Fortitude Gold Corp

Good day ladies and gentlemen and welcome to the Fortitude Gold 2025 year-end conference call. At this time all participants are on a listen-only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Jason Reid, CEO and President of Fortitude Gold. Sir, you may begin.

Great. Thank you, sir. Good morning, everyone, and thank you for joining Fortitude Gold Corp's 2025 year-end conference call. Following my extended comments and associated presentation for those who joined online, we will have a question and answer period. Joining me on the call today for the Q&A portion will be Ms. Janet Turner, our Chief Financial Officer. If you have the ability to join the web version, you will want to see the exciting exploration potential we have uncovered in numerous areas. I highly suggest you join the web version of this call. Let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday, along with comments on this call, are made only as of today, March 4th, 2026, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks in our Form 10-K filed with the SEC for the year end December 31st, 2025. 2025 was a year of overcoming challenges, including the hangover from the long and arduous permit backlogs caused by the Biden administration and its anti-mining BLM. That backlog was being addressed near year-end 2025 and early 2026 when we were issued our new mine permits for County Line and Scarlet South under the new Trump administration. 2025 year-end results included 18.4 million net sales 4.7 million cash balance on December 31st, 2025, 5,236 gold ounces, 32,809 silver ounces produced, 29.5 million working capital at December 31st, 2025, 5.8 million dividends paid, 0.4 million net income, 10 million mine gross profit, 6.3 million exploration expenditures, 1,104 total cash after byproduct credits per gold ounce sold and 1,697 per ounce total all-in sustaining costs and 611 gold ounce rounds or bullion at December 31st, 2025. Throughout 2025, we took decisive action to protect the company in the face of prolonged federal permitting delays and the regulatory overhang caused by the Biden administration that materially disrupted our operating timeline. We reduced our dividend by 75%. We suspended all exploration drill programs. We reduced the exploration team. We relocated to a significantly more modest office space in South Colorado Springs. and eliminated company-wide bonuses. Overcoming challenges included chasing mineralization deep in the bottom of the Isabella Pearl open pit to stay in business as a mining company. This required us to deplete our cash reserves for the better part of 2025 by removing waste overburden to access Pearl Deep mineralization. This program was never previously contemplated but became a possible option as gold climbed above $3,000 per ounce at that time. The alternative would have been to stop mining and along with that most all other operations while we continued to wait for the permit backlog to be cleared by Trump. As I stated last year, a vote for Harris would have continued the erosion of the company's viability in a clear vote against a shareholder's financial interest in the company. Shareholders should keep that in mind on elections going forward and decide if they want US-based natural resource companies and our company to succeed or not. Votes matter. Had Trump not been elected, it would be questionable what the company would look like today and what our future optionality would be at this point. Fortunately, Under the new Trump administration, we were granted not only our county line permits in September of 2025, but more recently, our Scarlet South mine permits as well. In addition, we waited for four years under Biden to be connected to the Nevada power grid, but to no avail. Early in the Trump administration, as he addressed the energy backlog first, we were granted out of the blue and without prodding our power grid permit for the Isabella Pearl operation. What a commentary on how not only unproductive and inefficient but obstructionist the Biden administration was as it opposed U.S. business, U.S. mining, and U.S. prosperity. As part of our broader cost reduction and efficiency initiatives, the company terminated its mine contract in September 2025 following a comprehensive review of operating economics. This marked a strategic transition to an owner-operator model, bringing our mining fleet and workforce in-house. With the anticipated increase in tonnage from operating three separate mines, we expect to realize meaningful economies of scale. By utilizing our own personnel and equipment, we project a significant reduction in per ton mining costs and improved operational control. 2025 was the most challenging year in the company's history. But thankfully, with a new administration in place and new mine permits being issued, we not only have a viable but a very exciting path forward. Our goal is to obtain as many additional permits as possible under the Trump administration in case the American people vote back in a Biden-Harris-esque anti-business, anti-mining administration in the future. To underscore the differences in administrations and how Trump is pro-mining, he just executed on arguably the largest revision to the NEPA permitting process in history. I will have more on the NEPA update at the end of this call. I feel like we lost four years of the company's business plan during those dark Biden era years and permit backlog. We got bucked off our horse, so to speak, but we have now climbed back on because of Trump. To help us get back on our feet, subsequent to year end and in February of 2026, we made the strategic decision to raise capital by selling a limited amount of equity. We sold in a private placement 2.5 million shares of restricted stock at a discount price of $4.75 for proceeds of $12 million. The restricted shares