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Borealis Mining is a gold producer restarting its namesake Borealis heap leach mine near Hawthorne in Nevada’s Walker Lane, with the Sandman development project in Humboldt County and the early-stage Big Balds project also in Nevada. We talked through the production ramp-up, the record revenue quarter, why the stock is down about 40% since our last chat, cash and spending plans, Sandman engineering and permitting, and the M&A angle.
TL;DR
Borealis just posted a record quarter with over US$6 million in revenue from roughly 620 ounces poured, holds US$18.8 million in cash plus about US$7.5 million in work-in-progress inventory, and says no raise is coming anytime soon. The crusher has been the bottleneck but CEO Kelly told me they’re now operating at the 2,000-plus tons per day target, which will show up in next quarter’s numbers. The big near-term item is fiscal 2027 guidance, expected around August or before the September conferences, and he’d like to see free cash flow early in fiscal 2027, which starts August 1. Sandman is being advanced toward a construction decision with a 5,000 metre metallurgical and geotechnical drill program underway, a detailed study expected January or February 2027, and possible production in 2028 if they qualify for the FAST-41 permitting program.
What have they done for shareholders lately?
Since we last spoke about three months ago, they’ve been mining in the East Ridge pit, started stripping at Freedom Flats, ramped crushing and stacking, and poured about 620 ounces for a record revenue quarter. They crushed roughly 112,000 to 120,000 tons in Q3 and are now targeting 100,000 tons crushed per month, a rate that started last month. They hit 100,000 hours without a lost-time injury and brought on a new health and safety manager. The 5,000 metre Sandman program kicked off mid-June, engineering work with M3 and RESPEC is ongoing, resources at Sandman are being remodeled, and a full mine plan and permit application was submitted for the JRCD area (Jamie’s Ridge and Cerro Duro) west of the main Borealis trend. Kelly also bought another 40,000 units at the end of April between $1.00 and $1.20 and says he’d like to buy more below a dollar, and he owns over 4.4 million shares. One wart he owned up to: they had to correct a quarterly release the same day it went out because the gold sales figure was nearly double what was initially stated, which he called a mistake caught just after dissemination.
How much money do they have and what are they spending it on?
As of April 30 they had US$18.8 million in cash plus about US$7.5 million in work-in-progress inventory, after closing a C$23 million bought deal in January at $1.50, of which C$22 million was institutional orders. He doesn’t anticipate a raise anytime soon. Cash declined from about US$21 million to US$19 million during the quarter despite rising revenue, which he attributed to mobilization, stripping at Deep Flats and Borealis pits, water issues in East Ridge that are now handled, and general ramp-up costs. Spending goes to earthworks and stripping at the mine, plus Sandman, where the budget is roughly US$3.5 million for engineering, about US$900,000 for drilling, and around US$1.5 million for permitting, so call it US$6 million all-in to be mine-ready, potentially debt-financed for construction rather than equity. Big Balds drilling of 1,500 to 2,500 metres is planned but not yet board-approved. G&A and marketing for the coming fiscal year is expected at C$3 to 3.5 million, and they’re seriously looking at a secondary US listing on NASDAQ or NYSE American. There are no hedges and no debt. Realized gold price in the quarter was about US$4,600 per ounce, strip ratio was about 2.5:1 with a 2:1 target, and gross margin compressed from 58% in Q1 to 30% in Q3 because Q1 was cheap stockpile material with a skeleton crew while Q3 carried full mining costs.
Upcoming catalysts
Technical: geotechnical and metallurgical results from the 5,000 metre Sandman program, with column leach tests taking four to six months, followed by step-out exploration drilling at Sandman hopefully starting after the engineering holes wrap by end of summer, a first drill program at Big Balds, and the detailed Sandman study and report expected January or February 2027 with a draft permit application possibly before year-end. Operational: improved crushing rates showing up in the next quarterly update, metallurgical test work on run-of-mine leaching that could bypass the crusher and cut operating costs, and full cost reporting including all-in sustaining costs starting with Q1 fiscal 2027 reporting from August onward. Corporate: fiscal 2027 guidance in roughly the next two months, annual results around November, JRCD permitting updates, a possible US secondary listing, and what he called the rabbit in the hat, acquisitions, including a consolidation idea in a certain area he wouldn’t detail.
Risks
The crusher remains the operational bottleneck and has been a persistent frustration, and heap leach recovery timing actually gets slower as the pad grows, adding about two weeks per lift. Margin compression from full mining costs is real, and there’s still no guidance or all-in cost disclosure. The share price weakness limits their ability to use stock for M&A and makes the company a potential target rather than the acquirer. Sandman carries permitting risk, since FAST-41 eligibility isn’t confirmed and Kelly himself said you never know the answer until it’s in hand, plus the original water rights were lost in the property sale and new water still has to be secured. The production restart was made without a feasibility-level economic study on Borealis, the sulfide leaching thesis at Sandman is unproven at feasibility level, and mining remains inherently dangerous, which is what he says keeps him up at night.
Borealis Mining CEO Interview
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