Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 01, 2018 | |
Document and Entity Information: | ||
Entity Registrant Name | New Jersey Mining Company | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
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 | 122,510,282 | |
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 | 2,018 | |
Document Fiscal Period Focus | Q2 |
New Jersey Mining Company Conso
New Jersey Mining Company Consolidated Balance Sheets (Interim period unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | |
Current assets: | |||
Cash and cash equivalents | $ 1,301,521 | $ 124,617 | |
Note receivable, current portion | 200,000 | ||
Gold sales receivable | 36,465 | 307,796 | |
Inventories | 162,410 | 245,154 | |
Joint venture receivable | 4,109 | 4,682 | |
Other current assets | 103,175 | 102,361 | |
Total current assets | 1,807,680 | 784,610 | |
Note receivable, non-current | 50,000 | ||
Property, plant and equipment, net of accumulated depreciation | 6,431,785 | 5,890,961 | |
Mineral properties, net of accumulated amortization | 3,221,974 | 2,135,956 | |
Investment in joint venture | 435,000 | 435,000 | |
Reclamation bond | 103,320 | 103,320 | |
Deposit on equipment | 10,330 | 30,000 | |
Total assets | 12,060,089 | 9,379,847 | |
Current liabilities: | |||
Accounts payable and other accrued liabilities | 359,714 | 363,810 | |
Accrued payroll and related payroll expenses | 60,596 | 40,710 | |
Notes and interest payable related parties, current portion | 74,222 | 211,829 | |
Notes payable, current portion | 240,696 | 95,988 | |
Due on mineral property purchase, current portion, net of discount | [1] | 89,980 | |
Forward gold contracts, current portion | [2] | 137,283 | 568,609 |
Total current liabilities | 962,491 | 1,280,946 | |
Asset retirement obligation | 139,338 | 121,560 | |
Notes and interest payable related parties, long term | 205,930 | 601,082 | |
Notes payable, long term | 295,738 | 176,802 | |
Due on mineral property purchase, long term, net of discount | 503,274 | ||
Forward gold contracts, long term | [2] | 351,970 | |
Total long term liabilities | 1,144,280 | 1,251,414 | |
Total liabilities | 2,106,771 | 2,532,360 | |
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; June 30, 2018-122,510,282 shares and December 31, 2017-112,310,372 shares issued and outstanding | 17,354,756 | 15,985,512 | |
Accumulated deficit | (10,497,572) | (12,250,319) | |
Total New Jersey Mining Company stockholders' equity | 6,857,184 | 3,735,193 | |
Non-controlling interest | 3,096,134 | 3,112,294 | |
Total stockholders' equity | 9,953,318 | 6,847,487 | |
Total liabilities and stockholders' equity | $ 12,060,089 | $ 9,379,847 | |
[1] | Note 8 | ||
[2] | Note 12 |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
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 | 122,510,282 | 112,310,372 |
Common Stock, Shares Outstanding | 122,510,282 | 112,310,372 |
New Jersey Mining Company Cons4
New Jersey Mining Company Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue: | ||||
Gold sales | $ 489,555 | $ 1,262,690 | $ 1,590,946 | $ 1,952,008 |
Total revenue | 489,555 | 1,262,690 | 1,590,946 | 1,952,008 |
Costs of Sales: | ||||
Cost of sales and other direct production costs | 1,026,459 | 803,949 | 2,052,178 | 1,304,353 |
Depreciation and amortization | 76,504 | 32,711 | 145,564 | 59,991 |
Total costs of sales | 1,102,963 | 836,660 | 2,197,742 | 1,364,344 |
Gross profit (loss) | (613,408) | 426,030 | (606,796) | 587,664 |
Other operating expenses (income): | ||||
Exploration | 109,038 | 17,550 | 208,270 | 35,980 |
Gain on sale of mineral property | (2,947,862) | (2,947,862) | ||
Management | 47,178 | 37,550 | 68,980 | 92,639 |
Professional services | 35,057 | 32,889 | 101,633 | 98,522 |
General and administrative | 134,615 | 61,722 | 185,697 | 141,481 |
Total other operating expenses (income) | (2,621,974) | 209,417 | (2,383,282) | 467,956 |
Operating income | 2,008,566 | 216,613 | 1,776,486 | 119,708 |
Other (income) expense: | ||||
Timber expense | 5,231 | 5,304 | ||
Interest income | (396) | (102) | (1,992) | (859) |
Interest expense | 22,116 | 16,948 | 47,460 | 37,173 |
Change in fair value of forward gold contracts | (2,131) | (1,618) | 7,887 | 141,596 |
Amortization of discount on note payable | 11,756 | 26,274 | ||
Total other (income) expense | 19,589 | 32,215 | 53,355 | 209,488 |
Net income (loss) | 1,988,977 | 184,398 | 1,723,131 | (89,780) |
Net loss attributable to non-controlling interest | (17,009) | (16,274) | (29,616) | (27,307) |
Net income (loss) attributable to New Jersey Mining Company | $ 2,005,986 | $ 200,672 | $ 1,752,747 | $ (62,473) |
Net income per common share-basic and diluted | $ 0.02 | $ 0 | $ 0.01 | $ 0 |
Weighted average common shares outstanding-basic | 121,699,503 | 108,893,704 | 117,382,967 | 104,893,704 |
Weighted average common shares outstanding-diluted | 123,924,436 | 109,698,060 | 119,430,274 | 104,893,704 |
New Jersey Mining Company Cons5
New Jersey Mining Company Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,723,131 | $ (89,780) |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: | ||
Depreciation and amortization | 145,564 | 59,991 |
Amortization of discount on note payable | 26,274 | |
Accretion of asset retirement obligation | 7,007 | 3,988 |
Stock based compensation | 27,140 | 73,137 |
Change in fair value of forward gold contracts | 7,887 | 141,596 |
Gain on sale of mineral property | (2,947,862) | |
Change in operating assets and liabilities: | ||
Milling receivables | 10,500 | |
Gold sales receivable | 271,331 | (183,236) |
