10-Q: Rise Gold Q1 2026: Strong Cash Position, Legal Battle Continues

Rise Gold Corp. reports a significant increase in cash and working capital following recent financings, as it continues its legal fight for vested mining rights at the Idaho-Maryland Gold Mine.

Summary

• The net loss for the three months ended October 31, 2025, was $1,349,368, an increase from $628,393 for the same period in 2024.
• Cash and cash equivalents significantly increased to $9,414,926 at October 31, 2025, up from $2,783,348 at July 31, 2025.
• Working capital surplus grew to $8,238,117 at October 31, 2025, compared to $1,930,258 at July 31, 2025.
• The company successfully completed two private placements, raising $7,000,000 on October 24, 2025, and $3,000,000 on May 8, 2025.
• Legal efforts are ongoing to assert the company's constitutionally protected vested right to mine at the Idaho-Maryland Gold Mine Property, with oral arguments scheduled for January 9, 2026.
• David Watkinson was appointed President and CEO, and a Director, on November 20, 2025, replacing Joseph Mullin.
• The company is reviewing historical data to assess the potential for significant tungsten deposits at the Idaho-Maryland Mine.
• A material weakness in internal control over financial reporting was identified due to a lack of segregation of incompatible duties.

Sentiment

Score: 6

Explanation: While the company reported an increased net loss, the significant capital raises have substantially improved its cash position and working capital, providing crucial liquidity for ongoing operations and critical litigation. The positive court ruling on standing in the vested rights case is a favorable development. However, the company remains an exploration-stage entity with no revenue, an accumulated deficit, and faces substantial risks related to permitting, financing, and the inherent uncertainties of mineral exploration. The material weakness in internal controls is also a concern. The overall sentiment is cautiously optimistic due to improved financial runway and a key legal win, but tempered by the operational stage and inherent risks.

Positives

• Cash and cash equivalents increased substantially to $9,414,926 at October 31, 2025, from $2,783,348 at July 31, 2025.
• Working capital surplus improved significantly to $8,238,117 at October 31, 2025, from $1,930,258 at July 31, 2025, and a deficit of $1,766,960 at July 31, 2024.
• Successfully completed two private placements, raising $7,000,000 on October 24, 2025, and $3,000,000 on May 8, 2025.
• Repaid the entire Eridanus loan and Myrmikan loan in May 2025, eliminating significant debt obligations.
• The Superior Court of California rejected Nevada County's motion for summary judgment in the vested rights litigation, affirming the company's beneficial interest in the mine property.
• Initiated a review of historical data for potential tungsten deposits at the Idaho-Maryland Mine, aligning with critical metals initiatives.
• Subsequent to the period end, the revolving credit facility was canceled and the outstanding balance was paid.

Negatives

• Net loss for the three months ended October 31, 2025, increased to $1,349,368, compared to $628,393 for the same period in 2024.
• Accumulated deficit grew to $34,844,343 at October 31, 2025.
• Operating activities continue to consume cash, with $366,922 used in the three months ended October 31, 2025.
• Professional fees significantly increased to $513,775 for the three months ended October 31, 2025, from $100,881 in the prior year, primarily due to litigation.
• Share-based compensation expense increased to $564,240 for the three months ended October 31, 2025, from $162,508 in the prior year.
• The company is an exploration-stage entity with no revenue from operations and expects to operate at a loss for at least the next 12 months.
• A material weakness in internal control over financial reporting exists due to a lack of segregation of incompatible duties.

