Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2017shares | |
Document and Entity Information: | |
Entity Registrant Name | New Jersey Mining Company |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2017 |
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 | 111,477,037 |
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 | 2,017 |
Document Fiscal Period Focus | Q3 |
New Jersey Mining Company Conso
New Jersey Mining Company Consolidated Balance Sheets (Interim period unaudited) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | |
Current assets: | |||
Cash and cash equivalents | $ 249,263 | $ 154,833 | |
Milling receivables | 16,950 | 31,450 | |
Gold sales receivable | 378,612 | 54,319 | |
Concentrate inventory | 193,452 | 175,157 | |
Joint venture receivables | 7,727 | 2,888 | |
Note receivable | 58,386 | ||
Other current assets | 86,593 | 52,717 | |
Total current assets | 932,597 | 529,750 | |
Property, plant and equipment, net of accumulated depreciation | 5,854,845 | 5,788,362 | |
Mineral properties, net of accumulated amortization | 2,104,906 | 2,046,900 | |
Investment in joint venture | 435,000 | 435,000 | |
Reclamation bond | 103,320 | 58,000 | |
Total assets | 9,430,668 | 8,858,012 | |
Current liabilities: | |||
Accounts payable | 313,452 | 243,123 | |
Accrued payroll and related payroll expenses | 36,728 | 37,861 | |
Notes and interest payable related parties, current portion | 207,760 | 567,580 | |
Notes payable, current portion, net of discount | 335,805 | 623,185 | |
Forward gold contracts, current portion | 649,411 | 845,198 | |
Total current liabilities | 1,543,156 | 2,316,947 | |
Asset retirement obligation | 102,142 | 72,218 | |
Notes and interest payable related parties, long term | 697,985 | 513,715 | |
Notes payable, long term | 170,661 | 268,158 | |
Forward gold contracts, long term | 452,486 | 541,030 | |
Total long term liabilities | 1,423,274 | 1,395,121 | |
Total liabilities | 2,966,430 | 3,712,068 | |
Commitments | [1] | 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; September 30, 2017-108,893,704 shares and December 31, 2016-97,193,704 shares issued and outstanding | 15,549,941 | 14,293,105 | |
Accumulated deficit | (12,207,538) | (12,289,473) | |
Total New Jersey Mining Company stockholders' equity | 3,342,403 | 2,003,632 | |
Non-controlling interests | 3,121,835 | 3,142,312 | |
Total stockholders' equity | 6,464,238 | 5,145,944 | |
Total liabilities and stockholders' equity | $ 9,430,668 | $ 8,858,012 | |
[1] | Note 2 |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
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 | 108,893,704 | 97,193,704 |
Common Stock, Shares Outstanding | 108,893,704 | 97,193,704 |
New Jersey Mining Company Cons4
New Jersey Mining Company Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Gold Sales | $ 1,266,139 | $ 45,854 | $ 3,218,147 | $ 123,518 |
Milling income | 6,500 | 21,114 | ||
Total revenue | 1,266,139 | 52,354 | 3,218,147 | 144,632 |
Costs and expenses: | ||||
Production | 813,785 | 51,241 | 2,118,138 | 146,428 |
Pre-development expenses | 59,769 | 199,821 | 159,102 | 199,821 |
Exploration | 9,220 | 37,772 | 45,200 | 112,829 |
Depreciation and amortization | 40,597 | 100,588 | 3,214 | |
Management | 35,678 | 45,923 | 128,317 | 102,074 |
Accounting and legal services | 33,232 | 32,776 | 131,754 | 87,766 |
General and administrative expenses | 51,135 | 42,520 | 192,616 | 98,285 |
Total operating expenses | 1,043,416 | 405,053 | 2,875,715 | 750,417 |
Operating income (loss) | 222,723 | (352,699) | 342,432 | (605,785) |
Other (income) expense: | ||||
Royalties and other income | (200) | |||
Timber income | (52,252) | (52,252) | ||
Timber expense | 5,304 | 428 | ||
Interest income | (7,745) | (1,483) | (8,604) | (4,532) |
Interest expense | 16,070 | 20,760 | 53,243 | 60,837 |
Change in fair value of forward gold contracts | 76,865 | 466,783 | 218,461 | 466,783 |
Amortization of discount on note payable | 8,925 | 42,249 | 35,200 | 67,157 |
Total other expense | 94,115 | 476,057 | 303,604 | 538,221 |
Net income (loss) | 128,608 | (828,756) | 38,828 | (1,144,006) |
Net income (loss) attributable to non-controlling interest | (15,799) | 9,702 | (43,107) | 23,311 |
Net income (loss) attributable to New Jersey Mining Company | $ 144,407 | $ (838,458) | $ 81,935 | $ (1,167,317) |
Net income (loss) per common share-basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average common shares outstanding-basic | 108,893,704 | 94,855,670 | 105,707,990 | 94,485,652 |
Weighted average common shares outstanding-diluted | 109,805,242 | 94,855,670 | 106,461,364 | 94,485,652 |
New Jersey Mining Company Cons5
New Jersey Mining Company Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 38,828 | $ (1,144,006) |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 100,588 | 3,214 |
Amortization of discount on note payable | 35,200 | 67,157 |
Accretion of asset retirement obligation | 6,327 | 3,968 |
Stock based compensation | 115,836 | 55,815 |
Change in fair value of forward gold contracts | 218,461 | 466,783 |
Change in: | ||
Milling receivables | 14,500 | (34,632) |
Joint venture receivables | (4,839) | 2,794 |
Gold sales receivables | (324,293) | |
Concentrate inventory | (18,295) | |
Timber receivables | (4,977) | |
Other current assets | (33,876) | (16,250) |
Accounts payable | 70,329 | 115,477 |
Accrued payroll and related payroll expense | (1,133) | 16,462 |
Interest payable related parties | 14,152 | 14,479 |
Net cash provided (used) by operating activities | 231,785 | (453,716) |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment | (89,458) | (90,838) |
Purchase of mineral property | (14,522) | (88,842) |
Proceeds from option payment on property | 15,000 | 10,000 |
Purchase of investment in joint venture | (225,000) | |
Acquisition of GF&H, net of gain recognized as equity transaction | 41,333 | |
Payment received on note receivable | 58,386 | |
Purchase of reclamation bond | (45,320) | (58,000) |
Net cash (used) by investing activities | (75,914) | (411,347) |
Cash flows from financing activities: | ||
Sales of common stock and warrants, net of issuance costs | 1,041,000 | |