Inventories | 82,744 | 209 |
Joint venture receivable | 573 | (4,718) |
Other current assets | (814) | 2,328 |
Accounts payable and other accrued liabilities | (4,096) | (34,749) |
Accrued payroll and related payroll expenses | 19,886 | (4,752) |
Interest payable to related parties | (10,772) | 9,835 |
Net cash provided (used) by operating activities | (678,281) | 10,623 |
Cash flows from investing activities: | ||
Issuance of note receivable | (250,000) | (250,000) |
Proceeds from sale of mineral property | 3,000,000 | |
Purchases of property, plant and equipment | (242,603) | (67,275) |
Purchase of mineral property | (257,619) | (5,125) |
Deposit on equipment | (10,330) | |
Purchase of reclamation bond | (45,320) | |
Net cash provided (used) by investing activities | 2,239,448 | (117,720) |
Cash flows from financing activities: | ||
Sales of common stock and warrants, net of issuance costs | 1,107,571 | 1,041,000 |
Proceeds from exercise of stock options | 1,200 | |
Payments on forward gold contracts | (126,287) | (175,828) |
Gold purchased for payments on forward gold contracts | (172,113) | (157,887) |
Principal payments on notes payable | (193,320) | (396,192) |
Principal payments on notes payable, related parties | (1,014,770) | (53,657) |
Contributions from non-controlling interest | 13,456 | 14,903 |
Net cash provided (used) by financing activities | (384,263) | 272,339 |
Net change in cash and cash equivalents | 1,176,904 | 165,242 |
Cash and cash equivalents, beginning of period | 124,617 | 154,833 |
Cash and cash equivalents, end of period | 1,301,521 | 320,075 |
Non-cash investing and financing activities: | ||
Deposit on equipment applied to purchase of equipment | 30,000 | |
Equipment purchases financed with notes payable | 456,964 | |
Forward gold contract exchanged for note payable, related party | 492,783 | |
Mineral property acquired with payable and shares of common stock | $ 826,587 | $ 100,000 |
1. The Company and Significant
1. The Company and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
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 six month periods ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018. For further information refer to the financial statements and footnotes thereto in the Companys audited financial statements for the year ended December 31, 2017 as filed with the Securities and Exchange Commission. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV). 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. Inventories Inventories are 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 that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At June 30, 2018 and December 31, 2017, the Company determined fair value on a recurring basis as follows: Liabilities June 30, 2018 December 31, 2017 Fair Value Hierarchy Forward gold contracts (Note 12) $ 137,283 $ 920,579 2 Reclassifications Certain prior period amounts have been reclassified to conform to the 2018 financial statement presentation. Reclassifications had no effect on net loss, stockholders equity, or cash flows as previously reported. New Accounting Pronouncement In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. We adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospective transition approach. We performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it did not change the timing of revenue recognition or amounts of revenue recognized compared to how we recognized revenue under our previous policies. Adoption of ASU No. 2014-09 requires additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. See Note 3 for information on our sales of products. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the potential 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. Adoption of the update on January 1, 2018 had no impact on the consolidated financial statements In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Adoption of the update on January 1, 2018 had no impact 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. Inventories
2. Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
2. Inventories | 2. Inventories At June 30, 2018 and December 31, 2017, the Companys inventories consisted of the following: June 30, 2018 December 31, 2017 Gold concentrate $ 142,748 $ 219,660 Materials and supplies 19,662 25,494 Total $ 162,410 $ 245,154 At June 30, 2018, gold concentrate inventory is carried at estimated net realizable value based on current metal prices as it was lower than allocated production costs. |
3. Sales of Products
3. Sales of Products | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
3. Sales of Products | 3. Sales of Products Our products consist of both gold floatation concentrates which we sell to a broker (H&H Metal), and an unrefined gold-silver product known as doré which we sell to a precious metal refinery. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer, and the transaction price can be determined or reasonably estimated. For gold flotation concentrate sales, the performance obligation is met when the transaction price can be reasonably estimated and revenue is recognized generally at the time when risk is transferred to H&H Metal based on contractual terms. Based on contractual terms, we have determined the performance obligation is met and title is transferred to H&H Metal when the Company receives its first provisional payment on the concentrate because, at that time, 1) legal title is transferred to the customer, 2) the customer has accepted the concentrate lot and obtained the ability to realize all of the benefits from the product, 3) the concentrate content specifications are known, have been communicated to H&H Metal, and H&H Metal has the significant risks and rewards of ownership to it, 4) it is very unlikely a concentrate will be rejected by H&H Metal upon physical receipt, and 5) we have the right to payment for the concentrate. Concentrates lots that have been sold are held at our mill from 30 to 60 days, until H&H Metal provides shipping instructions. Judgment is required in identifying the performance obligations for our concentrate sales. We have determined that the individual performance obligation is satisfied at a point in time when control of the concentrate is transferred to H&H Metal which is when H&H Metal pays us the first provisional payment on the concentrate based on contractual terms. Our concentrate sales sometimes involve variable consideration, as they can be subject to changes in metals prices between the time of shipment and their final settlement. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the estimated month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement for financial reporting purposes. Also, it is unlikely a significant reversal of revenue for any one concentrate lot will occur. As such, we use the expected value method to price the concentrate until the final settlement date occurs, at which time the final transaction price is known. At June 30, 2018, metals contained in concentrates and exposed to future price changes totaled 1,398 ounces of gold. Sales and accounts receivable for concentrate shipments are recorded net of charges for treatment and other charges negotiated by us with H&H Metal, which represent components of the transaction price. Charges are estimated by us upon transfer of risk of the concentrates based on contractual terms, and actual charges typically do not vary materially from our estimates. Costs charged by the customer include fixed treatment, refining and costs per ton of concentrate and may include penalty charges for lead and zinc content above a negotiated baseline as well as excessive moisture. For sales of metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer. For sales of doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of title and control of the doré containing the agreed-upon metal quantities to the customer. Sales of products by metal for the three and six month periods ended June 30, 2018 and 2017 were as follows: June 30, 2018 June 30, 2017 Three Months Six Months Three Months Six Months Gold $ 576,713 $ 1,783,134 $ 1,320,966 $ 2,048,474 Silver 4,011 7,985 7,720 11,305 Less: Smelter and refining charges (91,169) (200,173) (65,996) (107,771) Total $ 489,555 $ 1,590,946 $ 1,262,690 $ 1,952,008 Sales by significant product type for the three and six month periods ended June 30, 2018 and 2017 were as follows: June 30, 2018 June 30, 2017 Three Months Six Months Three Months Six Months Concentrate sales to H&H Metal $ 456,553 $ 1,280,582 $ 1,262,690 $ 1,952,008 Dore sales to refinery 33,002 310,364 - - Total $ 489,555 $ 1,590,946 $ 1,262,690 $ 1,952,008 At June 30, 2018 and December 31, 2017, our trade accounts receivable balance related to contracts with customers of $36,465 and $307,796, respectively, consist only of amounts due from H&H Metal. There is no allowance for doubtful accounts. At June 30, 2018, the Company has a payable due to H&H Metal of $42,110 for final settlement of gold concentrate sales which is a result of recoveries being less than originally invoiced. The payable is included in accounts payable and accrued liabilities on the consolidated balance sheet. We have determined our contracts do not include a significant financing component. For doré sales, payment is received at the time the performance obligation is satisfied. Consideration for concentrate sales is variable, and we receive payment for a significant portion of the estimated value of concentrate parcels at the time the performance obligation is satisfied. We do not incur significant costs to obtain contracts, nor costs to fulfill contracts which are not addressed by other standards. Therefore, we have not recognized an asset for such costs as of June 30, 2018 or December 31, 2017. |
4. Related Party Notes Payable
4. Related Party Notes Payable | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
4. Related Party Notes Payable | 4. Related Party Notes Payable At June 30, 2018 and December 31, 2017, the Company had the following notes and interest payable to related parties: June 30, 2018 December 31, 2017 Mine Systems Design (MSD), a company in which our Companys Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through March 2019 $ 42,297 $ 68,299 John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $322,367 in February 2020; paid in full in May 2018 - 441,163 John Swallow, Company president, 5% interest, principal and interest due February 2020; paid in full in May 2018 - 192,677 Ophir Holdings LLC, a company owned by three of the Companys Officers, 6% interest, monthly payments of $3,777 with a balloon payment of $183,559 in February 2020 237,855 - Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2019; paid in full in May 2018 - 100,000 280,152 802,139 Accrued interest payable - 10,772 Total 280,152 812,911 Current portion 74,222 211,829 Long term portion $ 205,930 $ 601,082 Related party interest expense for the three and six month periods ended June 30, 2018 and 2017 is as follows: 2018 2017 Three Months Six Months Three Months Six Months $ 13,478 $ 31,828 $ 13,635 $ 28,968 Future principal payments of related party notes payable at June 30, 2018 