Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 16, 2017 | Jun. 30, 2016 | |
Document and Entity Information: | |||
Entity Registrant Name | New Jersey Mining Company | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Trading Symbol | njmc | ||
Amendment Flag | false | ||
Entity Central Index Key | 1,030,192 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 105,418,759 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Entity Public Float | $ 7,111,237 | ||
Entity Incorporation, State Country Name | Idaho | ||
Entity Incorporation, Date of Incorporation | Jul. 18, 1996 |
New Jersey Mining Company Conso
New Jersey Mining Company Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | |
Current assets: | |||
Cash and cash equivalents | $ 154,833 | $ 62,275 | |
Milling receivables | 31,450 | 40,577 | |
Gold sales receivable | 54,319 | ||
Inventory | 184,324 | ||
Joint venture receivables | 2,888 | 3,109 | |
Note receivable | 58,386 | 58,386 | |
Other current assets | 43,550 | 40,350 | |
Total current assets | 529,750 | 204,697 | |
Property, plant and equipment, net of accumulated depreciation | 5,788,362 | 5,698,831 | |
Mineral properties, net of accumulated amortization | 2,046,900 | 1,907,089 | |
Investment in joint venture | 435,000 | ||
Reclamation bond | 58,000 | ||
Deposit on equipment | 13,982 | ||
Total assets | 8,858,012 | 7,824,599 | |
Current liabilities: | |||
Accounts payable | 243,123 | 58,267 | |
Accrued payroll and related payroll expenses | 37,861 | 14,513 | |
Notes and interest payable related parties, current portion | 567,580 | 88,114 | |
Notes payable, current portion, net of discount | 623,185 | 488,435 | |
Forward gold contracts, current portion | [1] | 845,198 | |
Total current liabilities | 2,316,947 | 649,329 | |
Asset retirement obligation | 72,218 | 28,656 | |
Notes and interest payable related parties, long term | 513,715 | 598,127 | |
Notes payable, long term, net of discount | 268,158 | 731,940 | |
Forward gold contracts, long term | [1] | 541,030 | |
Total long term liabilities | 1,395,121 | 1,358,723 | |
Total liabilities | 3,712,068 | 2,008,052 | |
Commitments | [2] | 0 | 0 |
Stockholders' equity: | |||
Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding | 0 | 0 | |
Common stock, no par value, 200,000,000 shares authorized; 97,193,704 and 91,760,148 shares issued and outstanding, respectively | 14,293,105 | 13,590,739 | |
Accumulated deficit | (12,289,473) | (10,981,432) | |
Total New Jersey Mining Company stockholders' equity | 2,003,632 | 2,609,307 | |
Non-controlling interests | 3,142,312 | 3,207,240 | |
Total stockholders' equity | 5,145,944 | 5,816,547 | |
Total liabilities and stockholders' equity | $ 8,858,012 | $ 7,824,599 | |
[1] | Note 15 | ||
[2] | Notes 6 and 14 |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of financial position | ||
Preferred Stock, Par Value | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares Issued | 97,193,704 | 91,760,148 |
Common Stock, Shares Outstanding | 97,193,704 | 91,760,148 |
New Jersey Mining Company Cons4
New Jersey Mining Company Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Revenue: | |||
Gold sales | $ 523,637 | ||
Contract services revenue and other | $ 4,203 | ||
Milling revenue | 21,114 | 1,886,970 | |
Total revenue | 544,751 | 1,891,173 | |
Costs and expenses: | |||
Production | 544,721 | 1,263,931 | |
Exploration | 284,657 | 200,587 | |
Depreciation and amortization | 30,191 | 150,367 | |
Management | 315,580 | 282,299 | |
Professional services | 179,826 | 181,329 | |
General and administrative | 219,441 | 292,134 | |
(Gain) on sale of equipment | (6,000) | ||
(Gain) on forfeiture of milling advance | (125,000) | ||
Impairment of mineral property | 95,598 | ||
Total operating expenses | 1,574,416 | 2,335,245 | |
Operating income (loss) | (1,029,665) | (444,072) | |
Other (income) expense: | |||
Timber revenue | (130,574) | (51,815) | |
Timber expense | 6,838 | 9,707 | |
Royalties and other (income) expense | 6,716 | ||
Gain on remeasurement of previously held equity interest | [1],[2] | (164,696) | |
Interest income | (12,443) | (5,252) | |
Interest expense | 80,338 | 22,722 | |
Change in fair value of forward gold contracts | 296,098 | ||
Amortization of discount on note payable | 84,370 | 27,350 | |
Total other (income) expense | 331,343 | (161,984) | |
Net loss | (1,361,008) | (282,088) | |
Net income (loss) attributable to non-controlling interests | 15,708 | (36,314) | |
Net loss attributable to New Jersey Mining Company | $ (1,376,716) | $ (245,774) | |
Net loss per common share-basic and diluted | $ 0.01 | $ 0 | |
Weighted average common shares outstanding-basic and diluted | 95,002,915 | 91,760,148 | |
[1] | Note 1 | ||
[2] | Note 14 |
New Jersey Mining Company Cons5
New Jersey Mining Company Consolidated Statement of Changes in Stockholders' Equity - USD ($) | Common Stock Shares | Common Stock Amount | Accumulated Deficit | Non-controlling Interests | Total | |
Stockholders' equity at Dec. 31, 2014 | $ 13,442,395 | $ (10,735,658) | $ 3,247,113 | $ 5,953,850 | ||
Shares issued at Dec. 31, 2014 | 91,760,148 | |||||
Net contribution (reduction) of non-controlling interest in Mill JV | (3,559) | (3,559) | ||||
Stock options granted to directors | 148,344 | 148,344 | ||||
Net loss | (245,774) | (36,314) | (282,088) | |||
Stockholders' equity at Dec. 31, 2015 | 13,590,739 | (10,981,432) | 3,207,240 | 5,816,547 | ||
Shares issued at Dec. 31, 2015 | 91,760,148 | |||||
Acquisition of GF&H Company non-controlling interest, value | [1] | $ 57,625 | $ 68,675 | $ (84,966) | $ 41,334 | |
Acquisition of GF&H Company non-controlling interest, stock | [1] | 175,760 | ||||
Issuance of common stock and warrants for cash net of offering costs, value | $ 92,500 | $ 92,500 | ||||
Issuance of common stock and warrants for cash net of offering costs, stock | 1,075,000 | |||||
Issuance of common stock for services, value | 71,507 | 71,507 | ||||
Issuance of common stock for services, stock | 682,796 | |||||
Issuance of common stock for investment in joint venture, value | 210,000 | 210,000 | ||||
Issuance of common stock for investment in joint venture, stock | 3,000,000 | |||||
Stock based compensation relating to options | 220,734 | 220,734 | ||||
Stock issued for exercise of options, value | 50,000 | 50,000 | ||||
Stock issued for exercise of options, stock | 500,000 | |||||
Net contribution (reduction) of non-controlling interest in Mill JV | $ 4,330 | 4,330 | ||||
Net loss | $ (1,376,716) | 15,708 | (1,361,008) | |||
Stockholders' equity at Dec. 31, 2016 | $ 14,293,105 | $ (12,289,473) | $ 3,142,312 | $ 5,145,944 | ||
Shares issued at Dec. 31, 2016 | 97,193,704 | |||||
[1] | Note 13 |
New Jersey Mining Company Cons6
New Jersey Mining Company Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Cash flows from operating activities: | |||
Net loss | $ (1,361,008) | $ (282,088) | |
Adjustments to reconcile net loss to net cash (used) by operating activities | |||
Depreciation and amortization | 30,191 | 150,367 | |
(Gain) loss on sale of equipment | (6,000) | ||
Gain of forfeiture of milling advance | (125,000) | ||
Amortization of discount on note payable | 84,370 | 27,350 | |
Gain on remeasurement of previously held equity interest | [1],[2] | (164,696) | |
Accretion of asset retirement obligation | 5,291 | 5,290 | |
Impairment of mineral property | 95,598 | ||
Stock based compensation | 292,241 | 148,344 | |
Change in fair value of forward gold contracts | 296,098 | ||
Change in operating assets and liabilities | |||
Milling receivables | 9,127 | 77,038 | |
Gold Sales Receivables | (54,319) | ||
Inventory | (184,324) | ||
Joint venture receivables | 221 | 25,013 | |
Other current assets | (3,200) | (7,909) | |
Accounts payable | 184,856 | (25,163) | |
Accrued payroll and related payroll expense | 23,348 | (35,449) | |
Interest payable related parties | 4,167 | ||
Net cash (used) by operating activities | (672,941) | (117,305) | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (131,657) | (133,260) | |
Purchase of mineral property | (102,823) | ||
Deposit on equipment | (13,982) | ||
Proceeds from sale of equipment | 17,200 | ||
Purchase of controlling interest in GCJV, net of cash acquired | (179,476) | ||
Gain recognized as equity transaction on GF&H acquisition | [3] | 68,675 | |
Purchase of GF&H non-controlling interest | [3] | (27,341) | |
Proceeds from option payment on property | 10,000 | 10,000 | |
Purchase of investment in joint venture | (225,000) | ||
Purchase of reclamation bond | (58,000) | ||
Net cash provided (used) by investing activities | (448,946) | (316,718) | |
Cash flows from financing activities: | |||
Sales of common stock and warrants, net of issuance costs | 92,500 | ||
Cash from exercise of stock options | 16,250 | ||
Proceeds from forward gold contracts | 1,240,306 | ||
Payments on forward gold contracts | (150,176) | ||
Principal payments on notes payable | (413,402) | (271,052) | |
Payment on milling advance | (75,000) | ||
Borrowings from related parties | 475,000 | 550,000 | |
Principal payments on note and other payables, related party | (50,363) | (44,174) | |
Proceeds from non-controlling interest | 4,330 | ||
Net cash provided (used) by financing activities | 1,214,445 | 159,774 | |
Net change in cash and cash equivalents | 92,558 | (274,249) | |
Cash and cash equivalents, beginning of year | 62,275 | 336,524 | |
Cash and cash equivalents, end of year | 154,833 | 62,275 | |
Supplemental disclosure of cash flow information: | |||
Interest paid in cash, net of amount capitalized | 80,338 | 22,722 | |
Non-cash investing and financing activities: | |||
Deposit on equipment applied to purchase of equipment | 13,982 | 12,480 | |
Property exchanged on elimination of debt | 175,000 | ||
Purchase of property and equipment with note payable | $ 92,320 | ||
Shares of common stock issued for investment in joint venture | 210,000 | ||
Stock option exercised in exchange for reduction of note payable, related party | 33,750 | ||
Shares of common stock issued for acquisition of GF&H | $ 26,364 | ||
[1] | Note 1 | ||
[2] | Note 14 | ||
[3] | Note 13 |
1. Description of Business
1. Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
1. Description of Business | 1. Description of Business New Jersey Mining Company (“the Company”) was incorporated as an Idaho corporation on July 18, 1996. The Company's primary business is exploring for and developing gold, silver, and base metal mineral resources in the Greater Coeur d’Alene Mining District of North Idaho and extending into Western Montana The Company is currently focused on mining and milling ore from the Golden Chest property. It is also evaluating new mineral investment and development opportunities in the western United States. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
2. Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation At December 31, 2016, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the Golden Chest LLC Joint Venture (“GCJV”) and GF&H Company (“GF&H”); and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). During 2016, the Company acquired the remaining outstanding shares of GF&H. At December 31, 2015, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, GCJV and its majority-owned subsidiaries, NJMJV and GF&H. During 2015, the Company acquired the remaining outstanding interest in GCJV. Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the consolidated balance sheets and statements of operations. Accounting for Investments in Joint Ventures For joint ventures where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee. For joint ventures in which the Company does not have joint control or significant influence, the cost method is used. Under the cost method, these investments are carried at the lower of cost or fair value. For those joint ventures in which there is joint control between the parties, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. The Company periodically assesses its investments in joint ventures for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations. At December 31, 2016 and December 31, 2015, the Company’s percentage ownership and method of accounting for each joint venture is as follows: December 31, 2016 December 31, 2015 Joint Venture % Ownership Significant Influence? Accounting Method % Ownership Significant Influence? Accounting Method NJMJV 67% Yes Consolidated 67% Yes Consolidated Butte Highlands Joint Venture (“BHJV”) 50% No Cost NA NA NA Non-controlling Interests Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Company’s stockholders’ equity as is net income (loss). Non-controlling interests represent interests at the date of the original acquisition and the non-controlling investor’s share of changes in equity since that date. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for items such as depreciation lives and methods, potential impairment of long-lived assets, deferred income taxes, fair value of forward gold contracts, fair value of stock based compensation, estimation of asset retirement obligations and reclamation liabilities. Actual results could differ from those estimates. Revenue Recognition Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. Revenue received from drilling and exploration contracts with third parties is recognized when the contract has been established, the services are rendered and collection of payment is deemed probable. These services are not a part of normal operations. Income received as the operator of the Company's joint ventures is recognized in the months during which those operations occur. Revenue received from engineering services provided is recognized when services are rendered and collection of payment is deemed probable. These services are not a part of normal operations. Revenues from mill operations and custom milling are recognized in the period in which the milling is performed and collection of payment is deemed probable. Revenue from harvest of raw timber is recognized when a contract has been established, the timber has been shipped, and payment is deemed probable. Sales of timber found on the Company’s mineral properties are not a part of normal operations. Income Taxes Income taxes are accounted for under the liability method. Under this method deferred income tax liabilities or assets are determined at the end of each period using the tax rate expected to be in effect when the taxes are expected to be paid or recovered. A valuation allowance is recorded to reduce the deferred tax assets, if there is uncertainty regarding their realization. Fair Values Measurements When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. During 2016 and 2015, the Company determined fair value on a recurring basis and non-recurring basis as follows: Asset or Liability December 31, 2016 December 31, 2015 Fair Value Hierarchy Asset: Non-recurring: Mineral properties (Note 6) - $ 215,127 3 Liabilities: Recurring: Forward gold contracts (Note 15) $ (1,386,227) - 2 Non-recurring: Asset retirement obligation (Note 8) (38,271) - 3 Financial Instruments The carrying amounts of financial instruments including cash and cash equivalents, reclamation bonds, note receivable, notes payable to related parties, and notes payable approximate their fair values. Net Income (Loss) Per Share Net income (loss) per share is computed by dividing the net amount by the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. For the years ended December 31, 2016 and 2015, the effect of the Company’s potential issuance of shares from the exercise of 10,737,500 warrants and 7,500,000 stock options in 2016 and 10,200,000 warrants and 5,750,000 stock options in 2015 would have been anti-dilutive. Accordingly, only basic net loss per share has been presented. Reclassifications Certain prior period amounts have been reclassified to conform to the 2016 financial statement presentation. Reclassifications had no effect on net loss, stockholders' equity, or cash flows as previously reported. Cash and Cash Equivalents The Company considers cash in banks and other deposits with an original maturity of three months or less when purchased to be cash and cash equivalents. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation and amortization are based on the estimated useful lives of the assets and are computed using straight-line or units-of-production methods. The expected useful lives of most of the Company’s buildings are up to 50 years and equipment life expectancy ranges between 2 and 10 years. When assets are retired or sold, the costs and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operations. Mineral Properties Significant payments related to the acquisition of mineral properties, mineral rights, and mineral leases are capitalized. If a commercially mineable ore body is discovered, such costs are amortized when production begins using the units-of-production method based on proven and probable reserves. If no commercially mineable ore body is discovered, or such rights are otherwise determined to have no value, such costs are expensed in the period in which it is determined the property has no future economic value. Mine Exploration and Development Costs The Company expenses exploration costs as such in the period they occur. Mine development costs are capitalized as deferred development costs after proven and probable reserves have been identified. Amortization of deferred development costs is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable mineral ounces. Claim Fees Unpatented claim fees paid at time of staking are expensed when incurred. Recurring renewal fees which are paid annually are recorded as prepaid and expensed over the course of the year. Impairment of Long-Lived Asset Evaluations The Company evaluates the carrying amounts of its long-lived assets for impairment whenever events and circumstances indicate the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Estimated undiscounted future net cash flows from each mineral property are calculated using estimated future production, three year average metals prices, operating capital and costs, and reclamations costs. An impairment loss is recognized when the estimated discounted future cash flows expected to result from the use of an asset are less than the carrying amount of the asset. The Company’s estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in estimates could occur which may affect the expected recoverability of the Company’s investments in mineral properties. Asset Retirement Obligations and Remediation Costs Mineral properties are subject to standards for mine reclamation that have been established by various governmental agencies. Asset retirement obligations are related to the retirement of the mine when a contractual obligation has been established and a reasonable estimate of fair value can be determined. These obligations are initially measured at fair value with the resulting cost capitalized at the present value of estimated reclamation costs. An asset and a related liability are recorded for the fair value of these costs. The liability is accreted and the asset amortized over the life of the related asset. Adjustments are made for changes resulting from either the timing or amount of the original estimate underlying the obligation. If there is an impairment to an asset’s carrying value and a decision is made to permanently close the property, changes to the liability are recognized and charged to the provision for closed operations and environmental matters. Reclamation Bond Various laws and permits require that financial assurances be in place for certain environmental and reclamation obligations and other potential liabilities. At December 31, 2016, the Company has a $58,000 reclamation bond for the Golden Chest Mine. Share Based Compensation or Payments All transactions in which goods or services are received for the issuance of shares of the Company’s common stock or options to purchase shares of common stock are accounted for based on the fair value of the goods or services received or the fair value of the equity interest issued, whichever is more reliably measurable. The value of common stock awards is determined based upon the closing price of our stock on the date of the award. The Company estimates the fair value of stock-based compensation using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected life”), the estimated volatility of our common stock price over the expected term (“volatility”), employee forfeiture rate, the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of the fair value of stock-based compensation. Derivatives The Company measures derivative contracts as assets or liabilities based on their fair value. Gains or losses resulting from changes in the fair value of derivatives in each period are recorded in current earnings (losses). None of the Company’s derivative contracts qualify for hedge accounting. The Company does not hold or issue derivative financial instruments for speculative trading purposes. Recent Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2015-17 Income Taxes-Balance Sheet Classification of Deferred Taxes (Topic 740). The update is designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial position. ASU No. 2015-17 requires the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09 Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for stock-based compensation, including income tax consequences and balance sheet and cash flow statement classification of awards. The update is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