Proceeds from forward gold contracts | 1,240,306 | |
Borrowings on notes payable, related parties | 475,000 | |
Payments on forward gold contracts in cash | (270,755) | |
Gold purchased for payments on forward gold contracts | (232,037) | |
Principal payments on notes payable | (532,577) | (402,838) |
Principal payments on note payables, related parties | (89,702) | (28,422) |
Contributions from non-controlling interest | 22,630 | 1,856 |
Net cash provided (used) by financing activities | (61,441) | 1,285,902 |
Net change in cash and cash equivalents | 94,430 | 420,839 |
Cash and cash equivalents, beginning of period | 154,833 | 62,275 |
Cash and cash equivalents, end of period | 249,263 | 483,114 |
Non-cash investing and financing activities | ||
Shares of common stock and warrants issued for payment of note and interest payable, related party | 100,000 | |
Shares of common stock issued for investment in joint venture | 210,000 | |
Shares of common stock issued for acquisition of GF&H | $ 26,364 | |
Note payable for equipment purchase | $ 112,500 |
1. The Company and Significant
1. The Company and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
1. The Company and Significant Accounting Policies: | 1. The Company and Significant Accounting Policies: These unaudited interim consolidated financial statements have been prepared by the management of New Jersey Mining Company (the Company) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Companys management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim consolidated financial statements have been included. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's financial position and results of operations. Operating results for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. For further information refer to the financial statements and footnotes thereto in the Companys audited financial statements for the year ended December 31, 2016 as filed with the Securities and Exchange Commission. Principles of Consolidation At September 30, 2017 and December 31, 2016, the consolidated balance sheet includes the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV). The consolidated statements of operations and cash flows for the period ended September 30, 2017 includes the same companies. 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. 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. Revenues from mill operations and custom milling are recognized in the period in which the milling is completed, concentrates are shipped, and collection of payment is deemed probable. Pre-Development Activities Pre-development activities involve cost incurred that may ultimately benefit production, such as underground ramp development, pumping, and open pit development, which are expensed due to the lack of evidence of economic development, which is necessary to demonstrate future recoverability of these expenses. These costs are charged to operations as incurred. Inventory Inventory is stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Fair Value 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. At September 30, 2017 and December 31, 2016, the Company determined fair value on a recurring basis as follows: September 30, 2017 December 31, 2016 Fair Value Hierarchy Forward gold contracts-liability (Note 11) $ 1,101,897 $ 1,386,228 2 Concentration During the fourth quarter 2016 and through the nine months ended September 30, 2017, the Company has sold all of its gold concentrate product to a concentrate broker, H&H Metals Corp. Reclassifications Certain prior period amounts have been reclassified to conform to the 2017 financial statement presentation. Reclassifications had no effect on net loss, stockholders equity, or cash flows as previously reported. |
2. Going Concern
2. Going Concern | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
2. Going Concern | 2. Going Concern The Companys cash flow is directly related to revenues generated from production and milling activities. The Company has experienced operating losses and negative operating cash flows prior to and during the ramp up of production activities at the Golden Chest Mine. In addition to cash flow from operations, ongoing operations are dependent on the Companys ability to obtain public equity financing by the issuance of capital and to generate profitable operations in the future. The Company is currently producing from the open-pit at the Golden Chest Mine and began underground operations in early November 2017. In addition, during the first three quarters of 2017, production has generated positive cash flow of $231,785 and planned production for the next 18 months indicates the trend to improve. The Company has also been successful in raising required capital to commence production and fund ongoing operations, completing a forward gold sale of $1.2 million in 2016 and closing private placements of $1.4 million in the first quarter of 2017. The Company also completed a private placement on October 20, 2017 using the proceeds to reduce debt and pay off the remaining balance on the Golden Chest Mine project. As a result of its planned production, equity sales and ability to restructure debt, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months. |
3. Related Party Notes Payable
3. Related Party Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
3. Related Party Notes Payable | 3. Related Party Notes Payable At September 30, 2017 and December 31, 2016, the Company had the following notes and interest payable to related parties: September 30, 2017 December 31, 2016 Mine Systems Design (MSD), a company in which our Companys Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through October 2018 $ 80,729 $ 115,868 John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $416,295 in February 2019 465,446 520,010 John Swallow, Company president, 5% interest, principal and interest due February 2019 245,516 341,250 Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2018 100,000 100,000 891,691 1,077,128 Accrued interest payable 14,054 4,167 Total 905,745 1,081,295 Current portion 207,760 567,580 Long term portion $ 697,985 $ 513,715 Related Party interest expense for the three and nine month periods ending September 30, 2017 and 2016 is as follows: September 30, 2017 September 30, 2016 3 months 9 months 3 months 9 months $ 13,001 $ 41,970 $ 16,806 $ 45,770 During the quarter ended March 31, 2017 in conjunction with a private placement (Note 9), the Company issued 1,000,000 units of its common stock and warrants with a combined value of $100,000 in exchange for $95,734 in principal and $4,266 in accrued interest on a note payable due to John Swallow, the Companys president. On August 8, 2017, notes with Mr. Swallow were amended to extend the balloon payments on both notes to February 2019. |