are as follows: 12 months ended June 30, 2019 $ 74,222 2020 205,930 Total $ 280,152 On January 1, 2018 Ophir Holdings agreed to convert their Forward Gold Contract (Note 12) which at that time had an outstanding balance of 419.5 ounces with a fair value of $492,783 to a conventional note payable for the same amount. The note bears interest at 6% and has monthly principal and interest payments of $3,777 with a balloon payment of $454,733 in February 2020. In May 2018 an additional payment of $244,208 of the principal outstanding was paid to Ophir Holdings reducing the balloon payment to $183,559. On January 1, 2018, notes with Mr. Swallow were amended to extend the balloon payments on both notes to February 2020. In May 2018 both of these notes as well as accrued interest were paid in full. In May 2018, the note payable to Margaret Bathgate and its associated accrued interest was paid in full. |
5. Joint Ventures
5. Joint Ventures | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
5. Joint Ventures | 5. Joint Ventures New Jersey Mill Joint Venture Agreement The Company owns 65% of the New Jersey Mill Joint Venture and has significant influence in its operations. Thus the venture is included in the consolidated financial statements along with presentation of the non-controlling interest. At June 30, 2018 and December 31, 2017, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (Crescent), for $4,109 and $4,682, respectively, for shared operating costs as defined in the JV agreement. Crescents non-controlling interest in the JV changed during the three and six months ended June 30, 2018 and 2017 as follows: Six months ended June 30, 2018 2017 Beginning balance $ 3,112,294 $ 3,142,312 Contribution from non-controlling interest 13,456 14,903 Net loss attributable to non-controlling interest (29,616) (27,307) Ending balance $ 3,096,134 $ 3,129,908 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. |
6. Earnings Per Share
6. Earnings Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
6. Earnings Per Share | 6. Earnings per Share Basic and diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding basic and diluted, respectively. The calculation of the weighted average number of common shares outstanding diluted includes the following common stock equivalents: June 30, 2018 June 30, 2017 Three Months Six Months Three Months Six Months Stock options 7,321,665 7,491,141 3,250,000 - Stock purchase warrants 1,200,000 1,200,000 1,200,000 - Total 16,958,334 8,862,500 4,450,000 - For the six month period ending June 30, 2017, all outstanding stock options and warrants were excluded from the computation of diluted loss per share, because they were anti-dilutive. |
7. Property, Plant, and Equipme
7. Property, Plant, and Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
7. Property, Plant, and Equipment | 7. Property, Plant, and Equipment Property, plant and equipment at June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 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 (490,752) (428,760) Total mill 4,463,670 4,525,662 Building and equipment at cost 1,402,909 673,338 Less accumulated depreciation (302,264) (222,648) Total building and equipment 1,100,645 450,690 Land Bear Creek 266,934 266,934 Little Baldy - 47,139 BOW 230,449 230,449 Eastern Star 250,817 250,817 Gillig 79,137 79,137 Highwater 40,133 40,133 Total Land 867,470 914,609 Total $ 6,431,785 $ 5,890,961 |
8. Mineral Properties
8. Mineral Properties | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
8. Mineral Properties | 8. Mineral Properties Mineral properties at June 30, 2018 and December 31, 2017 consisted of the following: June 30, 2018 December 31, 2017 New Jersey $ 248,289 $ 248,289 McKinley 250,000 250,000 Golden Chest 1,667,092 1,649,142 Four Square 826,587 - Butte Potosi 250,440 - Toboggan - 5,000 Less accumulated amortization (20,434) (16,475) Total $ 3,221,974 $ 2,135,956 On March 2, 2018, the Company entered into an agreement with J-J Farms LLC and Achievement Holdings LLC (Four Square) to purchase a group of patented and unpatented mining claims. Per the agreement, future payments for the mineral property are as follows: · · Total purchase price is $826,587. A mineral purchase property payable was recorded representing the future payments of shares of common stock and cash which total $633,333 less discount of $40,079 which will be amortized over the term of the payment obligation. In the second quarter of 2018 the Company sold property including the Little Baldy and Toboggan to Hecla Mining for $3,000,000. This sale resulted in a net gain of $2,947,862 which was recognized in the second quarter of 2018 In the second quarter of 2018 the Company purchased the Butte Potosi property near its Golden Chest mine for $250,440 and a royalty deed to the sellers for a 2% net smelter return on all ores mined and shipped from the property. This property consist of patented mining claims some of which include both the surface and mineral rights and on some of which include only the mineral rights. |
9. Notes Payable
9. Notes Payable | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