Risks

• Increased levels of volatility or rapid destabilization of global economic conditions could have a material adverse effect on operations and financial condition.
• The ability to continue as a going concern is dependent on obtaining adequate financing in the future.
• Significant additional capital will be required to fund the business plan, exploration, and potential development of properties.
• Sales of substantial amounts of securities may have a highly dilutive effect on ownership or share structure.
• No commercial production has commenced, leading to negative cash flows and reliance on additional financing.
• The company has a limited operating history and no history of producing products from any properties.
• Advancing the Idaho-Maryland Mine Property into the development stage requires significant capital and time, with no assurance of successful commercial production.
• The company has a history of losses and expects to continue to incur losses in the future.
• Damage to the company's reputation could adversely affect operations and financial condition, particularly from public concern regarding mining activities.
• Reliance on information systems that may become subject to security threats.
• Increasing attention to environmental, social, and governance (ESG) matters may impact the business, leading to increased costs, investigations, litigation, or negative stock price impact.
• There is no assurance that the company can establish the existence of any mineral reserve in commercially exploitable quantities.
• Mineral exploration and production activities involve a high degree of risk and the possibility of uninsured losses.
• Commodity price volatility could have dramatic effects on the results of operations and the ability to execute the business plan.
• Estimates of mineralized material and resources are subject to evaluation uncertainties that could result in project failure.
• Exploration activities may not be commercially successful, potentially leading to abandonment of plans and loss of investments.
• The company is subject to significant governmental regulations and may not be able to obtain all required permits and licenses to place properties into production.
• The vested rights to mine are subject to confirmation by the County and courts, with no assurance that the company's rights will be recognized.
• Subsurface mining in Nevada County requires a 'Use Permit' and approval of a Reclamation Plan, involving public hearings and CEQA compliance, with no assurance of acceptance as submitted.
• Environmental laws and regulations may increase costs of doing business and restrict operations.
• Regulations and pending legislation governing climate change could result in increased operating costs.
• Land reclamation requirements for properties may be burdensome and expensive.
• The company faces intense competition in the mining industry for properties, financing, and qualified managerial and technical employees.
• A shortage of equipment and supplies could adversely affect the ability to operate the business.
• Joint ventures and other partnerships may expose the company to risks.
• Difficulty attracting and retaining qualified management to meet anticipated growth needs.
• Results of operations could be affected by currency fluctuations between the U.S. dollar and Canadian dollar.
• Title to properties may be subject to other claims that could affect property rights and claims.
• The company may be unable to secure surface access or purchase required surface rights.
• Properties and operations may be subject to litigation or other claims.
• The company does not currently insure against all the risks and hazards of mineral exploration, development, and mining operations.
• The share price may be volatile, and investors could lose all or part of their investment.
• The company has never paid dividends on its common stock and does not expect to for the foreseeable future.
• Investors' interests will be diluted if additional employee/director/consultant options are issued or if additional common stock and/or warrants are sold to finance operations.
• The issuance of additional shares of common stock may negatively impact the trading price of securities.
• Failure to satisfy the continued listing criteria of the CSE may result in delisting of common stock from the CSE.

Future Outlook

The company's plan for the next 12 months focuses on continuing litigation to protect its property rights under California state and U.S. federal laws. With an increased cash balance, the company will also continue to assess the potential supply of tungsten at the Idaho-Maryland Mine Property. The company expects to operate at a loss for at least the next 12 months and has no agreements for additional financing, with no assurance that future funding will be available on acceptable terms for long-term business plan execution. The company retains an option to repurchase 66 acres of land sold, contingent on acquiring final government approvals for mining operations. The proposed project design for the Idaho-Maryland Mine includes underground mining at 1,000 tons per day, gold processing, and the creation of 58 acres of industrial zoned land, requiring approximately 300 employees at full production.

Management Comments

• "Rise [has] a beneficial interest in the mine property it owns that is the subject of its vested right petition: if its vested right to mine is recognized, Rise possesses all of the surface and mineral estate necessary to begin mining."
• Management estimates that it does have sufficient funds to continue operations for the ensuing 12 months from the date of these financial statements, based on working capital at October 31, 2025.
• "Our plan of operations for the next 12 months is to continue the litigation in pursuit of protecting the Company's property rights under both California state and U.S. federal laws."
• "With a larger cash balance available now, the Company will also aim to continue the work it already started to assess the potential supply of tungsten at the I-M Mine Property."
• "We expect to operate at a loss for at least the next 12 months."
• "Based on current working capital available, management estimates that it does have sufficient funds to continue as a going concern."