3. Going Concern
3. Going Concern | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
3. Going Concern | 3. Going Concern At December 31, 2016, the CompanyÂ’s current debt exceeded current assets by $1,787,197. In addition, the Company has accumulated deficit of $12,289,473 and ongoing net loss from operations. These factors indicate that there may be doubt regarding our ability to continue as a going concern for the next twelve months. During the first quarter of 2017, the Company completed $1,141,000 of equity sales which included an exchange of $100,000 in the CompanyÂ’s commons stock for debt owed by the Company to a related party. In addition, related party debt holders are willing to restructure payments that will allow the Company to defer $724,247 in current debt to long term debt if necessary. In addition, first quarter of 2017 production has resulted in positive cash flow and production planned for the remainder of the year indicate the trend to continue. As a result of its planned production, equity sales and ability to restructure debt, management believes there is not a substantial doubt about the CompanyÂ’s ability to continue as a going concern for the next twelve months. Cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the time period. |
4. Note Receivable
4. Note Receivable | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
4. Note Receivable | 4. Note Receivable On September 30, 2014 the Company loaned $58,386 to Premium Exploration (USA) Inc under a convertible promissory note. The note carries simple interest at 8% and matured on August 1, 2015 at which time the principal and interest was due. Premium Exploration has since filed for bankruptcy and the Company is listed as a creditor in the bankruptcy proceedings and still expects to receive payment and has accrued no reserve for uncollectibility at December 31, 2016. |
5. Property, Plant and Equipmen
5. Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
5. Property, Plant and Equipment | 5. Property, Plant and Equipment Property, plant and equipment at December 31, 2016 and 2015, consisted of the following: 2016 2015 Mill Mill land $ 225,289 $ 225,289 Mill building 536,193 536,193 Milling equipment 4,192,940 4,209,440 4,954,422 4,970,922 Less accumulated depreciation (307,302) (285,420) Total mill 4,647,120 4,685,502 Building and equipment at cost 434,897 362,188 Less accumulated depreciation (223,264) (217,738) Total building and equipment 211,633 144,450 Land Bear Creek Land 266,934 196,204 Little Baldy Land 62,139 72,139 BOW Land 230,449 230,449 Eastern Star Land 250,817 250,817 Gillig Land 79,137 79,137 Highwater Land 40,133 40,133 Total Land 929,609 868,879 Total $ 5,788,362 $ 5,698,831 During the year ended December 31, 2015, $16,295 in interest was capitalized in conjunction with the mill expansion project. None was capitalized in 2016 for the mill expansion. During the year ended December 31, 2012, a lease agreement was entered into with Hecla Mining Company (“Hecla”) on the Company’s Little Baldy land holding. Under the agreement, Hecla has paid $10,000 each year in 2016 and 2015, respectively, to the Company for the option to obtain NJMC’s interest in the land. The Company has recorded these lease payments as a reduction in the carrying value of the land for the years ended December 31, 2016 and 2015. |
6. Mineral Properties
6. Mineral Properties | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
6. Mineral Properties | 6. Mineral Properties Mineral properties are as follows: December 31, 2016 December 31, 2015 New Jersey $ 215,127 $ 215,127 McKinley 250,000 250,000 Golden Chest 1,586,324 1,445,229 Toboggan 5,000 5,000 Less accumulated amortization (9,551) (8,267) Total $ 2,046,900 $ 1,907,089 In the year ended December 31, 2016, $6,253 of interest was capitalized for the construction at the Golden Chest property. No interest was capitalized for development in 2015. New Jersey The Coleman property is located at the New Jersey Mine area of interest and consists of 62 acres of patented mining claims, mineral rights to 108 acres of fee land, 80 acres of land for which the Company owns the surface but not the mineral rights, and approximately 130 acres of unpatented mining claims. The Coleman property was acquired in October 2002. As of December 31, 2015, an impairment analysis determined that the propertyÂ’s value had been impaired based upon current mineral prices and market conditions and a impairment loss of $70,098 was recognized. Fair value of the property at December 31, 2015 was determined using Level 3 fair value inputs based on recent sales of comparable properties in the immediate area. McKinley The McKinley Project is an exclusive exploration and mining lease which covers several historic mines and prospects, including the McKinley Mine, Ibex Mine, and Big Easy Mine, on private land located in central Idaho near the town of Lucile. On December 31, 2013, NJMC received all rights and agreements, intellectual property, historic and recent due diligence, surveys and maps, along with a 12-month option to purchase the historic McKinley Mine, located on 62 acres within the overall land package. The purchase option has an exercise price of $285,000. NJMC can perform certain due diligence, including exploration drilling, prior to the exercise date, which has been extended to November 2017. A prior lessee of the McKinley Mine is due a 1.0% to 2.0% NSR sliding scale royalty on future production based on the price of gold, which is capped at a total of $500,000. Golden Chest The Golden Chest is an exploration and underground mine project located near Murray, Idaho consisting of 25 patented and 70 unpatented mining claims. Previously owned by GCJV, the property is now owned by NJMC after the Company acquired the remaining 52.22% interest in 2015 (Note 14). A 2% Net Smelter Royalty is payable to Marathon Gold on production at the Golden Chest and $6,916 was paid in the fourth quarter of 2016. Silver Button/Roughwater The Silver Button claim is the remaining property of the ten claims acquired from Roughwater Mining Company. During 2005, the other nine Roughwater unpatented claims were dropped. In 2001, the Company purchased the property through the issuance of 255,000 shares of its common stock to Roughwater Mining Company. The shares were valued at $0.10 per share, for a total acquisition cost of $25,500. As of December 31, 2015 an impairment analysis determined that the property had no value using Level 3 fair value inputs based on current mineral prices and market conditions and an impairment loss for the entire $25,500 carrying value was recognized. Toboggan Toboggan is a gold and silver exploration project consisting of 106 claims covering 2,100 acres of federal land administered by the U.S. Forest Service. In 2001, the Company issued 50,000 shares of stock to an individual to acquire the rights. The shares were valued at $0.10 per share for a total acquisition cost of $5,000. This cost was for a portion of the claims in the Toboggan property that were purchased; the remaining claims were staked by the Company. The Little Baldy prospect which a part of the Toboggan project is under lease to Hecla. The lease has a 20-year term and calls for annual payments to NJMC of $10,000 through the fifth year, then escalating to $15,000 for three years, $20,000 for one year, and $48,000 thereafter. Should gold production be realized from the leased claims, a 2% net smelter return royalty is due NJMC. The Company is currently in the fifth year of the lease. The annual requirement for 2017 is a payment of $15,000 and work commitment of $200,000 which will be paid by Hecla. |
7. Notes Payable
7. Notes Payable | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
7. Notes Payable | 7. Notes Payable At December 31, 2016 and 2015 notes payable are as follows: 2016 2015 Note payable, 4.91% interest rate payable monthly, remaining principal of note due in one payment at end of term, collateralized by property, monthly payments of $459 $ 39,021 $ 42,726 Note payable, 11.0% interest rate payable monthly, remaining principal of note due in one payment at end of term, collateralized by property, monthly payments of $1,124 98,559 105,196 Note payable, 17.53% interest per annum, collateralized by pump, monthly payments of $3,268 48,035 76,097 Note payable for mineral property, 10 quarterly payments, 0.0% interest rate discounted at 10%, collateralized by mineral property, quarterly payments of $125,000 750,000 1,125,000 Total notes payable 935,615 1,349,019 Due within one year 664,787 572,806 Due after one year $ 270,828 $ 776,213 Future principal payments of debt and related discount amortization at December 31, 2016 are as follows: Note Discount Net 2017 $ 664,788 $ (41,603) $ 623,185 2018 146,849 (2,669) 144,180 2019 34,790 34,790 2020 3,872 3,872 Thereafter 85,316 85,316 Total $ 935,615 $ (44,272) $ 891,343 |
8. Asset Retirement Obligation
8. Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
8. Asset Retirement Obligation | 8. Asset Retirement Obligation The Company has established asset retirement obligations associated with the ultimate closing of its mineral properties where there has been or currently is operations. 2016 2015 Balances at January 1 $ 28,656 $ 23,366 Accretion expense 5,291 5,291 Incurred on Golden Chest mining operations 38,271 Balance December 31 $ 72,218 $ 28,656 During 2016, the Company established a asset requirement obligation for its Golden Chest mine. Management estimated that the cost to reclaim the property based upon disturbance to date to be $42,182. The estimated reclamation costs were discounted using credit adjusted, risk-free interest rate of 5.0% from the time the obligation was incurred to the time management expects to pay the retirement obligation. |
9. Joint Venture Arrangements
9. Joint Venture Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