4. Joint Ventures
4. Joint Ventures | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
4. Joint Ventures | 4. Joint Ventures For joint ventures in which 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. For joint ventures in which the Company does not have joint control or significant influence, the cost method is used. For those joint ventures in which there is joint control between the parties, and the Company has significant influence, the equity method is utilized. At September 30, 2017 and December 31, 2016, the Companys percentage ownership and method of accounting for each joint venture is as follows: September 30, 2017 December 31, 2016 Joint Venture % Ownership Significant Influence? Accounting Method % Ownership Significant Influence? Accounting Method New Jersey Mill Joint Venture(NJMJV) 65% Yes Consolidated 65% Yes Consolidated Butte Highlands Joint Venture (BHJV) 50% No Cost 50% No Cost New Jersey Mill Joint Venture Agreement At September 30, 2017 and December 31, 2016, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (Crescent), for $7,727 and $2,888, respectively, for shared operating costs as defined in the JV agreement. Crescents non-controlling interest in the JV changed from December 31, 2016 to September 30, 2017 as follows: Balance December 31, 2016 $ 3,142,312 Contribution from non-controlling interest 22,630 Net loss attributable to non-controlling interest (43,107) Balance September 30, 2017 $ 3,121,835 Butte Highlands JV, LLC (BHJV) 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 Companys 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 ventures activities, it accounts 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 Companys mineral property portfolio. |
5. Earnings per Share
5. Earnings per Share | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
5. Earnings per Share | 5. Earnings per Share For the three month period ending September 30, 2017, stock options of 2,750,000 and warrants of 1,200,000 are included in the calculation of diluted income per share. For the nine month period ended September 30, 2017, stock options of 3,250,000 and warrants of 1,200,000 warrants are included in the calculation of diluted income per share. Excluded from the diluted earnings per share calculations for both the three and nine months ending September 30, 2017 were 2,725,000 stock options and 6,387,500 warrants. These stock options and warrants were excluded because the exercise prices were greater than the average trading prices of the Companys common stock for the periods. For the three and nine month periods ending September 30, 2016, all outstanding stock options and warrants were excluded from the computation of diluted loss per share, as net losses for those periods would cause their conversion and exercise to have no effect on the calculation of loss per share. |
6. Property, Plant, and Equipme
6. Property, Plant, and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
6. Property, Plant, and Equipment | 6. Property, Plant, and Equipment Property, plant and equipment at September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Mill Mill land $ 225,289 $ 225,289 Mill building 536,193 536,193 Milling equipment 4,192,940 4,192,940 4,954,422 4,954,422 Less accumulated depreciation (391,895) (307,302) Total mill 4,562,527 4,647,120 Building and equipment at cost 612,155 434,897 Less accumulated depreciation (234,446) (223,264) Total building and equipment 377,709 211,633 Land Bear Creek 266,934 266,934 Little Baldy 47,139 62,139 BOW 230,449 230,449 Eastern Star 250,817 250,817 Gillig 79,137 79,137 Highwater 40,133 40,133 Total Land 914,609 929,609 Total $ 5,854,845 $ 5,788,362 |
7. Mineral Properties
7. Mineral Properties | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
7. Mineral Properties | 7. Mineral Properties Mineral properties at September 30, 2017 and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 New Jersey $ 215,127 $ 215,127 McKinley 250,000 250,000 Golden Chest 1,649,142 1,586,324 Toboggan 5,000 5,000 Less accumulated amortization (14,363) (9,551) Total $ 2,104,906 $ 2,046,900 |
8. Notes Payable
8. Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
8. Notes Payable | 8. Notes Payable At September 30, 2017 and December 31, 2016, notes payable are as follows: September 30, 2017 December 31, 2016 Property with shop 36 month note payable, 4.91% interest rate payable monthly, remaining principal of note due in one payment at end of term in June 2019, monthly payments of $474 $ 36,413 $ 39,021 Property 120 month note payable, 11.0% interest rate payable monthly, remaining principal of note due in one payment at end of term in March 2021, collateralized by property, monthly payments of $1,122 93,083 98,559 Tailings pump, 35 month note payable, 17.5% interest rate payable monthly through May of 2018, monthly payments of $3,268, collateralized by equipment 23,542 48,035 Haul Truck, 20 month note payable, 10.0% interest rate payable monthly through May of 2019, monthly payments of 6,020, collateralized by equipment 112,500 750,000 Mineral property, 10 quarterly payments, 0.0% interest rate discounted at 10%, collateralized by property, quarterly payments of $125,000 through May of 2018 250,000 935,615 Total notes payable 515,538 664,787 Due within one year 344,877 270,828 Due after one year $ 170,661 $ 39,021 Future principal payments of debt and related discount amortization at September 30, 2017 are as follows: Note Discount Net 1 year $ 344,877 $ (9,072) $ 335,805 2 years 84,818 - 84,818 3 years 4,260 - 4,260 4 years 81,583 - 81,583 Total $ 515,538 $ (9,072) $ 506,466 |
