Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 13-May-15 | |
Document Information [Line Items] | ||
Entity Registrant Name | Searchlight Minerals Corp. | |
Entity Central Index Key | 1084226 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | SRCH | |
Entity Common Stock, Shares Outstanding | 148,920,208 | |
Amendment Flag | FALSE | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $1,552,182 | $584,976 |
Prepaid expenses | 92,686 | 75,214 |
Assets held for sale | 0 | 227,500 |
Total current assets | 1,644,868 | 887,690 |
Property and equipment, net | 7,361,316 | 7,717,762 |
Assets held for sale, non-current portion | 0 | 227,500 |
Restricted cash | 227,345 | 0 |
Deferred financing fees | 91,407 | 97,401 |
Deposits and other assets | 14,566 | 14,566 |
Total non-current assets | 137,150,135 | 137,499,276 |
Total assets | 138,795,003 | 138,386,966 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,194,889 | 897,951 |
Accounts payable - related party | 162,937 | 21,539 |
Convertible notes, net of discount | 3,145,094 | 0 |
Derivative liability - convertible debt | 1,471,212 | 0 |
VRIC payable, current portion - related party | 398,451 | 315,552 |
Total current liabilities | 6,372,583 | 1,235,042 |
Long-term liabilities | ||
VRIC payable, net of current portion - related party | 299,693 | 382,592 |
Convertible notes, net of discount | 0 | 3,087,380 |
Derivative liability - convertible debt | 0 | 1,218,619 |
Deferred tax liability | 26,905,230 | 27,547,468 |
Total long-term liabilities | 27,204,923 | 32,236,059 |
Total liabilities | 33,577,506 | 33,471,101 |
Commitments and contingencies - Note 15 | ||
Stockholders' equity | ||
Common stock, $0.001 par value; 400,000,000 shares authorized, 148,920,208 and 144,153,748 shares, respectively, issued and outstanding | 148,919 | 144,153 |
Additional paid-in capital | 161,843,958 | 160,177,521 |
Accumulated deficit | -56,775,380 | -55,405,809 |
Total stockholders' equity | 105,217,497 | 104,915,865 |
Total liabilities and stockholders' equity | 138,795,003 | 138,386,966 |
Slag Project [Member] | ||
Noncurrent assets | ||
Mineral properties | 121,843,109 | 121,829,655 |
Smelter Site and Slag Pile [Member] | ||
Noncurrent assets | ||
Land | 5,916,150 | 5,916,150 |
Remaining Amount [Member] | ||
Noncurrent assets | ||
Land | $1,696,242 | $1,696,242 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Common stock, par value per share | $0.00 | $0.00 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 148,920,208 | 144,153,748 |
Common stock, shares outstanding | 148,920,208 | 144,153,748 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Revenue | $0 | $0 |
Operating expenses | ||
Administrative - Clarkdale site | 32,445 | 20,036 |
Gain on asset dispositions | -2,548 | 0 |
Depreciation | 358,383 | 378,825 |
Total operating expenses | 1,627,985 | 1,711,069 |
Loss from operations | -1,627,985 | -1,711,069 |
Other income (expense) | ||
Rental revenue | 5,100 | 7,380 |
Change in fair value of derivative liabilities | -252,593 | 198,497 |
Interest expense | -136,372 | -129,997 |
Interest and dividend income | 41 | 503 |
Total other income (expense) | -383,824 | 76,383 |
Loss before income taxes | -2,011,809 | -1,634,686 |
Income tax benefit | 642,238 | 723,387 |
Net loss | -1,369,571 | -911,299 |
Comprehensive loss | -1,369,571 | -911,299 |
Loss per common share - basic and diluted | ||
Net loss | ($0.01) | ($0.01) |
Weighted average common shares outstanding - | ||
Basic | 144,606,126 | 135,768,318 |
Diluted | 144,606,126 | 135,768,318 |
All Other [Member] | ||
Operating expenses | ||
Mineral exploration and evaluation expenses | 481,629 | 590,692 |
General and administrative | 615,012 | 590,672 |
Related Party Transactions [Member] | ||
Operating expenses | ||
Mineral exploration and evaluation expenses | 75,000 | 79,376 |
General and administrative | $68,064 | $51,468 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | ($1,369,571) | ($911,299) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 358,383 | 378,825 |
Stock based compensation | 42,088 | 33,025 |
Amortization of prepaid expense | 74,480 | 87,888 |
Amortization of debt financing fees and debt discount | 63,708 | 59,066 |
Deferred income taxes | -642,238 | -723,387 |
Change in fair value of derivative liabilities | 252,593 | -198,497 |
Gain on asset dispositions | -2,548 | 0 |
Changes in operating assets and liabilities: | ||
Restricted cash | -227,345 | 0 |
Prepaid expenses | -91,952 | -59,174 |
Accounts payable and accrued liabilities | 553,997 | 98,953 |
Net cash used in operating activities | -988,405 | -1,234,600 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from property and equipment disposition, net | 457,548 | 0 |
Purchase of property and equipment | -1,937 | -24,763 |
Net cash provided by (used in) investing activities | 455,611 | -24,763 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from stock issuance | 1,500,000 | 0 |
Payments on VRIC payable - related party | 0 | -90,000 |
Net cash provided by (used in) financing activities | 1,500,000 | -90,000 |
NET CHANGE IN CASH | 967,206 | -1,349,363 |
CASH AT BEGINNING OF PERIOD | 584,976 | 2,065,824 |
CASH AT END OF PERIOD | 1,552,182 | 716,461 |
SUPPLEMENTAL INFORMATION | ||
Interest paid, net of capitalized amounts | 14,773 | 140,930 |
Income taxes paid | 0 | 0 |
Accrued Liabilities [Member] | ||
Non-cash investing and financing activities: | ||
Common stock issued in satisfaction of accrued interest | $129,115 | $0 |
DESCRIPTION_OF_BUSINESS_HISTOR
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES | 3 Months Ended | ||
Mar. 31, 2015 | |||
Accounting Policies [Abstract] | |||
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES | 1 | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES | |
Description of business - Searchlight Minerals Corp. (the “Company”) has been in the exploration stage since its formation, and the Company has not yet realized any revenues from its planned operations. The Company is primarily focused on the exploration, acquisition and development of mining and mineral properties. Upon the location of commercially minable reserves, the Company plans to prepare for mineral extraction and enter the development stage. | |||
History - The Company was incorporated on January 12, 1999 pursuant to the laws of the State of Nevada under the name L.C.M. Equity, Inc. From 1999 to 2005, the Company operated primarily as a biotechnology research and development company with its headquarters in Canada and an office in the United Kingdom (the “UK”). On November 2, 2001, the Company entered into an acquisition agreement with Regma Bio Technologies, Ltd. pursuant to which Regma Bio Technologies, Ltd. entered into a reverse merger with the Company with the surviving entity named “Regma Bio Technologies Limited”. On November 26, 2003, the Company changed its name from “Regma Bio Technologies Limited” to “Phage Genomics, Inc.” (“Phage”). | |||
In February 2005, the Company announced its reorganization from a biotechnology research and development company to a company focused on the development and acquisition of mineral properties. In connection with its reorganization the Company entered into mineral option agreements to acquire an interest in the Searchlight mining claims. Also in connection with its corporate restructuring, its Board of Directors approved a change in its name from Phage to "Searchlight Minerals Corp.” effective June 23, 2005. | |||
Going concern - The accompanying consolidated financial statements were prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raise substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business it must raise additional equity or debt capital and continue cost cutting measures. There can be no assurance that the Company will be able to achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. | |||
If the Company continues to incur operating losses and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations and 2) the Company’s inability to fully implement its current business plan. There can be no assurance that the Company will successfully improve its liquidity position. The accompanying consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty. | |||
As of March 31, 2015, the Company had cumulative net losses of $56,775,380 from operations and had not commenced its commercial mining and mineral processing operations; rather it is still in the exploration stage. For the three month period ended March 31, 2015, the Company incurred a net loss of $1,369,571, had negative cash flows from operating activities of $988,405 and will incur additional future losses due to planned continued exploration expenses. In addition, the Company had a working capital deficit totaling $4,727,715 at March 31, 2015. | |||