9. Joint Venture Arrangements | 9. Joint Venture Arrangements New Jersey Mill Venture Agreement (“NJMJV”) In January 2011, the Company and United Mine Services, Inc. (“UMS”) entered into an agreement relating to the New Jersey mineral processing plant. To earn a 35 percent interest in the venture, UMS provided $3.2 million funding to expand the processing plant to 15 tonnes/hr. The Company is the operator of the venture and charges operating costs to UMS for milling its ore up to 7,000 tonnes/month, retain a milling capacity of 3,000 tonnes/month, and as the operator of the venture receive a fee of $2.50/tonne milled. UMS subsequently dissolved and its interest in the mill was transferred to Crescent Silver, LLC (Crescent). As of December 31, 2016 and 2015, an account receivable existed with the Mill Joint Venture from Crescent for $2,888 and $3,109 respectively. To date, no ore has been processed under this joint venture arrangement. Butte Highlands Joint Venture On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) from Timberline Resources Corporation for $225,000 in cash and 3,000,000 restricted shares of the Company’s common stock valued at $210,000 for a total consideration of $435,000. Highland Mining, LLC (“Highland”) is the other 50% owner and manager of the joint venture. Under the agreement, Highland will fund all future project exploration and mine development costs. The Agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the joint venture’s activities, it will account for its investment on a cost basis. The Company purchased the interest in the BHJV to provide additional opportunities for exploration and development and expand the Company’s mineral property portfolio. |
10. Income Taxes
10. Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
10. Income Taxes | 10. Income Taxes The Company did not recognize a provision (benefit) for income taxes for the years ended December 31, 2016 and 2015 due to net losses for those periods. At December 31, 2016 and 2015, the Company had net deferred tax assets principally arising from the net operating loss carry forwards for income tax purposes multiplied by an expected tax rate of 40%. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax assets, a valuation allowance equal to the net deferred tax assets has been established at December 31, 2016 and 2015. The significant components of net deferred tax assets at December 31, 2016 and 2015 were as follows: December 31, December 31, 2016 2015 Deferred tax asset Net operating loss carry forward $ 4,346,000 $ 3,436,000 Mineral properties 920,000 1,321,000 Asset retirement obligation 8,000 11,000 Stock based compensation 176,000 Derivative contracts 44,000 Discount on note payable 118,000 Total deferred tax assets 5,612,000 4,768,000 Valuation allowance (4,712,000) (4,153,000) 900,000 615,000 Deferred tax liabilities Acquisition of mineral interest (90,000) (90,000) Property, plant, and equipment (810,000) (525,000) Total deferred tax liabilities (900,000) (615,000) Net deferred tax asset $ 0 $ 0 At December 31, 2016 and 2015 the Company had net operating loss carry forwards of approximately $10,900,000 and $8,600,000 respectively for both federal and the state of Idaho, which expire in the years 2019 through 2036. The income tax benefit shown in the financial statements for the years ended December 31, 2016 and 2015 differs from the statutory rate as follows: December 31, 2016 December 31, 2015 Provision (benefit) at statutory rate $ (476,000) $ (86,000) State taxes, net of federal taxes (68,000) (12,000) Adjustment of prior year tax estimate to actual 15,000 116,000 Increase (decrease) in valuation allowance 559,000 (18,000) Total provision (benefit) $ 0 $ 0 We are open to examination of our income tax filings in the United States and state jurisdictions for the 2014 through 2016 tax years. In the event that the Company is assessed penalties and or interest, penalties will be charged to other operating expense and interest will be charged to interest expense. Certain tax positions taken in the 2014 through 2016 tax years could result in adjustments to our exploration and development costs for tax purposes. However, such adjustments would not result in a tax provision because they would only revise to the net operating loss carry forwards balance. |
11. Equity
11. Equity | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
11. Equity | 11. Equity The Company has authorized 200,000,000 shares of no par common stock at December 31, 2016 and 2015. In addition, the Company has authorized 1,000,000 shares of no par preferred stock, none of which had been issued at December 31, 2016 or 2015. The Company began a private placement in the fourth quarter 2016 which ran through the first quarter of 2017. Each unit consisted of two shares of the CompanyÂ’s common stock and one stock purchase warrant with each warrant exercisable for one share of the CompanyÂ’s stock at $0.20 through February 2020. As of December 31, 2016, 537,500 units were sold consisting of 1,075,000 shares and 537,500 warrants for net proceeds of $92,500 after deducting the 10% commission and other related placement fees. See Note 16 Subsequent Events. In 2016, the Company issued 500,000 shares of common stock pursuant to the exercise of stock purchase options at $0.10 per share for $16,250 in cash and $33,750 in exchange for a reduction of a note payable with a related party. During the year ended December 31, 2016 the Company issued 3,000,000 shares of common stock for the purchase of a 50% interest in Butte Highlands joint venture at $0.07 per share for a value of $210,000 and 175,760 shares of common stock for the acquisition of GF&H at $0.15 per share for a value of $26,364. Fair values were based on the trading price of the CompanyÂ’s stock on the date of the respective transactions. During the year ended December 31, 2016, the Company issued 682,796 shares of its common stock valued at $71,507 for professional services. Fair value was based on the trading price of the CompanyÂ’s stock on the dates of each transaction. No shares of common stock were issued in 2015. Stock Purchase Warrants Outstanding Transactions in common stock purchase warrants for the year ended December 31, 2016 and 2015 are as follows: Number of Warrants Exercise Prices Balance December 31, 2014 21,200,000 $ 0.10-0.20 Expired (11,000,000) 0.15 Balance December 31, 2015 10,200,000 0.10-0.20 Issued in connection with private placement 537,500 0.20 Balance December 31, 2016 10,737,500 $ 0.10-0.20 These warrants expire as follows: Shares Exercise Price Expiration Date 3,000,000 $0.15 March 4, 2017 6,000,000 $0.20 August 11, 2017 1,200,000 $0.10 August 11, 2019 537,500 $0.20 February 28, 2020 10,737,500 Stock Options In April 2014 the Board of Directors of the Company established a stock option plan to authorize the granting of stock options to officers and employees. Upon exercise of the options shares are issued from the available authorized shares of the Company. On April 30, 2014, 2,250,000 options were issued to management, 750,000 options vested immediately and the remaining 1,500,000 vested at a rate of 750,000 each year on the anniversary for 2 additional years, and they expire 3 years after vesting date. Each option allows the holder to purchase one share of the CompanyÂ’s stock at $0.10 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of three years, a risk free rate of 0.87%, and expected volatility of 161.30% compensation cost of $173,844 is associated with these options. Of this $115,896 was recorded as a general and administrative expense in 2014 and $43,461 was recognized in 2015, the remaining $14,487 was recognized in 2016. On December 30, 2015, 1,500,000 options were granted to management, 750,000 options vested immediately and the remaining 750,000 vested on December 30, 2016. The options expire 5 years after their corresponding vesting date. Each option allows the holder to purchase one share of the CompanyÂ’s stock at $0.10 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of five years, a risk free rate of 1.80%, and expected volatility of 158.50%, a compensation cost of $110,208 is associated with the options. Of this, $55,104 was recorded as a general and administrative expense in 2015. The remaining compensation cost of $55,104 was recognized in 2016. In the fourth quarter of 2016 2,750,000 options were granted to management, directors, consultants, and employees of the Company. 1,225,000 vested in the fourth quarter of 2016 and the remaining 1,525,000 vest in 2017. The options expire three years after their grant date. Each option allows the holder to purchase one share of the CompanyÂ’s stock at $0.15 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of three years, a risk free rate of between 0.91% and 1.47%, and expected volatility of between 147.1% and 148.2%, a compensation cost of $268,032 is associated with the options. Of this, $151,143 was recorded as a general and administrative expense in 2016. The remaining unrecognized compensation cost of $116,889 is expected to be recognized in 2017. Number of Options Exercise Prices Balance January 1, 2015 4,500,000 $ 0.10-0.15 Cancelled (250,000) 0.15 Issued 1,500,000 0.10 Balance December 31, 2015 5,750,000 0.10-0.15 Exercised (500,000) 0.10 Issued 2,750,000 0.15 Expired (500,000) 0.11 Balance December 31, 2016 7,500,000 0.10-0.15 Exercisable at December 31, 2016 5,975,000 $ 0.10-0.15 At December 31, 2016, the stock options have an intrinsic value of approximately $65,000 and have a weighted average remaining term of 3 years. |
12. Related Party Transactions
12. Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
12. Related Party Transactions | 12. Related Party Transactions At December 31, 2016 and 2015, the Company had the following notes and interest payable to related parties: December 31, 2016 December 31, 2015 Mine Systems Design (“MSD”), a company in which our Company’s Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through October 2018 $ 115,868 $ 141,033 John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $475,973 in November 2017 520,010 545,208 John Swallow, Company president, 5% interest, principal and interest due January 2018 341,250 Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2018 100,000 1,077,128 686,241 Accrued interest payable 4,167 Total 1,081,295 686,241 Current portion 567,580 88,114 Long term portion $ 513,715 $ 598,127 Related party interest expense for the years ending December 31, 2016 and 2015 was $63,650 and $20,572, respectively. At December 31, 2016, $567,580 of total related party debt is payable in 2017 and $509,548 is payable in 2018. Also see Note 15 for Forward Gold Contracts with related parties and Note 16 Subsequent Events for related party debt exchanged for shares of common stock subsequent to year end. |
13. Acquisition of Gf&h Company
13. Acquisition of Gf&h Company | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
