Executive Summary / Key Takeaways

• Patriot Gold Corp. (PGOL) operates as a natural resource exploration company focused on properties in Nevada, supplemented by royalty interests from past divestitures, primarily the Moss Mine in Arizona.
• The company's financial health is currently severely impacted by the suspension of royalty payments from the Moss Mine operator, Golden Vertex, leading to zero revenue in Q1 2025 compared to $361,523 in Q1 2024.
• An ongoing legal dispute and Chapter 15 bankruptcy proceedings involving Golden Vertex create significant uncertainty regarding the recovery of outstanding royalties and future revenue from this source.
• PGOL faces a liquidity challenge, with current cash and assets insufficient to cover estimated operating costs of $1 million over the next twelve months, raising substantial doubt about its ability to continue as a going concern without securing additional funding.
• Compared to larger, diversified peers in the gold sector, PGOL operates at a significantly smaller scale, lacks operational production, and exhibits weaker financial metrics, making it highly vulnerable to disruptions like the current royalty dispute.

The Uncertain Ground Beneath Patriot Gold's Ambitions

Patriot Gold Corp. traces its roots back to 1998, establishing itself as a player in the natural resource exploration sector with a focus on acquiring, exploring, and developing mineral properties. Over time, the company built a portfolio that included key assets like the Moss Mine in Arizona and the Vernal and Windy Peak properties in Nevada. A pivotal moment in its history came in 2016 with the divestiture of its working interest in the Moss Mine, transitioning its stake into a 3% net smelter return (NSR) royalty. This strategic shift moved the company towards a hybrid model, combining active exploration efforts on its Nevada properties with passive income streams from royalties.

The core of Patriot Gold's current strategy revolves around advancing its exploration projects, particularly Windy Peak in Nevada, while benefiting from the royalty revenue generated by the Moss Mine. This dual approach aims to provide potential upside from new discoveries alongside a steady income stream. However, the company operates within a competitive landscape dominated by much larger, established gold producers like Harmony Gold (HMY), IAMGOLD (IAG), and B2Gold (BTG), as well as significant royalty and streaming companies such as Osisko Gold Royalties (OR). These larger peers benefit from economies of scale, diversified asset portfolios, and significantly greater financial resources, allowing them to absorb market fluctuations and invest heavily in exploration and development.

Patriot Gold, in contrast, is a smaller, more focused entity. Its competitive positioning relies on its specific property holdings and royalty agreements. While its U.S.-centric focus on Nevada and Arizona could offer localized expertise and potential regulatory advantages compared to companies with global operations, its smaller scale inherently leads to higher relative operating costs and lower throughput compared to the large-scale production of companies like HMY or IAG. Unlike many larger mining firms that invest heavily in proprietary extraction or processing technologies to gain efficiency or access complex deposits, Patriot Gold's business model, based on traditional exploration and royalty management, does not currently feature significant technological differentiation in its core operations. The company's only notable mention of technology investment is its holding of shares in Strata Power Corp., focused on lithium mining extraction technologies. There is no detailed information available regarding quantifiable benefits this investment brings to Patriot Gold's gold exploration or royalty business, nor is there indication of any proprietary technology development within PGOL itself that provides a competitive edge in gold recovery or exploration efficiency. This lack of a technological moat in its core business makes PGOL more susceptible to cost pressures and less able to achieve the operational efficiencies seen in larger, technologically advanced mining operations.

Financial Headwinds and Liquidity Concerns

The financial narrative for Patriot Gold in the most recent period is dominated by a significant disruption to its primary revenue source. For the three months ended March 31, 2025, the company reported $0 in revenue, a stark contrast to the $361,523 earned from the Moss Mine royalty during the same period in 2024. This dramatic decline is a direct consequence of Golden Vertex, the operator of the Moss Mine, suspending royalty payments in early 2024 to preserve its own liquidity.

This cessation of revenue has had a material impact on Patriot Gold's financial performance and liquidity. The net loss for the three months ended March 31, 2025, widened to $400,106, compared to a net loss of $367,108 in the prior year period. While mineral and exploration expenses decreased due to a temporary pause in activities at the Windy Peak project, general and administrative expenses increased, primarily driven by higher legal fees associated with the royalty dispute.