To address liquidity constraints, the Company will seek additional sources of capital through the issuance of equity or debt financing. Additionally, the Company has reduced expenses and elected to defer payment of certain obligations. Cash conservation measures include, but are not limited to, the deferred payment of outsourced consulting fees where available, deferred payment of current and future board fees and reduction of staffing levels. The Company has deferred payment of officer salaries, monthly legal retainer fees, and the Verde River Iron Company, LLC (“VRIC”) monthly payable. These activities have reduced the required cash outlay of the Company’s business significantly. The Company is focused on continuing to reduce costs and obtaining additional funding. There is no assurance that such funding will be available on terms acceptable to the Company, or at all. If the Company raises additional funds by selling additional shares of capital stock, securities convertible into shares of capital stock or the issuance of convertible debt, the ownership interest of the Company’s existing common stock holders will be diluted. | |||
Basis of presentation - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company’s fiscal year-end is December 31. | |||
These condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. All such adjustments are, in the opinion of management, of a normal recurring nature. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on April 13, 2015. | |||
Principles of consolidation - The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clarkdale Minerals, LLC (“CML”) and Clarkdale Metals Corp. (“CMC”). Significant intercompany accounts and transactions have been eliminated. | |||
Use of estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the valuation of stock-based compensation and derivative liabilities, impairment analysis of long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates. | |||
Capitalized interest cost - The Company capitalizes interest cost related to acquisition, development and construction of property and equipment which is designed as integral parts of the manufacturing process. The capitalized interest is recorded as part of the asset it relates to and will be amortized over the asset’s useful life once production commences. | |||
Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Once mineral reserves are established, development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the proven and probable reserves. | |||
Mineral exploration and development costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in mineral exploration and evaluation expense. | |||
Property and equipment - Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 15 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operating expenses. | |||
Impairment of long-lived assets - The Company reviews and evaluates its long-lived assets for impairment at each balance sheet date due to its planned exploration stage losses and documents such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property. | |||
The tests for long-lived assets in the exploration, development or production stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts. | |||
The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value. | |||
Deferred financing fees – Deferred financing fees represent fees paid in connection with obtaining debt financing. These fees are amortized using the effective interest method over the term of the financing. | |||
Convertible notes – derivative liabilities – The Company evaluates the embedded features of convertible notes to determine if they are required to be bifurcated and recorded as a derivative liability. If more than one feature is required to be bifurcated, the features are accounted for as a single compound derivative. The fair value of the compound derivative is recorded as a derivative liability and a debt discount. The carrying value of the convertible notes is recorded on the date of issuance at its original value less the fair value of the compound derivative. | |||
The derivative liability is measured at fair value on a recurring basis with changes reported in other income (expense). Fair value is determined using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The debt discount is amortized to non-cash interest expense using the effective interest method over the life of the notes. If a conversion of the underlying note occurs, a proportionate share of the unamortized amount is immediately expensed. | |||
Reclamation and remediation costs - For its exploration stage properties, the Company accrues the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. | |||
Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised. | |||
The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known. | |||
Fair value of financial instruments - The Company’s financial instruments consist principally of derivative liabilities and the VRIC payable. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels defined as follows: | |||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | ||
Level 2 | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and | ||
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | ||
The Company’s financial instruments consist of the VRIC payable (described in Note 9), derivative liabilities and convertible notes (described in Note 7). The VRIC payable and the convertible notes are classified within Level 2 of the fair value hierarchy. The fair value of the VRIC payable approximates carrying value as the imputed interest rate is considered to approximate a market interest rate. The fair value of the convertible notes approximates carrying value as the interest rate is considered to approximate a market interest rate. | |||
The Company calculates the fair value of its derivative liabilities using various models which are all Level 3 inputs. The fair value of the derivative warrant liability (described in Note 6) is calculated using the Binomial Lattice model, and the fair value of the derivative liability - convertible notes (described in Note 8) is calculated using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The change in fair value of the derivative liabilities is classified in other income (expense) in the consolidated statement of operations. The Company generally does not use derivative financial instruments to hedge exposures to cash flow, market or foreign currency risks. | |||
There have been no changes in the valuation techniques used for the derivative liabilities. The Company does not have any non-financial assets or liabilities that it measures at fair value. During the three months ended March 31, 2015 and 2014, there were no transfers of assets or liabilities between levels. | |||
Per share amounts - Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. At March 31, 2015 and 2014, 65,420,053 and 36,798,697 stock options, warrants and common shares issuable upon the conversion of notes were outstanding, respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive. | |||
Stock-based compensation - Stock-based compensation awards are recognized in the consolidated financial statements based on the grant date fair value of the award which is estimated using the Binomial Lattice option pricing model. The Company believes that this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. | |||
The fair value of performance-based stock option grants is determined on their grant date through the use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements. | |||
The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Binomial Lattice option pricing model. The measurement of stock-based compensation to non-employees is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company’s consolidated statements of operations during the period the related services are rendered. | |||
Income taxes - The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. | |||
For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, and is reflected as an increase to the total purchase price which is then applied to the underlying acquired assets in the absence of there being a goodwill component associated with the acquisition transactions. | |||
Recent accounting standards - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. | |||
In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity. | |||
In November 2014, the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity. | |||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows. | |||
In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows. | |||
RESTRICTED_CASH
RESTRICTED CASH | 3 Months Ended | ||
Mar. 31, 2015 | |||
Receivables [Abstract] | |||
RESTRICTED CASH | 2 | RESTRICTED CASH | |
At March 31, 2015, restricted cash amounted to $227,345 and consisted of funds designated for debt collateral. | |||
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
PROPERTY AND EQUIPMENT [Abstract] | ||||||||||||||||||||
PROPERTY AND EQUIPMENT | 3 | PROPERTY AND EQUIPMENT | ||||||||||||||||||