9. Notes Payable | 9. Notes Payable At June 30, 2018 and December 31, 2017, notes payable are as follows: June 30, 2018 December 31, 2017 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 $459 $ 33,389 $ 35,416 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 $1,124; paid in full in May 2018 - 91,155 Tailings pump, 35 month note payable, 17.5% interest rate payable monthly through May of 2018, monthly payments of $3,268, collateralized by equipment - 14,641 Haul truck, 20 month note payable, 10.0% interest rate payable monthly through May of 2019, monthly payments of 6,020, collateralized by equipment 65,206 97,126 Compressor, 48 month note payable, 5.25% interest rate payable monthly through November 2021, monthly payments of $813, collateralized by equipment 31,749 34,452 Jumbo drill and 1 yrd. LHD, 12 month note payable, 8% interest rate payable monthly through January of 2019, monthly payments of $10,874, collateralized by equipment 74,125 - Atlas Copco loader, 60 month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550 165,925 - Caterpillar excavator and skid steer, 48 month note payable, 6.8% interest rate payable monthly through June 2022, monthly payments of $2,392 100,300 - 2018 pick-up, 72 month note payable, 9% interest rate payable monthly through June 2024, monthly payments of $701 38,740 - 2008 pick-up, 60 month note payable, 9% interest rate payable monthly through June 2023, monthly payments of $562 27,000 - Total notes payable 536,434 272,790 Due within one year 240,696 95,988 Due after one year $ 295,738 $ 176,802 Future principal payments of debt at June 30, 2018 are as follows: 12 months ended June 30, 2019 $ 240,696 2020 72,925 2021 79,335 2022 81,788 2023 53,899 2024 7,791 Total $ 536,434 |
10. Stockholders' Equity
10. Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
10. Stockholders' Equity | 10. Stockholders Equity The Company offered private placements in 2018. Under the private placements, the Company sold 8,858,577 units for net proceeds of $1,107,571. Each unit consisted of one share of the Companys stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Companys stock at $0.22 for 24 months. Stock Purchase Warrants Outstanding The activity in stock purchase warrants is as follows: Number of Warrants Exercise Prices Balance December 31, 2016 10,737,500 0.10-0.20 Issued in connection with private placements 7,558,334 0.20 Expired (9,000,000) 0.15-0.20 Balance December 31, 2017 9,295,834 $0.10-0.20 Issued in connection with private placement 4,429,289 0.22 Balance June 30, 2018 13,725,123 $0.10-0.22 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 March 28, 2020 1,708,334 $0.20 November 3, 2020 4,429,289 $0.22 March 30, 2020 13,725,123 - - |
11. Stock Options
11. Stock Options | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
11. Stock Options | 11. Stock Options In 2017, the Company granted a total of 662,500 options to consultants and employees of the Company. These options vest in 2018. The options had a fair value of $66,539 which is being recognized ratably over the vesting period. Compensation cost of $27,140 was recognized in the first half of 2018. The remaining unrecognized compensation cost of $14,881 is expected to be recognized in the remainder 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 December 31, 2016 7,500,000 0.10-0.15 Expired (500,000) 0.10 Issued 662,500 0.15-0.18 Balance December 31, 2017 7,662,500 0.10-0.18 Expired (500,000) 0.10 Exercised (8,000) 0.15 Balance June 30, 2018 7,154,500 0.10-0.18 Exercisable at June 30, 2018 6,892,000 $ 0.10-0.15 At June 30, 2018, outstanding stock options have a weighted average remaining term of two years and an intrinsic value of approximately $605,000. During the six months ended June 30, 2018, stock options for 8,000 shares of common stock with an exercise rate of $0.15 were exercised for total proceeds of $1,200. The intrinsic value of the options on the date of exercise was $640. |
12. Forward Gold Contracts
12. Forward Gold Contracts | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
12. Forward Gold Contracts | 12. 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 called 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. The equivalent of 80.5 ounces were delivered to Ophir Holdings in 2017. On January 1, 2018 Ophir agreed to convert their Forward Gold Contract which at that time had an outstanding balance of 419.5 ounces with a fair value of $492,783 to a conventional debt structure at 6% interest (see Note 4). 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. The December 1, 2016 payment, 4 payments in 2017, and two payment in 2018 were paid with an ounce equivalent of 793 ounces. At June 30, 2018, future gold deliveries of 111 ounces are due the remainder of 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 is as follows: Six months ended June 30, 2018 2017 Beginning balance $ 920,579 $ 1,386,228 Conversion to note payable (492,783) - Payments in cash (126,287) (175,828) Payments in gold purchased by the Company (172,113) (157,887) Change in fair value 7,887 141,596 Ending balance $ 137,283 $ 1,194,109 The fair value was calculated using the market approach with Level 2 inputs for forward gold contract rates and a discount rate of 10%. |
13. Asset Retirement Obligation
13. Asset Retirement Obligation | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
13. Asset Retirement Obligation | 13. 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 six months ended June 30, 2018 and 2017 is as follows: Six Months Ended June 30, 2018 2017 Balance at beginning of period $ 121,560 $ 72,218 Accretion expense 7,007 3,988 Revision of estimated reclamation costs 10,771 14,882 Balance at end of period $ 139,338 $ 91,088 During the six period ended June 30, 2018, the estimated retirement obligation for the Golden Chest mineral property was revised in consideration of additional disturbance activity during the period. The estimated costs were discounted using credit adjusted, risk-free interest rate of 6.0% from the time the obligation was incurred to the time management expects to pay the retirement obligation. |