9. Stockholders' Equity
9. Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
9. Stockholders' Equity | 9. Stockholders Equity 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 Companys common stock and one stock purchase warrant with each warrant exercisable for one share of the Companys 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 the first quarter of 2017 an 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. The Company offered an additional private placement in March of 2017. The private placement was for 4,250,000 units, each unit consisting of two shares of the Companys stock and one stock purchase warrant with each warrant exercisable for one share of the Companys stock at $0.20 through April 2020. No commission was paid with this private placement. Proceeds were $750,000 in cash and a $100,000 payment on a note and interest payable to the Companys president, John Swallow. The Companys concentrate broker, H&H Metals Corp., who purchases all of the Companys gold concentrate product, participated in this private placement purchasing 1,250,000 units for $250,000. S tock Purchase Warrants Outstanding The activity in stock purchase warrants is as follows: Number of Warrants Exercise Prices 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 Expired (9,000,000) (0.15-0.20) Issued in connection with private placement 5,850,000 0.20 Balance September 30, 2017 7,587,500 0.10-0.20 These warrants expire as follows: Shares Exercise Price Expiration Date 1,200,000 $0.10 August 11, 2019 2,137,500 $0.20 February 28, 2020 4,250,000 $0.20 April 30, 2020 |
10. Stock Options
10. Stock Options | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
10. Stock Options | 10. Stock Options In the fourth quarter of 2016, the Company granted 2,750,000 options to management, directors, consultants, and employees of the Company. Of these options 1,225,000 vested in the fourth quarter of 2016 and the remaining 1,525,000 vest in 2017. The options had a fair value of $268,032 which is being recognized ratably over the vesting period. Compensation costs of $151,143 were recognized in the fourth quarter of 2016. Compensation costs of $33,504 and $100,512 was recognized in the three and nine month periods ended September 30, 2017, respectively. The remaining unrecognized compensation cost of $16,377 is expected to be recognized in the fourth of 2017. In the second quarter of 2017, the Company granted 400,000 options to consultants and employees of the Company. These options vest in the second quarter of 2018. The options had a fair value of $36,777 which is being recognized ratably over the vesting period. Compensation cost of $9,194 and $15,324 was recognized in the three and nine month periods ended September 30, 2017, respectively. The remaining unrecognized compensation cost of $21,453 is expected to be recognized in the remainder of 2017 and the first half of 2018. Stock based compensation costs are included in management, production, exploration, and general and administrative expenses where applicable. Number of Options Exercise Prices Balance January 1, 2016 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 Expired (500,000) 0.10 Issued 400,000 0.15 Balance September 30, 2017 7,400,000 $ 0.10-0.15 Exercisable at September 30, 2017 5,475,000 $ 0.10-0.15 At September 30, 2017, the stock options have an intrinsic value of approximately $192,500 and have a weighted average remaining term of 2.5 years. |
11. Forward Gold Contracts
11. Forward Gold Contracts | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
11. Forward Gold Contracts | 11. Forward Gold Contracts On July 13, 2016, the Company entered into a forward gold contract with Ophir Holdings LLC ("Ophir"), a company owned by three of the Companys officers, for net proceeds of $467,500 to fund startup costs at the Golden Chest. The contract calls for the Company to deliver a total of 500 ounces of gold to the purchasers with quarterly payments equivalent to $25,000 in ounces starting February 1, 2017 until all other investors in forward gold contracts are paid in full at which time the quarterly payments will increase to the equivalent of $75,000 in ounces until the remaining balance is paid in full as gold is produced from the Golden Chest Mine and New Jersey Mill. During the first nine months of 2017, the Company paid the equivalent of 60.5 gold ounces to Ophir. At September 30, 2017, future gold deliveries are 439.5 ounces due. On July 29, 2016, the Company entered into forward gold contracts through GVC Capital LLC (GVC) 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. During the first nine months of 2017, the Company paid the equivalent of 337.5 gold ounces to GVC. At September 30, 2017, future gold deliveries are 113 ounces due in the remainder of 2017 and 339 ounces due 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 based on average gold prices for the applicable quarter. The contracts are accounted for as derivatives requiring their value to be adjusted to fair value each period end. The change in balance for the forward gold contracts for the nine months ended September 30, 2017 and 2016 is as follows: 2017 2016 Beginning balance $ 1,386,228 - Proceeds from contracts - $ 1,240,306 Payments: In cash (270,755) - In gold purchased by the Company (232,037) - Change in fair value 218,461 466,783 Ending balance 1,101,897 1,707,089 Current 649,411 887,943 Long term $ 452,486 $ 819,146 The fair value was calculated using the market approach with Level 2 inputs for forward gold contract rates and a discount rate of 10%. |
12. Asset Retirement Obligation
12. Asset Retirement Obligation | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