Property and equipment consisted of the following: | ||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||
Depreciation | Value | Depreciation | Value | |||||||||||||||||
Furniture and fixtures | $ | 38,255 | $ | -37,607 | $ | 648 | $ | 38,255 | $ | -37,476 | $ | 779 | ||||||||
Lab equipment | 249,061 | -248,320 | 741 | 249,061 | -247,356 | 1,705 | ||||||||||||||
Computers and equipment | 68,558 | -56,020 | 12,538 | 68,558 | -54,025 | 14,533 | ||||||||||||||
Vehicles | 47,675 | -45,633 | 2,042 | 47,675 | -45,458 | 2,217 | ||||||||||||||
Slag conveyance equipment | 300,916 | -300,916 | - | 300,916 | -300,916 | - | ||||||||||||||
Demo module building | 6,630,063 | -4,029,612 | 2,600,451 | 6,630,063 | -3,863,860 | 2,766,203 | ||||||||||||||
Grinding circuit | 913,679 | -14,167 | 899,512 | 913,679 | -11,667 | 902,012 | ||||||||||||||
Extraction circuit | 938,352 | -321,915 | 616,437 | 938,352 | -274,997 | 663,355 | ||||||||||||||
Leaching and filtration | 1,300,618 | -1,105,525 | 195,093 | 1,300,618 | -1,040,494 | 260,124 | ||||||||||||||
Fero-silicate storage | 4,326 | -1,839 | 2,487 | 4,326 | -1,731 | 2,595 | ||||||||||||||
Electrowinning building | 1,492,853 | -634,463 | 858,390 | 1,492,853 | -597,141 | 895,712 | ||||||||||||||
Site improvements | 1,677,843 | -622,389 | 1,055,454 | 1,675,906 | -591,259 | 1,084,647 | ||||||||||||||
Site equipment | 360,454 | -344,945 | 15,509 | 360,454 | -338,588 | 21,866 | ||||||||||||||
Construction in progress | 1,102,014 | - | 1,102,014 | 1,102,014 | - | 1,102,014 | ||||||||||||||
$ | 15,124,667 | $ | -7,763,351 | $ | 7,361,316 | $ | 15,122,730 | $ | -7,404,968 | $ | 7,717,762 | |||||||||
Depreciation expense was $358,383 and $378,825 for the three months ended March 31, 2015 and 2014, respectively. At March 31, 2015, construction in progress included the gold, copper, and zinc extraction circuits and electrowinning equipment at the Clarkdale Slag Project. | ||||||||||||||||||||
The Company leases corporate office space under a sublease agreement from a related party as further discussed in Note 18. The lease agreement commenced September 1, 2013 and is for a two year period. Total rent expense was $5,001 and $8,457 for the three months ended March 31, 2015 and 2014, respectively. | ||||||||||||||||||||
On March 9, 2015, the Company completed the sale of three parcels of land for net proceeds of $457,548 with half of the net proceeds designated for operating purposes and the remaining half designated for debt and is recorded as restricted cash on the consolidated balance sheet. | ||||||||||||||||||||
CLARKDALE_SLAG_PROJECT
CLARKDALE SLAG PROJECT | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Business Combinations [Abstract] | ||||||||
CLARKDALE SLAG PROJECT | 4 | CLARKDALE SLAG PROJECT | ||||||
On February 15, 2007, the Company completed a merger with Transylvania International, Inc. (“TI”) which provided the Company with 100% ownership of the Clarkdale Slag Project in Clarkdale, Arizona, through its wholly owned subsidiary CML. This acquisition superseded the joint venture option agreement to acquire a 50% ownership interest as a joint venture partner pursuant to Nanominerals Corp. (“NMC”) interest in a joint venture agreement (“JV Agreement”) dated May 20, 2005 between NMC and VRIC. One of the Company’s former directors was an affiliate of VRIC. The former director joined the Company’s board subsequent to the acquisition. | ||||||||
The Company also formed a second wholly owned subsidiary, CMC, for the purpose of developing a processing plant at the Clarkdale Slag Project. | ||||||||
The Company believes the acquisition of the Clarkdale Slag Project was beneficial because it provides for 100% ownership of the properties, thereby eliminating the need to finance and further develop the projects in a joint venture environment. | ||||||||
This merger was treated as a statutory merger for tax purposes whereby CML was the surviving merger entity. | ||||||||
The Company applied Emerging Issues Task Force (“EITF”) 98-03 (which has been superseded by ASC 805-10-25-1) with regard to the acquisition of the Clarkdale Slag Project. The Company determined that the acquisition of the Clarkdale Slag Project did not constitute an acquisition of a business as that term is defined in ASC 805-10-55-4, and the Company recorded the acquisition as a purchase of assets. | ||||||||
The $130.3 million purchase price was comprised of a combination of the cash paid, the deferred tax liability assumed in connection with the acquisition, and the fair value of our common shares issued, based on the closing market price of our common stock, using the average of the high and low prices of our common stock on the closing date of the acquisition. The Clarkdale Slag Project is without known reserves and the project is exploratory in nature in accordance with Industry Guides promulgated by the Commission, Guide 7 paragraph (a)(4)(i). As required by ASC 930-805-30, Mining – Business Combinations – Initial Recognition, and ASC 740-10-25-49-55, Income Taxes – Overall – Recognition – Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, the Company then allocated the purchase price among the assets as follows (and also further described in this Note 4 to the financial statements): $5,916,150 of the purchase price was allocated to the slag pile site, $3,300,000 to the remaining land acquired, and $309,750 to income property and improvements. The remaining $120,766,877 of the purchase price was allocated to the Clarkdale Slag Project, which has been capitalized as a tangible asset in accordance with ASC 805-20-55-37, Use Rights. Upon commencement of commercial production, the asset will be amortized using the unit-of-production method over the life of the Clarkdale Slag Project. | ||||||||
Closing of the TI acquisition occurred on February 15, 2007, (the “Closing Date”) and was subject to, among other things, the following terms and conditions: | ||||||||
a) | The Company paid $200,000 in cash to VRIC on the execution of a letter agreement; | |||||||
b) | The Company paid $9,900,000 in cash to VRIC on the Closing Date; | |||||||
c) | The Company issued 16,825,000 shares of its common stock, valued at $3.975 per share using the average of the high and low price on the Closing Date, to the designates of VRIC on the closing pursuant to Section 4(2) and Regulation D of the Securities Act of 1933; | |||||||
In addition to the cash and equity consideration paid and issued upon closing, the acquisition agreement contains the following payment terms and conditions: | ||||||||
d) | The Company agreed to continue to pay VRIC $30,000 per month until the earlier of: (i) the date that is 90 days after receipt of a bankable feasibility study by the Company (the “Project Funding Date”), or (ii) the tenth anniversary of the date of the execution of the letter agreement; | |||||||
The acquisition agreement also contains the following additional contingent payment terms which are based on the Project Funding Date as defined in the agreement: | ||||||||
e) | The Company has agreed to pay VRIC $6,400,000 on the Project Funding Date; | |||||||
f) | The Company has agreed to pay VRIC a minimum annual royalty of $500,000, commencing on the Project Funding Date (the “Advance Royalty”), and an additional royalty consisting of 2.5% of the net smelter returns (“NSR”) on any and all proceeds of production from the Clarkdale Slag Project (the “Project Royalty”). The Advance Royalty remains payable until the first to occur of: (i) the end of the first calendar year in which the Project Royalty equals or exceeds $500,000 or (ii) February 15, 2017. In any calendar year in which the Advance Royalty remains payable, the combined Advance Royalty and Project Royalty will not exceed $500,000 in any calendar year; and | |||||||
g) | The Company has agreed to pay VRIC an additional amount of $3,500,000 from the net cash flow of the Clarkdale Slag Project. The Company has accounted for this as a contingent payment and upon meeting the contingency requirements, the purchase price of the Clarkdale Slag Project will be adjusted to reflect the additional consideration. | |||||||
Under the original JV Agreement, the Company agreed to pay NMC a 5% royalty on NSR payable from the Company’s 50% joint venture interest in the production from the Clarkdale Slag Project. Upon the assignment to the Company of VRIC’s 50% interest in the Joint Venture Agreement in connection with the reorganization with TI, the Company continues to have an obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. On July 25, 2011, the Company agreed to pay NMC an advance royalty payment of $15,000 per month effective January 1, 2011. The advance royalty payment is more fully discussed in Note 15. | ||||||||
The following table reflects the recorded purchase consideration for the Clarkdale Slag Project: | ||||||||
Purchase price: | ||||||||
Cash payments | $ | 10,100,000 | ||||||