13. Acquisition of Gf&h Company | 13. Acquisition of GF&H Company On July 11, 2014, the Company acquired two thirds of the issued and outstanding common shares of GF&H Company (“GF&H). In the third quarter of 2016, the Company acquired the remaining one third of GF&H’s outstanding shares at which time GF&H was dissolved. For the remaining one third interest, the Company paid the non-controlling interest $27,341 in cash and 175,760 shares of the Company’s common stock valued at $0.15 per share ($26,364) for a total consideration of $53,705. On the date of the acquisition, the non-controlling interest had a net asset value of $84,966 resulting in a gain of $31,261 which was been recognized as an addition to stockholders’ equity. The Company purchased the outstanding shares of GF&H Company to consolidate the Company’s land holdings in the area of the Golden Chest property and provide additional opportunities timber revenue and mineral exploration. |
14. Acquisition of Gcjv
14. Acquisition of Gcjv | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
14. Acquisition of Gcjv | 14. Acquisition of GCJV In December of 2015 the Company became the 100% owner of the GCJV. Prior to that the Company held 47.77% of the joint venture. The Company received the 52.22% share of GCJV held by MUSA in exchange for $180,000 and a 2% NSR royalty payable to MUSA on all future gold production from the property. During the year ended December 31, 2016, the Company recognized $6,916 of royalty expense in accordance with this agreement. In addition to the assets of GCJV, a note payable of $1,250,000 for the patented mining claims was assumed by the Company. A summary of the acquisition is as follows: December 2, 2015 Consideration Cash for MUSAÂ’s 52.22% interest $ 180,000 Assumed fair value of NJMCÂ’s 47.77% 164,696 Total consideration $ 344,696 Fair value of assets acquired Cash $ 524 Prepaid claim fees 9,946 Buildings and equipment 131,700 Golden Chest Mineral property 1,427,050 Fair value of liabilities Note payable on property (1,094,007) Accounts payable (130,517) Net assets acquired $ 344,696 As the CompanyÂ’s carrying value of their previously held 47.77% interest was Nil at the time of acquisition, a gain was recorded as remeasurement of previously held interest. The fair value of the remeasurement was established based upon the purchase price of 52.22% of GCJV held by MUSA for $180,000 which resulted in an impued full value for the property of $344,696 which implied that the original investment held a value of $164,696. The note discount was calculated at an assumed rate of 10% for the remaining 10 quarterly payments on the full note value of $1,125,000 at the date of acquisition resulting in a discount of $155,992 to be amortized over the remainder of the note. At December 31, 2016 the balance remaining of the discount was $44,271. The Company purchased the outstanding share in GCJV to consolidate ownership and facilitate exploration and mining plans going forward. GCJV had minimal operating activity over the past several years with the exception of the lease of the Skookum project which in 2015 included $1,093,317 in depreciation expenses and lease payments of $125,000 per quarter. The unaudited pro forma financial information below represents the combined results of the CompanyÂ’s operations as if For the year ended December 31, 2015 (unaudited) Revenue $ 1,891,173 $ Operating expenses (3,273,219) Net loss from continuing operations (436,502) Net loss per common share, basic and diluted $ 0 $ |
15. Forward Gold Contracts
15. Forward Gold Contracts | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
15. Forward Gold Contracts | 15. Forward Gold Contracts On July 13, 2016, the Company entered into a forward gold contract with Ophir Holdings LLC, a company owned by three of the CompanyÂ’s officers, for net proceeds of $467,500 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 500 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. Ophir Holdings agreed to delay receipt of its December 1, 2016 payment until 2017. At December 31, 2016, future gold deliveries are 312.5 ounces in 2017 and 187.5 ounces in 2018. On July 29, 2016, the Company entered into a forward gold contract through GVC Capital LLC for net proceeds of $772,806 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 904 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. The December 1, 2016 payment, was paid with an ounce equivalent of 114.5 ounces. At December 31, 2016, future gold deliveries are 450.5 ounces in 2017 and 339 ounces in 2018. The gold to be delivered does not need to be produced from the Golden Chest property. In addition, the counterparties can request cash payment instead of gold ounces for each quarterly payment. The cash payments are on average gold prices for the applicable quarter. Due to these provisions, the contracts are accounted for as derivatives requiring their value to be adjusted to fair value each period end. For year ended December 31, 2016, the Company recognized a change in fair value of $296,098. The fair value was calculated using the market approach with Level 2 inputs for forward gold contract rates and a discount rate of 10%. |
16. Subsequent Events
16. Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Notes | |
16. Subsequent Events | 16. Subsequent Events In the first quarter of 2017 the Company completed the private placement begun in the fourth quarter 2016 which ran through the first quarter of 2017. Each unit consisted of two shares of the CompanyÂ’s common stock and one stock purchase warrant with each warrant exercisable for one share of the CompanyÂ’s stock at $0.20 through February 2020. As of December 31, 2016, 537,500 units were sold consisting of 1,075,000 shares and 537,500 warrants for net proceeds of $92,500 after deducting the 10% commission and other related placement fees. In 2017 and additional 3,200,000 shares and 1,600,000 warrants were sold for net proceeds in 2017 of $291,000 after deducting the 10% commission. At closing of the private placement in March 2017, the total units for the private placement were 2,137,500 units consisting of 4,275,000 shares and 2,137,500 warrants, net proceeds of the private placement in total were $383,500. On March 28, 2017 an additional private placement was completed by the Company. The private placement was for 4,250,000 units, each units consisting of two shares of the CompanyÂ’s stock and one stock purchase warrant with each warrant exercisable for one share of the CompanyÂ’s stock at $0.20 through March 28, 2020. No commission was paid with this private placement. Proceeds were $850,000 which included an exchange of $100,000 in private placement participation in exchange for $100,000 in debt owed by the Company to a related party. |
2. Summary of Significant Acc23
2. Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Principles of Consolidation | Principles of Consolidation At December 31, 2016, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, the Golden Chest LLC Joint Venture (“GCJV”) and GF&H Company (“GF&H”); and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). During 2016, the Company acquired the remaining outstanding shares of GF&H. At December 31, 2015, the consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, GCJV and its majority-owned subsidiaries, NJMJV and GF&H. During 2015, the Company acquired the remaining outstanding interest in GCJV. Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the consolidated balance sheets and statements of operations. |
2. Summary of Significant Acc24
2. Summary of Significant Accounting Policies: Accounting For Investments in Joint Ventures (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Accounting For Investments in Joint Ventures | Accounting for Investments in Joint Ventures For joint ventures where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee. For joint ventures in which the Company does not have joint control or significant influence, the cost method is used. Under the cost method, these investments are carried at the lower of cost or fair value. For those joint ventures in which there is joint control between the parties, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount. The Company periodically assesses its investments in joint ventures for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations. At December 31, 2016 and December 31, 2015, the Company’s percentage ownership and method of accounting for each joint venture is as follows: December 31, 2016 December 31, 2015 Joint Venture % Ownership Significant Influence? Accounting Method % Ownership Significant Influence? Accounting Method NJMJV 67% Yes Consolidated 67% Yes Consolidated Butte Highlands Joint Venture (“BHJV”) 50% No Cost NA NA NA |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies: Other Comprehensive Income, Noncontrolling Interest (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Non-controlling Interests | |
Other Comprehensive Income, Noncontrolling Interest | Non-controlling Interests Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the CompanyÂ’s stockholdersÂ’ equity as is net income (loss). Non-controlling interests represent interests at the date of the original acquisition and the non-controlling investorÂ’s share of changes in equity since that date. |
2. Summary of Significant Acc26
2. Summary of Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for items such as depreciation lives and methods, potential impairment of long-lived assets, deferred income taxes, fair value of forward gold contracts, fair value of stock based compensation, estimation of asset retirement obligations and reclamation liabilities. Actual results could differ from those estimates. |
2. Summary of Significant Acc27
2. Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Revenue Recognition | Revenue Recognition Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. Revenue received from drilling and exploration contracts with third parties is recognized when the contract has been established, the services are rendered and collection of payment is deemed probable. These services are not a part of normal operations. Income received as the operator of the Company's joint ventures is recognized in the months during which those operations occur. Revenue received from engineering services provided is recognized when services are rendered and collection of payment is deemed probable. These services are not a part of normal operations. Revenues from mill operations and custom milling are recognized in the period in which the milling is performed and collection of payment is deemed probable. Revenue from harvest of raw timber is recognized when a contract has been established, the timber has been shipped, and payment is deemed probable. Sales of timber found on the CompanyÂ’s mineral properties are not a part of normal operations. |
2. Summary of Significant Acc28