12. Asset Retirement Obligation | 12. 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 are operations. Activity for the nine months ended September 30, 2017 and the year ended December 31, 2016 is as follows: Nine Months Ended Year Ended September 30, 2017 December 31, 2016 Balance at beginning of period $ 72,218 $ 28,656 Accretion expense 6,327 5,291 Incurred on Golden Chest mining operations 23,597 38,271 Balance at end of period $ 102,142 $ 72,218 During 2016, the Company established an asset requirement obligation for its Golden Chest mine. At September 30, 2017, management estimated that the cost to reclaim the property based upon disturbance to be $70,087. 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. |
13. Subsequent Events
13. Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Notes | |
13. Subsequent Events | 13. Subsequent Events In October 2017, the Company completed a private placement consisting of a total of 1,291,667 units sold at a price of $0.24 per unit, which resulted in gross proceeds to the Company of $250,000 and a debt reduction of $60,000. No commissions will be paid on the sale. Each unit consisted of two shares of the Companys common stock and one common stock purchase warrant exercisable at a price of $0.20 for a period of 36 months (ending October 20, 2020). H&H Metals Corp. purchased 1,041,667 units, comprised of 2,083,334 shares and 1,041,667 warrants, for a total of $250,000. John Swallow converted $60,000 of debt owed to him and was issued 250,000 units comprised of 500,000 shares and 250,000 warrants. In total, the Company issued an aggregate of 1,291,667 units, comprised of 2,583,334 common shares and 1,291,667 warrants. In October 2017, the Company utilized proceeds of the private placement to pay the remaining debt due on the Golden Chest property of $250,000. |
1. The Company and Significan19
1. The Company and Significant Accounting Policies: Principles of Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Principles of Consolidation | Principles of Consolidation At September 30, 2017 and December 31, 2016, the consolidated balance sheet includes the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV). The consolidated statements of operations and cash flows for the period ended September 30, 2017 includes the same companies. 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. |
1. The Company and Significan20
1. The Company and Significant Accounting Policies: Revenue Recognition (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
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. Revenues from mill operations and custom milling are recognized in the period in which the milling is completed, concentrates are shipped, and collection of payment is deemed probable. |
1. The Company and Significan21
1. The Company and Significant Accounting Policies: Pre-development Activities (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Pre-development Activities | Pre-Development Activities Pre-development activities involve cost incurred that may ultimately benefit production, such as underground ramp development, pumping, and open pit development, which are expensed due to the lack of evidence of economic development, which is necessary to demonstrate future recoverability of these expenses. These costs are charged to operations as incurred. |
1. The Company and Significan22
1. The Company and Significant Accounting Policies: Inventory, Policy (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Inventory, Policy | Inventory Inventory is stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. |
1. The Company and Significan23
1. The Company and Significant Accounting Policies: Fair Value Measurements (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Fair Value Measurements | Fair Value 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. At September 30, 2017 and December 31, 2016, the Company determined fair value on a recurring basis as follows: September 30, 2017 December 31, 2016 Fair Value Hierarchy Forward gold contracts-liability (Note 11) $ 1,101,897 $ 1,386,228 2 |
1. The Company and Significan24
1. The Company and Significant Accounting Policies: Concentration (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Concentration | Concentration During the fourth quarter 2016 and through the nine months ended September 30, 2017, the Company has sold all of its gold concentrate product to a concentrate broker, H&H Metals Corp. |
1. The Company and Significan25
1. The Company and Significant Accounting Policies: Reclassifications (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Policies | |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the 2017 financial statement presentation. Reclassifications had no effect on net loss, stockholders equity, or cash flows as previously reported. |
1. The Company and Significan26
1. The Company and Significant Accounting Policies: Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | September 30, 2017 December 31, 2016 Fair Value Hierarchy Forward gold contracts-liability (Note 11) $ 1,101,897 $ 1,386,228 2 |
3. Related Party Notes Payable_
3. Related Party Notes Payable: Schedule of Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Related Party Transactions | September 30, 2017 December 31, 2016 Mine Systems Design (MSD), a company in which our Companys Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through October 2018 $ 80,729 $ 115,868 John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $416,295 in February 2019 465,446 520,010 John Swallow, Company president, 5% interest, principal and interest due February 2019 245,516 341,250 Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2018 100,000 100,000 891,691 1,077,128 Accrued interest payable 14,054 4,167 Total 905,745 1,081,295 Current portion 207,760 567,580 Long term portion $ 697,985 $ 513,715 |
3. Related Party Notes Payabl28
3. Related Party Notes Payable: Related Party interest expense (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Related Party interest expense | September 30, 2017 September 30, 2016 3 months 9 months 3 months 9 months $ 13,001 $ 41,970 $ 16,806 $ 45,770 |
4. Joint Ventures_ Schedule of