Joint venture option acquired in 2005 for cash | 690,000 | |||||||
Warrants issued for joint venture option | 1,918,481 | |||||||
Common stock issued | 66,879,375 | |||||||
Monthly payments, current portion | 167,827 | |||||||
Monthly payments, net of current portion | 2,333,360 | |||||||
Acquisition costs | 127,000 | |||||||
Total purchase price | 82,216,043 | |||||||
Net deferred income tax liability assumed - Clarkdale Slag Project | 48,076,734 | |||||||
Total | $ | 130,292,777 | ||||||
The following table reflects the components of the Clarkdale Slag Project: | ||||||||
Allocation of acquisition cost: | ||||||||
Clarkdale Slag Project (including net deferred income tax liability assumed of $48,076,734) | $ | 120,766,877 | ||||||
Land - smelter site and slag pile | 5,916,150 | |||||||
Land | 3,300,000 | |||||||
Income property and improvements | 309,750 | |||||||
Total | $ | 130,292,777 | ||||||
The Company agreed to continue to pay VRIC $30,000 per month until the earlier of the Project Funding Date or the tenth anniversary of the date of the execution of the letter agreement. As of March 31, 2015 and December 31, 2014, the cumulative interest cost capitalized and included in the Slag Project was $1,076,232 and $1,062,778, respectively. | ||||||||
The following table sets forth the change in the Slag Project for the three month period ended March 31, 2015 and the year ended December 31, 2014: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Slag Pile, beginning balance | $ | 121,829,655 | $ | 121,759,811 | ||||
Capitalized interest costs | 13,454 | 69,844 | ||||||
Slag Pile, ending balance | $ | 121,843,109 | $ | 121,829,655 | ||||
ACCOUNTS_PAYABLE_AND_ACCRUED_L
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | ||||||||
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 5 | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | ||||||
Accounts payable and accrued liabilities at March 31, 2015 and December 31, 2014 consisted of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Trade accounts payable | $ | 969,429 | $ | 728,021 | ||||
Accrued compensation and related taxes | 201,593 | 88,293 | ||||||
Accrued interest | 23,867 | 81,637 | ||||||
$ | 1,194,889 | $ | 897,951 | |||||
Accounts payable – related party are discussed in Note 18. | ||||||||
DERIVATIVE_WARRANT_LIABILITY
DERIVATIVE WARRANT LIABILITY | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||
DERIVATIVE WARRANT LIABILITY | 6 | DERIVATIVE WARRANT LIABILITY | |||||||||||
Related to a private placement completed on November 12, 2009, the Company issued 6,341,263 warrants to purchase shares of common stock. The warrants had an initial expiration date of November 12, 2012 and an initial exercise price of $1.85 per share. The warrants have anti-dilution provisions, including provisions for the adjustment to the exercise price and to the number of warrants granted if the Company issues common stock or common stock equivalents at a price less than the exercise price. | |||||||||||||
The Company determined that the warrants were not afforded equity classification because the warrants are not considered to be indexed to the Company’s own stock due to the anti-dilution provisions. In addition, the Company determined that the anti-dilution provisions shield the warrant holders from the dilutive effects of subsequent security issuances and therefore the economic characteristics and risks of the warrants are not clearly and closely related to the Company’s common stock. Accordingly, the warrants are treated as a derivative liability and are carried at fair value. | |||||||||||||
On November 1, 2012, October 25, 2013 and November 11, 2014, the Company’s Board of Directors unilaterally determined, without any negotiations with the warrant holders to amend these private placement warrants. The expiration date of the warrants was extended for one year at each extension. The current expiration date is November 12, 2015. In all other respects, the terms and conditions of the warrants remained the same. | |||||||||||||
With respect to the extensions, the Company did not recognize any additional expense as the fair values of the warrants were calculated at zero using the Binomial Lattice model with the following assumptions: | |||||||||||||
November 11, | October 25, | November 1, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Risk-free interest rate | 0.14 | % | 0.11 | % | 0.19 | % | |||||||
Expected volatility | 142.72 | % | 114.79 | % | 94.94 | % | |||||||
Expected life (years) | 1 | 1 | 1 | ||||||||||
As of March 31, 2015, the cumulative adjustment to the warrants was as follows: (i) the exercise price was adjusted from $1.85 per share to $1.36 per share, and (ii) the number of warrants was increased by 2,167,325 warrants. In connection with the financing completed with Luxor Capital Partners, L.P. and its affiliates (“Luxor”) on June 7, 2012, Luxor waived its right to the anti-dilution adjustments on 4,252,883 warrants it holds from the 2009 private placement. Future anti-dilution adjustments were not waived. The adjusted exercise price of those warrants is $1.39 per share. During the three month period ended March 31, 2015, the warrants increased by 354,891 as a result of dilutive issuances. | |||||||||||||
The total warrants accounted for as a derivative liability were 8,508,588 and 8,153,697 as of March 31, 2015 and December 31, 2014, respectively. | |||||||||||||
The following table sets forth the changes in the fair value of derivative liability for the three month period ended March 31, 2015 and the year ended December 31, 2014: | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Beginning balance | $ | - | $ | -81,574 | |||||||||
Adjustment to warrants | - | - | |||||||||||
Change in fair value | - | 81,574 | |||||||||||
Ending balance | $ | - | $ | - | |||||||||
The Company estimates the fair value of the derivative liabilities by using the Binomial Lattice pricing-model, with the following assumptions used for the three month period ended March 31, 2015 and the year ended December 31, 2014: | |||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Dividend yield | - | - | |||||||||||
Expected volatility | 63.85% | 29.38% - 153.76% | |||||||||||
Risk-free interest rate | 0.11% - 0.14% | 0.02% - 0.26% | |||||||||||
Expected life (years) | 0.6 | 0.10 – 1.0 | |||||||||||
The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs would result in a significantly lower or higher fair value measurement. | |||||||||||||
CONVERTIBLE_NOTES
CONVERTIBLE NOTES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Convertible Debt [Abstract] | ||||||||
CONVERTIBLE NOTES | 7 | CONVERTIBLE NOTES | ||||||
On September 18, 2013, the Company completed a private placement of secured convertible notes (the “Notes”) to certain investors resulting in gross proceeds of $4,000,000. At the issuance date, the Notes were convertible into shares of common stock at $0.40 per share, subject to certain adjustments. The term of the Notes is five years, but as of March 31, 2015, the Notes can be called within one year. The Notes bear interest at 7% which is payable semi-annually. The Notes have customary provisions relating to events of default including an increase in the interest rate to 9%. The Notes are secured by a first priority lien on all of the assets of the Company including its subsidiaries. At March 31, 2015, the first priority lien included $227,345 of restricted cash specifically dedicated to debt collateral. | ||||||||
The Company has agreed not to incur any additional secured indebtedness or any other indebtedness with a maturity prior to that of the Notes without the written consent of the holders of the majority-in-interest of the Notes. In the event of a change of control of the Company, the Notes will become due and payable at 120% of the principal balance. The holders of the Notes had the right to purchase, pro rata, up to $600,000 of additional separate notes by the first anniversary of the issuance date on the same general terms and conditions as the original Notes. On September 10, 2014, $69,000 in additional notes were issued. | ||||||||
At March 31, 2015, the Notes were convertible into 10,433,333 shares of common stock at $0.39 per share, as adjusted for anti-dilutive provisions and the if-converted value equaled the principal amount of the Notes. Certain embedded features in the Notes were required to be bifurcated and accounted for as a single compound derivative and reported at fair value as further discussed in Note 8. | ||||||||
On the issuance date, the fair value of the compound derivative amounted to $1,261,285 and was recorded as both a derivative liability and a debt discount. The debt discount is being amortized to interest expense over the term of the Notes and the derivative liability is carried at fair value until conversion or maturity. | ||||||||