must be held by the placement participants for a minimum of six months. We welcome our new shareholders as well as existing ones that participated in the placement. Post-placement, the company has only 26.8 million shares outstanding as a producer operating multiple mines. Sometimes dilution is warranted. This was one of those times. In an industry where junior explorers have hundreds of millions of shares outstanding, and many producers have half a billion or over a billion shares outstanding, we proudly place our tight capital structure against any others in the mining industry. Private placement use of proceeds will help advance our two new permitted mines in production, allowing us to reengage our exploration programs immediately and pursue additional mine permits for future longevity. Had we not raised capital, it was questionable if we would have been able to re-engage our drill programs at all in 2026. With these current record-setting gold prices and the long lead times of this industry, the sooner the company can increase production and increase mine life as driving catalysts that would help the company seat firmly back on the horse moving forward to maximize shareholder value. There were a few silver linings that came out of the challenging 2025 year. With our drill budgets cut, our geology team focused on solid grassroots boots on the ground mapping and rock chip sampling programs. Areas of focus included both the southeast end of our Isabella Pearl Trend near our operations and our East Camp Douglas property. The southeast end of our Isabella Pearl Trend is where we just began mining Scarlet South. This slide, for those participating online, show the great image of the Isabella Pearl Mine processing facility, Scarlet South, Scarlet North, from up on top of Prospect Mountain. Our Isabella Pearl Trend is filled with geologic structures mapped at surface and high-grade rock chip surface sampled gold. These boots-on-the-ground geologic programs identified four areas near the Isabella Pearl deposit on the east end of our Isabella Pearl Trend that any one of them could be another Isabella Pearl deposit. I'm personally convinced, given the historic Santa Fe mine south of our trend and our Isabella Pearl deposit on trend and our lockup of the 10 kilometers of this mineralized trend going to the northwest, that there will be another Isabella Pearl or Santa Fe-esque deposit to be discovered. We just want to be the company who finds them. On the right of this map shows our focus on the very southeast end of our trend. In the map on the left, the map's fault structures are noted as blue lines. Note the fault structures predominantly run in a northwest direction along our northwest mineralized trend. Many structures are associated with high-grade gold samples noted by the yellow and orange dots. We drew a blue circle around our Isabella Pearl mine at the bottom of this map to show its spatial area where we have been mining that deposit into its sixth year. We then superimposed that same shape for demonstration purposes on four nearby targets that have both the spatial, structural, and gold potential to possibly be another Isabella Pearl. One or several of these could be our next sizable deposit. Even if none of them turn out to be, the vast vein structures, vein swarms, and gold samples on our trend speak to the potential that there are more Isabelle Pearl deposits on trend. Our boots-on-the-ground geologic efforts during the Biden permit backlog have generated these new targets. Let's focus for the moment on one particular target, the Prospect Mountain area. On this map, we added topo lines that demonstrate a mineralized vertical extent of 320 feet. Along this entire vertical extent, we can pull high-grade gold rock chip samples from the top of the mountain descending down into the valley. That depth of vertical extent is analogous to how deep the Isabella Pearl Deposit's oxide gold horizon is. This target has the surface spatial structural vertical mineralized horizon, and high-grade gold components similar to Isabella Pearl. And mining down on this mountain topographically could provide far less waste removal than a pit layback on flat ground if it turns out to be a deposit. In addition, a small silica litho cap similar to the one on top of Isabella Pearl before we began mining it is also present on Prospect Mountain. This is yet another touch point that the Prospect Mountain area has many of the earmarks to possibly be the next Isabella Pearl. This excellent geologic mapping and sampling program was a silver lining that came out of maneuvering through the Biden era permit backlog. Back when we were drilling our Scarlet North target, we ended our last drill program in gold before the Biden administration's BLM chose not to grant us another drill permit under an NOI to keep drilling. Under this new administration, are there any guesses if we can drill this area again? We now have in hand another NOI to keep drilling this area, and we are moving to bring a drill here as soon as possible as part of the use of proceeds from the raise. Scarlet North could also be another Isabella Pearl, and both Scarlet South and Scarlet North have the potential to expand and perhaps even connect. We are also pursuing an exploration EA. along the greater Isabella Pearl trend, which would allow us to explore far more area than the typical 5-acre NOI and explore larger areas more efficiently. This brings us to our East Camp Douglas property. Our Boots on the Ground exploration initiative of mapping and sampling work have provided us with an increased understanding of the geologic model. This vast district-sized property with its southern mineralized lithocap and northern high-grade gold veins has potential to host one or more deposits and perhaps a major discovery. On March 2nd of 2026, we