The company's balance sheet reflects this challenging environment. As of March 31, 2025, Patriot Gold held cash of $285,815 and total current assets of $404,584. Against this, total current liabilities stood at $1.01 million, indicating a significant working capital deficit. Cash used in operating activities, while lower at $115,940 in Q1 2025 compared to $435,438 in Q1 2024 (primarily due to changes in receivables and payables), still represents a cash outflow.

Management's assessment of the liquidity situation is candid. They estimate needing approximately $1 million to fund operations over the next twelve months, covering exploration, working capital, and administrative costs. Crucially, they state that based on the temporary cessation of Moss royalty revenues, the illiquidity of marketable securities, and insufficient current cash, they may not have sufficient funds to support the business in 2025. This assessment underpins the disclosure of substantial doubt about the company's ability to continue as a going concern.

The Shadow of the Moss Mine Dispute

The core challenge facing Patriot Gold is the legal battle over the Moss Mine royalties. Following Golden Vertex's suspension of payments, Patriot initiated litigation in Arizona in April 2024. Golden Vertex subsequently sought protection under Chapter 15 of the US Bankruptcy Code. The US Bankruptcy court has ordered certain Golden Vertex assets to be segregated and preserved, pending a ruling on Patriot's claims.

This situation creates immense uncertainty. While Patriot is confident in the validity of its royalty claims, the outcome and timeline of the bankruptcy court proceedings are unpredictable. This uncertainty has forced Patriot to adopt a conservative revenue recognition policy, only recognizing royalty revenue when payments and settlement statements are received, resulting in zero revenue from this source since April 1, 2024.

This dispute highlights a key vulnerability of PGOL's business model: significant reliance on a single royalty stream operated by a third party facing financial distress. Larger royalty companies like Osisko Gold Royalties mitigate this risk through highly diversified portfolios across numerous mines and operators. Patriot's concentration risk is starkly exposed by the Moss Mine situation.

Outlook Hinges on Capital and Litigation

Patriot Gold's immediate future and its ability to pursue its exploration strategy are directly tied to resolving the Moss Mine royalty dispute and securing additional funding. Management is evaluating strategies to obtain the required capital, including equity financing, debt, or other arrangements, and is also considering restructuring operations to potentially grow revenue and decrease expenses. While management believes they will be able to obtain sufficient capital to continue operations, they acknowledge that the success of these plans in mitigating the going concern conditions cannot yet be demonstrated.

The outlook, therefore, is highly dependent on external factors and successful execution of financing efforts. A favorable resolution to the Moss Mine dispute could reinstate a vital revenue stream and potentially provide a cash infusion from recovered past royalties. However, an unfavorable outcome or prolonged litigation could exacerbate the liquidity crisis. The ability to raise the estimated $1 million needed for the next twelve months is paramount. Without it, exploration activities, which were already temporarily paused at Windy Peak, would likely remain curtailed or cease entirely, hindering the company's ability to create value through discovery.

Compared to peers, Patriot Gold's outlook lacks the clear production targets or growth pipelines seen in companies like HMY or BTG. Its future is less about scaling existing operations and more about survival and unlocking value from its exploration assets and disputed royalty. The competitive landscape suggests that while gold prices may offer a favorable backdrop, PGOL's specific challenges are company-specific and tied to its financial structure and reliance on the Moss Mine royalty.

Conclusion

Patriot Gold Corp. finds itself at a critical juncture. The suspension of royalty payments from the Moss Mine has stripped the company of its primary revenue source, exposing significant liquidity constraints and raising substantial doubt about its ability to continue operations without securing external funding. The ongoing legal battle adds a layer of unpredictability to the company's financial future.

The investment thesis for PGOL currently rests less on its exploration potential or competitive advantages in the traditional mining sense, and more on the successful resolution of the Moss Mine royalty dispute and the company's ability to raise necessary capital. While its Nevada properties offer potential long-term upside, advancing them requires funding that is not currently secured. In a sector with larger, more financially robust, and often more technologically advanced players, Patriot Gold's small scale and concentrated revenue risk present significant challenges. Investors considering PGOL must weigh the potential upside from a favorable legal outcome and successful financing against the immediate and substantial risks to the company's liquidity and going concern status. The path forward is uncertain, contingent on navigating these critical financial and legal hurdles.