The carrying value of the convertible debt, net of discount was comprised of the following: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Convertible notes at face value | $ | 4,069,000 | $ | 4,000,000 | ||||
Issuance of additional notes | - | 69,000 | ||||||
Unamortized discount | -923,906 | -981,620 | ||||||
Convertible notes, net of discount | $ | 3,145,094 | $ | 3,087,380 | ||||
The Company incurred $126,446 of financing fees related to the Notes. Such amounts were capitalized and recorded as deferred financing fees and are being amortized to interest expense over the term of the Notes. The effective interest rate on the Notes is 15.4% which included the following components and amounts for the three months ended: | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Interest rate at 7% | $ | 71,191 | $ | 70,000 | ||||
Amortization of debt discount | 57,714 | 53,510 | ||||||
Amortization of deferred financing fees | 5,994 | 5,557 | ||||||
Interest expense - convertible notes | $ | 134,899 | $ | 129,067 | ||||
DERIVATIVE_LIABILITY_CONVERTIB
DERIVATIVE LIABILITY - CONVERTIBLE NOTES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Derivative Liability And Convertible Debt [Abstract] | ||||||||
DERIVATIVE LIABILITY - CONVERTIBLE NOTES | 8 | DERIVATIVE LIABILITY – CONVERTIBLE NOTES | ||||||
As further discussed in Note 7, the Company has issued $4,069,000 of convertible notes. The Notes are convertible at any time into shares of common stock at $0.39 per share. | ||||||||
The Notes have several embedded conversion and redemption features. The Company determined that two of the features were required to be bifurcated and accounted for under derivative accounting as follows: | ||||||||
1 | The embedded conversion feature includes a provision for the adjustment to the conversion price if the Company issues common stock or common stock equivalents at a price less than the exercise price. Derivative accounting was required for this feature due to this anti-dilution provision. | |||||||
2 | One embedded redemption feature requires the Company to pay 120% of the principal balance due upon a change of control. Derivative accounting was required for this feature as the debt involves a substantial discount, the option is only contingently exercisable and its exercise is not indexed to either an interest rate or credit risk. | |||||||
These two embedded features have been accounted for together as a single compound derivative. The Company estimated the fair value of the compound derivative using a model with estimated probabilities and inputs calculated by the Binomial Lattice model and present values. The assumptions included in the calculations are highly subjective and subject to interpretation. Assumptions used for the three months ended March 31, 2015 and 2014 included redemption and conversion estimates/behaviors, estimates regarding future anti-dilutive financing agreements and the following other significant estimates: | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Expected volatility | 105.61 | % | 96.46 | % | ||||
Risk-free interest rate | 1.13 | % | 1.73 | % | ||||
Expected life (years) | 2 | 3 | ||||||
The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. Significant increases or decreases in inputs would result in a significantly lower or higher fair value measurement. | ||||||||
The following table sets forth the changes in the fair value of the derivative liability for the three month period ended March 31, 2015 and the year ended December 31, 2014: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Beginning balance | $ | 1,218,619 | $ | 755,709 | ||||
Issuance of convertible debt | - | 9,519 | ||||||
Change in fair value | 252,593 | 453,391 | ||||||
Ending balance | $ | 1,471,212 | $ | 1,218,619 | ||||
VRIC_PAYABLE_RELATED_PARTY
VRIC PAYABLE - RELATED PARTY | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Other Liabilities Disclosure [Abstract] | |||||
VRIC PAYABLE - RELATED PARTY | 9 | VRIC PAYABLE - RELATED PARTY | |||
Pursuant to the Clarkdale acquisition agreement, the Company agreed to pay VRIC $30,000 per month until the Project Funding Date. Mr. Harry Crockett was an affiliate of VRIC and served on the Company’s Board of Directors subsequent to the acquisition until he passed away in 2010. | |||||
The Company has recorded a liability for this commitment using imputed interest based on its best estimate of its incremental borrowing rate. The effective interest rate used was 8.00%, resulting in an initial present value of $2,501,187 and a debt discount of $1,128,813. The discount is being amortized over the expected term of the debt using the effective interest method. The expected term used was 10 years which represents the maximum term the VRIC liability is payable if the Company does not obtain project funding. | |||||
Interest costs related to this obligation were $13,454 and $19,615 for the three months periods ended March 31, 2015 and 2014, respectively. Interest costs incurred have been capitalized and included in the Slag Project. To address liquidity constraints, the Company has deferred payment of the VRIC payable effective May 1, 2014. On December 18, 2014, VRIC relinquished $255,000 of payments due to them. The relinquishment was recorded as a contribution of capital. | |||||
The following table represents future minimum payments on the VRIC payable for each of the twelve month periods ending March 31: | |||||
2016 | $ | 450,000 | |||
2017 | 311,195 | ||||
Thereafter | - | ||||
Total minimum payments | 761,195 | ||||
Less: amount representing interest | -63,051 | ||||
Present value of minimum payments | 698,144 | ||||
VRIC payable, current portion | 398,451 | ||||
VRIC payable, net of current portion | $ | 299,693 | |||
The acquisition agreement also contains payment terms which are based on the Project Funding Date as defined in the agreement. The terms and conditions of these payments are discussed in more detail in Notes 4 and 15. | |||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||
STOCKHOLDERS' EQUITY | 10 | STOCKHOLDERS’ EQUITY | |||||
During the three month period ended March 31, 2015, the Company’s stockholders’ equity activity consisted of the following: | |||||||
a) | On March 23, 2015, the Company’s Board of Directors approved a private placement offering for gross proceeds of $1,500,000 with Luxor. A total of 4,250,000 units will be issued at a price of $0.3529. Each unit consists of one share of the Company’s common stock and one share purchase warrant exercisable at $0.50 per share. Such warrants will expire five years from the date of issuance and are considered to be indexed to the Company’s common stock. The financing was completed on March 25, 2015. | ||||||
b) | On March 18, 2015, the Company issued 516,460 shares of common stock at a price of $0.25 per share to certain convertible note holders as consideration for cancellation of an aggregate of $129,115 for interest payments due on the convertible notes as of March 18, 2015. The remaining note holders received interest payments in cash. | ||||||
During the three month period ended March 31, 2014 the Company did not issue any common stock or enter into any financing agreements. | |||||||
The following summarizes the exercise price per share and expiration date of our outstanding warrants issued to investors to purchase common stock at March 31, 2015: | |||||||
Shares Underlying Outstanding Warrants | Exercise Price | Expiration Date | |||||
7,750,000 | $ | 0.375 | Jun-15 | ||||
3,184,818 | 1.36 | Nov-15 | |||||
5,323,768 | 1.39 | Nov-15 | |||||
7,042,387 | 1.85 | Nov-15 | |||||
1,000,000 | 0.375 | Jun-17 | |||||
316,752 | 0.3 | Sep-19 | |||||
2,197,500 | 0.3 | Oct-19 | |||||
1,000,000 | 0.3 | Nov-19 | |||||
1,498,750 | 0.3 | Dec-19 | |||||
3,981,000 | 0.5 | Dec-19 | |||||
4,250,000 | 0.5 | Mar-20 | |||||
37,544,975 | |||||||
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
STOCK-BASED COMPENSATION | 11 | STOCK-BASED COMPENSATION | |||||||||||||||
Stock-based compensation includes grants of stock options and purchase warrants to eligible directors, employees and consultants as determined by the board of directors. | |||||||||||||||||
Stock option plans - The Company has adopted several stock option plans, all of which have been approved by the Company’s stockholders that authorize the granting of stock option awards subject to certain conditions. At March 31, 2015, the Company had 5,533,576 of its common shares available for issuance for stock option awards under the Company’s stock option plans. | |||||||||||||||||
At March 31, 2015, the Company had the following stock option plans available: | |||||||||||||||||