announced the signing of a strategic $40 million joint venture on East Camp Douglas with Hawthorne Land and Minerals LLC, a group with massive financial firepower. Fortitude retains 60% ownership, is the operator, and when we are fortunate enough to find deposits, Fortitude is in the position to mine them. We look forward to working with Hawthorne, who shares our vision of the district, to discover, develop, and produce gold from East Camp Douglas in the future. In the next two years, we expect to deploy $40 million on East Camp to advance these efforts. This is an expedited and aggressive timeline to not only discover and permit more projects, but to rapidly advance the property toward production under the mining-friendly Trump administration. Use of joint venture proceeds include drilling, exploration surveys, baseline background studies, rock characterization reports, et cetera. The goal is to make a deposit discovery in the shortest time possible. in tandem with permitting efforts, and if possible, discover and permit a project under the Trump administration with the longer-term goal of putting more mines into production. We welcome our new JV partner and appreciate the ability to now expedite the property far faster than we ever could do alone. We gladly share 40% interest going forward for this expansive, expedited, and aggressive exploration and discovery effort. We can advance East Camp Douglas on a level never experienced before in Fortitude's history. Our ability to execute our business plan is directly tied to our ability to acquire the needed permits to bring new mines into production. With the new administration's pro-business, pro-mining stance, the Biden era hangover is now lifting fast. And we are positioned to remain a mining company now with multiple mines selling gold at much higher gold prices, which is another silver lining, and with more mine permits in the regulatory queue. This chart, inspired by one of our long-term shareholders and supporters, Mr. Bob Gee, demonstrates the downward pressure on Fortitude's stock price as a function of the Biden era permit backlog and the damage it inflicted to our company. and the upward momentum of Fortitude's stock price as a function of the pro-business, pro-mining Trump administration. We are coming off a 2025 year where we produced the least amount of gold in our company's history to now having two new mine permits as we race to get them optimized and increased production. We are also now positioned to begin drilling immediately from both a permit and available capital standpoint at County Line and the Scarlet areas targeting additions to our mine life. We are also positioned to obtain every permit possible under the Trump administration. In addition, our new JV at East Camp Douglas is a transformational moment for the property to advance it on an expedited basis. We said goodbye to the challenges of 2025 and are excited about all our prospects in 2026 and this incredible gold price environment. Before closing, I want to read a portion of a press release from the U.S. Department of Interior dated February 23rd, 2026. This highlights the efforts this administration is taking to help the industry. Under the leadership of President Donald J. Trump, the Department of the Interior today announced final sweeping reforms to its National Environmental Policy Act, or NEPA, procedures cutting red tape accelerating project approvals and restoring NEPA to its intended role as a focused, efficient decision-making tool. The reforms led by Interior Secretary Doug Burgum and part of a whole government approach reaffirms the rescission of more than 80% of Interior's prior NEPA regulations, with the majority of those regulations moved into a streamlined departmental NEPA handbook for implementing procedures. The PR goes on to say the action follows the White House Council on Environmental Equality's recent confirmation of its own rescission of NEPA regulations, clearing the way for the agency to modernize outdated and duplicative requirements. Quote, for decades, NEPA has been twisted into a weapon to block American energy infrastructure and conservation projects. said Secretary of the Interior Doug Burgum, quote, under the leadership of President Trump, this administration is fixing that. We are cutting unnecessary bureaucracy, speeding up approvals, and putting Americans back to work while enforcing NEPA as Congress originally intended, end quote. The reforms represent one of the most consequential permitting overhauls ever undertaken by the department. Quote, this is a decisive step toward fixing a broken permitting system, end quote, said Associate Deputy Secretary Karen Budd Fallon. In addition to that press release, about two weeks ago, Mr. Burgum stated on national TV regarding the need to focus on mining that last year the U.S. graduated only about 300 mining industry graduates. He went on to say that we have to get back to mining for the economic and security interests of the US. What a positive impact this administration is making on the industry. During Biden's tenure, he obstructed, prohibited, and continued to break the mine permitting system. Fortitude had to survive that onslaught that damaged our business plan, but fortunately, Trump is actively delivering our permits and fixing the situation. This couldn't happen at a better time as we look to increase production, pursue new mine permits, and move into a very aggressive exploration push to find deposit discoveries. With that, I would like to thank everyone for their time today on this conference call. Operator, would you please open up the lines for any possible Q&A?

Thank you, sir. Ladies and gentlemen, the floor is now open for your questions. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. And you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.