2. Summary of Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Income Taxes | Income Taxes Income taxes are accounted for under the liability method. Under this method deferred income tax liabilities or assets are determined at the end of each period using the tax rate expected to be in effect when the taxes are expected to be paid or recovered. A valuation allowance is recorded to reduce the deferred tax assets, if there is uncertainty regarding their realization. |
2. Summary of Significant Acc29
2. Summary of Significant Accounting Policies: Fair Value Measurement, Policy (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Fair Value Measurement, Policy | Fair Values Measurements When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. During 2016 and 2015, the Company determined fair value on a recurring basis and non-recurring basis as follows: Asset or Liability December 31, 2016 December 31, 2015 Fair Value Hierarchy Asset: Non-recurring: Mineral properties (Note 6) - $ 215,127 3 Liabilities: Recurring: Forward gold contracts (Note 15) $ (1,386,227) - 2 Non-recurring: Asset retirement obligation (Note 8) (38,271) - 3 |
2. Summary of Significant Acc30
2. Summary of Significant Accounting Policies: Fair Values Measurements (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Fair Values Measurements | Financial Instruments The carrying amounts of financial instruments including cash and cash equivalents, reclamation bonds, note receivable, notes payable to related parties, and notes payable approximate their fair values. |
2. Summary of Significant Acc31
2. Summary of Significant Accounting Policies: Net Income (loss) Per Share (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Net Income (loss) Per Share | Net Income (Loss) Per Share Net income (loss) per share is computed by dividing the net amount by the weighted average number of common shares outstanding during the year. Diluted net income (loss) per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. For the years ended December 31, 2016 and 2015, the effect of the CompanyÂ’s potential issuance of shares from the exercise of 10,737,500 warrants and 7,500,000 stock options in 2016 and 10,200,000 warrants and 5,750,000 stock options in 2015 would have been anti-dilutive. Accordingly, only basic net loss per share has been presented. |
2. Summary of Significant Acc32
2. Summary of Significant Accounting Policies: Reclassifications (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the 2016 financial statement presentation. Reclassifications had no effect on net loss, stockholders' equity, or cash flows as previously reported. |
2. Summary of Significant Acc33
2. Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash in banks and other deposits with an original maturity of three months or less when purchased to be cash and cash equivalents. |
2. Summary of Significant Acc34
2. Summary of Significant Accounting Policies: Property, Plant and Equipment (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation and amortization are based on the estimated useful lives of the assets and are computed using straight-line or units-of-production methods. The expected useful lives of most of the CompanyÂ’s buildings are up to 50 years and equipment life expectancy ranges between 2 and 10 years. When assets are retired or sold, the costs and related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is reflected in operations. |
2. Summary of Significant Acc35
2. Summary of Significant Accounting Policies: Mineral Properties (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Mineral Properties | Mineral Properties Significant payments related to the acquisition of mineral properties, mineral rights, and mineral leases are capitalized. If a commercially mineable ore body is discovered, such costs are amortized when production begins using the units-of-production method based on proven and probable reserves. If no commercially mineable ore body is discovered, or such rights are otherwise determined to have no value, such costs are expensed in the period in which it is determined the property has no future economic value. |
2. Summary of Significant Acc36
2. Summary of Significant Accounting Policies: Mine Exploration and Development Costs (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Mine Exploration and Development Costs | Mine Exploration and Development Costs The Company expenses exploration costs as such in the period they occur. Mine development costs are capitalized as deferred development costs after proven and probable reserves have been identified. Amortization of deferred development costs is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable mineral ounces. |
2. Summary of Significant Acc37
2. Summary of Significant Accounting Policies: Claim fees (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Claim fees | Claim Fees Unpatented claim fees paid at time of staking are expensed when incurred. Recurring renewal fees which are paid annually are recorded as prepaid and expensed over the course of the year. |
2. Summary of Significant Acc38
2. Summary of Significant Accounting Policies: Impairment of Properties (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Impairment of Properties | Impairment of Long-Lived Asset Evaluations The Company evaluates the carrying amounts of its long-lived assets for impairment whenever events and circumstances indicate the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Estimated undiscounted future net cash flows from each mineral property are calculated using estimated future production, three year average metals prices, operating capital and costs, and reclamations costs. An impairment loss is recognized when the estimated discounted future cash flows expected to result from the use of an asset are less than the carrying amount of the asset. The CompanyÂ’s estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in estimates could occur which may affect the expected recoverability of the CompanyÂ’s investments in mineral properties. |
2. Summary of Significant Acc39
2. Summary of Significant Accounting Policies: Asset Retirement Obligations and Remediation Costs (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Asset Retirement Obligations and Remediation Costs | Asset Retirement Obligations and Remediation Costs Mineral properties are subject to standards for mine reclamation that have been established by various governmental agencies. Asset retirement obligations are related to the retirement of the mine when a contractual obligation has been established and a reasonable estimate of fair value can be determined. These obligations are initially measured at fair value with the resulting cost capitalized at the present value of estimated reclamation costs. An asset and a related liability are recorded for the fair value of these costs. The liability is accreted and the asset amortized over the life of the related asset. Adjustments are made for changes resulting from either the timing or amount of the original estimate underlying the obligation. If there is an impairment to an assetÂ’s carrying value and a decision is made to permanently close the property, changes to the liability are recognized and charged to the provision for closed operations and environmental matters. |
2. Summary of Significant Acc40
2. Summary of Significant Accounting Policies: Reclamation Bonds (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Reclamation Bonds | Reclamation Bond Various laws and permits require that financial assurances be in place for certain environmental and reclamation obligations and other potential liabilities. At December 31, 2016, the Company has a $58,000 reclamation bond for the Golden Chest Mine. |
2. Summary of Significant Acc41
2. Summary of Significant Accounting Policies: Share Based Compensation Or Payments (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Share Based Compensation Or Payments | Share Based Compensation or Payments All transactions in which goods or services are received for the issuance of shares of the Company’s common stock or options to purchase shares of common stock are accounted for based on the fair value of the goods or services received or the fair value of the equity interest issued, whichever is more reliably measurable. The value of common stock awards is determined based upon the closing price of our stock on the date of the award. The Company estimates the fair value of stock-based compensation using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected life”), the estimated volatility of our common stock price over the expected term (“volatility”), employee forfeiture rate, the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of the fair value of stock-based compensation. |
2. Summary of Significant Acc42
2. Summary of Significant Accounting Policies: Derivatives, Policy (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Derivatives, Policy | Derivatives The Company measures derivative contracts as assets or liabilities based on their fair value. Gains or losses resulting from changes in the fair value of derivatives in each period are recorded in current earnings (losses). None of the CompanyÂ’s derivative contracts qualify for hedge accounting. The Company does not hold or issue derivative financial instruments for speculative trading purposes. |
2. Summary of Significant Acc43
2. Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Policies | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2015-17 Income Taxes-Balance Sheet Classification of Deferred Taxes (Topic 740). The update is designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial position. ASU No. 2015-17 requires the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09 Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for stock-based compensation, including income tax consequences and balance sheet and cash flow statement classification of awards. The update is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
2. Summary of Significant Acc44
2. Summary of Significant Accounting Policies: Accounting For Investments in Joint Ventures: Schedule of Cost Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Cost Method Investments | December 31, 2016 December 31, 2015 Joint Venture % Ownership Significant Influence? Accounting Method % Ownership Significant Influence? Accounting Method NJMJV 67% Yes Consolidated 67% Yes Consolidated Butte Highlands Joint Venture (“BHJV”) 50% No Cost NA NA NA |
2. Summary of Significant Acc45