· | 2009 Incentive Plan – The terms of the 2009 Incentive Plan, as amended, allow for up to 7,250,000 options to be issued to eligible participants. Under the plan, the exercise price is generally equal to the fair market value of the Company’s common stock on the grant date and the maximum term of the options is generally ten years. No participants shall receive more than 500,000 options under this plan in any one calendar year. For grantees who own more than 10% of the Company’s common stock on the grant date, the exercise price may not be less than 110% of the fair market value on the grant date and the term is limited to five years. The plan was approved by the Company’s stockholders on December 15, 2009 and the amendment was approved by the Company’s stockholders on May 8, 2012. As of March 31, 2015, the Company had granted 3,437,500 options under the 2009 Incentive Plan with a weighted average exercise price of $0.68 per share and had 3,812,500 options remaining available for issuance. As of March 31, 2015, 3,397,500 of the options granted were outstanding. | ||||||||||||||||
· | 2009 Directors Plan - The terms of the 2009 Directors Plan, as amended, allow for up to 2,750,000 options to be issued to eligible participants. Under the plan, the exercise price may not be less than 100% of the fair market value of the Company’s common stock on the grant date and the term may not exceed ten years. No participants shall receive more than 250,000 options under this plan in any one calendar year. The plan was approved by the Company’s stockholders on December 15, 2009 and the amendment was approved by the Company’s stockholders on May 8, 2012. As of March 31, 2015, the Company had granted 2,076,877 options under the 2009 Directors Plan with a weighted average exercise price of $0.72 per share and had 673,123 options remaining available for issuance. As of March 31, 2015, 2,065,627 of the options granted were outstanding. | ||||||||||||||||
· | 2007 Plan - Under the terms of the 2007 Plan, options to purchase up to 4,000,000 shares of common stock may be granted to eligible participants. Under the plan, the option price for incentive stock options is the fair market value of the stock on the grant date and the option price for non-qualified stock options shall be no less than 85% of the fair market value of the stock on the grant date. The maximum term of the options under the plan is ten years from the grant date. The 2007 Plan was approved by the Company’s stockholders on June 15, 2007. As of March 31, 2015, the Company had granted 2,952,047 options under the 2007 Plan with a weighted average exercise price of $0.61 per share and had 1,047,953 options remaining available for issuance. As of March 31, 2015, 2,763,618 of the options granted were outstanding. | ||||||||||||||||
As of March 31, 2015, the Company had granted 9,215,000 options and warrants outside of the aforementioned stock option plans with a weighted average exercise price of $0.47 per share. As of March 31, 2015, 9,215,000 of the options and warrants granted were outstanding. | |||||||||||||||||
Non-Employee Directors Equity Compensation Policy – Non-employee directors have a choice between receiving $9,000 value of common stock per quarter, where the number of shares is determined by the closing price of the Company’s stock on the last trading day of each quarter, or a number of options, limited to 18,000, to purchase twice the number of shares of common stock that the director would otherwise receive if the director elected to receive shares, with an exercise price based on the closing price of the Company’s common stock on the last trading day of each quarter. | |||||||||||||||||
Stock warrants – Upon approval of the Board of Directors, the Company may grant stock warrants to consultants for services performed. | |||||||||||||||||
Valuation of awards – At March 31, 2015, the Company had options outstanding that vest on two different types of vesting schedules, service-based and performance-based. For both service-based and performance-based stock option grants, the Company estimates the fair value of stock-based compensation awards by using the Binomial Lattice option pricing model with the following assumptions used for the three month periods ended: | |||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Risk-free interest rate | 0.24% - 1.37% | 0.39% - 1.73% | |||||||||||||||
Dividend yield | - | - | |||||||||||||||
Expected volatility | 91.23% - 105.19% | 98.65% - 105.87% | |||||||||||||||
Expected life (years) | 1.00 - 4.25 | 2.00 - 4.25 | |||||||||||||||
The expected volatility is based on the historical volatility levels on the Company’s common stock. The risk-free interest rate is based on the implied yield available on US Treasury zero-coupon issues over equivalent lives of the options. | |||||||||||||||||
The expected life of awards represents the weighted-average period the stock options or warrants are expected to remain outstanding and is a derived output of the Binomial Lattice model. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. | |||||||||||||||||
Stock-based compensation activity – During the three months ended March 31, 2015, the Company granted stock-based awards as follows: | |||||||||||||||||
a) | On March 31, 2015, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.33 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on March 31, 2020. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date. | ||||||||||||||||
b) | On March 23, 2015, the Company’s Board of Directors unilaterally determined to amend 659,890 stock options by extending their expiration dates. The options were granted at various dates between October 6, 2008 and December 31, 2010 and have a weighted average exercise price of $0.83 per share. The expiration dates of all of the options were extended by twelve months. In all other respects, the terms and conditions of the extended options remain the same. The modification resulted in additional expense of $31,544. | ||||||||||||||||
During the three month period ended March 31, 2014, the Company granted stock-based awards as follows: | |||||||||||||||||
a) | On March 31, 2014, the Company granted stock options under the 2009 Directors Plan for the purchase of 54,000 shares of common stock at $0.26 per share. The options were granted to three of the Company’s non-management directors for directors’ compensation, are fully vested and expire on March 31, 2019. The exercise price of the stock options equaled the closing price of the Company’s common stock for the grant date. | ||||||||||||||||
b) | On January 13, 2014, the Company extended the expiration date of 200,000 warrants issued to a consultant. The expiration date was extended from January 13, 2014 to January 13, 2016. All other terms were unchanged. The modification resulted in additional expense of $5,011. | ||||||||||||||||
Expenses related to the vesting, modifying and granting of stock-based compensation awards were $42,088 and $33,025 for the three months ended March 31, 2015 and 2014, respectively. Such expenses have been included in general and administrative and mineral exploration and evaluation expense. | |||||||||||||||||
The following table summarizes the Company’s stock-based compensation activity for the three month period ended March 31, 2015: | |||||||||||||||||
Number of | Weighted | Weighted | Weighted | Aggregate | |||||||||||||
Shares | Average | Average | Average | Intrinsic | |||||||||||||
Grant | Exercise Price | Remaining | Value | ||||||||||||||
Date Fair | Contractual | ||||||||||||||||
Value | Life | ||||||||||||||||
(Years) | |||||||||||||||||
Outstanding, December 31, 2014 | 17,387,745 | $ | 0.24 | $ | 0.55 | 4.53 | |||||||||||
Options/warrants granted | 54,000 | 0.12 | 0.33 | 5 | |||||||||||||
Options/warrants expired | - | - | - | - | |||||||||||||
Options/warrants exercised | - | - | - | - | |||||||||||||
Outstanding, March 31, 2015 | 17,441,745 | $ | 0.25 | $ | 0.55 | 4.32 | $ | 52,578 | |||||||||
Exercisable, March 31, 2015 | 17,091,745 | $ | 0.23 | $ | 0.53 | 4.27 | $ | 52,578 | |||||||||
Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the quarter ended March 31, 2015 in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable. | |||||||||||||||||
Unvested awards - The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the three month period ended March 31, 2015: | |||||||||||||||||
Number of | Weighted | ||||||||||||||||
Shares Subject | Average | ||||||||||||||||
to Vesting | Grant Date | ||||||||||||||||
Fair Value | |||||||||||||||||
Unvested, December 31, 2014 | 350,000 | $ | 0.93 | ||||||||||||||
Options/warrants granted | - | - | |||||||||||||||
Options/warrants vested | - | - | |||||||||||||||
Unvested, March 31, 2015 | 350,000 | $ | 0.93 | ||||||||||||||
For the three month period ended March 31, 2014, the total grant date fair value of shares vested was $74,731. No shares vested during the three month period ended March 31, 2015. As of March 31, 2015, there was $10,966 of total unrecognized compensation cost related to unvested stock-based compensation awards. The weighted average period over which this cost will be recognized was 0.75 years as of March 31, 2015. Included in the total of unvested stock options at March 31, 2015, was 250,000 performance-based stock options. At March 31, 2015, management determined that achievement of the performance targets was probable. The weighted average period over which the related expense will be recognized was 0.75 years as of March 31, 2015. | |||||||||||||||||
