the Company’s cash flows, liquidity and capital resources, even after we are permitted to resume operations. Although the Company currently estimates its existing capital resources and the cash flows generated from its other mine properties will continue to be sufficient to meet the Company’s ongoing cash flow, capital expenditure and other business requirements for the foreseeable future, there are a number of factors that may change the Company’s estimate or that the Company was not able to estimate and, therefore, the Company’s expected cash requirements may increase. These factors include, among other things, the ongoing cost of the remediation of the Çöpler site and the surrounding area, the potential legal and regulatory obligations and associated fines and penalties that may arise, the extent of third-party liability and our ability to recover from any such third parties, the availability and extent of property and liability insurance and the impact of debt covenants and other contractual obligations. If the Company’s estimates of the costs and other expenditures that it will incur in connection with the Çöpler Incident are incorrect or insufficient, it may result in a material adverse effect on Company’s liquidity, cash flows, results of operations and business.
Ongoing investigations and remediation in connection with the Çöpler Incident could have a material adverse effect on the operation.
The Türkiye governmental authorities continue their investigations into the Çöpler Incident. The Türkiye government has arrested and charged certain of our employees as part of this investigation. As a result of the investigations, the Company may face, among other things, criminal and/or civil sanctions, which may include significant fines, orders for additional remediation and restitution to the individual, families and communities that may have been impacted and loss of permits and/or the ability to operate Çöpler. The Türkiye government has revoked Çöpler’s environmental and operating permits in connection with the incident, and the Company cannot predict when or if such permits will be reinstated and under what conditions.
Additionally, planning and engineering for the long-term storage and remediation of the displaced heap leach material is ongoing and subject to direction and approval of the applicable Turkish authorities. We cannot predict the final remediation or storage plans, the timing of any such approval or completion of such plans and the costs associated with these plans. Actual costs of long-term storage and remediation may vary significantly from our current estimates, which could have a material adverse impact on our cash flows, results of operations or financial condition.
The Çöpler Incident may result in environmental contamination of the surrounding area.
While we are not aware of any recordable contamination to local soil, water or air from the Çöpler Incident from the sampling to date, there can be no guarantee that there will not be any future environmental impact on the areas surrounding the site or that the Turkish authorities or third parties will not assert that the Çöpler Incident resulted in contamination or some other environmental impact. If the incident resulted (or if applicable Turkish authorities determine that it resulted) in environmental contamination, we may become financially responsible for the remediation, penalties and liable for claims by affected parties, which could be significant. If we are held responsible for an environmental contamination, that could affect, among other things, our ability to operate in Türkiye, our reputation and our business more generally, and results of operations and financial condition.
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The Company’s production, development plans and cost estimates for Çöpler may not be achieved.
The Company has prepared estimates of future production, operating costs and capital costs for Çöpler and the Technical Report Summary for Çöpler contains estimates of future production, development plans, operating and capital costs and other economic and technical estimates, if operations resume at Çöpler. As a result of the Çöpler Incident, the Company may not be able to achieve these estimates during the time frame it has set out, if at all, as the operating and economic assumptions, along with the mineral reserves, mineral resources, cost estimates and other findings contained in such TRS, may no longer be accurate. When more information is available regarding the operations at Çöpler, the TRS may need to be amended, and we are not certain as to when this will occur. The Company cannot estimate at this time when Çöpler will resume operations, which may have a material adverse impact on the Company’s future cash flows, profitability, results of operations and financial condition.
Additionally, on August 20, 2024, the local Turkish court issued a decision cancelling the 2021 EIA, due to insufficiencies in the 2021 EIA approval process. On February 11, 2025, the Turkish Council of State affirmed the decision of the lower court. As a result of the cancellation of the 2021 EIA, the operating guidelines at Çöpler revert to those outlined in the Company’s prior environmental impact assessment, which was issued in 2014 EIA, which, among other considerations, prescribes a lower throughput rate for the sulfide plant operations. If the Company is permitted to resume operations at Çöpler, it may not be able to operate the mine under the parameters of the 2014 EIA, if at all. There can be no guarantee that the mine, if operations are permitted to resume, will be able to operate under the parameters of the 2021 EIA in the future, if at all. At this time, the Company cannot fully assess the entire scope of the impact of operating under the 2014 EIA.
Covenants and events of default in our debt instruments could limit our ability to borrow funds under such instruments and adversely affect our liquidity and such debt instruments allow for acceleration of repayment of our borrowings under certain conditions.
Our Second Amended Credit Agreement contains a number of covenants and events of default, which may be implicated by the Çöpler Incident. Although we do not believe the Çöpler Incident was a material adverse event under the terms of the Second Amended Credit Agreement or that there has been a violation of any covenant or an event of default, if it was later determined that the Çöpler Incident or an event that occurs as a result of the Çöpler Incident, such as an action by Turkish authorities or by third parties, is a material adverse event or the resulting events triggered a violation of a covenant or an event of default, the lenders under the Second Amended Credit Agreement may be permitted to terminate all commitments to extend credit under the Second Amended Credit Agreement and, if we had outstanding borrowings, to exercise remedies against the collateral pledged to secure the obligations thereunder. As of the date of this report, we do not have any outstanding borrowings under our Second Amended Credit Agreement. The Second Amended Credit Agreement also requires us to maintain specified financial ratios and satisfy other financial tests and make certain representations and warranties whenever we are borrowing under the Second Amended Credit Agreement. Our ability to meet those financial ratios and tests and to be able to make such required representations and warranties may be negatively affected by the Çöpler Incident and we may not be permitted to borrow under the Second Amended Credit Agreement. If our lenders terminate all commitments to extend further credit or restrict our ability to borrow under the Second Amended Credit Agreement, we may not have access to adequate financial resources to fund our business and planned capital expenditures, which may have a material adverse impact on our cash flows, results of operations or financial condition and liquidity position.
Responding to the Çöpler Incident, including progressing the remediation and restart efforts, requires significant management attention.
The health, safety, and well-being of our employees, contractors, and their families, along with the surrounding community, following the Çöpler Incident, responding to inquiries from and interacting with the government of Türkiye and progressing the remediation and the steps necessary to resume operations at Çöpler have been key areas of focus and the priority of the management team since the Çöpler Incident. Our management team will continue to focus on the remediation effort, working to resume operations at Çöpler and responding to the legal and other claims to which the Company has and may in the future become subject. This will continue to require substantial management time and attention, which may divert management from overseeing the operations of the Company’s other mines and focusing on developing and executing on our overall strategy.
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The Çöpler Incident could impact the ongoing development of Hod Maden.
While the Çöpler Incident has not impacted our development plan with respect to Hod Maden to date, there can be no guarantee that direct or indirect impacts will not arise in the future. As a result of the Çöpler Incident, the Türkiye government could rescind or revoke permits associated with our Hod Maden development or otherwise prevent us from completing or participating in the development of Hod Maden, or make less desirable to do so. Our ability to continue with the development or participation in the Hod Maden project may have a material adverse impact on the Company's cash flows, results of operations or financial condition or our ongoing joint venture relationships and operations in Türkiye.
The Company’s access to capital in a timely manner and on acceptable terms may be negatively impacted by the Çöpler Incident.
Although we currently do not believe that we will need to seek external sources of funding to operate our business, fund the remediation of the Çöpler Incident, or support the additional costs and other liabilities that could arise over the next 12 months, the Çöpler Incident may negatively impact our access to capital through available sources of debt and equity financings in a timely manner and on acceptable terms. Additionally, to the extent we are put on a “watch” or our credit rating is downgraded by one or more rating agencies as a result of an event related to the Çöpler Incident our access to capital will be further impacted. If our current expectations regarding our need for external sources of financing are inaccurate and we are unable to access external sources of financing for our business, the remediation of the Çöpler Incident and the associated costs and potential liabilities, our financial condition, liquidity, cash flows and results of operations may be adversely impacted.
The Company’s insurance coverage may not cover all of the Company’s potential losses, liabilities and damages related to Çöpler Incident.
As a result of the Çöpler Incident, the Company and certain of its current and former officers and directors are subject to securities class actions in the United States and Canada, and it is possible that the Çöpler Incident could result in significant additional claims for damages, including, potentially, claims for loss of life and property or environmental damage, or securities losses. We have no ability to estimate the timing, extent or the significance of any of these claims. Therefore, these events could materially affect the Company’s business, reputation, financial condition and results of operations. If the Company is held responsible for loss of life, environmental and other property damage caused by the Çöpler Incident, it could have a material impact on the Company’s financial condition, liquidity, cash flows and results of operations. The Company has insurance coverage for third party claims and damages, but the aggregate losses associated with the Çöpler Incident could significantly exceed the amount of available insurance coverage or we may not be successful in our efforts to recover our insurance policies. The Company is incurring legal and consulting fees to manage current and potential lawsuits and financial implications related to the Çöpler Incident, and those amounts are likely to be material, and are in addition to the claims for damages, which could be significant.
Additionally, to the extent that any liability that we may have in connection with the Çöpler Incident is or may be indemnifiable by a third-party, such third-party may not carry sufficient insurance coverage or have sufficient funds to meet the full extent of any such indemnification claim. There is no guarantee that the Company could recover from any third-party an amount sufficient to cover the aggregate losses associated with the Çöpler Incident, if the Company can recover any amount at all.
The Company’s share price may continue to be volatile.
As a result of the Çöpler Incident, our shares have experienced increased trading volume volatility on both Nasdaq and the TSX. It is likely that our share price will continue to be volatile due to the release of new information about the Çöpler Incident or the Company, including, among other things, updates regarding the timing or likelihood of returning to operations at Çöpler, actions taken by the Türkiye government, lawsuits or claims filed against us, or financial implications arising from the incident. Additionally, media reports and social media stories in the United States, Canada, Türkiye and elsewhere, whether or not substantiated, could have an impact on our share price. These factors could subject the market price of our common shares to price fluctuations regardless of our underlying operating performance. As a result, our share price may continue to be volatile.
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Risks Related to the Company’s Operations and Business
The Company’s production, development plans and cost estimates may vary and/or not be achieved.
The Company has prepared estimates of future production, operating costs and capital costs for its Çöpler, Marigold, Seabee, Puna and CC&V operating mines, and the Company’s technical studies and reports for the Company’s operating mines and other projects, as may be amended or updated from time to time, contain estimates of future production, development plans, operating and capital costs and other economic and technical estimates relating to these projects. These estimates are based on a variety of factors and assumptions and there is no assurance that such production, plans, costs or other estimates will be achieved. Actual production, costs and financial returns may vary significantly from the estimates depending on a variety of factors, many of which are not within the Company’s control. These factors primarily include, but are not limited to: actual ore mined varying from estimates of grade, tonnage, dilution, metallurgical and other characteristics; short-term operating factors, such as the need for sequential development of ore bodies and the processing of new or different ore grades from those planned; mine failures, slope failures, equipment failures or accidents and the exposure for related claims of loss and liabilities; and encountering unusual or unexpected geological conditions. Failure to achieve estimates or material increases in costs could have a material adverse impact on the Company’s future cash flows, profitability, results of operations and financial condition.
Changes in the market prices of gold, silver and other metals, which in the past have fluctuated widely, will affect the Company’s operations.