Industry Context

The company operates in the highly speculative mineral exploration industry, primarily focused on gold and potentially tungsten. Its strategy involves re-activating the historical Idaho-Maryland Gold Mine, a past-producing high-grade property. The exploration for tungsten aligns with broader industry trends recognizing critical metals for national security and technological applications, as highlighted by the U.S. Department of Energy's Critical Metals List. The ongoing legal battles over vested mining rights and use permits reflect the increasing regulatory scrutiny and environmental activism faced by mining companies, particularly in jurisdictions with stringent environmental laws like California. The need for significant capital raises is typical for exploration-stage companies that do not generate revenue from operations.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• The company is a defendant in a civil claim filed in the Supreme Court of British Columbia by Wundr Software Inc., seeking general damages and damages for conspiracy to cause economic harm. Management has determined that the probability of an unfavorable outcome and financial loss is unlikely.
• The Community Environmental Advocates Foundation issued a notice of intent to file a citizen suit against the company for alleged Clean Water Act violations. The company was dismissed from the suit, but its subsidiary, Rise Grass Valley Inc., is still a defendant. Litigation is ongoing, and Rise Grass Valley denies all allegations. No estimate of a loss event can be determined at this time.
• The company submitted a Writ of Mandamus to the Superior Court of California after Nevada County's Board of Supervisors rejected its petition asserting a vested right to mine at the Idaho-Maryland Gold Mine Property without a use permit. The Court rejected the County's motion for summary judgment, affirming Rise's beneficial interest. Oral arguments are scheduled for January 9, 2026.

Related Party Transactions

• Consulting fees of $33,000 were paid to the CEO during the three months ended October 31, 2025.
• Director fees of $20,000 were paid to directors during the three months ended October 31, 2025.
• Consulting fees of $21,298 were paid to a company controlled by the CFO during the three months ended October 31, 2025.
• Share-based compensation of $518,140 was recognized for options and DSUs granted to key management personnel during the period.
• $224,463 was owed to related parties as of October 31, 2025.
• Certain directors and officers purchased an aggregate of 1,080,000 shares in the October 24, 2025 private placement for total gross proceeds of $270,000.
• Certain directors and officers purchased an aggregate of 9,904,196 units in the May 8, 2025 private placement for gross proceeds of $812,144.
• Daniel Oliver Jr., a director of the company, is the managing member of Myrmikan Gold Fund, LLC, which provided a $500,000 loan (repaid in May 2025). Mr. Oliver disclosed his interest and abstained from voting on the loan approval.
• Eridanus Capital LLC, which provided a loan (repaid in May 2025), directed 340,000 share purchase warrants to Daniel Oliver Jr., a member of Eridanus and a director of the company.

Stakeholder Impact

• Shareholders: Experienced significant dilution from recent private placements but benefit from improved liquidity and reduced immediate going concern risk. Share price volatility is expected due to exploration stage and legal uncertainties.
• Employees/Management: A new CEO has been appointed, signaling a leadership transition. The Long-Term Incentive Plan provides equity-based compensation, aligning management interests with shareholders. Potential for 300 new jobs if the mine reaches full production.
• Creditors: The repayment of the Eridanus and Myrmikan loans, and the cancellation of the credit facility, have significantly reduced the company's debt burden.
• Local Community (Grass Valley, CA): Ongoing litigation regarding mining rights and environmental concerns (Clean Water Act, Use Permit, CEQA) creates uncertainty. There is potential for economic development and job creation if mining operations are approved, but also continued opposition from non-governmental organizations and local groups.
• Regulatory Authorities: The company is actively engaged in legal proceedings with Nevada County and faces ongoing scrutiny regarding environmental compliance and permitting.

Next Steps

• Continue litigation to protect property rights under California state and U.S. federal laws.
• Attend oral arguments for the Writ of Mandamus in the vested rights case on January 9, 2026.
• Continue assessing the potential supply of tungsten at the Idaho-Maryland Mine Property.
• Remediate the material weakness in internal control over financial reporting by hiring proper staff.
• Potentially repurchase 66 acres of land if final government approvals for mining operations are acquired.

Key Dates

Recommendation

The company has significantly improved its liquidity through recent capital raises and debt repayments, which is crucial for an exploration-stage company. The positive court ruling on the vested rights litigation, rejecting the County's motion for summary judgment, is a key development that reduces a major legal hurdle. However, the company remains in the exploration stage with no revenue, an increasing accumulated deficit, and faces substantial ongoing legal and regulatory challenges to commence mining operations. The material weakness in internal controls is also a concern. The potential for tungsten discovery adds an interesting speculative element. Given the high-risk, high-reward nature of exploration and the ongoing uncertainties, a 'Hold' recommendation is appropriate for investors who are comfortable with speculative investments and are monitoring the legal and exploration progress.

Keywords

Gold exploration, Idaho-Maryland Gold Mine, Nevada County, SEC 10-Q, Mining rights, Vested rights, Tungsten, Critical metals, Private placement, Capital raise, Financial results, Exploration stage, Corporate governance, Management change, Stock options, Deferred Share Units, Environmental regulation, CEQA, SMARA, Litigation