STOCKHOLDER_RIGHTS_AGREEMENT
STOCKHOLDER RIGHTS AGREEMENT | 3 Months Ended | ||
Mar. 31, 2015 | |||
STOCKHOLDERS' EQUITY [Abstract] | |||
STOCKHOLDER RIGHTS AGREEMENT | 12 | STOCKHOLDER RIGHTS AGREEMENT | |
The Company adopted a Stockholder Rights Agreement (the “Rights Agreement”) in August 2009 to protect stockholders from attempts to acquire control of the Company in a manner in which the Company’s Board of Directors determines is not in the best interest of the Company or its stockholders. Under the agreement, each currently outstanding share of the Company’s common stock includes, and each newly issued share will include, a common share purchase right. The rights are attached to and trade with the shares of common stock and generally are not exercisable. The rights will become exercisable if a person or group acquires, or announces an intention to acquire, 15% or more of the Company’s outstanding common stock. The Rights Agreement was not adopted in response to any specific effort to acquire control of the Company. The issuance of rights had no dilutive effect, did not affect the Company’s reported earnings per share and was not taxable to the Company or its stockholders. | |||
The Company has agreed to waive the 15% limitation currently in the Rights Agreements with respect to Luxor, and to allow Luxor to become the beneficial owners of up to 26% of the Company’s common stock, without being deemed to be an “acquiring person” under the Rights Agreement. | |||
PROPERTY_RENTAL_AGREEMENTS_AND
PROPERTY RENTAL AGREEMENTS AND LEASES | 3 Months Ended | ||
Mar. 31, 2015 | |||
PROPERTY RENTAL AGREEMENTS AND LEASES [Abstract] | |||
PROPERTY RENTAL AGREEMENTS AND LEASES | 13 | PROPERTY RENTAL AGREEMENTS AND LEASES | |
The Company, through its subsidiary CML, has the following lease and rental agreements as lessor: | |||
Clarkdale Arizona Central Railroad – rental – CML rents land to Clarkdale Arizona Central Railroad on month-to-month terms at $1,700 per month. | |||
INCOME_TAXES
INCOME TAXES | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
INCOME TAXES | 14 | INCOME TAXES | ||||||
The Company is a Nevada corporation and is subject to federal, Arizona income taxes. Nevada does not impose a corporate income tax. | ||||||||
Significant components of the Company’s net deferred income tax assets and liabilities at March 31, 2015 and December 31, 2014 were as follows: | ||||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred income tax assets: | ||||||||
Net operating loss carryforward | $ | 18,944,766 | $ | 18,520,488 | ||||
Option compensation | 1,467,477 | 1,451,484 | ||||||
Property, plant & equipment | 1,330,212 | 1,264,961 | ||||||
Gross deferred income tax assets | 21,742,455 | 21,236,933 | ||||||
Less: valuation allowance | -422,759 | -480,288 | ||||||
Net deferred income tax assets | 21,319,696 | 20,756,645 | ||||||
Deferred income tax liabilities: | ||||||||
Acquisition related liabilities | -48,224,926 | -48,304,113 | ||||||
Net deferred income tax liability | $ | -26,905,230 | $ | -27,547,468 | ||||
The realizability of deferred tax assets are reviewed at each balance sheet date. The Company’s deferred tax liabilities are related to depletable assets. Such depletion will begin with the processing of mineralized material once production has commenced. Therefore, the deferred tax liabilities will reverse in similar time periods as the deferred tax assets. The reversal of the deferred tax liabilities is sufficient to support the deferred tax assets. The valuation allowance relates to state net operating loss carryforwards which may expire unused due to their shorter life. | ||||||||
Deferred income tax liabilities were recorded on GAAP basis over income tax basis using statutory federal and state rates with the corresponding increase in the purchase price allocation to the assets acquired. | ||||||||
The resulting estimated future federal and state income tax liabilities associated with the temporary difference between the acquisition consideration and the tax basis are reflected as an increase to the total purchase price which has been applied to the underlying mineral and slag project assets in the absence of there being a goodwill component associated with the acquisition transactions. | ||||||||
A reconciliation of the deferred income tax benefit for the three month periods ended March 31, 2015 and 2014 at US federal and state income tax rates to the actual tax provision recorded in the financial statements consisted of the following components: | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Deferred tax benefit at statutory rates | $ | 704,133 | $ | 572,140 | ||||
State deferred tax benefit, net of federal benefit | 60,354 | 49,041 | ||||||
Increase (decrease) in deferred tax benefit from: | ||||||||
Change in valuation allowance | 57,529 | 100,186 | ||||||
Change in state NOL’s | -59,531 | -47,874 | ||||||
Gain (loss) on the change in fair value of derivative liabilities | -95,985 | 75,429 | ||||||
Other permanent differences | -24,262 | -25,535 | ||||||
Deferred income tax benefit | $ | 642,238 | $ | 723,387 | ||||
The Company had cumulative net operating losses of $51,500,746 as of March 31, 2015 for federal income tax purposes. The federal net operating loss carryforwards will expire between 2025 and 2035. | ||||||||
State income tax allocation - The Company had cumulative net operating losses of $22,906,432 as of March 31, 2015 for state income tax purposes. The Company has placed a valuation allowance against state net operating loss carryforwards expected to expire unused. The remaining net operating loss carryforwards expire at various dates through 2035. | ||||||||
Tax returns subject to examination - The Company and its subsidiaries file income tax returns in the United States. These tax returns are subject to examination by taxation authorities provided the years remain open under the relevant statutes of limitations, which may result in the payment of income taxes and/or decreases in its net operating losses available for carryforward. The Company has losses from inception to date, and thus all years remain open for examination. While the Company believes that its tax filings do not include uncertain tax positions, the results of potential examinations or the effect of changes in tax law cannot be ascertained at this time. The Company does not have any tax returns currently under examination by the Internal Revenue Service. | ||||||||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | ||
Mar. 31, 2015 | |||
Commitments and Contingencies Disclosure [Abstract] | |||
COMMITMENTS AND CONTINGENCIES | 15 | COMMITMENTS AND CONTINGENCIES | |
Severance agreements – The Company has severance agreements with two executive officers that provide for various payments if the officer’s employment agreement is terminated by the Company, other than for cause. At March 31, 2015, the total potential liability for severance agreements was $112,500. | |||
Clarkdale Slag Project royalty agreement - NMC - Under the original JV Agreement, the Company agreed to pay NMC a 5% royalty on NSR payable from the Company’s 50% joint venture interest in the production from the Clarkdale Slag Project. Upon the assignment to the Company of VRIC’s 50% interest in the Joint Venture Agreement in connection with the reorganization with Transylvania International, Inc., the Company continues to have an obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. | |||
Purchase consideration Clarkdale Slag Project - In consideration of the acquisition of the Clarkdale Slag Project from VRIC, the Company has agreed to certain additional contingent payments. The acquisition agreement contains payment terms which are based on the Project Funding Date as defined in the agreement: | |||
a) | The Company has agreed to pay VRIC $6,400,000 on the Project Funding Date; | ||
b) | The Company has agreed to pay VRIC a minimum annual royalty of $500,000, commencing on the Project Funding Date (the “Advance Royalty”), and an additional royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project (the “Project Royalty”). The Advance Royalty remains payable until the first to occur of: (i) the end of the first calendar year in which the Project Royalty equals or exceeds $500,000 or (ii) February 15, 2017. In any calendar year in which the Advance Royalty remains payable, the combined Advance Royalty and Project Royalty will not exceed $500,000; and, | ||
c) | The Company has agreed to pay VRIC an additional amount of $3,500,000 from the net cash flow of the Clarkdale Slag Project. | ||