The Company’s profitability, long-term viability and the economic feasibility of its mineral properties depend, in large part, on the market price of gold, silver, copper, lead and zinc. The market prices for these metals are volatile and are affected by numerous factors beyond the Company’s control, including:
• global or regional consumption patterns;
• the supply of, and demand for, these metals;
• gold sales, purchases or leasing by governments and central banks;
• the monetary policies employed by the world’s major central banks;
• the fiscal policies employed by the world’s major industrialized economies;
• recession or reduced economic activity in the United States and other industrialized or developing countries;
• speculative short positions taken by significant investors or traders in gold, silver, lead, zinc or other metals;
• forward sales by producers in hedging or similar transactions;
• the availability and costs of metal substitutes;
• decreased industrial, jewelry, base metal or investment demand;
• increased import and export taxes and tariffs;
• inflation and/or expectations for inflation;
• other political and economic conditions, including interest rates and currency values; and
• changing investor or consumer sentiment, including as it relates to mining companies and in connection with transition to a low-carbon economy, investor interest in crypto currencies and other investment alternatives, away from precious metals, and other factors.
The Company cannot predict the effect of these factors on metal prices. For example, average gold prices for 2025 were $3,435 per ounce (2024: $2,387; 2023: $1,943), average silver prices for 2025 were $39.94 per ounce (2024: $28.25; 2023: $23.39), average lead prices for 2025 were $0.95 per pound (2024: $0.93; 2023: $0.99) and average zinc prices for 2025 were $1.28 per pound (2024: $1.14; 2023: $0.92). Any decline in our realized prices adversely impacts our revenues, net income and operating cash flows.
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In addition, a decrease in the market price of gold, silver and other metals would affect the profitability of Çöpler, Marigold, Seabee, Puna and CC&V and could affect the Company’s ability to finance the exploration and development of any of the Company’s other mineral properties. The market price of gold, silver and other metals may not remain at current levels. In particular, an increase in worldwide supply, and consequential downward pressure on prices, may result over the longer term from increased gold or silver production from mines developed or expanded as a result of current metal price levels.
The Company’s estimates of mineral reserves and mineral resources are based on interpretation and assumptions and may yield less mineral production under actual conditions than is currently estimated.
There are numerous uncertainties inherent in estimating mineral reserves and grades of mineralization, including many factors beyond the Company’s control. In making determinations about whether to advance any of the Company’s projects to development or to mine existing mineral reserves, the Company must rely upon estimated calculations as to the mineral reserves and grades of mineralization on its properties. Until ore is actually mined and processed, mineral reserves and grades of mineralization must be considered as estimates only.
These estimates are imprecise and depend upon geological interpretation and statistical inferences drawn from drilling and sampling, which may prove to be unreliable. The Company cannot assure that mineral reserves, mineral resources or other mineralization estimates will be accurate, or that mineralization can be mined or processed profitably. Actual operating and capital cost and economic returns on projects may differ significantly from original estimates. Further, it may take many years from the initial phases of exploration until commencement of production, during which time, the economic feasibility of production may change.
Any material changes in mineral reserves estimates and grades of mineralization will affect the economic viability of placing a property into production and a property’s return on capital. The Company’s estimates of mineral reserves and mineral resources have been determined and valued based on assumed future prices, cut-off grades and operating costs that may prove to be inaccurate. Extended declines in market prices for gold, silver and other precious metals may render portions of the Company’s mineralization uneconomic and result in reduced reported mineral reserves or mineral resources.
Any material reductions in estimates of mineralization, or of the Company’s ability to extract this mineralization, including estimates made in a Technical Report Summary (as defined herein) for any of the Company’s operating properties and additional projects, could have a material adverse effect on the Company’s results of operations or financial condition. There is no assurance that mineral recovery rates achieved in small scale tests will be duplicated in large scale tests under on-site conditions or in production scale. If our reserve estimations are required to be revised using significantly lower gold, silver, copper, zinc, lead and other metal prices as a result of a decrease in commodity prices, increases in operating costs, reductions in metallurgical recovery or other modifying factors, this could result in material write-downs of our investment in mining properties or increased amortization, reclamation and closure charges.
Additionally, the Company is required to comply with the disclosure standards under Regulation S-K Subpart 1300 (“S-K 1300”) of the U.S. securities laws. The provisions of this disclosure standard are intended to align with those used in the other major mining regulatory jurisdictions, however certain provisions of the disclosure standards may be more restrictive and/or prescriptive, or require a presentation of different information, than those used in other regulatory jurisdictions. Such variation may result in disclosures by the Company that differ, potentially materially, from those of our competitors and non-U.S. joint-venture partner.
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The Company may be unable to replace its mineral reserves or acquire additional commercially mineable mineral rights.
The Company must continually replace its depleted mineral reserves to maintain production levels over the long term. Mineral reserves can be replaced by expanding known ore bodies, locating new deposits or making acquisitions. There is a risk that depletion of the Company’s mineral reserves will not be offset by discoveries or acquisitions. The Company’s mineral base may decline if mineral reserves are mined without adequate replacement and the Company may not be able to sustain production beyond the current mine lives, based on current production rates. If, as a result of the Çöpler Incident, the Company is unable to resume operations at Çöpler in a timely manner or at all, the Company may consider acquisitions to replace the mineral reserves associated with Çöpler. The Company may not have adequate financial resources or otherwise be able to fund any such acquisition as a result of a number of factors, including the Çöpler Incident, and/or any such acquisition may not replace the mineral reserves associated with Çöpler. If the Company’s mineral reserves are not replaced either by the development of additional mineral reserves and/or additions to mineral reserves, there may be an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition, and this may be compounded by requirements to expend funds for reclamation and decommissioning.
The Company’s future growth and productivity will also depend, in part, on its ability to identify and acquire additional commercially mineable mineral rights, and on the costs and results of continued exploration and potential development programs. Mineral exploration is highly speculative in nature and is frequently non-productive. Most exploration projects do not result in the discovery of commercially mineable ore deposits, and there is no assurance that any anticipated or estimated level of recovery of mineral reserves will be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) orebody that can be legally and economically exploited. Once a site with mineralization is discovered, it may take several years from the initial phases of drilling until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are also required to establish proven and/or probable mineral reserves and to construct mining and processing facilities. Material changes in mineral reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project. As a result, there is no assurance that current or future exploration programs will be successful.
As part of the Company’s business strategy, it has sought and will continue to seek new operating, exploration and development opportunities in the mining industry, such as the Company’s recent acquisition of the CC&V mine. The Company may consider, from time to time, the acquisition of ore reserves from third parties. Such acquisitions are typically based on an analysis of a variety of factors including, but not limited to, historical operating results, estimates of and assumptions regarding the extent of ore reserves, the timing of production from such reserves, cash and other operating costs and the Company’s assumptions for future gold, silver, copper, zinc or lead prices or other mineral prices. In connection with any acquisitions, the Company may rely on data and reports prepared by third parties, which may contain information or data that the Company is unable to independently verify or confirm. Other than historical operating results, all of these factors are uncertain and may have an impact on the Company’s revenue, cash flow and other operating issues, as well as contributing to the uncertainties related to the process used to estimate ore reserves.
In pursuit of such opportunities, the Company may fail to select appropriate acquisition candidates or negotiate acceptable arrangements, including arrangements to finance acquisitions or integrate the acquired opportunities into the Company’s existing business. The Company cannot provide assurance that it can complete any acquisition or business arrangement that it pursues, or is pursuing, on favorable terms, if at all, or that any acquisitions or business arrangements completed will ultimately benefit its business. Further, any acquisition the Company has made or will make will require a significant amount of time and attention from the Company’s management, as well as resources that otherwise could be spent on the operation and development of its existing business. In addition, there may be intense competition for the acquisition of ore reserves and/or attractive mining properties. There can be no assurance that the Company will be able to successfully acquire any desired ore reserves or mining properties.
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Any acquisition would be accompanied by risks, including the quality of the mineral deposit acquired proving to be lower than expected; the difficulty of assimilating the operations and personnel of any acquired companies; the potential disruption of its ongoing business; the inability of management to realize anticipated synergies and maximize its financial and strategic position; the failure to maintain uniform standards, controls, procedures and policies; and the potential for unknown or unanticipated liabilities associated with acquired assets and businesses, including tax, environmental or other liabilities. There can be no assurance that any business or assets that the Company has acquired or that it may acquire in the future will prove to be profitable, that the Company will be able to integrate the acquired businesses or assets successfully or that the Company will identify all potential liabilities during due diligence. Any of these factors could have a material adverse effect on its business, expansion, results of operations and financial condition.
The Company faces intense competition in the mining industry.
The mining industry is intensely competitive in all phases and the Company competes with many companies, several of which possess greater financial and technical resources than itself. Competition in the base and precious metals mining industry is primarily for mineral rich properties which can be developed and produced economically; the human resources and technical expertise to find, develop, and operate such properties; the labor to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for and mine precious metals, but also conduct refining and marketing operations on a world-wide basis. Such competition may result in the Company being unable to acquire desired properties, recruit or retain qualified employees or acquire the capital necessary to fund its operations and develop its properties. Existing or future competition in the mining industry could materially adversely affect the Company’s prospects for mineral exploration and success in the future.
Increased operating and capital costs could affect the Company’s profitability.
Costs at any particular mining location are subject to variation due to a number of factors, such as variable ore grade, changing metallurgy and revisions to mine plans in response to the physical shape and location of the ore body, as well as the age and utilization rates for the mining and processing related facilities and equipment. In addition, costs are affected by the price and availability of input commodities, such as fuel, electricity, labor, chemical reagents, explosives, steel, concrete and mining and processing related equipment and facilities. Commodity costs are, at times, subject to volatile price movements, including increases that could make production at certain operations less profitable. Further, changes in laws and regulations can affect commodity prices, uses and transport including those related to import, exports and tariffs in the jurisdictions in which we operate. Reported costs may also be affected by changes in accounting standards. A material increase in costs at any significant location could have a significant effect on our profitability and operating cash flow.
We could have significant increases in capital and operating costs over the next several years in connection with the development of new projects and in the sustaining and/or expansion of existing mining and processing operations. In addition, it is expected that the Company will incur significant costs related to remediation of the Çöpler Incident and may be exposed to significant claims for loss and damage, which may not be covered by insurance. Costs associated with capital expenditures may increase in the future as a result of factors beyond our control. Increased capital expenditures may have an adverse effect on the profitability of and cash flow generated from existing operations, as well as the economic returns anticipated from new projects.
The Company is subject to supply chain disruptions and transportation risks.
The Company’s ability to mine, process and sell products is critical to our operations. The Company’s operations depend on the continued availability and delivery of supplies of consumables, including, but not limited to, diesel, tires, sodium cyanide and reagents, and capital items to operate efficiently. In addition to consumables, continuous supplies of energy, water, equipment and labor are critical to the Company’s operations, the costs of which are subject to worldwide supply and demand as well as other factors beyond the Company’s control. Supply chain disruptions, power outages, labor disputes and/or strikes, geopolitical activity, health emergencies in the regions where we operate, weather events and natural disasters could seriously harm the Company’s operations as well as the operations of the Company’s customers and suppliers. Additionally, the uncertainty created by shifting trade and tariff policies can negatively impact the Company’s operations and increase costs. Further, the Company’s suppliers may experience capacity limitations in their own operations or may elect to reduce or eliminate certain product lines, all of which is beyond the Company’s control but could have a material adverse effect on the Company’s operations and revenue.
