i-80 Gold Corp (IAUX) posted a first‑half adjusted net loss of 8 cents per share, compared with a GAAP loss of 15 cents. The difference stems largely from a perpetual net‑smelter‑returns (NSR) royalty the company granted to Franco‑Nevada on 16 March 2026.
Under the agreement, i‑80 sold a 1.5% NSR royalty on its Granite Creek, Ruby Hill, Cove and Lone Tree properties for $250 million, of which $225 million was funded at closing. The royalty steps up to 3 % in perpetuity beginning 1 January 2031. The contract specifies that the royalty is a real‑property interest that runs with the land and contains no buy‑back provision.
i‑80 elected the fair‑value accounting option for the royalty, classifying it as a financial liability. The Level 3 fair‑value inputs include life‑of‑mine production estimates, forward gold prices and company‑specific discount rates. As these inputs improve, the liability grows. The royalty was recorded at $225 million on 16 March, rose to $232.4 million fifteen days later, and reached $256 million by 30 June. The embedded derivative component of the purchase agreement increased from $20.4 million at year‑end to $57.7 million at quarter‑end, offset by a $29.9 million asset from a gold pre‑pay.
The company’s six‑month MD&A attributes a $131.1 million GAAP net loss to $39.5 million of non‑cash fair‑value losses on derivative instruments, including $31.7 million from the NSR royalty. After reconciling to adjusted earnings, the loss narrows to $69.9 million, or 8 cents per share.
The analysis compares i‑80’s treatment with that of Hycroft Mining, which also holds a perpetual 1.5 % NSR royalty from a $30 million cash consideration. Hycroft records the royalty as a deferred‑gain liability, which remained unchanged at $29.8 million across three reporting dates despite rising gold prices. Both companies lack a repurchase right, but differ in how the royalty is measured on the balance sheet.
The report notes that i‑80 plans to complete refurbishment of its Lone Tree autoclave by 31 December 2027, after which it expects to process its underground gold internally, ending a current toll‑milling arrangement that expires the same date. The perpetual royalty therefore remains a key financial encumbrance as the firm transitions its processing operations.