2. Summary of Significant Accounting Policies: Fair Value Measurement, Policy: Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques | Asset or Liability December 31, 2016 December 31, 2015 Fair Value Hierarchy Asset: Non-recurring: Mineral properties (Note 6) - $ 215,127 3 Liabilities: Recurring: Forward gold contracts (Note 15) $ (1,386,227) - 2 Non-recurring: Asset retirement obligation (Note 8) (38,271) - 3 |
5. Property, Plant and Equipm46
5. Property, Plant and Equipment: Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Property, Plant and Equipment | 2016 2015 Mill Mill land $ 225,289 $ 225,289 Mill building 536,193 536,193 Milling equipment 4,192,940 4,209,440 4,954,422 4,970,922 Less accumulated depreciation (307,302) (285,420) Total mill 4,647,120 4,685,502 Building and equipment at cost 434,897 362,188 Less accumulated depreciation (223,264) (217,738) Total building and equipment 211,633 144,450 Land Bear Creek Land 266,934 196,204 Little Baldy Land 62,139 72,139 BOW Land 230,449 230,449 Eastern Star Land 250,817 250,817 Gillig Land 79,137 79,137 Highwater Land 40,133 40,133 Total Land 929,609 868,879 Total $ 5,788,362 $ 5,698,831 |
6. Mineral Properties_ Schedule
6. Mineral Properties: Schedule of mineral properties (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of mineral properties | December 31, 2016 December 31, 2015 New Jersey $ 215,127 $ 215,127 McKinley 250,000 250,000 Golden Chest 1,586,324 1,445,229 Toboggan 5,000 5,000 Less accumulated amortization (9,551) (8,267) Total $ 2,046,900 $ 1,907,089 |
7. Notes Payable_ Schedule of D
7. Notes Payable: Schedule of Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Debt | 2016 2015 Note payable, 4.91% interest rate payable monthly, remaining principal of note due in one payment at end of term, collateralized by property, monthly payments of $459 $ 39,021 $ 42,726 Note payable, 11.0% interest rate payable monthly, remaining principal of note due in one payment at end of term, collateralized by property, monthly payments of $1,124 98,559 105,196 Note payable, 17.53% interest per annum, collateralized by pump, monthly payments of $3,268 48,035 76,097 Note payable for mineral property, 10 quarterly payments, 0.0% interest rate discounted at 10%, collateralized by mineral property, quarterly payments of $125,000 750,000 1,125,000 Total notes payable 935,615 1,349,019 Due within one year 664,787 572,806 Due after one year $ 270,828 $ 776,213 |
7. Notes Payable_ Schedule of M
7. Notes Payable: Schedule of Maturities of Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Maturities of Long-term Debt | Note Discount Net 2017 $ 664,788 $ (41,603) $ 623,185 2018 146,849 (2,669) 144,180 2019 34,790 34,790 2020 3,872 3,872 Thereafter 85,316 85,316 Total $ 935,615 $ (44,272) $ 891,343 |
8. Asset Retirement Obligation_
8. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Asset Retirement Obligations | 2016 2015 Balances at January 1 $ 28,656 $ 23,366 Accretion expense 5,291 5,291 Incurred on Golden Chest mining operations 38,271 Balance December 31 $ 72,218 $ 28,656 |
10. Income Taxes_ Schedule of D
10. Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Deferred Tax Assets and Liabilities | December 31, December 31, 2016 2015 Deferred tax asset Net operating loss carry forward $ 4,346,000 $ 3,436,000 Mineral properties 920,000 1,321,000 Asset retirement obligation 8,000 11,000 Stock based compensation 176,000 Derivative contracts 44,000 Discount on note payable 118,000 Total deferred tax assets 5,612,000 4,768,000 Valuation allowance (4,712,000) (4,153,000) 900,000 615,000 Deferred tax liabilities Acquisition of mineral interest (90,000) (90,000) Property, plant, and equipment (810,000) (525,000) Total deferred tax liabilities (900,000) (615,000) Net deferred tax asset $ 0 $ 0 |
10. Income Taxes_ Schedule of E
10. Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Effective Income Tax Rate Reconciliation | December 31, 2016 December 31, 2015 Provision (benefit) at statutory rate $ (476,000) $ (86,000) State taxes, net of federal taxes (68,000) (12,000) Adjustment of prior year tax estimate to actual 15,000 116,000 Increase (decrease) in valuation allowance 559,000 (18,000) Total provision (benefit) $ 0 $ 0 |
11. Equity_ Common Stock Purcha
11. Equity: Common Stock Purchase Warrant Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Common Stock Purchase Warrant Transactions | Number of Warrants Exercise Prices Balance December 31, 2014 21,200,000 $ 0.10-0.20 Expired (11,000,000) 0.15 Balance December 31, 2015 10,200,000 0.10-0.20 Issued in connection with private placement 537,500 0.20 Balance December 31, 2016 10,737,500 $ 0.10-0.20 |
11. Equity_ Warrant Expirations
11. Equity: Warrant Expirations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Warrant Expirations | Shares Exercise Price Expiration Date 3,000,000 $0.15 March 4, 2017 6,000,000 $0.20 August 11, 2017 1,200,000 $0.10 August 11, 2019 537,500 $0.20 February 28, 2020 10,737,500 |
11. Equity_ Schedule of Share-b
11. Equity: Schedule of Share-based Compensation, Stock Options, Activity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Share-based Compensation, Stock Options, Activity | Number of Options Exercise Prices Balance January 1, 2015 4,500,000 $ 0.10-0.15 Cancelled (250,000) 0.15 Issued 1,500,000 0.10 Balance December 31, 2015 5,750,000 0.10-0.15 Exercised (500,000) 0.10 Issued 2,750,000 0.15 Expired (500,000) 0.11 Balance December 31, 2016 7,500,000 0.10-0.15 Exercisable at December 31, 2016 5,975,000 $ 0.10-0.15 |
12. Related Party Transactions_
12. Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Schedule of Related Party Transactions | December 31, 2016 December 31, 2015 Mine Systems Design (“MSD”), a company in which our Company’s Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through October 2018 $ 115,868 $ 141,033 John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $475,973 in November 2017 520,010 545,208 John Swallow, Company president, 5% interest, principal and interest due January 2018 341,250 Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2018 100,000 1,077,128 686,241 Accrued interest payable 4,167 Total 1,081,295 686,241 Current portion 567,580 88,114 Long term portion $ 513,715 $ 598,127 |
14. Acquisition of Gcjv_ Busine
14. Acquisition of Gcjv: Business Acquisition, Pro Forma Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Tables/Schedules | |
Business Acquisition, Pro Forma Information | For the year ended December 31, 2015 (unaudited) Revenue $ 1,891,173 $ Operating expenses (3,273,219) Net loss from continuing operations (436,502) Net loss per common share, basic and diluted $ 0 $ |
1. Description of Business (Det
1. Description of Business (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Details | |
Entity Incorporation, State Country Name | Idaho |
Entity Incorporation, Date of Incorporation | Jul. 18, 1996 |
2. Summary of Significant Acc59
2. Summary of Significant Accounting Policies: Accounting For Investments in Joint Ventures: Schedule of Cost Method Investments (Details) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Investment Owned, Percent of Net Assets | 67.00% | 67.00% |
investment owned percentage of net assets 2 | 50.00% |
2. Summary of Significant Acc60
2. Summary of Significant Accounting Policies: Fair Value Measurement, Policy: Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Assets, Fair Value Disclosure, Nonrecurring | $ 215,127 | |
Liabilities, Fair Value Disclosure, Recurring | $ (1,386,227) | |
Liabilities, Fair Value Disclosure, Nonrecurring | $ (38,271) |
3. Going Concern (Details)
3. Going Concern (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Accumulated deficit | $ 12,289,473 | $ 10,981,432 |
Substantial Doubt about Going Concern, Management's Evaluation | During the first quarter of 2017, the Company completed $1,141,000 of equity sales which included an exchange of $100,000 in the Company’s commons stock for debt owed by the Company to a related party. In addition, related party debt holders are willing to restructure payments that will allow the Company to defer $724,247 in current debt to long term debt if necessary. In addition, first quarter of 2017 production has resulted in positive cash flow and production planned for the remainder of the year indicate the trend to continue. As a result of its planned production, equity sales and ability to restructure debt, management believes there is not a substantial doubt about the Company’s ability to continue as a going concern for the next twelve months. Cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the time period. |
4. Note Receivable (Details)
4. Note Receivable (Details) | Dec. 31, 2014USD ($) |
Details | |
Notes, Loans and Financing Receivable, Net, Current | $ 58,386 |
5. Property, Plant and Equipm63
5. Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Mill land | $ 225,289 | $ 225,289 |
Mill building | 536,193 | 536,193 |
Milling equipment | 4,192,940 | 4,209,440 |
Mill buildings and improvements, accumulated depreciation | (307,302) | (285,420) |
Mill Buildings and Improvements, Net | 4,647,120 | 4,685,502 |
Buildings and Improvements, Gross | 434,897 | 362,188 |
Buildings and improvements, accumulated depreciation | (223,264) | (217,738) |
Buildings and improvements net | 211,633 | 144,450 |
Bear Creek Land | 266,934 | 196,204 |
Little Baldy Land | 62,139 | 72,139 |
BOW Land | 230,449 | 230,449 |
Eastern Star Land | 250,817 | 250,817 |
Gillig Land | 79,137 | 79,137 |
Highwater Land | 40,133 | 40,133 |
Land | 929,609 | 868,879 |
Property, plant and equipment, net of accumulated depreciation | $ 5,788,362 | $ 5,698,831 |
5. Property, Plant and Equipm64
5. Property, Plant and Equipment (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Interest expense, mill | 16,295 | |
Cash received for land interest | 10,000 |
6. Mineral Properties_ Schedu65
6. Mineral Properties: Schedule of mineral properties (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||||
Mineral Properties 1 | $ 215,127 | $ 215,127 | $ 215,127 | $ 215,127 |
Mineral Properties 2 | 250,000 | 250,000 | 250,000 | 250,000 |
Mineral Properties 3 | $ 1,586,324 | $ 1,445,229 | 1,586,324 | 1,445,229 |
Mineral Properties 5 | 5,000 | 5,000 | ||
Mineral properties amortization | (9,551) | (8,267) | ||
Mineral properties net | $ 2,046,900 | $ 1,907,089 | $ 2,046,900 | $ 1,907,089 |
7. Notes Payable_ Schedule of66
7. Notes Payable: Schedule of Debt (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Note payable, property | $ 39,021 | $ 42,726 |
Note payable, property | 98,559 | 105,196 |
Note payable, equipment | 48,035 | 76,097 |
Note payable, mineral property | 750,000 | |
Long-term Debt | 935,615 | 1,349,019 |
Notes Payable, Current | $ 270,828 | $ 776,213 |
7. Notes Payable_ Schedule of67