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Likewise, disruptions in the transportation and delivery of consumables and other products may impact our ability to sell our own products and deliver them to our customers on time. Transportation of any good is subject to numerous risks including, but not limited to, roadblocks, terrorism, interruption by domesticated and non-domesticated herding animals, theft, weather conditions, environmental liabilities in the event of an accident or spill, inability to transport oversized loads, personal injury and loss of life. In addition, the costs of transporting materials and products through our chain of sourcing and production may increase, and such increases could be significant. If the Company experiences prolonged disruption to the delivery of such consumables, the Company’s production efficiency and ability to effectively complete capital projects requiring such deliveries may be reduced. Separately, if a seasonal access route, including, but not limited to, the seasonal ice road constructed to access Seabee, becomes unusable or unavailable for any reason, the Company may incur significant costs to arrange alternative transportation, if such alternative transportation is even available or possible. There can be no assurance that these transportation risks will not have an adverse effect on any site, particularly Seabee, and therefore on the Company’s profitability.
Failure to take adequate steps to mitigate the likelihood or potential impact of such disruptions, or to effectively manage such disruptions if they occur, could adversely affect our business and results of operations, as well as require additional resources to restore our global supply chain. To address these risks, generally, the Company seeks to have many sources of supply for key materials in order to avoid significant dependence on any one or a few suppliers, however, prices charged for such key materials by suppliers may differ substantially and obtaining key materials from different suppliers may impact the Company’s costs. Although there can be no assurance that such mitigation efforts will prevent future difficulty in obtaining sufficient and timely delivery of certain materials, the Company believes it has adequate programs to ensure a reliable supply of key materials.
The Company’s operations may be adversely affected by rising energy prices or energy shortages.
Our mining operations and development projects require significant amounts of energy, including purchased electricity, diesel fuel, natural gas, propane and coal. Increasing global demand for energy, concerns about nuclear power and the limited growth of new energy sources are affecting the price and supply of energy. A variety of factors, including higher energy usage in emerging market economies, actual and proposed taxation of carbon emissions as well as concerns surrounding continued and new unrest and conflict in the Middle East, Ukraine, Venezuela or other areas, could result in increased demand or limited supply of energy and/or sharply escalating prices. Additionally, changes in energy laws and regulations in various jurisdictions may impact energy dispatch rules and the ability to access energy and sell excess energy. Limitations on energy supply and increased energy prices could negatively impact our operating costs and cash flow.
Some of our operations are in remote locations requiring long distance transmission of power, and in some locations, we compete with other companies for access to third party power generators or electrical supply networks. A disruption in the transmission of energy, increased competition for energy with other entities, inadequate energy transmission infrastructure or the termination of any of our energy supply contracts could interrupt our energy supply and adversely affect our operations.
Continuation of the Company’s mining production is dependent on the availability of sufficient water supplies to support our mining operations.
The Company recognizes the right to clean, safe water and that reliable water supplies are vital for hygiene, sanitation, livelihoods and the health of the environment. Across the globe, water is a shared and regulated resource. Water is also critical to the Company’s business, and the increasing pressure on water resources requires us to consider both current and future conditions in our water management approach. The Company operates in areas where watersheds are under stress with limited supply, increasing population and water demand that impact water in various forms. The Company’s management of water-related risks targets the specific areas of operation, as well as considering the physical environment and social and regulatory context. Although each of the Company’s operations currently have sufficient water rights, claims and contracts to cover its operational demands, the potential outcome of pending or future legal proceedings or community negotiations relating to water rights, claims, contracts and uses is unknown and unpredictable. Further, laws and regulations may be introduced in certain operational jurisdictions, which could limit the Company’s access to sufficient water resources. Water shortages and excess water may result from weather or environmental changes and climate impacts out of the Company’s control. While the Company has considered and incorporated systems to address the impact of the dry season and climate change as part of its operating plans, there is no assurance that those systems will be sufficient to address all shortages in water supply. Any interruption, or shortage of water supplies and even excess water, could require the Company to curtail or shut down mining production and could prevent the Company from pursuing expansion opportunities, resulting in production and processing delays or stoppages.
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The Company may be exposed to future development risks.
Any adverse condition affecting mining or processing conditions at a Company mining property could have a material adverse effect on the Company's financial performance and results of operations. The future development of any other properties found to be economically feasible and approved by the Company’s Board of Directors will require the construction and operation of mines, processing plants and related infrastructure. As a result, the Company is and will continue to be subject to all of the risks associated with establishing new mining operations, including:
• the availability and cost of skilled labor, and mining and processing equipment;
• the availability and cost of appropriate smelting and refining arrangements;
• securing long-term access agreements required to develop and operate a mine;
• the need to obtain and retain necessary environmental and other governmental approvals and permits and the timing of the receipt of those approvals and permits and the risk of rescission or revocation of necessary approval and permits;
• potential opposition from governmental or non-governmental organizations, environmental groups or local community groups which may delay or prevent development activities;
• potential for labor unrest or other labor disturbances;
• potential increases in cost structures due to changes in input costs including the cost of fuel, power, materials and supplies and fluctuations in currency exchange rates;
• the timing and cost, which may be considerable, of the construction and expansion of mining, processing and tailings management facilities;
• changes in tonnage, grades and metallurgical characteristics of ore to be mined and processed;
• the quality of the data on which engineering assumptions were made;
• adverse geotechnical conditions or unanticipated changes in surface conditions;
• changes in tax laws, the laws and/or regulations around royalties and other taxes due to the regional and national governments and royalty agreements;
• natural disasters, weather or severe climate impacts, including, without limitation, prolonged or unexpected precipitation, drought and/or sub-zero temperatures; and
• potential delays and restrictions in connection with health and safety issues, including pandemics and other infectious diseases.
The costs, timing and complexities of operating the Company’s existing operations and constructing and developing the Company’s other projects may be greater than the Company anticipates. The majority of the Company’s established and development property interests are not located in developed areas and, as a result, the Company’s property interests may not be served by appropriate road access, water and power supply and other support infrastructure. Cost estimates may also increase as more detailed engineering work is completed on a project. As a result of the Çöpler Incident, the Company’s exposure to certain of these risks related to the Çöpler property and its planned development of Hod Maden have increased.
Properties not yet in production or slated for expansion are subject to higher risks, as new mining operations often experience unexpected problems during the construction and start-up phase, and production delays and cost adjustments can often occur. Further, feasibility studies, pre-feasibility studies and preliminary economic assessments contain project-specific estimates of future production, which are based on a variety of factors and assumptions. There is no assurance that such estimates will be achieved and the failure to achieve production or cost estimates or material increases in costs could have a material adverse effect on the Company’s future cash flows, profitability, results of operations and financial condition and the Company’s share price.
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In addition, developments are prone to material cost overruns compared to what we have budgeted. The capital expenditures and time required to develop new mines, including building mining and processing facilities for new properties, are considerable, and changes in cost or construction schedules can significantly increase both the time and capital required to build the mine. The project development schedules are also dependent on obtaining the governmental approvals and permits necessary for the operation of a mine, which is often beyond the Company’s control. It is not unusual in the mining industry for new mining operations to experience unexpected problems during the start-up phase, resulting in delays and requiring more capital than anticipated. There is no assurance that there will be sufficient availability of funds to finance construction and development activities, particularly if unexpected problems arise.
The Company’s production forecasts are based on full production rates being achieved at all of the Company’s mines on the expected schedule. The Company’s ability to achieve and maintain full production rates at these mines is subject to a number of risks and uncertainties, which are described in this section. Future development activities may not result in the expansion or replacement of current production forecasts with new production forecasts. One or more new projects may be less profitable than anticipated or may not be profitable at all. Any reduction in production forecasts could have a material adverse effect on the Company’s results of operations and financial position.
Land reclamation, mine closure and remediation requirements and costs may be burdensome and actual environmental and asset retirement obligations may exceed estimates and reserves.
Land reclamation, mine closure and remediation requirements are generally imposed by one or more relevant governing authorities on mining companies in order to minimize long-term effects of land disturbance. Such requirements may include requirements to control dispersion of potentially deleterious effluents, and reasonably re-establish pre-disturbance landforms and vegetation.
The laws and regulations governing mine closure and reclamation in a particular jurisdiction are subject to review at any time and may be amended to impose additional requirements and conditions. Any additional obligations may cause our financial provisions for environmental liabilities to be underestimated and could materially affect our financial position or results of operations. In addition, regulators are increasingly requesting security in the form of cash collateral, credit, trust arrangements or guarantees to secure the performance of environmental obligations, which could also have an adverse effect on our financial position. For a more detailed description of potential environmental liabilities, see the discussion in Environmental Matters in Notes 6 and 23 to the Consolidated Financial Statements.
Under the U.S. Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) and its state law equivalents, current or former owners of properties may be held jointly and severally liable for the costs of site cleanup or required to undertake remedial actions in response to unpermitted releases of hazardous substances at such property, in addition to, among other potential consequences, liability to governmental entities for the cost of damages to natural resources, which may be significant. These subject properties are referred to as “superfund” sites. While none of our operations are currently so designated, it is possible that certain of our other current or former operations in the United States could be designated as a superfund site in the future, exposing us to potential liability under CERCLA.
In order for the Company to carry out reclamation, mine closure and remediation obligations in connection with its exploration, potential development and production activities, the Company must allocate financial resources that might otherwise be spent on further exploration and development programs, including providing the appropriate regulatory authorities with reclamation financial assurance. The amount and nature of the financial assurance are dependent upon a number of factors, including the Company’s financial condition and reclamation cost estimates, and can be difficult to predict, particularly water remediation requirements which may be ongoing and long lasting. Changes to these amounts, as well as the nature of the collateral to be provided, could significantly increase the Company’s costs, making the maintenance and development of existing and new mines less economically feasible. To the extent that the value of the collateral provided to the regulatory authorities is or becomes insufficient to cover the amount of financial assurance the Company is required to post, the Company would be required to replace or supplement the existing security with more expensive forms of security, which might include cash deposits, which would reduce the Company’s cash available for operations and financing activities. There can be no assurance that the Company will be able to maintain or add to the Company’s current level of financial assurance. The Company may not have sufficient capital resources to further supplement the Company’s existing security.
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Certain of the Company’s mineral properties have been subject to historic mining operations and certain of the mineral properties that were historically mined by the Company are subject to remediation obligations. In addition, the actual costs of reclamation, mine closure and remediation are uncertain and planned expenditures may differ from the actual expenditures required. Therefore, the amount that the Company is required to spend could be materially higher than current estimates. Any additional amounts required to be spent on reclamation and mine closure may have an adverse effect on the Company’s financial position and results of operations and may cause the Company to alter the Company’s operations.
The Company is subject to information systems security threats and other risks.
The Company’s operations depend, in part, on how well the Company, its suppliers and third-party service providers protect networks, equipment, information technology (“IT”) systems and software upon which the Company relies against damage from a number of threats, including, but not limited to, cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, hacking, computer viruses, cyberattack, vandalism and theft. Cybersecurity risk is increasingly difficult to identify and quantify and cannot be fully mitigated because of the rapidly evolving nature of the threats, targets and consequences. Additionally, unauthorized parties may attempt to gain access to these systems or our information through fraud or other means of deceiving our third-party service providers, employees or vendors.