14. Note Receivable
14. Note Receivable | 6 Months Ended |
Jun. 30, 2018 | |
Notes | |
14. Note Receivable | 14. Note Receivable On June 6, 2018, the Company loaned $250,000 to West Materials, Inc. and William J. West (collectively West) which bears interest at 8% and has a term of fifteen months. Five payments are due quarterly with the first payment due September 30, 2018. For each payment, the Company has the option of receiving payment in cash or 48.45 troy ounces of gold. The Company plans to opt for cash payment unless the price of gold increases to a level where it would be more beneficial. During the six months ended June 30, 2018, the Company purchased the Butte Potosi mineral property from West (see Note 8). The note receivable is collateralized by a mortgage on the Butte Potosi real property and a related net smelter royalty rights. |
1. The Company and Significan20
1. The Company and Significant Accounting Policies: Principles of Consolidation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV). 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 Significan21
1. The Company and Significant Accounting Policies: Revenue Recognition (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
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 Significan22
1. The Company and Significant Accounting Policies: Inventories (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Policies | |
Inventories | Inventories Inventories are 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) | 6 Months Ended |
Jun. 30, 2018 | |
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 that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At June 30, 2018 and December 31, 2017, the Company determined fair value on a recurring basis as follows: Liabilities June 30, 2018 December 31, 2017 Fair Value Hierarchy Forward gold contracts (Note 12) $ 137,283 $ 920,579 2 |
1. The Company and Significan24
1. The Company and Significant Accounting Policies: Reclassifications (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Policies | |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the 2018 financial statement presentation. Reclassifications had no effect on net loss, stockholders equity, or cash flows as previously reported. |
1. The Company and Significan25
1. The Company and Significant Accounting Policies: New Accounting Pronouncement (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Policies | |
New Accounting Pronouncement | New Accounting Pronouncement In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. We adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospective transition approach. We performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it did not change the timing of revenue recognition or amounts of revenue recognized compared to how we recognized revenue under our previous policies. Adoption of ASU No. 2014-09 requires additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. See Note 3 for information on our sales of products. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the potential 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. Adoption of the update on January 1, 2018 had no impact on the consolidated financial statements In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Adoption of the update on January 1, 2018 had no impact 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. |
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) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Liabilities June 30, 2018 December 31, 2017 Fair Value Hierarchy Forward gold contracts (Note 12) $ 137,283 $ 920,579 2 |
2. Inventories_ Schedule of Inv
2. Inventories: Schedule of Inventory, Current (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of Inventory, Current | June 30, 2018 December 31, 2017 Gold concentrate $ 142,748 $ 219,660 Materials and supplies 19,662 25,494 Total $ 162,410 $ 245,154 |
3. Sales of Products_ Schedule
3. Sales of Products: Schedule of sales of products by metal (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of sales of products by metal | June 30, 2018 June 30, 2017 Three Months Six Months Three Months Six Months Gold $ 576,713 $ 1,783,134 $ 1,320,966 $ 2,048,474 Silver 4,011 7,985 7,720 11,305 Less: Smelter and refining charges (91,169) (200,173) (65,996) (107,771) Total $ 489,555 $ 1,590,946 $ 1,262,690 $ 1,952,008 |
3. Sales of Products_ Schedul29
3. Sales of Products: Schedule of sales by significant product type (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of sales by significant product type | June 30, 2018 June 30, 2017 Three Months Six Months Three Months Six Months Concentrate sales to H&H Metal $ 456,553 $ 1,280,582 $ 1,262,690 $ 1,952,008 Dore sales to refinery 33,002 310,364 - - Total $ 489,555 $ 1,590,946 $ 1,262,690 $ 1,952,008 |
4. Related Party Notes Payable_
4. Related Party Notes Payable: Schedule of Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of Related Party Transactions | June 30, 2018 December 31, 2017 Mine Systems Design (MSD), a company in which our Companys Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through March 2019 $ 42,297 $ 68,299 John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $322,367 in February 2020; paid in full in May 2018 - 441,163 John Swallow, Company president, 5% interest, principal and interest due February 2020; paid in full in May 2018 - 192,677 Ophir Holdings LLC, a company owned by three of the Companys Officers, 6% interest, monthly payments of $3,777 with a balloon payment of $183,559 in February 2020 237,855 - Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2019; paid in full in May 2018 - 100,000 280,152 802,139 Accrued interest payable - 10,772 Total 280,152 812,911 Current portion 74,222 211,829 Long term portion $ 205,930 $ 601,082 |