7. Notes Payable: Schedule of Maturities of Long-term Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Note payable maturity 2017 | $ 664,788 | |
Note payable maturity 2017, discount | (41,603) | |
Note payable maturity 2017, net | 623,185 | |
Note payable maturity 2018 | 146,849 | |
Note payable maturity 2018, discount | (2,669) | |
Note payable maturity 2018, net | 144,180 | |
Note payable maturity 2019 | 34,790 | |
Note payable maturity 2019, net | 34,790 | |
Note payable maturity 2020 | 3,872 | |
Note payable maturity 2020, net | 3,872 | |
Note payable maturity Thereafter | 85,316 | |
Long-term Debt | 935,615 | $ 1,349,019 |
Note payable maturity, discount | (44,272) | |
Notes payable net | $ 891,343 |
8. Asset Retirement Obligatio68
8. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Details | |||
Asset retirement obligation | $ 72,218 | $ 28,656 | $ 23,366 |
Asset Retirement Obligation, Period Increase (Decrease) | 5,291 | 5,291 | |
Asset Retirement Obligation, Liabilities Incurred | 38,271 | ||
Asset retirement obligation | $ 72,218 | $ 28,656 | $ 23,366 |
9. Joint Venture Arrangements (
9. Joint Venture Arrangements (Details) | 12 Months Ended |
Dec. 31, 2016 | |
New Jersey Mill | |
Cost Method Investments, Additional Information | New Jersey Mill Venture Agreement (“NJMJV”) In January 2011, the Company and United Mine Services, Inc. (“UMS”) entered into an agreement relating to the New Jersey mineral processing plant. To earn a 35 percent interest in the venture, UMS provided $3.2 million funding to expand the processing plant to 15 tonnes/hr. The Company is the operator of the venture and charges operating costs to UMS for milling its ore up to 7,000 tonnes/month, retain a milling capacity of 3,000 tonnes/month, and as the operator of the venture receive a fee of $2.50/tonne milled. UMS subsequently dissolved and its interest in the mill was transferred to Crescent Silver, LLC (Crescent). As of December 31, 2016 and 2015, an account receivable existed with the Mill Joint Venture from Crescent for $2,888 and $3,109 respectively. To date, no ore has been processed under this joint venture arrangement. |
Butte Highlands | |
Cost Method Investments, Additional Information | Butte Highlands Joint Venture On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) from Timberline Resources Corporation for $225,000 in cash and 3,000,000 restricted shares of the Company’s common stock valued at $210,000 for a total consideration of $435,000. Highland Mining, LLC (“Highland”) is the other 50% owner and manager of the joint venture. Under the agreement, Highland will fund all future project exploration and mine development costs. The Agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the joint venture’s activities, it will account for its investment on a cost basis. The Company purchased the interest in the BHJV to provide additional opportunities for exploration and development and expand the Company’s mineral property portfolio. |
10. Income Taxes_ Schedule of70
10. Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 4,346,000 | $ 3,436,000 |
Effective Income Tax Rate Reconciliation, Other Reconciling Items, Amount | 920,000 | 1,321,000 |
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount | 8,000 | 11,000 |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount | 176,000 | |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Leases, Amount | 44,000 | |
Deferred Tax Assets, Gross | $ 5,612,000 | $ 4,768,000 |
Valuation Allowance | (4,712,000) | (4,153,000) |
Deferred Tax Assets, Net of Valuation Allowance | $ 900,000 | $ 615,000 |
Deferred Tax Liabilities, Other | (90,000) | (90,000) |
Deferred Tax Liabilities, Property, Plant and Equipment | (810,000) | (525,000) |
Deferred Tax Liabilities, Net | $ (900,000) | $ (615,000) |
10. Income Taxes (Details)
10. Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Details | ||
Operating Loss Carryforwards | $ 10,900,000 | $ 8,600,000 |
10. Income Taxes_ Schedule of72
10. Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ (476,000) | $ (86,000) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | (68,000) | (12,000) |
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes, Amount | 15,000 | 116,000 |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | 559,000 | (18,000) |
Income Tax Expense (Benefit) | $ 0 | $ 0 |
11. Equity (Details)
11. Equity (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Details | |||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 | |
Stock options issued to management | 2,250,000 | ||
Stock options issued to management Value | 173,844 | ||
Stock options issued to management | 1,500,000 | ||
Stock options issued to management Value | 110,208 | ||
Stock options issued to management | 2,750,000 | ||
Stock options issued to management Value | 268,032 |
11. Equity_ Common Stock Purc74
11. Equity: Common Stock Purchase Warrant Transactions (Details) | Dec. 31, 2016shares |
Details | |
Class of Warrant or Right, Outstanding | 10,737,500 |
11. Equity_ Warrant Expiratio75
11. Equity: Warrant Expirations (Details) | 12 Months Ended |
Dec. 31, 2016shares | |
Details | |
Warrant Expiration Date | February 28, 2020 |
Class of Warrant or Right, Outstanding | 10,737,500 |
11. Equity_ Schedule of Share76
11. Equity: Schedule of Share-based Compensation, Stock Options, Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Details | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 7,500,000 | 5,750,000 | 4,500,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (500,000) | (250,000) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 2,750,000 | 1,500,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ (500,000) |
12. Related Party Transaction77
12. Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Details | ||
Notes Payable, Related Parties | $ 1,077,128 | $ 686,241 |
Interest Expense, Related Party | 4,167 | |
Notes and interest payable related parties, current portion | 567,580 | 88,114 |
Notes and interest payable related parties, long term | $ 513,715 | $ 598,127 |
14. Acquisition of Gcjv (Detail
14. Acquisition of Gcjv (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Details | |
Business acquisition cash paid | 180,000 |
Business Combination, Acquisition Related Costs | $ 344,696 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 524 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | 9,946 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Buildings | 131,700 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other | 1,427,050 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (1,094,007) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (130,517) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 344,696 |
14. Acquisition of Gcjv_ Busi79
14. Acquisition of Gcjv: Business Acquisition, Pro Forma Information (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)$ / shares | |
Details | |
Business Acquisition, Pro Forma Revenue | $ | $ 1,891,173 |
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Net of Tax, Per Share, Diluted | $ / shares | $ (3,273,219) |
Business Acquisition, Pro Forma Net Income (Loss) | $ | $ (436,502) |
Basic Earnings Per Share, Pro Forma | $ / shares | $ 0 |
15. Forward Gold Contracts (Det
15. Forward Gold Contracts (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Opyhir Holdings | |
Option Indexed to Issuer's Equity, Settlement Alternatives | On July 13, 2016, the Company entered into a forward gold contract with Ophir Holdings LLC, a company owned by three of the Company’s officers, for net proceeds of $467,500 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 500 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. Ophir Holdings agreed to delay receipt of its December 1, 2016 payment until 2017. At December 31, 2016, future gold deliveries are 312.5 ounces in 2017 and 187.5 ounces in 2018. |
GVC Capital | |
Option Indexed to Issuer's Equity, Settlement Alternatives | On July 29, 2016, the Company entered into a forward gold contract through GVC Capital LLC for net proceeds of $772,806 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 904 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. The December 1, 2016 payment, was paid with an ounce equivalent of 114.5 ounces. At December 31, 2016, future gold deliveries are 450.5 ounces in 2017 and 339 ounces in 2018. |
Golden Chest | |
Option Indexed to Issuer's Equity, Settlement Alternatives | The gold to be delivered does not need to be produced from the Golden Chest property. In addition, the counterparties can request cash payment instead of gold ounces for each quarterly payment. The cash payments are on average gold prices for the applicable quarter. Due to these provisions, the contracts are accounted for as derivatives requiring their value to be adjusted to fair value each period end. For year ended December 31, 2016, the Company recognized a change in fair value of $296,098. The fair value was calculated using the market approach with Level 2 inputs for forward gold contract rates and a discount rate of 10%. |
16. Subsequent Events (Details)
16. Subsequent Events (Details) | 12 Months Ended |
Dec. 31, 2016 | |
First Quarter Private Placement | |
Subsequent Event, Description | In the first quarter of 2017 the Company completed the private placement begun in the fourth quarter 2016 which ran through the first quarter of 2017. Each unit consisted of two shares of the Company’s common stock and one stock purchase warrant with each warrant exercisable for one share of the Company’s stock at $0.20 through February 2020. As of December 31, 2016, 537,500 units were sold consisting of 1,075,000 shares and 537,500 warrants for net proceeds of $92,500 after deducting the 10% commission and other related placement fees. In 2017 and additional 3,200,000 shares and 1,600,000 warrants were sold for net proceeds in 2017 of $291,000 after deducting the 10% commission. At closing of the private placement in March 2017, the total units for the private placement were 2,137,500 units consisting of 4,275,000 shares and 2,137,500 warrants, net proceeds of the private placement in total were $383,500. |
Additional Private Placement | |
Subsequent Event, Description | On March 28, 2017 an additional private placement was completed by the Company. The private placement was for 4,250,000 units, each units consisting of two shares of the Company’s stock and one stock purchase warrant with each warrant exercisable for one share of the Company’s stock at $0.20 through March 28, 2020. No commission was paid with this private placement. Proceeds were $850,000 which included an exchange of $100,000 in private placement participation in exchange for $100,000 in debt owed by the Company to a related party. |