4. Joint Ventures: Schedule of percentage ownership and method of accounting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of percentage ownership and method of accounting | September 30, 2017 December 31, 2016 Joint Venture % Ownership Significant Influence? Accounting Method % Ownership Significant Influence? Accounting Method New Jersey Mill Joint Venture(NJMJV) 65% Yes Consolidated 65% Yes Consolidated Butte Highlands Joint Venture (BHJV) 50% No Cost 50% No Cost |
4. Joint Ventures_ Schedule o30
4. Joint Ventures: Schedule of change in non-controlling interest (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of change in non-controlling interest | Balance December 31, 2016 $ 3,142,312 Contribution from non-controlling interest 22,630 Net loss attributable to non-controlling interest (43,107) Balance September 30, 2017 $ 3,121,835 |
6. Property, Plant, and Equip31
6. Property, Plant, and Equipment: Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Property, Plant and Equipment | September 30, 2017 December 31, 2016 Mill Mill land $ 225,289 $ 225,289 Mill building 536,193 536,193 Milling equipment 4,192,940 4,192,940 4,954,422 4,954,422 Less accumulated depreciation (391,895) (307,302) Total mill 4,562,527 4,647,120 Building and equipment at cost 612,155 434,897 Less accumulated depreciation (234,446) (223,264) Total building and equipment 377,709 211,633 Land Bear Creek 266,934 266,934 Little Baldy 47,139 62,139 BOW 230,449 230,449 Eastern Star 250,817 250,817 Gillig 79,137 79,137 Highwater 40,133 40,133 Total Land 914,609 929,609 Total $ 5,854,845 $ 5,788,362 |
7. Mineral Properties_ Schedule
7. Mineral Properties: Schedule of mineral properties (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of mineral properties | September 30, 2017 December 31, 2016 New Jersey $ 215,127 $ 215,127 McKinley 250,000 250,000 Golden Chest 1,649,142 1,586,324 Toboggan 5,000 5,000 Less accumulated amortization (14,363) (9,551) Total $ 2,104,906 $ 2,046,900 |
8. Notes Payable_ Schedule of D
8. Notes Payable: Schedule of Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Debt | September 30, 2017 December 31, 2016 Property with shop 36 month note payable, 4.91% interest rate payable monthly, remaining principal of note due in one payment at end of term in June 2019, monthly payments of $474 $ 36,413 $ 39,021 Property 120 month note payable, 11.0% interest rate payable monthly, remaining principal of note due in one payment at end of term in March 2021, collateralized by property, monthly payments of $1,122 93,083 98,559 Tailings pump, 35 month note payable, 17.5% interest rate payable monthly through May of 2018, monthly payments of $3,268, collateralized by equipment 23,542 48,035 Haul Truck, 20 month note payable, 10.0% interest rate payable monthly through May of 2019, monthly payments of 6,020, collateralized by equipment 112,500 750,000 Mineral property, 10 quarterly payments, 0.0% interest rate discounted at 10%, collateralized by property, quarterly payments of $125,000 through May of 2018 250,000 935,615 Total notes payable 515,538 664,787 Due within one year 344,877 270,828 Due after one year $ 170,661 $ 39,021 |
8. Notes Payable_ Schedule of M
8. Notes Payable: Schedule of Maturities of Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Maturities of Long-term Debt | Note Discount Net 1 year $ 344,877 $ (9,072) $ 335,805 2 years 84,818 - 84,818 3 years 4,260 - 4,260 4 years 81,583 - 81,583 Total $ 515,538 $ (9,072) $ 506,466 |
9. Stockholders' Equity_ Schedu
9. Stockholders' Equity: Schedule of Stockholders' Equity Note, Warrants or Rights (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Stockholders' Equity Note, Warrants or Rights | Number of Warrants Exercise Prices 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 Expired (9,000,000) (0.15-0.20) Issued in connection with private placement 5,850,000 0.20 Balance September 30, 2017 7,587,500 0.10-0.20 |
9. Stockholders' Equity_ Warran
9. Stockholders' Equity: Warrant Expirations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Warrant Expirations | Shares Exercise Price Expiration Date 1,200,000 $0.10 August 11, 2019 2,137,500 $0.20 February 28, 2020 4,250,000 $0.20 April 30, 2020 |
10. Stock Options_ Share-based
10. Stock Options: Share-based Compensation, Stock Options, Activity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Share-based Compensation, Stock Options, Activity | Number of Options Exercise Prices Balance January 1, 2016 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 Expired (500,000) 0.10 Issued 400,000 0.15 Balance September 30, 2017 7,400,000 $ 0.10-0.15 Exercisable at September 30, 2017 5,475,000 $ 0.10-0.15 |
11. Forward Gold Contracts_ Sch
11. Forward Gold Contracts: Schedule of Options Indexed to Issuer's Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Options Indexed to Issuer's Equity | 2017 2016 Beginning balance $ 1,386,228 - Proceeds from contracts - $ 1,240,306 Payments: In cash (270,755) - In gold purchased by the Company (232,037) - Change in fair value 218,461 466,783 Ending balance 1,101,897 1,707,089 Current 649,411 887,943 Long term $ 452,486 $ 819,146 |
12. Asset Retirement Obligati39
12. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Tables/Schedules | |
Schedule of Asset Retirement Obligations | Nine Months Ended Year Ended September 30, 2017 December 31, 2016 Balance at beginning of period $ 72,218 $ 28,656 Accretion expense 6,327 5,291 Incurred on Golden Chest mining operations 23,597 38,271 Balance at end of period $ 102,142 $ 72,218 |
1. The Company and Significan40
1. The Company and Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Details | |
Basis of Accounting | These unaudited interim consolidated financial statements have been prepared by the management of New Jersey Mining Company (the Company) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Companys management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim consolidated financial statements have been included. The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's financial position and results of operations. Operating results for the three and nine month periods ended September 30, 2017 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2017. |
1. The Company and Significan41