Given the unpredictability of the timing, nature and scope of cybersecurity attacks or other IT disruptions, it is difficult to predict how such disruptions may impact our business. Cybersecurity attacks or IT disruptions may result in, among other things, production downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial actions and reputational harm. Outages in our operational technology may affect operations related to health and safety and could result in putting lives at risk of harm or death. Furthermore, as artificial intelligence capabilities continue to advance and are increasingly adopted, cybersecurity attacks may become more sophisticated, including through the use of artificial intelligence enabled techniques. In addition, as technologies evolve and cybersecurity attacks continue to become more sophisticated, we may incur significant costs to upgrade or enhance our security measures to protect against such attacks and we may face difficulties in fully anticipating or implementing adequate preventive measures or mitigating potential harm, which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations. We review our cybersecurity controls against actual and current industry threats and partner with security vendors to assist with protecting our network and data resources through activities such as penetration and vulnerability testing, assessments against current cybersecurity standards, and leveraging industry recommendations from both independent vendors as well as industry partners. Such efforts may incur significant costs and yet prove insufficient to deter future cybersecurity attacks or prevent all security breaches.
The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as preemptive expenses to mitigate the risks of failures, any of which could result in information system failures, delays and/or increase in capital and operating expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company’s reputation and results of operations.
The Company’s joint venture interests are subject to risks.
The Company has joint venture arrangements in respect of certain of its properties. Although the Company expects relations with its joint venture and strategic partners to remain positive, contractual or other disputes may arise that may have a material adverse effect on the Company’s financial condition or its ability to develop and operate its assets. Furthermore, the Company has inherently less control when it is not the operator of a project subject to a joint venture agreement, even if the Company has a controlling interest under a joint venture agreement. In such instances, the contractual terms of the agreement may limit the Company’s ability to influence the operation of the project.
The Company’s interest in deferred consideration received from divestitures may not be fully realizable.
From time to time, as partial or full consideration for the Company’s disposition of assets, the Company may receive certain deferred cash or enter into long-term royalty arrangements, including net smelter royalties. The Company cannot provide any assurances that the Company will be able to realize the full value of any deferred cash or royalty interests.
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Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to the Company’s overall ability to advance its business or projects.
Damage to the Company’s reputation can be the result of the actual or perceived occurrence of any number of events, and could include negative publicity. The increased use of social media and other web-based tools to generate, publish and discuss user-generated content and to connect with other users has made it increasingly easier for individuals and groups to communicate and share opinions and views regarding the Company and its activities, whether true or not. For example, as a result of the Çöpler Incident, we have observed and we are continuing to observe increased negative media and social media attention directed at our Company and our operations in Türkiye, which we expect to continue.
In recent years, social media has grown to rival or even dominate traditional media outlets in reach and dissemination of information. This has resulted in an environment of information overload which is frequently infiltrated by fabricated and fraudulent information. Fabricated and fraudulent information articles multiply rapidly and act as narratives that omit or add information to facts. Social media may be the primary source of news and information in certain regions in which the Company conducts business, and traditional media outlets may pick up social media-based stories and further disseminate information beyond social media platforms. In this environment, false or fabricated information about the Company and its business may travel more quickly than the Company can issue or disseminate the truth. Shifts in social attitudes to our operations in a particular jurisdiction or mining generally may increase our exposure to these risks.
The Company does not ultimately have direct control over how it is perceived by others and there is no assurance that the Company would be able to reverse any negative perceptions. Fabricated and fraudulent news articles may be misinterpreted as true and may lead to increased public scrutiny of the Company. Such increased public scrutiny may also lead to increased governmental or regulatory scrutiny, whether deserved or not, leading to potential reputational damage to the Company and direct financial impacts. Reputational damage, real or perceived, could have a material adverse impact on the Company’s financial performance, financial condition, cash flows and growth prospects, including its ability to recruit employees from local communities and secure or retain the support of local communities and local and national governments. In certain of the regions where we have operating mines, we have been, and could be in the future, targeted by negative publicity campaigns by individuals or groups that may not favor our presence or the existence of our mine. These campaigns can have a negative impact on the morale of our employees and create retention and recruitment issues. These campaigns could have an impact on the local community’s acceptance of our presence and ability to operate, which can have a meaningful impact on the local and national government’s willingness to allow us to continue to operate. Additionally, these campaigns can have an impact on our ability to recruit contractors and on our relationships with our customers and suppliers.
The Company’s insurance coverage does not cover all of the Company’s potential losses, liabilities and damages related to its business and certain risks are uninsured and uninsurable.
The Company’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labor disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, mechanical failures, changes in the regulatory environment and natural phenomena such as inclement weather conditions, fires, floods, hurricanes and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company’s properties or the properties of others, delays in mining, monetary losses and possible legal liability.
As described above with respect to the Çöpler Incident, although the Company maintains insurance to protect against certain risks in such amounts as it considers reasonable, the Company’s insurance will not cover all of the potential risks associated with a mining company’s operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as loss of title to mineral property, environmental pollution, or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards which may not be insured against or which it may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect on its financial performance and results of operations.
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The Company is exposed to market and/or counterparty risks related to the sale of its concentrates and metals.
There is no assurance that the Company will, in the future and where necessary, be successful in entering into arrangements to sell the Company’s doré or concentrates on acceptable terms, or at all. If the Company is not successful in entering into such arrangements, the Company may be forced to sell some or all of the Company’s products, or greater volumes of them than the Company may from time to time intend, in the spot market, or the Company may not have a market for its products and the Company’s future operating results may be materially adversely impacted as a result.
In addition, the Company may become subject to such market limitations and/or complications should any counterparty to any of the Company’s arrangements not honor such arrangement or should any of such counterparties become insolvent. Moreover, there is no assurance that the Company will be able to renew any agreements the Company has in place to sell doré or concentrates when such agreements expire, that the Company will be able to enter into any new or additional sale agreements, or that the Company’s doré or concentrates will meet the qualitative and/or quantitative requirements under supply agreements or of existing or future buyers.
Public health crises have, and could in the future, adversely affect the Company’s business.
An epidemic or pandemic, such as COVID-19, may result in restrictions, orders, protocols and shutdowns that could negatively impact the Company’s operations, including significant restrictions on travel, temporary business closures, quarantines, stock market volatility, supplier and vendor uncertainty and a general reduction in global consumer activity. These crises have caused and could in the future cause, operational shut downs at the Company’s properties, operational and supply chain delays and disruptions, labor shortages, social unrest, breach of material contracts and customer agreements, increased insurance premiums and/or taxes, increased supplier and contractor expenses, decreased demand or the inability to sell and deliver precious metals, declines in the price of precious metals, delays in permitting or approvals, governmental disruptions, international economic and political conditions, international or regional consumptive patterns, expectations on inflation or deflation, interest rates, capital markets volatility, or other unknown but potentially significant impacts, including the possibility of a significant protracted economic downturn, including a global recession.
In response to a public health crisis, governments may introduce new, or modify existing, laws, regulations, decrees or other orders, all of which could impact the Company’s suppliers, local communities, customers, and other stakeholders and negatively impact our business. There is no assurance that the operations at any or all of the Company’s mines will not be the subject of new or additional restrictions, protocols, suspensions or closures, in whole or in part, in the future, which could have a material adverse effect on the Company’s business. Additionally, it is difficult to predict the long-term impact on the local economies where the Company’s properties are located or the global economy as a result of an epidemic or pandemic, which could, in turn, materially adversely affect our operations, financial results and/or liquidity position. In particular, slowed or delayed government processes, including permitting, could have a negative impact on the growth of our business.
Financial Risks and Risks Related to Our Indebtedness
General economic conditions may adversely affect the Company’s growth and profitability.
Market events and conditions, including the disruptions in the international credit markets and other financial systems, recession or fears of recession, along with political instability and fluctuation of currency rates may result in volatility. These conditions have, at times, caused a loss of confidence in global credit markets, resulting in the collapse of, and/or government intervention in, banks and investment banks, financial institutions and insurers, and other financial institutions, and creating a climate of greater volatility, tighter regulations, less liquidity, widening credit spreads, less price transparency, increased credit losses and tighter credit conditions. Notwithstanding any potential actions by governments, concerns about the condition of the capital markets, financial instruments, and financial institutions may cause the broader credit markets to be volatile and interest rates to fluctuate. These events may result in limitations on the availability of credit, impact general financial market liquidity, and decrease investor confidence, all of which may adversely affect the Company’s business. In addition, an increase in price levels generally, or in price levels in a particular sector, could result in a shift in demand for metals and changes to commodity prices, which could adversely affect our revenues and, at the same time, increase our costs.
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The Company may be adversely affected by fluctuations in foreign exchange rates.
The Company maintains its cash and cash equivalents primarily in USD. The Company’s revenues are in USD, while certain of the Company’s costs will be incurred in other currencies. Any appreciation in the currencies of Türkiye, Canada, Argentina, or any other country in which the Company carries out exploration or development activities against the USD may increase the Company’s costs of carrying on operations in such countries. In addition, any fluctuation in the exchange rate of the TRY, CAD, ARS, or the currency of any other country in which the Company operates, against the USD could result in a loss on the Company’s books to the extent the Company holds funds or net monetary or non-monetary assets denominated in those currencies, and any fluctuations in currency prices generally may result in volatility.
From time to time, countries in which the Company operates may adopt measures to restrict the availability of the local currency or the repatriation of capital across borders or enact tax rate changes designed to restrict fund movement across borders. These measures are imposed by governments or central banks, in some cases during times of economic instability, to prevent the removal of capital or the sudden devaluation of local currencies or to maintain in-country foreign currency reserves. In addition, many emerging markets countries require consents or reporting processes before local currency earnings can be converted into USD or other currencies and/or such earnings can be repatriated or otherwise transferred outside of the operating jurisdiction. These measures may have a number of negative effects on the Company, reducing the immediately available capital that we could otherwise deploy for investment opportunities or the payment of expenses. In addition, measures that restrict the availability of the local currency or impose a requirement to operate in the local currency may create other practical difficulties for us. As a result, the Company’s financial performance and forecasts may be significantly impacted by changes in foreign exchange rates.
Inflation may have a material adverse effect on results of operations.
Certain of the Company’s operations are located in countries that have in the past and are currently experiencing high rates of inflation. It is possible that in the future, high inflation in the countries in which we operate may result in an increase in operational costs in local currencies (without a concurrent devaluation of the local currency of operations against the dollar or an increase in the dollar price of gold, silver, copper, zinc or lead). Maintaining operating costs in currencies subject to significant inflation could expose us to risks relating to devaluation and high domestic inflation. Country-specific inflation rates are often volatile and unpredictable, and global inflation rates have risen consistently in recent years as a result of numerous global economic factors. Significant increases in inflation may significantly impact applicable currencies and precipitate governmental efforts to offset inflation impacts and restore the value of the impacted currency, including lowering central bank interest rates. Significantly higher and sustained rates of inflation, with subsequent increases in operational costs, could result in the deferral or closure of projects and mines in the event that operating costs become prohibitive. This could have a material adverse effect on our business, financial position and results of operations.
The Company may be subject to risks associated with hedging activities.
Precious metals prices, foreign currency rates, and costs of materials and consumables associated with exploration, development and mining activities are subject to frequent, unpredictable and substantial volatility which is beyond the Company’s control. The Company may engage in various hedging activities consistent with its hedging standards. Hedging activities are intended to mitigate exposure to fluctuations in foreign currencies, materials and consumables. Certain precious metals hedging strategies may protect the Company against lower prices, but they may also limit the price that can be realized on precious metal that is subject to forward sales and call options where the market price of gold exceeds the gold price in a forward sale or call option contract. Similarly, hedges of foreign currencies, materials and consumables may protect the Company against adverse currency variances and rising costs but may result in losses if currency rates and costs move counter to a company’s hedge position. Hedging activities may be uneconomic due to numerous factors and no assurances can be made that hedging will effectively mitigate risks as intended.
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Future funding requirements may affect the Company’s business.
