Company Overview

6 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Hycroft Mining Holding Corporation (formerly known as Mudrick Capital Acquisition Corporation ("MUDS")) and its subsidiaries (collectively, “Hycroft”, the “Company”, “we”, “us”, “our”, "it", "HYMC") is a U.S.-based gold and silver producer that is focused on operating and developing its wholly owned Hycroft Mine in a safe, environmentally responsible, and cost-effective manner. Gold and silver sales represent 100% of the Company’s operating revenues and the market prices of gold and silver significantly impact the Company’s financial position, operating results, and cash flows. The Hycroft Mine is located in the State of Nevada and the corporate office is located in Denver, Colorado. On May 29, 2020, the Company consummated the Recapitalization Transaction (as defined below) as contemplated by a purchase agreement dated January 13, 2020, as amended on February 26, 2020 (the “Purchase Agreement”), by and among the Company, MUDS Acquisition Sub, Inc. (“Acquisition Sub”) and Hycroft Mining Corporation ("Seller"). Pursuant to the Purchase Agreement, Acquisition Sub acquired all of the issued and outstanding equity interests of the direct subsidiaries of Seller and substantially all of the other assets of Seller and assumed substantially all of the liabilities of Seller in a business combination and reverse recapitalization transaction (the "Recapitalization Transaction"). See Note 3 - Recapitalization Transaction for further details.

The Company restarted open pit mining operations at the Hycroft Mine during the second quarter of 2019 and began producing and selling gold and silver during the third quarter of 2019. The Company's operating plan for 2021 will provide the Company with the opportunity to complete and evaluate the results of the ongoing technical and optimization work for the proprietary two-stage heap oxidation and leach process detailed in the Hycroft Technical Report Heap Leaching Feasibility Study, prepared in accordance with the requirements of the Modernization of Property Disclosures for Mining Registrants, with an effective date of July 31, 2019 (the “Hycroft Technical Report”) and evaluate alternative processing technologies. Based upon the findings and results of these evaluations, the Company may update or file a new technical report.

Restatement of Previously Issued Financial Statements

On April 12, 2021, the Acting Director of the Division of Corporation Finance and Acting Chief Accountant of the Securities and Exchange Commission together issued a statement regarding the accounting and reporting considerations for warrants issued by special purpose acquisition companies entitled "Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “SEC Statement”). Specifically, the SEC Statement clarified guidance for all SPAC-related companies regarding the accounting and reporting for their warrants and focused in part on provisions in warrant agreements that provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and because the holder of such warrants would not be an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude such warrants from being classified in equity and thus such warrants should be classified as a liability.

As previously disclosed in the Company's Annual Report on Form 10-K/A, as filed on May 14, 2021 (“2020 Form 10-K/A”), the Company restated its previously issued consolidated financial statements and accompanying notes as of and for the year ended December 31, 2020, to make the necessary accounting corrections related to warrant accounting and to recognize certain warrants as a liability instead of as equity, in accordance with Accounting Standards Codification (“ASC”) 815-40, Contracts in Entity’s Own Equity. As a smaller reporting company that was not required to include quarterly financial information in the 2020 Form 10-K/A, the Company did not amend its previously issued Quarterly Reports on Form 10-Q for any period prior to December 31, 2020. The Company restated the condensed consolidated financial statements for the three and six month periods ended June 30, 2020, as reflected below.

The following presents the restated condensed consolidated financial statements as of and for the three and six months ended June 30, 2020. The condensed consolidated statement of stockholders' equity reflects the restatement adjustments presented in the consolidated Balance Sheets presented below.


HYCROFT MINING HOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (dollars in thousands)
	June 30, 2020
	As Previously Reported		Restatement Adjustment		As Restated
Total assets	$	192,681	$	—	$	192,681
Liabilities:
Current liabilities	$	21,947	$	—	$	21,947
Other liabilities, non-current	153		(18)		135
Debt, net, non-current	139,044		—		139,044
Royalty obligation, non-current	29,699		—		29,699
Asset retirement obligation, non-current	4,561		—		4,561
Warrant liability	—		13,126		13,126
Total liabilities	$	195,404	$	13,108	$	208,512
Stockholders' (deficit) equity:
Common stock	$	5	$	—	$	5
Additional paid-in capital	466,047		(12,186)		453,861
Accumulated deficit	(468,775)		(922)		(469,697)
Total stockholders' deficit	$	(2,723)	$	(13,108)	$	(15,831)
Total liabilities and stockholders' deficit	$	192,681	$	—	$	192,681


HYCROFT MINING HOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) (dollars in thousands)
	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
	As Previously Reported		Restatement Adjustment		As Restated		As Previously Reported		Restatement Adjustment		As Restated
Revenue	$	7,636	$	—	$	7,636	$	18,760	$	—	$	18,760
Total cost of sales	(31,863)		—		(31,863)		(55,731)		—		(55,731)
Operating expenses	(10,526)		—		(10,526)		(12,625)		—		(12,625)
Loss from operations	(34,753)		—		(34,753)		(49,596)		—		(49,596)
Other (expense) income:
Interest expense, net of capitalized interest	(15,072)		—		(15,072)		(34,959)		—		(34,959)
Fair value adjustment to warrants	—		(922)		(922)		—		(922)		(922)
Interest income	35		—		35		147		—		147
Loss before reorganization items and income taxes	(49,790)		(922)		(50,712)		(84,408)		(922)		(85,330)
Net loss	$	(49,790)	$	(922)	$	(50,712)	$	(84,408)	$	(922)	$	(85,330)


HYCROFT MINING HOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands)
	Six Months Ended June 30, 2020
	As Previously Reported		Restatement Adjustment		As Restated
Net loss	$	(84,408)	$	(922)	$	(85,330)
Adjustments to reconcile net loss for the period to net cash used in operating activities:
Non-cash portion of interest expense	30,376		—		30,376
Write-down of production inventories	17,924		—		17,924
Depreciation and amortization	2,753		—		2,753
Stock-based compensation	592		—		592
Fair value adjustment to warrants	—		922		922
Accretion	187		—		187
Phantom share compensation	225		—		225
Changes in operating assets and liabilities	(25,291)		—		(25,291)
Net cash used in operating activities	(57,642)		—		(57,642)
Net cash used in investing activities	(11,704)		—		(11,704)
Cash flows from financing activities:	107,303		—		107,303
Net increase (decrease) in cash and restricted cash	37,957		—		37,957
Cash and restricted cash, beginning of period	48,967		—		48,967
Cash and restricted cash, end of period	$	86,924	$	—	$	86,924
Total cash and restricted cash	$	86,924	$	—	$	86,924