1. The Company and Significant Accounting Policies: Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 |
Details | |||
Liabilities, Fair Value Disclosure, Recurring | $ 1,101,897 | $ 1,386,228 | $ 1,707,089 |
2. Going Concern (Details)
2. Going Concern (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||
Net cash provided (used) by operating activities | $ 231,785 | $ (453,716) |
3. Related Party Notes Payabl43
3. Related Party Notes Payable: Schedule of Related Party Transactions (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Notes Payable, Related Parties | $ 905,745 | $ 1,081,295 |
Notes and interest payable related parties, current portion | 207,760 | 567,580 |
Notes and interest payable related parties, long term | $ 697,985 | $ 513,715 |
3. Related Party Notes Payabl44
3. Related Party Notes Payable: Related Party interest expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Details | ||||
Interest Expense, Related Party | $ 13,001 | $ 16,806 | $ 41,970 | $ 45,770 |
3. Related Party Notes Payable
3. Related Party Notes Payable (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Details | |
Common stock and warrant units issued to related party | shares | 1,000,000 |
Common stock and warrant units issued to related party, value | shares | 100,000 |
Principal repaid | $ | $ 95,734 |
Interest repaid | $ | $ 4,266 |
4. Joint Ventures_ Schedule o46
4. Joint Ventures: Schedule of percentage ownership and method of accounting (Details) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Investment Owned, Percent of Net Assets | 65.00% | 65.00% |
Investment owned percentage of net assets 2 | 50.00% | 50.00% |
4. Joint Ventures (Details)
4. Joint Ventures (Details) - USD ($) | Jan. 29, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Details | |||
Joint venture receivables, detail of accounts receivable | $ 7,727 | $ 2,888 | |
Payments for Purchase of Other Assets | $ 225,000 | ||
Stock Issued During Period, Shares, Purchase of Assets | 3,000,000 | ||
Stock Issued During Period, Value, Purchase of Assets | $ 210,000 | ||
Investment in joint venture | $ 435,000 | $ 435,000 | $ 435,000 |
4. Joint Ventures_ Schedule o48
4. Joint Ventures: Schedule of change in non-controlling interest (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Details | |||||
Non-controlling interests | $ 3,121,835 | $ 3,121,835 | $ 3,142,312 | ||
Proceeds from contributions from noncontrolling interest | 22,630 | 22,630 | |||
Net income (loss) attributable to non-controlling interest | $ (15,799) | $ 9,702 | $ (43,107) | $ 23,311 |
5. Earnings per Share (Details)
5. Earnings per Share (Details) - shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Details | ||
Incremental Common Shares Attributable to Dilutive Effect of Written Put Options | 2,750,000 | 3,250,000 |
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 1,200,000 | 1,200,000 |
Incremental common shares attributable to written put options excluded from dilutive earnings | 2,725,000 | |
Incremental common shares attributable to call options and warrants excluded from dilutive earnings | 6,387,500 |
6. Property, Plant, and Equip50
6. Property, Plant, and Equipment: Property, Plant and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Mill land | $ 225,289 | $ 225,289 |
Mill building | 536,193 | 536,193 |
Milling equipment | 4,192,940 | 4,192,940 |
Mill buildings and improvements, accumulated depreciation | (391,895) | (307,302) |
Mill Buildings and Improvements, Net | 4,562,527 | 4,647,120 |
Buildings and Improvements, Gross | 612,155 | 434,897 |
Buildings and improvements, accumulated depreciation | (234,446) | (223,264) |
Buildings and improvements net | 377,709 | 211,633 |
Bear Creek Land | 266,934 | 266,934 |
Little Baldy Land | 47,139 | 62,139 |
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 | 914,609 | 929,609 |
Property, plant and equipment, net of accumulated depreciation | $ 5,854,845 | $ 5,788,362 |
7. Mineral Properties_ Schedu51
7. Mineral Properties: Schedule of mineral properties (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Mineral Properties 1 | $ 215,127 | $ 215,127 |
Mineral Properties 2 | 250,000 | 250,000 |
Mineral Properties 3 | 1,649,142 | 1,586,324 |
Mineral Properties 4 | 5,000 | 5,000 |
Mineral properties net | $ 2,104,906 | $ 2,046,900 |
8. Notes Payable_ Schedule of52
8. Notes Payable: Schedule of Debt (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Details | ||
Note payable, property | $ 170,661 | $ 39,021 |
Note payable, property | 93,083 | 98,559 |
Note payable, equipment | 23,542 | 48,035 |
Note payable, mineral property | 112,500 | 750,000 |
Long-term Debt | 515,538 | 935,615 |
Notes Payable, Current | 515,538 | 664,787 |
Notes and Loans, Noncurrent | $ 344,877 | $ 270,828 |
8. Notes Payable_ Schedule of53
8. Notes Payable: Schedule of Maturities of Long-term Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Details | ||
Note payable maturity 2017 | $ 344,877 | |
Note payable maturity 2017, discount | (9,072) | |
Note payable maturity 2017, net | 335,805 | |
Note payable maturity 2018 | 84,818 | |
Note payable maturity 2018, net | 84,818 | |
Note payable maturity 2019 | 4,260 | |
Note payable maturity 2019, net | 4,260 | |
Note payable maturity 2020 | 81,583 | |
Note payable maturity 2020, net | 81,583 | |
Long-term Debt | 515,538 | $ 935,615 |
Note payable maturity, discount | (9,072) | |
Notes payable net | $ 506,466 |
9. Stockholders' Equity (Detail
9. Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Private placement one | |
Description of private placement | 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 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 the first quarter of 2017 an 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. |
Private placement two | |
Description of private placement | The Company offered an additional private placement in March of 2017. The private placement was for 4,250,000 units, each unit 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 April 2020. No commission was paid with this private placement. Proceeds were $750,000 in cash and a $100,000 payment on a note and interest payable to the Company’s president, John Swallow. The Company’s concentrate broker, H&H Metals Corp., who purchases all of the Company’s gold concentrate product, participated in this private placement purchasing 1,250,000 units for $250,000. |