Potential future investments, including projects in the Company’s project pipeline, acquisitions and other investments, will require significant funds for capital expenditures. The continuation of production, development and exploration activities, if any, will depend on the Company’s ability to generate sufficient operating cash flows from its mining operations and to obtain additional external financing where necessary. As a result of the Çöpler Incident we may be restricted in our ability to make such future investments. In particular, we may be required to divert available cash or cash flows from our other mines to fund the remediation at Çöpler or to pay claims made against us. This could have an impact on the planned capital expenditures at each of our operating mines and it may impact our overall development plan for Hod Maden.
Depending on gold, silver, copper, zinc and lead prices, the Company’s operating cash flow may not be sufficient to meet all of these expenditures, depending on the timing of development and other projects. As a result, new sources of capital may be needed to fund investments, ongoing business activities, construction and operation of potential future projects and exploration projects. The Company’s ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, future gold, silver, copper, zinc and lead prices as well as the Company’s operational performance, current cash flow and debt position, among other factors. Failure to obtain sufficient financing could result in the delay or indefinite postponement of exploration, development or production on any or all of its projects. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable. Alternatively, the Company may determine that it may be necessary or preferable to issue additional equity or other securities, defer projects or sell assets in the future to meet the Company’s capital needs.
U.S. and global markets have, from time to time, experienced significant dislocations and liquidity disruptions impacting volatility and pricing in the capital markets. Additional financing may not be commercially available when needed or, if available, the terms of such financing may not be favorable to us and, if raised by offering equity securities, any additional financing may involve substantial dilution to existing shareholders. In the event of lower gold, silver, copper, zinc or lead prices, unanticipated operating or financial challenges, or new funding limitations, the Company’s ability to pursue new business opportunities, invest in existing and new projects, fund our ongoing business activities, retire or service all outstanding debt, repurchase shares and pay dividends could be significantly constrained. In addition, the Company’s joint venture partners may not have sufficient funds or borrowing ability to make their expected capital commitments to such joint ventures. In the event that such joint venture partners do not make their economic commitments, the Company may be prevented from pursuing certain development opportunities or may assume additional financial obligations, which may require new sources of capital.
As described above, as a result of the Çöpler Incident, it may be more challenging for the Company to obtain new sources of debt or equity capital to fund investments, ongoing business activities, construction and operation of potential future projects and exploration projects.
The Company may be unable to generate sufficient cash to fund its operations or service its debt.
The Company’s ability to make scheduled payments or to refinance debt obligations and to fund planned capital expenditures and other ongoing liquidity needs depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. There can be no assurance that the Company’s business will generate sufficient cash flow from operations, or that borrowings will be available to us, to pay the principal, premium, if any, and interest on our debt or to fund our other liquidity needs. Additionally, as a result of the suspension of operations at Çöpler and the uncertainty when operations will resume, it is possible that our cash flows from operations could be impacted.
If the Company’s cash flows and capital resources are insufficient to fund its operational needs and debt service obligations, it could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance its indebtedness. The Company may not be able to affect any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternatives may not allow it to meet its operational needs and scheduled debt service obligations.
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Additionally, the terms of the Company’s debt may require the Company to satisfy various affirmative and negative covenants and to meet certain financial ratios and tests. These covenants limit, among other things, the Company’s ability to incur further indebtedness if doing so would cause it to fail to meet certain financial covenants, create certain liens on assets or engage in certain types of transactions. Although these covenants do not currently restrict the Company’s ability to conduct its business, there can be no assurances that the Company will continue to satisfy these covenants, that such covenants will not limit its ability to respond to changes in its business or competitive activities in the future, or the Company will not be restricted from engaging in future mergers, acquisitions or dispositions of assets which may be beneficial to the Company. Furthermore, a breach of these covenants, including a failure to meet the financial tests or ratios, would likely result in an event of default under the associated debt instrument unless the Company can obtain a waiver or consent in respect of any such breach. There can be no assurance that such waiver or consent would be granted. In the event of any default, the applicable lenders could elect to declare all outstanding borrowings, together with accrued and unpaid interest, fees and other amounts due, to be immediately due and payable, which may have a material adverse impact on the Company’s business, profitability or financial condition, or inhibit the Company’s ability to further its exploration and development activities. See Note 19 to the Consolidated Financial Statements for further information.
The Company’s indebtedness or lack of liquidity may impair the financial health of the Company.
The Company’s level of debt and associated debt service obligations may have adverse effects on our business, financial condition, cash flows or results of operations, including:
• making it more difficult for us to satisfy our obligations with respect our outstanding indebtedness;
• reducing the amount of funds available to finance our operations, capital expenditures and other activities;
• increasing our vulnerability to economic downturns and industry conditions;
• limiting our flexibility in responding to changing business and economic conditions;
• jeopardizing our ability to execute our business plans;
• placing us at a disadvantage when compared to our competitors that have less debt;
• increasing our cost of borrowing; and
• limiting our ability to borrow additional funds.
Additionally, the terms of the Company’s existing indebtedness, from time to time, may restrict the Company’s ability to dispose of assets and use the proceeds from those dispositions and may also restrict its ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. The Company may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due.
The Company may need to refinance all or a portion of its debt on or before maturity, but there is no assurance that the Company will be able to refinance any debt on commercially reasonable terms, or at all. The Company’s ability to restructure or refinance its debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of the Company’s debt could be at higher interest rates and may require the Company to comply with more onerous covenants, which could further restrict business operations.
The Company and its subsidiaries may incur substantial additional indebtedness in the future. If new debt is added to the Company and/or its subsidiaries’ existing debt levels, the existing risks associated with the Company’s aggregate debt would necessarily increase. Any failure to make payments of interest and principal on existing debt on a timely basis, or any other default under the terms of an outstanding debt instrument, would likely result in a reduction of the Company’s credit rating, which could harm our ability to incur additional debt.
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Risks Related to Our Industry and the Jurisdictions in Which We Operate
Mining is inherently risky and subject to conditions and events beyond the Company’s control.
The development and operation of a mine or mine property is inherently risky and involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome, including:
• unusual or unexpected geological formations or movements;
• metallurgical and other processing problems;
• shortages in materials or equipment and energy and electrical power supply interruptions or rationing;
• failure of engineered structures;
• inaccurate mineral modeling;
• unanticipated changes in inventory levels at heap-leach operations;
• metal losses;
• environmental hazards, including discharge of metals, concentrates, pollutants or hazardous chemicals;
• ground and water conditions;
• power outages;
• remote locations and inadequate infrastructure;
• community relations problems;
• labor disruptions;
• the availability and retention of skilled personnel;
• non-governmental organization or community activities;
• industrial accidents, including in connection with the operation of mining equipment, milling equipment and/or conveyor systems and accidents associated with the preparation and ignition of large-scale blasting operations, milling and processing;
• transportation incidents, including transportation of chemicals, explosions or other materials, transportation of large mining equipment and transportation of employees and business partners to and from sites;
• fall-of-ground accidents in underground operations;
• failure of mining pit slopes, tailings dam walls and/or heap leach facilities;
• periodic interruptions due to inclement or hazardous weather conditions or natural disasters, such as the forest fire in the vicinity of our Seabee mine, which temporarily suspended our operations and damaged equipment;
• flooding, explosions, fire, rockbursts, cave-ins and landslides;
• seismic activity;
• changes to legal and regulatory requirements;
• security incidents, including activities of illegal or artisanal miners, gold bullion or concentrate theft, including in transport, corruption and fraud;
• mechanical equipment and facility performance problems;
• failure of unproven or evolving technologies or loss of information integrity or data; and
• the availability of materials and equipment.
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We have experienced certain of these conditions and events with the occurrence of the Çöpler Incident.
The impact or magnitude of these risks may not be immediately identifiable or quantifiable, and liabilities may arise at any time, including, but not limited to, fines, monetary damages or settlement costs or liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. Additionally, these risks could result in damage to, or destruction of, mineral properties, production facilities or other properties, environmental damage, delays in mining, increased cost of sales, asset write downs, monetary losses and possible legal liability, sanctions or penalties, occupational illness or health issues, personnel injury or death, and/or facility and workforce evacuation, such as what we are or may experience as a result of the Çöpler Incident. The Company may not be able to obtain insurance to cover these risks at economically feasible premiums, or at all. The Company may suffer a material adverse effect on its business if it incurs losses related to any significant events that are not covered by the Company’s insurance policies.
Additionally, the Company’s operations, particularly those operations located outside of North America, are exposed to various levels of safety and security risks which could result in injury or death, damage to property, work stoppages, product theft, or blockades of the Company’s mining operations and projects. Risks and uncertainties vary from region to region and include, but are not limited to, terrorism, hostage taking, local drug gang and/or other gang activities, military and/or governmental repression, labor unrest and war or civil unrest. Local opposition to mine development projects could arise and such opposition may be violent. Additionally, local support to our presence, which can be influenced by the manner in which we operate our mine, address human capital considerations, focus on environmental and sustainability concerns and other factors, may impact our ability to continue to operate in a jurisdiction and could impact our ability to operate in a new jurisdiction. If the Company were to experience resistance or unrest in connection with its mines or projects, it could have a material adverse effect on the Company’s operations, liquidity and profitability. Additionally, to the extent that such risks and uncertainties are directed towards local populations, the Company may not be able to retain sufficient labor forces to maintain the Company’s operations.
Political or economic instability or unexpected regulatory change in the countries where the Company’s mineral properties are located could adversely affect its business.
The Company currently conducts operations in the United States, Türkiye, Canada and Argentina, and has development and exploration assets in the United States, Türkiye, and Canada; as such, the Company is exposed to various levels of economic, political and other risks and uncertainties. These risks and uncertainties vary from country to country and include, but are not limited to: royalties and tax increases or claims by governmental bodies; expropriation or nationalization; employee profit-sharing requirements; foreign exchange controls; restrictions on repatriation of profits; import and export regulations; cancellation or renegotiation of contracts; changing fiscal regimes and uncertain regulatory environments; fluctuations in currency exchange rates; high rates of inflation; changes in royalty and tax regimes, including the elimination of tax exemptions; underdeveloped industrial and economic infrastructure; unenforceability of contractual rights and judgments; loss of social license to operate resulting from a decline in societal support for the industry; loss of critical services such as power and water; and environmental permitting regulations. The occurrence of these various factors and uncertainties cannot be accurately predicted and could adversely affect the Company’s business.
Furthermore, the introduction of new tax laws, regulations or rules, or changes to, or differing interpretation of, or application of, existing tax laws, regulations or rules in any of the countries in which the Company’s operations or business is located, could result in an increase in its taxes, or other governmental charges, duties or impositions. No assurance can be given that new tax laws, rules or regulations will not be enacted or that existing tax laws will not be changed, interpreted or applied in a manner that could result in the Company’s profits being subject to additional taxation or that could otherwise have a material adverse effect on the Company.
Additionally, the taking of property by nationalization or expropriation without adequate compensation is a risk in certain jurisdictions in which the Company has operations. Such governmental actions may have an adverse impact on the Company’s operations and profitability.
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Suitable infrastructure may not be available or damage to existing infrastructure may occur.
