Fortitude Gold Corp Annual Report - Fiscal Year Ended December 31, 2025

Business Overview

Fortitude Gold Corp, a gold and silver mining company, actively explores, develops, and produces precious metals primarily in Nevada. Its strategy focuses on identifying and operating projects with low costs and high returns. The company's flagship asset is the Isabella Pearl Mine in Nevada, where it operates an open-pit mine, processes ore on-site, and sells the resulting gold-silver doré to a refiner.

For the fiscal year ended December 31, 2025, the Isabella Pearl Mine produced approximately 35,500 ounces of gold and 52,000 ounces of silver. The company achieved this production with an average cash cost of $985 per gold ounce and an All-In Sustaining Cost (AISC) of $1,320 per gold ounce.

In addition to Isabella Pearl, Fortitude Gold owns seven precious metal exploration properties across Nevada, spanning approximately 44,408 acres. These properties range from early-stage exploration (e.g., Intrepid, Dauntless, Ripper) to more advanced mineral definition and permitting (e.g., County Line, Golden Mile). In 2025, the company spent approximately $725,000 on annual claim maintenance fees and allocated $5.3 million to its exploration budget.

Financial Performance

Fortitude Gold delivered strong financial results for the fiscal year ended December 31, 2025, showcasing robust performance across key metrics:

• Revenue reached approximately $69.8 million, driven by gold sales at an average realized price of $1,960 per ounce and silver sales at $23.50 per ounce.
• The company achieved a net income of $18.5 million, resulting in earnings per share (EPS) of $0.37.
• Operating cash flow was robust at $25.1 million.
• Fortitude Gold distributed $0.04 per share in quarterly dividends throughout 2025.

The company is classified as a "Smaller reporting company" and a "Non-accelerated filer." This classification allows for less detailed disclosures than larger entities.

Risk Factors

Investors considering Fortitude Gold should be aware of several key risks that could impact the company's financial performance and stock price:

• Commodity Price Volatility: Fluctuations in gold and silver prices directly affect profitability.
• Production & Exploration Risks: Risks include failing to meet production targets at Isabella Pearl and exploration efforts not yielding commercially viable results on other properties.
• Permit Delays: Extended timelines for obtaining permits from the Bureau of Land Management (BLM) could delay exploration and development projects.
• Rising Operating Costs: Inflationary pressures on labor, fuel, and materials can increase operating expenses and reduce profit margins.
• Natural Disasters: Events like heavy rains, earthquakes, or ground movements could disrupt mining operations. Insurance coverage for certain natural occurrences may be limited.
• Regulatory & Political Risks: Changes in government regulations, environmental policies, or political stability could impact operations and costs.
• Customer Concentration: A significant portion of Isabella Pearl's revenue relies on a single refiner, posing a risk if this relationship is disrupted.
• Cybersecurity Threats: Cyberattacks could disrupt operations or compromise data.
• General Economic Factors: Broader economic trends, investor sentiment towards the mining industry, and potential litigation could also affect the company.

Management Discussion (MD&A highlights)

In 2025, Fortitude Gold showcased consistent operational performance and strategic progress, successfully navigating external challenges as detailed in its Management Discussion and Analysis (MD&A):

Operational Highlights and Wins:

• Consistent Production & Profitability: The Isabella Pearl Mine maintained steady production, exceeding initial gold ounce guidance and keeping costs within target ranges. This led to strong profitability and cash flow generation.
• Exploration Progress: Significant drilling at County Line and Golden Mile yielded promising early results. These warrant further investigation and indicate potential for resource expansion.
• Strategic Joint Venture (Subsequent Event): Following year-end, on February 27, 2026, Fortitude Gold entered a Joint Venture (JV) Agreement for its East Camp Douglas property, securing a 60% ownership interest. This JV is expected to accelerate exploration and reduce development cost risks for this asset.

Challenges and Mitigating Factors:

• Inflationary Pressures: The company faced rising costs for labor, fuel, and consumables. However, it implemented efficiency improvements to mitigate some of these impacts.
• Permitting Delays: Permit delays from the BLM, caused by a backlog, led to longer-than-anticipated timelines for routine permits and affected exploration scheduling. This remains a persistent concern.
• Customer Concentration: Reliance on a single customer for Isabella Pearl's doré sales is a recognized risk, though the company reported no adverse impact in 2025.

Fortitude Gold's core strategy focuses on optimizing Isabella Pearl, aggressively exploring its Nevada properties, leveraging strategic partnerships like the East Camp Douglas JV, and maintaining financial discipline. The company saw no significant changes to its executive leadership team or Board of Directors during 2025.

Financial Health

As of December 31, 2025, Fortitude Gold demonstrated a robust financial position, characterized by strong liquidity and a conservative balance sheet:

• Cash and cash equivalents totaled $25.4 million, providing strong liquidity.
• The company reported zero long-term debt, reflecting a conservative financial approach in the capital-intensive mining sector.
• Working capital (current assets minus current liabilities) stood at a healthy $32.1 million, ensuring the company's ability to meet short-term obligations.
• Capital expenditures for 2025 totaled $8.2 million, primarily funding sustaining capital at Isabella Pearl and initial development work at County Line.
• The company allocated $10.9 million for reclamation costs, representing provisions for future environmental restoration obligations.

Future Outlook

Fortitude Gold looks to the future with optimism, driven by continued operational excellence and an aggressive exploration program. The company has outlined its projections and strategic focus for the upcoming year:

• 2026 Production Guidance: The company projects Isabella Pearl's gold production to be between 38,000 and 42,000 ounces for 2026.
• 2026 Cost Guidance: All-In Sustaining Cost (AISC) for 2026 is expected to range from $1,300 to $1,400 per gold ounce.
• Exploration Investment: The company budgeted approximately $7.0 million for exploration activities in 2026, planning significant drill programs for County Line, Golden Mile, and the East Camp Douglas JV.
• Growth Strategy: The company aims to grow its resource base and extend mine life through new discoveries within its extensive Nevada land package.
• External Factors: Key external factors influencing the company's performance and project timelines include the future trajectory of gold and silver prices, ongoing inflationary pressures, and the timing of regulatory permits from the BLM. Fortitude Gold also acknowledges the increasing importance of Environmental, Social, and Governance (ESG) practices for maintaining its social license to operate.

Competitive Position

The gold and silver mining industry is highly competitive, and Fortitude Gold faces significant challenges in acquiring new properties and attracting skilled personnel. The company acknowledges a potential competitive disadvantage compared to larger industry players, stemming from:

• Access to Capital: Larger companies often have easier access to substantial capital for major acquisitions and large-scale project development.
• Scale and Diversification: Larger miners typically benefit from economies of scale and diversified operations across multiple mines and jurisdictions. Fortitude Gold, with its primary focus on Isabella Pearl, does not yet possess this scale or diversification.
• Talent Pool: Attracting top-tier talent can be more challenging for smaller companies competing with the resources of industry giants.

Despite these disadvantages, Fortitude Gold differentiates itself by focusing on high-grade, low-cost operations within Nevada – a mining-friendly jurisdiction – and through its disciplined approach to exploration and capital allocation.