9. Stockholders' Equity_ Sche55
9. Stockholders' Equity: Schedule of Stockholders' Equity Note, Warrants or Rights (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Details | |||
Class of Warrant or Right, Outstanding | 7,587,500 | 10,737,500 | 10,200,000 |
Warrants issued in private placement | 5,850,000 | 537,500 | |
Warrants expired | (9,000,000) |
9. Stockholders' Equity_ Warr56
9. Stockholders' Equity: Warrant Expirations (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Details | |
Warrants issued | 1,200,000 |
Warrants issued, exercise price | 0.10 |
Warrant Expiration Date | August 11, 2019 |
Warrants issued | 2,137,500 |
Warrants issued, exercise price | 0.20 |
Warrant Expiration Date | February 28, 2020 |
Warrants issued | 4,250,000 |
Warrants issued, exercise price | 0.20 |
Warrant Expiration Date | April 30, 2020 |
10. Stock Options (Details)
10. Stock Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2016 | Sep. 30, 2017 | |
Details | ||
Stock options issued to management | 2,750,000 | |
Stock options issued to management Value | 268,032 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 192,500 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 2 years 6 months |
10. Stock Options_ Share-base58
10. Stock Options: Share-based Compensation, Stock Options, Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 7,400,000 | 7,500,000 | 5,750,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ (500,000) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 400,000 | 2,750,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period | (500,000) | (500,000) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 5,475,000 |
11. Forward Gold Contracts (Det
11. Forward Gold Contracts (Details) | 9 Months Ended |
Sep. 30, 2017 | |
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 ('Ophir'), 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 contract calls for the Company to deliver a total of 500 ounces of gold to the purchasers with quarterly payments equivalent to $25,000 in ounces starting February 1, 2017 until all other investors in forward gold contracts are paid in full at which time the quarterly payments will increase to the equivalent of $75,000 in ounces until the remaining balance is paid in full as gold is produced from the Golden Chest Mine and New Jersey Mill. During the first nine months of 2017, the Company paid the equivalent of 60.5 gold ounces to Ophir. At September 30, 2017, future gold deliveries are 439.5 ounces due. |
GVC Capital | |
Option Indexed to Issuer's Equity, Settlement Alternatives | On July 29, 2016, the Company entered into forward gold contracts through GVC Capital LLC (“GVC”) for net proceeds of $772,806 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 904 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. During the first nine months of 2017, the Company paid the equivalent of 337.5 gold ounces to GVC. At September 30, 2017, future gold deliveries are 113 ounces due in the remainder of 2017 and 339 ounces due in 2018. The gold to be delivered does not need to be produced from the Golden Chest property. In addition, the counterparties can request cash payment instead of gold ounces for each quarterly payment. The cash payments are based on average gold prices for the applicable quarter. The contracts are accounted for as derivatives requiring their value to be adjusted to fair value each period end. |
11. Forward Gold Contracts_ S60
11. Forward Gold Contracts: Schedule of Options Indexed to Issuer's Equity (Details) - USD ($) | Sep. 30, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
Details | |||
Liabilities, Fair Value Disclosure, Recurring | $ 1,707,089 | $ 1,101,897 | $ 1,386,228 |
Proceeds from contracts | 70,087 | ||
Payments on forward gold contracts in cash | (270,755) | ||
Payments in gold purchased by the Company | (232,037) | ||
Change in fair value of forward gold contracts | 466,783 | 218,461 | |
Liabilities, Fair Value Disclosure, Recurring | 1,707,089 | 1,101,897 | 1,386,228 |
Forward gold contracts, current portion | 887,943 | 649,411 | 845,198 |
Forward gold contracts, long term | $ 819,146 | $ 452,486 | $ 541,030 |
12. Asset Retirement Obligati61
12. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Details | |||
Asset retirement obligation | $ 102,142 | $ 72,218 | $ 28,656 |
Asset retirement obligation | 102,142 | 72,218 | $ 28,656 |
Asset Retirement Obligation, Period Increase (Decrease) | 6,327 | 5,291 | |
Asset Retirement Obligation, Liabilities Incurred | $ 23,597 | $ 38,271 |
12. Asset Retirement Obligati62
12. Asset Retirement Obligation (Details) | Sep. 30, 2016USD ($) |
Details | |
Proceeds from contracts | $ 70,087 |
13. Subsequent Events (Details)
13. Subsequent Events (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Private placement | |
Subsequent Event, Description | In October 2017, the Company completed a private placement consisting of a total of 1,291,667 units sold at a price of $0.24 per unit, which resulted in gross proceeds to the Company of $250,000 and a debt reduction of $60,000. No commissions will be paid on the sale. Each unit consisted of two shares of the Company’s common stock and one common stock purchase warrant exercisable at a price of $0.20 for a period of 36 months (ending October 20, 2020). H&H Metals Corp. purchased 1,041,667 units, comprised of 2,083,334 shares and 1,041,667 warrants, for a total of $250,000. John Swallow converted $60,000 of debt owed to him and was issued 250,000 units comprised of 500,000 shares and 250,000 warrants. In total, the Company issued an aggregate of 1,291,667 units, comprised of 2,583,334 common shares and 1,291,667 warrants. |
Debt paid | |
Subsequent Event, Description | In October 2017, the Company utilized proceeds of the private placement to pay the remaining debt due on the Golden Chest property of $250,000. |