On August 2, 2023, CORE Alaska, a subsidiary of the Company, pursuant to an ISDA Master Agreement entered into with ING Capital Markets LLC (the “ING ISDA Master Agreement”) and an ISDA Master Agreement entered into with Macquarie Bank Limited (the “Macquarie ISDA Master Agreement”), in accordance with its obligations under the Credit Agreement, entered into a series of

hedging agreements with ING Capital LLC and Macquarie Bank Limited for the sale of an aggregate of 124,600 ounces of gold at a weighted average price of $2,025 per ounce. The hedge agreements have delivery obligations beginning in July 2024 and ending in December 2026, and represent approximately 42% of the Company’s interest in the projected production from the Manh Choh mine over the current anticipated life of the mine.

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by gold future pricing. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments.

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to gold movements and the Company has elected not to apply hedge accounting. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings.

As of June 30, 2024, the Company had the following outstanding derivatives that were not designated as hedges in qualifying hedging relationships:


Period	Commodity	Volume		Weighted Average Price ($/oz)
2024	Gold		21,100	$	2,025
2025	Gold		62,400	$	2,025
2026	Gold		41,100	$	2,025

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023.


		As of June 30, 2024								As of December 31, 2023
Derivatives not designated as hedging instruments	Balance Sheet Location	Gross Recognized Assets / Liabilities			Gross Amounts Offset		Net Recognized Assets / Liabilities			Gross Recognized Assets / Liabilities			Gross Amounts Offset		Net Recognized Assets / Liabilities
Commodity Contracts	Derivative contract asset - current	$	—		$	—	$	—		$	—		$	—	$	—
Commodity Contracts	Derivative contract liability - current	$	(17,869,326	)	$	—	$	(17,869,326	)	$	(2,679,784	)	$	—	$	(2,679,784	)
Commodity Contracts	Derivative contract asset - noncurrent	$	—		$	—	$	—		$	—		$	—	$	—
Commodity Contracts	Derivative contract liability - noncurrent	$	(33,727,276	)	$	—	$	(33,727,276	)	$	(20,737,997	)	$	—	$	(20,737,997	)

As of June 30, 2024, the fair value of derivatives in a net liability position, which excludes any adjustment for nonperformance risk, related to these agreements was $51,596,602. As of June 30, 2024, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions as of June 30, 2024, it could have been required to settle its obligations under the agreements at their termination value of $51,596,602.

Effect of Derivatives Not Designated as Hedging Instruments on the Income Statement

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2024 and 2023.


Derivatives Not Designated as Hedging Instruments under Subtopic 815-20	Location of Unrealized Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative					Amount of Gain or (Loss) Recognized in Income on Derivative
		Three months ended June 30, 2024			Three months ended June 30, 2023		Six months ended June 30, 2024			Six months ended June 30, 2023
Commodity Contracts	Unrealized loss on derivative contracts	$	(12,553,491	)	$	—	$	(28,178,821	)	$	—
Total		$	(12,553,491	)	$	—	$	(28,178,821	)	$	—

Cross Default. The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations.

Material adverse change. Certain of the Company's agreements with its derivative counterparties contain provisions where if a specified event or condition occurs that materially changes the Company's creditworthiness in an adverse manner, the Company may be required to fully collateralize its obligations under the derivative instrument.

Incorporation of loan covenants. The Company has an agreement with a derivative counterparty that incorporates the loan covenant provisions of the Company's indebtedness with a lender affiliate of the derivative counterparty. Failure to comply with the loan covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.