Mining, processing, development and exploration activities depend on adequate infrastructure. Reliable roads, ice roads, bridges, port and/or rail transportation, power sources, water supply and access to key consumables are important determinants for capital and operating costs. The lack of availability on acceptable terms or the delay in the availability of any one or more of these items could prevent or delay exploration, development or exploitation of the Company’s projects. If adequate infrastructure is not available in a timely manner, the Company cannot assure that the exploitation or development of its projects will be commenced or completed on a timely basis, or at all, or that the resulting operations will achieve the anticipated production volume, or that the construction costs and operating costs associated with the exploitation and/or development of the Company’s projects will not be higher than anticipated. In addition, extreme weather phenomena, sabotage, vandalism or government, non-governmental organization, community or other interference in the maintenance or provision of such infrastructure could adversely affect the Company’s operations and profitability.
Mining companies are increasingly required to consider and provide benefits to the communities and countries in which they operate in order to maintain operations.
Greater scrutiny of multinational companies to contribute to sustainable outcomes in the places where they operate has led to a proliferation of standards, reporting initiatives and expectations focused on environmental stewardship, social performance, community engagement and transparency. Extractive industries, and mining in particular, have seen significant increases in community and other stakeholder expectations and attention. Mining companies, like us, are increasingly required to meaningfully engage with impacted communities and interested stakeholders; to understand, avoid or mitigate negative impacts while optimizing economic development and employment opportunities associated with their operations. The expectation is for mining companies to recognize the impact their operations can have on the communities in which they operate and develop strategies and identify targets to address the actual or perceived impact to create shared value for shareholders, employees, governments, local communities and host countries. Such expectations tend to be particularly focused on companies whose activities are perceived to have high environmental impacts, like mining companies. Following the Çöpler Incident, we have been in discussions with the government of Türkiye, local government officials and impacted community members regarding remediation efforts. There is no assurance that any of these efforts will satisfy members of the community and other interested stakeholders.
Despite the Company’s commitment to ongoing engagement with communities and other interested stakeholders, no assurances can be provided that changes or increases in expectations and the publicity of these expectations will not result in interest from activists who seek a more rapid or more significant response to these interests, which can involve a range of matters, including perceived environmental risks. The outcome of these efforts can result in adverse financial and operational impacts to our business, including, without limitation, operational disruption, increased costs, increased investment obligations and increased taxes and royalties payable to governments.
Indigenous peoples’ title claims and rights to consultation and accommodation may affect the Company’s existing operations as well as development projects and future acquisitions.
Some of the Company’s properties may be subject to the rights or the asserted rights of various community stakeholders, including indigenous peoples. The presence of community stakeholders may impact the Company’s ability to develop or operate its mining properties and projects or to conduct exploration activities. Accordingly, the Company is subject to the risk that one or more groups may oppose the continued operation, further development, or new development or exploration of the Company’s current or future mining properties and projects. Such opposition may be directed through legal or administrative proceedings, or through protests or other campaigns against the Company’s activities. In addition, if historical artifacts or archaeological sites are discovered on or near the Company’s properties, the Company may be prohibited or restricted from developing or mining its mineral properties or be required to relocate or preserve such findings.
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Governments in many jurisdictions, including in some parts of Türkiye, Canada, the United States, and Argentina must consult with, or may require the Company to consult with, indigenous peoples with respect to grants of mineral rights and the issuance or amendment of project authorizations and permits, pursuant to various international and national laws, codes, resolutions, conventions and guidelines and other rights of indigenous peoples may require accommodation including undertakings regarding employment, royalty payments and other matters. This may affect the Company’s ability to acquire effective mineral titles, permits or licenses in these jurisdictions within a reasonable time, and may affect the timetable and costs of development and operation of the Company’s mineral properties in these jurisdictions. In addition, the risk of unforeseen title claims by indigenous peoples could affect existing operations and development projects. These legal requirements may also affect the Company’s ability to expand or transfer existing operations or to develop new projects.
Civil disobedience in certain of the countries where the Company’s mining operations are located could adversely affect its business.
Opposition to our mining operations, which could take the form of acts of civil disobedience, are common in certain of the countries where the Company’s properties are located. In recent years, many mining companies have been the targets of actions to restrict their legally granted access to mining concessions or property. The evolving expectations related to human rights, indigenous rights, and environmental protections may result in opposition to our current and future operations, the development of new projects and mines, and exploration activities. Such opposition may take the form of legal or administrative proceedings or other actions, such as physical protests, roadblocks or other forms of public expression, including social and other media campaigns, against our activities, any of which may have a negative impact on our local or global reputation and operations. Such acts of opposition and/or civil disobedience often occur with no warning and can result in significant direct and indirect costs and delays in operations. Opposition by community and activist groups to our operations may require modification of, or preclude the operation or development of, our projects and mines or may require us to enter into agreements with such groups or local governments, which may cause increased costs and significant delays to the advancement of our projects. There can be no assurance that the Company will not face disruptions to site access in the future.
The Company and the mining industry face geotechnical challenges, which could adversely impact our production and profitability.
As certain of our mines age, the Company may face geotechnical challenges faced by the mining industry as a whole, including mining deeper pits and more complex deposits, which generally leads to higher pit walls, more complex underground environments and increased exposure to geotechnical instability or failure and hydrological impacts. Unanticipated adverse geotechnical and hydrological conditions may occur at any time. Such conditions are often affected by risks and hazards outside of our control, such as severe weather and considerable rainfall, which may lead to periodic floods, mudslides, wall or slope instability and seismic activity, which may result in slippage of material. Such events may not be detected in advance.
In addition, the Company has operational and closed tailings impoundments in a variety of climatic and topographic settings. The failure of tailings dam and storage facilities, slopes or pit walls, heap leach pads, and other impoundments at our mining sites could cause severe, and in some cases catastrophic, property and environmental damage and loss of life. Geotechnical, heap leach or tailings storage facility failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs and other impacts, which could result in a material adverse effect on our results of operations and financial position. Recognizing this risk, while the Company continues to review its existing practices, there can be no assurance that these events will not occur.
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Risks Related to Our Personnel
Certain of the Company’s directors and/or officers also serve, or may serve, as directors of other companies involved in natural resource exploration and development, and consequently there exists the possibility for these directors and/or officers to be in a position of conflict.
Certain of the Company’s directors and/or officers may have fiduciary and/or contractual obligations to other companies, including companies that are engaged in business activities similar to those intended to be conducted by the Company. Accordingly, such companies may participate in transactions and have obligations that may be in conflict or competition with the Company’s business or acquisition strategy. As a result of such conflict, the Company may not be able to participate in certain transactions, which may have a material adverse effect on the Company’s financial position. To mitigate any such impact, the Company requires all directors and officers to disclose any actual or potential conflicts of interest. Further, any decision made by any of these directors and/or officers involving SSR Mining is required to be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of SSR Mining and its shareholders.
The Company could be subject to potential labor unrest or other labor disturbances.
Production at Çöpler, Marigold, Seabee, Puna and CC&V is dependent upon the efforts of the Company’s employees and the Company’s relations with them. Relations with the Company’s employees may be affected by changes in the scheme of labor relations that may be introduced by the relevant governmental authorities in each of the jurisdictions in which the Company carries on business. Changes in such legislation or in the relationship with the Company’s employees may have a material adverse effect on the Company’s business, financial condition and results of operations. Additionally, we could experience labor disputes, work stoppages or other disruptions in production due to union activities, in Türkiye and Argentina, or other employee actions at any of our mines. A failure to successfully enter into new contracts with labor unions in Türkiye or Argentina or resolve any complaints with employees at any of our mines could result in future labor disputes, work stoppages or other disruptions in production. Any labor unrest or other labor disturbances could have a material adverse effect on the Company’s business.
The Company is dependent on its ability to recruit and retain qualified personnel.
The Company competes with other mining companies, including national and international mining companies, to attract and retain key executives and skilled and experienced employees. The Company is dependent on the services of its key executives and other skilled and experienced personnel to focus on advancing its corporate objectives as well as the identification of new opportunities for growth and funding. The loss of any of these persons, or the Company’s inability to attract and retain suitable replacements for them or additional highly skilled employees and contractors may have a material adverse effect on its business and financial condition. The negative impacts of the Çöpler Incident, which include, among other things, the pressure on our financial results, the stability of our operations in Türkiye, the impact of our ability to use available cash to fund growth at our producing mines, the reputational damage we may face, legal and/or regulatory exposure, and the significant decline in our share price, may make it increasingly challenging to attract and retain key executives and skilled and experienced employees, and employees generally.
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The Company relies on contractors to conduct a significant portion of its operations and construction projects.
A significant portion of the Company’s operations and construction projects in Türkiye and Argentina are currently conducted in part by contractors. As a result, these operations are subject to a number of risks, some of which are outside of the Company’s control, including:
• Negotiating agreements with contractors on acceptable terms;
• New legislation limiting or altering the ability to utilize contractors or outsourced resources;
• The inability to replace a contractor and its operating equipment in the event that either party terminates the agreement;
• Reduced control over those aspects of operations which are the responsibility of the contractor;
• Failure of a contractor to perform under its agreement;
• Interruption of operations or increased costs in the event that a contractor ceases its business due to insolvency or other unforeseen events;
• Failure of a contractor to comply with applicable legal and regulatory requirements, to the extent it is responsible for such compliance;
• Problems of a contractor with managing its workforce, labor unrest or other employment issues; and
• Liability to third parties as a result of the actions of our contractors.
In addition, law and regulations relating to the use of contractors may vary in the jurisdictions in which we operate, and changes in legal and regulatory restrictions may also impact our ability to utilize contractors and outsourcing services. The occurrence of one or more of these risks could adversely affect our results of operations and financial position. The negative impacts of the Çöpler Incident may make it increasingly challenging to attract skilled and experienced contractors or employees in Türkiye.
Risks Related to Governmental Regulation and Legal Proceedings
The Company is subject to significant governmental regulations.
The Company’s operations are subject to extensive and complex federal, state, provincial, territorial and local laws and regulations across each of our operating regions and failure to comply with applicable legal requirements can result in substantial penalties, civil sanctions and, in some cases, criminal sanctions, including the suspension or revocation of permits. U.S. surface and underground mines are continuously inspected by the U.S. Department of Labor Mine Safety and Health Administration (“MSHA”), which inspections often lead to notices of violation under the Federal Mine Safety and Health Act of 1977 . Our U.S. mines could be subject to a temporary or extended shutdown as a result of a violation alleged by MSHA. The Company’s mining operations outside of the U.S. are similarly subject to inspection and regulation under applicable jurisdictional laws and regulations. If inspections result in an alleged violation, the Company may be subject to fines, penalties or sanctions and its mining operations could be subject to temporary or extended closures. In addition to potential government restrictions and regulatory fines, penalties or sanctions, the Company’s ability to operate and thus, its results of operations and financial position, could be adversely affected by accidents, injuries, fatalities or events detrimental (or perceived to be detrimental) to the health and safety of our employees, the environment or the communities in which the Company operates.
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In addition to existing regulatory requirements, legislation and regulations may be adopted or changed, regulatory procedures, interpretations or enforcement modified, or permit limits reduced at any time, any of which could result in additional exposure to liability, operating expense, capital expenditures or restrictions and delays in the mining, production or development of our properties, lead to the revocation of existing or future exploration or mining rights, or otherwise have an adverse impact on the Company’s results of operations and financial position. Mining accidents and fatalities or toxic waste releases, whether or not at our mines or related to metals mining, may increase the likelihood of additional regulation or changes in law or enhanced regulatory scrutiny. Shifts in social or political attitudes towards the mining sector in any of the jurisdictions in which we operate could also result in changes in laws or regulations that may negatively impact our results of operations and financial position. In addition, enforcement or regulatory tools and methods available to regulatory bodies which have not been or have infrequently been used against us or the mining industry to date, may in the future be used more extensively or more consistently.
Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties or enforcement actions, including orders issued by regulatory or judicial authorities enjoining or curtailing operations or requiring corrective measures, installation of additional equipment or remedial actions, or the imposition of additional local or foreign parties as joint venture partners, any of which could result in significant expenditures. The Company may also be required to compensate private parties suffering loss or damage by reason of a breach of such laws, regulations or permitting requirements. Future laws and regulations, or more stringent enforcement of current laws and regulations by governmental authorities, cannot be accurately predicted and it is possible that these could cause the Company to incur additional expense, divert management time and attention from revenue generating activities or restrict or delay the exploration and development of the Company’s properties.
The Company is subject to extensive permitting requirements.
The Company’s operations, including continued production at Çöpler, Marigold, CC&V, Seabee, and Puna, and further exploration, development and commencement of production on the Company’s other mineral properties, require licenses, permits and other approvals from various governmental authorities, including land and water usage permits. Obtaining or renewing governmental permits is a complex and time-consuming process. The duration and success of efforts to obtain and renew permits are contingent upon many variables not within the Company’s control.
The Company’s ability to obtain the required permits and approvals to explore for, develop and operate mines and to successfully operate near communities in the jurisdictions in which we operate depends in part on our ability to develop, operate and close mines in a manner that is consistent with the creation of social and economic benefits in the surrounding communities, which may or may not be required by law. Our ability to obtain permits and approvals and to operate near certain communities may be adversely impacted by real or perceived detrimental events associated with our activities or those of other mining companies affecting the environment, health and safety of communities in which we operate. Further, certain communities may challenge, or seek to challenge, permits and approvals granted to the Company, including, but not limited to, environmental impact assessments and other operating permits, which may result in temporary or permanent suspension of such permits and approvals or the cessation of Company operations. Any delay or suspension of the Company’s operations as a result of such challenges, whether such challenges have merit, may adversely affect the Company’s business, results of operations or financial condition.
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Previously obtained permits and approvals have been and may in the future be suspended or revoked for many reasons, including through government or court action as a result of events on our properties or our actions or perceived actions, or may be adjusted in a manner that adversely affects our operations, including our ability to explore or develop properties, commence production or continue operations. As a result of the Çöpler Incident, our permits to operate and the environmental impact assessment have been revoked, which has resulted in our inability to operate the Çöpler mine or may result in our inability to continue to pursue the development of Hod Maden. The Company's operating permits, which were revoked by the Ministry of Environment, Urbanization and Climate Change of Türkiye shortly after the Çöpler Incident, remain suspended at this time. The Company cannot predict or guarantee when, or if, such permits will be reinstated, or when or under what conditions Çöpler may be able to restart. Additionally, if such permits are reinstated, the Company may continue to face increased challenges to our existing and/or any future permits for Çöpler. Although we continue to progress the development of Hod Maden, the outcome of the Turkish authorities' legal and regulatory processes related to the Çöpler Incident may impact our ability or desirability to continue the Hod Maden project. There can be no assurance that other permits, licenses and approvals that are required for the operations of the Company, including any for construction of mining facilities or conduct of mining, will be obtainable or renewable on reasonable terms, or at all. Delays or a failure to obtain such required permits, or the expiry, revocation or failure by the Company to comply with the terms of any such permits that it has obtained, would adversely affect the Company’s business.
The Company’s activities are subject to environmental laws and regulations that may increase the Company’s costs and restrict its operations.
The Company’s activities are subject to extensive laws and regulations governing the protection of the environment, natural resources and human health. These laws address, among other things, emissions into the air and air quality, discharges into water and water quality, management of waste, management and disposal of solid and hazardous substances, protection of natural resources, fisheries and wildlife protection, antiquities, endangered species, noise and use and reclamation of lands disturbed by mining operations. For certain of its operations, the Company is required to obtain governmental permits and, in some instances, provide bonding requirements under federal, state or provincial air quality, water quality, and mine reclamation rules and permits. Although the Company makes provisions for reclamation costs, it cannot be assured that these provisions will be adequate to discharge the Company’s future obligations for these costs. Violations of environmental laws subject the Company exposure to civil sanctions and, in some cases, criminal sanctions, including the suspension or revocation of permits. While responsible environmental, health and safety stewardship is one of the Company’s core values, there can be no assurance that the Company has been or will be at all times in complete compliance with such laws, regulations and permits, or that the costs of complying with current and future environmental laws and permits will not materially and adversely affect the Company’s business, results of operations or financial condition.
Our U.S. operations are subject to the Clean Water Act (the “CWA”) and comparable legislation on Colorado and Nevada, which require permits for certain discharges into “waters of the United States.” Such permitting has been a frequent subject of litigation and enforcement activity by environmental advocacy groups and the U.S. Environmental Protection Agency (the “EPA”), respectively. Such litigation and enforcement has historically, resulted fewer permit applications being approved and extensive delays in permits being issued, as well as the frequent imposition of penalties for alleged permit violations. In 2019, however, the regulatory definition of “waters of the United States” that are protected by the CWA was narrowed by the EPA, excluding certain bodies of water that had previously been included in the definition. In 2023, the U.S. Supreme Court also narrowed the definition. In response to this ruling, in November 2025, the EPA proposed a new rule that narrows the definition by excluding certain bodies of water. The new rule is not final and may be subject to litigation. Even with a narrowed rule, it is possible that in the future the definition could again be expanded, or states could take action to address a perceived fall-off in protection under the CWA, either of which could increase litigation involving water discharge permits, which may result in delays in, or in some instances preclude, the commencement or continuation of development or production operations. Enforcement actions by the EPA or other federal or state agencies could also result. Adverse outcomes in lawsuits challenging permits or failure to comply with applicable regulations or permits could result in the suspension, denial, or revocation of required permits, or the imposition of penalties, any of which could have a material adverse impact on our cash flows, results of operations, or financial condition.
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Some of the mining wastes from our U.S. operations currently are exempt to a limited extent from the extensive set of EPA regulations governing hazardous waste under the Resource Conservation and Recovery Act (“RCRA”). If the EPA were to repeal this exemption, and designate these mining wastes as hazardous under RCRA, we would be required to expend additional amounts on the handling of such wastes and to make significant expenditures to construct hazardous waste storage or disposal facilities. In addition, if any of these wastes or other substances we release or cause to be released into the environment cause or has caused contamination in or damage to the environment at a U.S. mining facility, that facility could be designated as a “Superfund” site under CERCLA. Under CERCLA, any present owner or operator of a Superfund site or the owner or operator at the time of contamination may be held jointly and severally liable regardless of fault and may be forced to undertake extensive remedial cleanup action or to pay for the cleanup efforts. The owner or operator also may be liable to federal, state and tribal governmental entities for the cost of damages to natural resources, which could be substantial.
Under certain environmental laws, the Company could be held jointly and severally liable for removal or remediation of any hazardous substance contamination at its current, former and future properties, at nearby properties, or at other third-party sites where the Company’s wastes may have migrated or been disposed. The Company could also be held liable for damages to natural resources resulting from hazardous substance contamination. If there is contamination, we could be subject to significant liabilities and held responsible for the remediation. Additionally, environmental laws in some of the countries in which the Company operates require that the Company periodically perform environmental impact studies at the Company’s mines. The Company cannot provide assurance that these studies will not reveal environmental impacts that would require the Company to make significant capital outlays or cause material changes or delays in its intended activities, any of which could adversely affect the Company’s business.
The failure to comply with environmental laws and regulations or liabilities related to hazardous substance contamination could result in project development delays, material financial impacts or other material impacts to the Company’s projects and activities, fines, penalties, lawsuits by the government or private parties, or material capital expenditures. Environmental legislation in many countries is evolving and the trend has been towards stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and increasing responsibility for companies and their officers, directors and employees. Future changes in these laws or regulations could have a significant adverse impact on some portion of the Company’s business, causing the Company to re-evaluate impacted activities at that time.
In addition to evolving and expanding environmental regulations providing governmental authorities with the means to make claims against us, private parties have in the past and may in the future bring claims against us based upon damage to property and injury to persons resulting from the environmental, health and safety impacts of prior and current operations (including for exposure to or contamination by lead). Laws in the United States such as CERCLA and similar state laws may expose us to joint and several liability or claims for contribution made by the government (state or federal) or private parties. Moreover, exposure to these liabilities arises not only from our existing but also from closed operations, operations sold to third parties, or operations in which we had a leasehold, joint venture, or other interest. Because liability under CERCLA is often alleged on a joint and several basis against any property owner or operator or arranger for the transport of hazardous waste, our exposure to environmental claims may be greater because of the bankruptcy or dissolution of other mining companies which may have engaged in more significant activities at a mining site than we but which are no longer available for governmental agencies or other claimants to make claims against or obtain judgments from. Similarly, there is also the potential for claims against us based on agreements entered into by certain affiliates and predecessor companies relating to the transfer of businesses or properties, which contain indemnification provisions relating to environmental matters.
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Compliance with emerging climate change regulations could result in significant costs and climate change may present physical risks to a mining company’s operations.
Greenhouse gases (“GHG”) are emitted directly by the Company’s operations, as well as by external utilities from which it purchases power. Currently, a number of international and national measures to address or limit GHG emissions, including the Kyoto Protocol, the Copenhagen Accord, Durban Platform and the Paris Agreement, are in various phases of discussion or implementation in the countries in which the Company operates. These, or future, measures could require the Company to reduce its direct GHG emissions or energy use or to incur significant costs for GHG emissions permits or taxes or have these costs or taxes passed on by electricity utilities which supply the Company’s operations. The Company could also incur significant costs associated with capital equipment, GHG monitoring and reporting and other obligations to comply with applicable requirements. Additionally, concerns about potential GHG emissions impacts could manifest themselves in shareholder proposals, preferred purchasing, delays or failures in obtaining or retaining regulatory approvals, lack of market acceptance, continued pressure for and adoption of more stringent regulatory intervention and litigation, including governmental entities and other plaintiffs bringing claims against us for purported damages caused by the alleged effects of climate change. These risks could result in unexpected costs, increase our operating expenses, reduce the demand for our products and result in reputational harm to the Company, which in turn could have an adverse effect on the Company’s business, results of operations and financial condition.
The Company’s operations could be exposed to a number of physical risks from climate change, such as changes in rainfall rates, rising sea levels, reduced water availability, higher temperatures, increased snowpack and extreme weather events. Events or conditions such as flooding or inadequate water supplies could disrupt mining and transport operations, mineral processing and rehabilitation efforts, could create resource shortages and could damage the Company’s property or equipment and increase health and safety risks on site. Such events or conditions could have other adverse effects on the Company’s workforce and on the communities around the Company’s mines, such as an increased risk of food insecurity, water scarcity and prevalence of disease. In addition, if the effects of extreme weather events cause prolonged disruption to the delivery, or increased prices, of essential commodities or capital items, particularly over the seasonal ice road at Seabee, the Company’s production efficiency may be reduced. Although the Company makes efforts to mitigate these risks by ensuring that extreme weather conditions are included in emergency response plans at mine sites as required, there can be no assurance that these efforts will be effective and that these risks will not have an adverse effect on the Company’s operations.