4. Related Party Notes Payabl31
4. Related Party Notes Payable: Related Party interest expense (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Related Party interest expense | 2018 2017 Three Months Six Months Three Months Six Months $ 13,478 $ 31,828 $ 13,635 $ 28,968 |
4. Related Party Notes Payabl32
4. Related Party Notes Payable: Future principal payments of debt related party (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Future principal payments of debt related party | 12 months ended June 30, 2019 $ 74,222 2020 205,930 Total $ 280,152 |
5. Joint Ventures_ Non-controll
5. Joint Ventures: Non-controlling interest in Joint Venture (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Non-controlling interest in Joint Venture | Six months ended June 30, 2018 2017 Beginning balance $ 3,112,294 $ 3,142,312 Contribution from non-controlling interest 13,456 14,903 Net loss attributable to non-controlling interest (29,616) (27,307) Ending balance $ 3,096,134 $ 3,129,908 |
6. Earnings Per Share_ Schedule
6. Earnings Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | June 30, 2018 June 30, 2017 Three Months Six Months Three Months Six Months Stock options 7,321,665 7,491,141 3,250,000 - Stock purchase warrants 1,200,000 1,200,000 1,200,000 - Total 16,958,334 8,862,500 4,450,000 - |
7. Property, Plant, and Equip35
7. Property, Plant, and Equipment: Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Property, Plant and Equipment | June 30, 2018 December 31, 2017 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 (490,752) (428,760) Total mill 4,463,670 4,525,662 Building and equipment at cost 1,402,909 673,338 Less accumulated depreciation (302,264) (222,648) Total building and equipment 1,100,645 450,690 Land Bear Creek 266,934 266,934 Little Baldy - 47,139 BOW 230,449 230,449 Eastern Star 250,817 250,817 Gillig 79,137 79,137 Highwater 40,133 40,133 Total Land 867,470 914,609 Total $ 6,431,785 $ 5,890,961 |
10. Stockholders' Equity_ Warra
10. Stockholders' Equity: Warrant expirations (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
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 March 28, 2020 1,708,334 $0.20 November 3, 2020 4,429,289 $0.22 March 30, 2020 13,725,123 - - |
12. Forward Gold Contracts_ Sch
12. Forward Gold Contracts: Schedule of Options Indexed to Issuer's Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Tables/Schedules | |
Schedule of Options Indexed to Issuer's Equity | Six months ended June 30, 2018 2017 Beginning balance $ 920,579 $ 1,386,228 Conversion to note payable (492,783) - Payments in cash (126,287) (175,828) Payments in gold purchased by the Company (172,113) (157,887) Change in fair value 7,887 141,596 Ending balance $ 137,283 $ 1,194,109 |
1. The Company and Significan38
1. The Company and Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2018 | |
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 six month periods ended June 30, 2018 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2018. |
1. The Company and Significan39
1. The Company and Significant Accounting Policies: Fair Value Measurements: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Details | ||
Liabilities, Fair Value Disclosure, Recurring | $ 137,283 | $ 920,579 |
2. Inventories_ Schedule of I40
2. Inventories: Schedule of Inventory, Current (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Details | ||
Gold concentrate | $ 142,748 | $ 219,660 |
Materials, Supplies, and Other | 19,662 | 25,494 |
Inventory, Gross | $ 162,410 | $ 245,154 |
3. Sales of Products_ Schedul41
3. Sales of Products: Schedule of sales of products by metal (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Details | ||||
Gold | $ 576,713 | $ 1,320,966 | $ 1,783,134 | $ 2,048,474 |
Silver | 4,011 | 7,720 | 7,985 | 11,305 |
Smelter and refining charges | (91,169) | (65,996) | (200,173) | (107,771) |
Total revenue | 489,555 | 1,262,690 | 1,590,946 | 1,952,008 |
Total | $ 489,555 | $ 1,262,690 | $ 1,590,946 | $ 1,952,008 |
3. Sales of Products_ Schedul42
3. Sales of Products: Schedule of sales by significant product type (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Details | ||||
Concentrate sales | $ 456,553 | $ 1,262,690 | $ 1,280,582 | $ 1,952,008 |
Dore sales | 33,002 | 310,364 | ||
Total revenue | 489,555 | 1,262,690 | 1,590,946 | 1,952,008 |
Total | $ 489,555 | $ 1,262,690 | $ 1,590,946 | $ 1,952,008 |
3. Sales of Products (Details)
3. Sales of Products (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Details | ||
Gold sales receivable | $ 36,465 | $ 307,796 |
Settlement of gold concentrate sales | $ 42,110 |
4. Related Party Notes Payabl44
4. Related Party Notes Payable: Schedule of Related Party Transactions (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Details | ||
Notes Payable, Related Parties | $ 280,152 | $ 812,911 |
Notes and interest payable related parties, current portion | 74,222 | 211,829 |
Notes and interest payable related parties, long term | $ 205,930 | $ 601,082 |
4. Related Party Notes Payabl45
4. Related Party Notes Payable: Related Party interest expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Details | ||||
Interest Expense, Related Party | $ 13,478 | $ 13,635 | $ 31,828 | $ 28,968 |
4. Related Party Notes Payable
4. Related Party Notes Payable (Details) | Jan. 01, 2018 |