Further, climate change litigation has grown in frequency, as scientists, agencies, and the general public increasingly associate catastrophic environmental events with changing climate. In recent years, litigants have utilized common law theories and existing environmental statutes to try to hold companies liable for the effects of climate change. While much of the climate change litigation to date has focused on allegations that companies have or are contributing to GHG emissions, businesses have also been targeted based on a theory of failing to prepare for the effects of climate change. Additionally, increasing scrutiny of public climate change disclosures made by companies has prompted recent government investigations and enforcement actions. The Company may become subject to climate change-related lawsuits in the future. Regardless of whether future litigants are successful in such claims, such lawsuits may require significant time and attention by the Company’s management, result in significant defense costs and expense or possible penalties and may materially adversely affect the Company’s business and/or its ability to continue all or certain of its mining, exploration and development activities.
The Company may be required by human rights laws to take actions that delay the Company’s operations or the advancement of its projects.
Various international and national laws, codes, resolutions, conventions, guidelines and other materials relate to human rights (including rights with respect to health and safety and the environment surrounding the Company’s operations). Many of these materials impose obligations on governments and companies to respect human rights. Some mandate that governments consult with communities surrounding the Company’s projects regarding government actions that may affect local stakeholders, including actions to approve or grant mining rights or permits. The obligations of governments and private parties under the various international and national materials pertaining to human rights continue to evolve and be defined. One or more groups of people may oppose the Company’s current and future operations or further development or new development of its projects or operations. Such opposition may be directed through legal or administrative proceedings or expressed in actions such as protests, roadblocks or other forms of public expression against the Company’s activities, and may have a negative impact on its reputation. Opposition by such groups to the Company’s operations may require modification of, or preclude the operation or development of, the Company’s projects or may require it to enter into agreements with such groups or local governments with respect to its projects, in some cases causing considerable delays to the advancement of its projects.
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The Company’s mineral properties may be subject to uncertain title.
There can be no assurance that title to the Company’s mineral properties will not be challenged. The Company owns, leases or has under option, unpatented and patented mining claims, mineral claims or concessions which constitute its property holdings. The ownership and validity, or title, of unpatented mining claims and concessions are often uncertain and may be contested. Further, the Company may not have, or may not be able to obtain or economically obtain, all necessary surface rights to develop a property. Title insurance is generally not available for mineral properties and the Company’s ability to ensure that it has obtained a secure claim to individual mining properties or mining concessions may be severely constrained. The Company has not conducted surveys of all of the claims in which it holds direct or indirect interests. A successful claim contesting the Company’s title to a property will cause the Company to lose the Company’s rights to explore and, if warranted, develop that property or undertake or continue production thereon. This could result in the Company not being compensated for its prior expenditures relating to the property.
The Company is subject to claims and legal proceedings that arise in the ordinary course of business.
The Company is subject to various claims and legal proceedings, including adverse rulings in current or future litigation against the Company and/or its directors or officers, covering a wide range of matters that arise in the ordinary course of business activities or as a result of unforeseen events. Each of these matters is subject to various uncertainties and it is possible that some of these matters may be resolved unfavorably to the Company. The Company carries liability insurance coverage and establishes reserves for matters that are probable and can be reasonably estimated. In addition, the Company may be involved in disputes with other parties in the future that may result in litigation, which may have a material adverse impact on the Company’s future cash flows, profitability, results of operations and financial condition. Additionally, the Company may be subject to frivolous and/or nuisance claims. While such claims are often dismissed, there can be no assurance that all such claims will be dismissed entirely, or that the Company will not be required to incur significant expenses defending such claims.
The Company is subject to assessment by taxation authorities in multiple jurisdictions that arise in the ordinary course of business.
In the normal course of business, the Company is subject to assessment by taxation authorities in various jurisdictions. Tax provisions and tax filing positions require estimates and interpretations of tax rules and regulations of the various jurisdictions in which the Company operates and judgments as to their interpretation and application to the Company’s specific situation. Tax rates and the calculations of taxes and the associated deferred tax assets and liabilities can change significantly and are influenced by changes in political administrations, foreign currency fluctuations and other factors. The Company’s business and operations, and that of its subsidiaries, is complex, and the Company has, historically, undertaken several significant financings, acquisitions and other material transactions. The computation of taxes payable as a result of these transactions involves many complex factors as well as the Company’s interpretation of, and compliance with, relevant tax legislation and regulations. While the Company’s management believes that the provision for income tax is appropriate and in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable legislation and regulations, tax filing positions are subject to review and adjustment by taxation authorities, which may challenge the Company’s interpretation of the applicable tax legislation and regulations.
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The Company is subject to anti-corruption laws.
The Company is subject to anti-corruption laws under the Canadian Corruption of Foreign Public Officials Act and the U.S. Foreign Corrupt Practices Act , which generally prohibit companies from engaging in bribery or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. In addition, the Company may also be subject to the extra-territorial provisions of the Bribery Act 2010 (United Kingdom) which, in certain circumstances, can apply to offenses committed outside of the United Kingdom by foreign companies, as well as other anti-corruption laws applicable in the jurisdictions in which we operate. Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may occur from time-to-time in any jurisdiction in which the Company may conduct business, and the Company cannot provide assurance that its employees or other agents will not engage in such prohibited conduct for which the Company might be held responsible. If the Company’s employees or other agents, including past employees or agents of companies the Company has acquired, are found to have engaged in such practices, the Company could suffer severe penalties and other consequences that may have a material adverse effect on its business, financial condition and results of operations. The Company has an Anti-Corruption Policy and internal controls and procedures intended to address compliance and business integrity issues, and the Company trains its employees on anti-bribery compliance on a global basis. However, despite careful establishment and implementation, the Company cannot assure you that these or other anti-bribery, anti-fraud or anti-corruption policies and procedures are or will be sufficient to protect against fraudulent and/or corrupt activity. In particular, the Company, in spite of its best efforts, may not always be able to prevent or detect corrupt or unethical practices by current or former employees or third parties, such as subcontractors or joint venture partners, which may result in reputational damage, civil and/or criminal liability (under the Canadian Corruption of Foreign Public Officials Act , the U.S. Foreign Corrupt Practices Act or any other relevant compliance, anti-bribery, anti-fraud or anti-corruption laws) being imposed on the Company.
Risks Related to Ownership of Company Equity
The Company’s common shares are publicly traded and are subject to various factors that have historically made the Company’s common share price volatile.
The market price of the Company’s common shares has experienced, and may continue to experience, significant volatility, which may result in losses for investors. The market price of the Company’s common shares may increase or decrease in response to a number of events and factors, including: the Company’s operating performance and the performance of competitors and other similar companies; volatility in metal prices; the public’s reaction to the Company’s press releases on developments at the Company’s properties, such as the price volatility following the Çöpler Incident, material change reports, other public announcements and the Company’s filings with the various securities regulatory authorities; changes in earnings estimates or recommendations by research analysts who track the Company’s common shares or the shares of other companies in the resource sector; changes in general economic and/or political conditions; the number of common shares to be publicly traded after an offering of the Company’s common shares; the arrival or departure of key personnel; and acquisitions, strategic alliances or joint ventures involving the Company or the Company’s competitors.
In addition, the global stock markets and prices for mining company shares have experienced volatility that often has been unrelated to the operating performance of such companies and can be tied to market prices to the metals that we mine. These market and industry fluctuations may adversely affect the market price of the Company’s common shares, regardless of the Company’s operating performance. The variables which are not directly related to the Company’s success and are, therefore, not within the Company’s control, include other developments that affect the market for mining company shares, the breadth of the public market for the Company’s common shares and the attractiveness of alternative investments. The effect of these and other factors on the market price of the Company’s common shares on the exchanges on which they trade has historically made the Company’s common share price volatile and suggests that the Company’s common share price will continue to be volatile in the future.
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Holders of our common shares may not receive dividends.
Holders of our common shares are entitled to receive only such dividends as our Board of Directors may declare out of funds legally available for such payments. The declaration and payment of dividends is at the discretion of the Board of Directors and will be made based on the Company’s financial position and other factors relevant at the time. The Company’s ability to pay dividends will be subject to future earnings, capital requirements, financial condition, compliance with covenants and financial ratios related to existing or future indebtedness and other factors deemed relevant by the Board of Directors. An annualized dividend payout level has not been declared by the Board of Directors, and the declaration and payment of future dividends, including future quarterly dividends, remains at the discretion of the Board of Directors. The Company’s dividend framework is non-binding, and the Board of Directors may modify the dividend framework or reduce, defer or eliminate the common stock dividend in the future.
Future sales or issuances of equity securities could decrease the value of the Company’s common shares, dilute investors’ voting power and reduce the Company’s earnings per share.
The Company may sell additional equity securities in subsequent offerings (including through the sale of securities convertible into equity securities) and may issue equity securities in acquisitions. The Company cannot predict the size of future issuances of equity securities or the size and terms of future issuances of debt instruments or other securities convertible into equity securities or the effect, if any, that future issuances and sales of the Company’s securities will have on the market price of the Company’s common shares.
Additional issuances of the Company’s securities may involve the issuance of a significant number of common shares at prices less than the current market price for the common shares. Issuances of substantial numbers of common shares, or the perception that such issuances could occur, may adversely affect prevailing market prices of the Company’s common shares. Any transaction involving the issuance of previously authorized but unissued common shares, or securities convertible into common shares, would result in dilution, possibly substantial, to security holders. The Company is not able at this time to predict the future amount of such issuances or dilution.
Furthermore, sales of substantial amounts of the Company’s securities by the Company or the Company’s existing shareholders, or the availability of such securities for sale, could adversely affect the prevailing market prices for the Company’s securities and dilute investors’ earnings per share.
Risks Related to Being a Public Company
The Company may fail to maintain adequate internal control over financial reporting pursuant to the requirements of applicable regulations.
No evaluation can provide absolute assurance that the Company’s internal control over financial reporting will prevent, detect or uncover all failures of persons within the Company to disclose material information required to be reported. The effectiveness of the Company’s controls and procedures could also be limited by simple errors or faulty judgments. In addition, as the Company continues to expand, the challenges involved in implementing appropriate internal control over financial reporting will increase and will require that the Company continue to improve its internal control over financial reporting. Although the Company intends to devote substantial time and incur substantial costs, as necessary, to ensure ongoing compliance, the Company cannot be certain that it will be successful in complying with internal control regulations.
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The Company’s accounting and other estimates may be imprecise.
Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosure of assets, liabilities, revenue and expenses at the date of the consolidated financial statements and reporting periods. The more significant areas requiring the use of management assumptions and estimates relate to:
• Recoverable metal in stockpiles and leach pads;
• mineral reserves, mineral resources, and other resources that are the basis for future income and cash flow estimates and units-of-production depreciation, depletion and amortization calculations;
• impairment of long-lived assets;
• goodwill;
• income taxes;
• reclamation and remediation liabilities; and
• valuation of business combinations or asset acquisitions.
Future estimates and actual results may differ materially from these estimates as a result of using different assumptions or conditions. For additional information, see Critical Accounting Estimates in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, Note 2 to the Consolidated Financial Statements, and the risk factors set forth in this section.
It may be difficult to obtain and enforce judgments against the Company because of its Canadian incorporation and foreign assets.
The Company is a corporation existing under the laws of the Province of British Columbia. Some of the Company’s officers, directors, and experts are Canadian or non-U.S. residents, and many of its assets are located outside the United States. Investors should not assume that Canadian or other foreign courts would enforce judgments of United States courts, or liabilities, obtained in actions against the Company or its directors, officers or experts predicated upon the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws of any state or jurisdiction of the United States. In addition, while statutory provisions exist in British Columbia for derivative actions to be brought in certain circumstances, the circumstances in which a derivative action may be brought, and the procedures and defenses that may be available in respect of any such action, may be different than those of shareholders of a company incorporated in the United States.