Details | |
Debt Conversion, Description | On January 1, 2018 Ophir Holdings agreed to convert their Forward Gold Contract (Note 12) which at that time had an outstanding balance of 419.5 ounces with a fair value of $492,783 to a conventional note payable for the same amount. The note bears interest at 6% and has monthly principal and interest payments of $3,777 with a balloon payment of $454,733 in February 2020. In May 2018 an additional payment of $244,208 of the principal outstanding was paid to Ophir Holdings reducing the balloon payment to $183,559. |
5. Joint Ventures_ Non-contro47
5. Joint Ventures: Non-controlling interest in Joint Venture (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Details | ||||
Nonedeemable Nonconrolling Interest beginning balance | $ 3,112,294 | $ 3,142,312 | ||
Proceeds from contributions from noncontrolling interest | $ 13,456 | $ 14,903 | 13,456 | 14,903 |
Net loss attributable to non-controlling interests | $ (17,009) | $ (16,274) | (29,616) | (27,307) |
Nonedeemable Nonconrolling Interest ending balance | $ 3,096,134 | $ 3,129,908 |
5. Joint Ventures (Details)
5. Joint Ventures (Details) | Jan. 29, 2016USD ($)shares |
Details | |
Purchase of GF&H non-controlling interest | $ 225,000 |
Issuance of common stock for investment in joint venture, stock | shares | 3,000,000 |
Issuance of common stock for investment in joint venture, value | $ 210,000 |
6. Earnings Per Share_ Schedu49
6. Earnings Per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | |
Details | |||
Incremental Common Shares Attributable to Dilutive Effect of Written Put Options | 7,321,665 | 3,250,000 | 7,491,141 |
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants | 1,200,000 | 1,200,000 | 1,200,000 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 16,958,334 | 4,450,000 | 8,862,500 |
7. Property, Plant, and Equip50
7. Property, Plant, and Equipment: Property, Plant and Equipment (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
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 | (490,752) | (428,760) |
Mill Buildings and Improvements, Net | 4,463,670 | 4,525,662 |
Buildings and Improvements, Gross | 1,402,909 | 673,338 |
Buildings and improvements, accumulated depreciation | (302,264) | (222,648) |
Buildings and improvements net | 1,100,645 | 450,690 |
Bear Creek Land | 266,934 | 266,934 |
Little Baldy Land | 47,139 | |
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 | 867,470 | 914,609 |
Property, plant and equipment, net of accumulated depreciation | $ 6,431,785 | $ 5,890,961 |
8. Mineral Properties (Details)
8. Mineral Properties (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Details | ||
Mineral Properties 1 | $ 248,289 | $ 248,289 |
Mineral Properties 2 | 250,000 | 250,000 |
Mineral Properties 3 | 1,667,092 | 1,649,142 |
Mineral Properties 5 | 826,587 | |
Mineral Properties 6 | 250,440 | |
Mineral Properties 4 | 5,000 | |
Accumulated Amortization of Other Deferred Costs | (20,434) | (16,475) |
Mineral properties net | $ 3,221,974 | $ 2,135,956 |
9. Notes Payable (Details)
9. Notes Payable (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Details | ||
Long-term Debt | $ 536,434 | $ 272,790 |
Notes Payable, Current | 240,696 | 95,988 |
Notes payable, long term | 295,738 | 176,802 |
Long-term Debt | $ 536,434 | $ 272,790 |
10. Stockholders' Equity (Detai
10. Stockholders' Equity (Details) - shares | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Class of Warrant or Right, Outstanding | 13,725,123 | 9,295,834 | 10,737,500 |
Warrants issued in private placement | 4,429,289 | 7,558,334 | |
Warrants expired | (9,000,000) | ||
Private placement | |||
Private placement units sold | 8,858,577 | ||
Private placement units sold, net proceeds | 1,107,571 |
10. Stockholders' Equity_ War54
10. Stockholders' Equity: Warrant expirations (Details) - shares | 6 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | |||
Warrants issued | 1,200,000 | ||
Warrants issued, exercise price | 0.10 | ||
Warrants issued | 2,137,500 | ||
Warrants issued, exercise price | 0.20 | ||
Warrants issued | 4,250,000 | ||
Warrants issued, exercise price | 0.20 | ||
Warrants issued | 1,708,334 | ||
Warrants issued, exercise price | 0.20 | ||
Warrants issued | 4,429,289 | ||
Warrants issued, exercise price | 0.22 | ||
Class of Warrant or Right, Outstanding | 13,725,123 | 9,295,834 | 10,737,500 |
11. Stock Options (Details)
11. Stock Options (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Details | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 662,500 | ||
Options issued to consultants and employees value | $ 66,539 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 7,154,500 | 7,662,500 | 7,500,000 |
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, Grants in Period, Net of Forfeitures | 662,500 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ (8,000) | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number | 6,892,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 605,000 |
13. Asset Retirement Obligati56
13. Asset Retirement Obligation (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Details | |||
Balance at beginning of period | $ 121,560 | $ 72,218 | |
Asset Retirement Obligation, Period Increase (Decrease) | 7,007 | 3,988 | |
Asset Retirement Obligation, Liabilities Incurred | 10,771 | 14,882 | |
Asset retirement obligation | $ 139,338 | $ 91,088 | $ 121,560 |
14. Note Receivable (Details)
14. Note Receivable (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Details | ||
Issuance of note receivable | $ 250,000 | $ 250,000 |