The Advance Royalty shall continue for a period of ten years from the Agreement Date or until such time that the Project Royalty shall exceed $500,000 in any calendar year, at which time the Advance Royalty requirement shall cease. | |||
On July 25, 2011, the Company and NMC entered into an amendment (the “Third Amendment”) to the assignment agreement between the parties dated June 1, 2005. Pursuant to the Third Amendment, the Company agreed to pay advance royalties (the “Advance Royalties”) to NMC of $15,000 per month (the “Minimum Royalty Amount”) effective as of January 1, 2011. The Third Amendment also provides that the Minimum Royalty Amount will continue to be paid to NMC in every month where the amount of royalties otherwise payable would be less than the Minimum Royalty Amount, and such Advance Royalties will be treated as a prepayment of future royalty payments. In addition, fifty percent of the aggregate consulting fees paid to NMC from 2005 through December 31, 2010 were deemed to be prepayments of any future royalty payments. As of December 31, 2010, aggregate consulting fees previously incurred amounted to $1,320,000, representing credit for advance royalty payments of $660,000. | |||
Total advance royalty fees were $45,000 and $45,000 for the three month periods ended March 31, 2015 and 2014, respectively. Advanced royalty fees have been included in mineral exploration and evaluation expenses – related party on the statements of operations. | |||
Development agreement - In January 2009, the Company submitted a development agreement to the Town of Clarkdale for development of an Industrial Collector Road (the “Road”). The purpose of the Road is to provide the Company the capability to transport supplies, equipment and products to and from the Clarkdale Slag Project site efficiently and to meet stipulations of the Conditional Use Permit for the full production facility at the Clarkdale Slag Project. | |||
The timing of the development of the Road is to be within two years of the effective date of the agreement. The effective date shall be the later of (i) 30 days from the approving resolution of the agreement by the Council, (ii) the date on which the Town of Clarkdale obtains a connection dedication from separate property owners who have land that will be utilized in construction of the Road, or (iii) the date on which the Town of Clarkdale receives the proper effluent permit. The contingencies outlined in (ii) and (iii) above are beyond control of the Company. | |||
The Company estimates the initial cost of construction of the Road to be approximately $3,500,000 and the cost of additional enhancements to be approximately $1,200,000 which will be required to be funded by the Company. Based on the uncertainty of the contingencies, this cost is not included in the Company’s current operating plans. Funding for construction of the Road will require obtaining project financing or other significant financing. As of the date of this filing, these contingencies had not changed. | |||
Registration Rights Agreement - In connection with the June 7, 2012 private placement, the Company entered into a Registration Rights Agreement (“RRA”) with the purchasers. Pursuant to the RRA, the Company agreed to certain demand registration rights. These rights include the requirement that the Company file certain registration statements within a specified time period and to have these registration statements declared effective within a specified time period. The Company also agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions. If the Company is not able to comply with these registration requirements, the Company will be required to pay cash penalties equal to 1.0% of the aggregate purchase price paid by the investors for each 30 day period in which a registration default, as defined by the RRA, exists. The maximum penalty is equal to 3.0% of the purchase price which amounts to $121,500. As of the date of this filing, the Company does not believe the penalty to be probable and accordingly, no liability has been accrued. | |||
Registration Rights Agreement - In connection with the September 18, 2013 convertible notes issuance, the Company entered into a RRA with the investors. Pursuant to the RRA, the Company agreed to file a registration statement covering the resale of the shares of common stock issuable upon conversion of the notes and the additional notes allowed for under the agreement. Pursuant to the RRA, the Company agreed to certain demand registration rights. These rights include the requirement that the Company file certain registration statements within a specified time period and to have these registration statements declared effective within a specified time period. The Company also agreed to file and keep continuously effective such additional registration statements until all of the shares of common stock registered thereunder have been sold or may be sold without volume restrictions. The Purchasers will also be granted piggyback registration rights with respect to such shares. If the Company is not able to comply with these registration requirements, the Company will be required to pay cash penalties equal to 1.0% of the purchase price. The maximum penalty is equal to 3.0% of the purchase price which amounts to $120,000 for the convertible notes and $18,000 for the additional notes. As of the date of this filing, the Company does not believe the penalty to be probable and accordingly, no liability has been accrued. | |||
CONCENTRATION_OF_CREDIT_RISK
CONCENTRATION OF CREDIT RISK | 3 Months Ended | ||
Mar. 31, 2015 | |||
CONCENTRATION OF CREDIT RISK [Abstract] | |||
CONCENTRATION OF CREDIT RISK | 16 | CONCENTRATION OF CREDIT RISK | |
The Company maintains its cash accounts in financial institutions. Cash accounts at these financial institutions are insured by the Federal Deposit Insurance Corporation (the “FDIC”) for up to $250,000 per institution. The Company has never experienced a material loss or lack of access to its cash accounts; however, no assurance can be provided that access to the Company’s cash accounts will not be impacted by adverse conditions in the financial markets. At March 31, 2015, the Company had $1,242,163 of deposits in excess of FDIC insured limits. | |||
CONCENTRATION_OF_ACTIVITY
CONCENTRATION OF ACTIVITY | 3 Months Ended | ||
Mar. 31, 2015 | |||
Concentration Of Activity [Abstract] | |||
CONCENTRATION OF ACTIVITY | 17 | CONCENTRATION OF ACTIVITY | |
The Company currently utilizes a mining and environmental firm to perform significant portions of its mineral property and metallurgical exploration work programs. A change in the lead mining and environmental firm could cause a delay in the progress of the Company’s exploration programs and would cause the Company to incur significant transition expense and may affect operating results adversely. | |||
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Related Party Transactions [Abstract] | ||||||||
RELATED PARTY TRANSACTIONS | 18 | RELATED PARTY TRANSACTIONS | ||||||
NMC - The Company utilizes the services of NMC to provide technical assistance and financing related activities. In addition, NMC provides the Company with use of its laboratory, instrumentation, milling equipment and research facilities. One of the Company’s executive officers, Mr. Ager, is affiliated with NMC. The Company and NMC agreed to an advance royalty of $15,000 per month and to reimburse NMC for actual expenses incurred and consulting services provided. | ||||||||
The Company has an existing obligation to pay NMC a royalty consisting of 2.5% of the NSR on any and all proceeds of production from the Clarkdale Slag Project. The royalty agreement and advance royalty payments are more fully discussed in Note 15. | ||||||||
The following table provides details of transactions between the Company and NMC for the three months ended: | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Reimbursement of expenses | $ | - | $ | 4,376 | ||||
Consulting services provided | 30,000 | 30,000 | ||||||
Advance royalty payments | 45,000 | 45,000 | ||||||
Mineral and exploration expense – related party | $ | 75,000 | $ | 79,376 | ||||
The Company had outstanding balances due to NMC of $88,365 and $13,365 at March 31, 2015 and December 31, 2014, respectively. | ||||||||
Cupit, Milligan, Ogden & Williams, CPAs - The Company utilizes CMOW to provide accounting support services. CMOW is an affiliate of our CFO, Mr. Williams. Fees for services provided by CMOW do not include any charges for Mr. Williams’ time. Mr. Williams is compensated for his time under his employment agreement. | ||||||||
The following table provides details of transactions between the Company and CMOW and the direct benefit to Mr. Williams for the three month periods ended: | ||||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Accounting support services | $ | 63,064 | $ | 43,011 | ||||
Direct benefit to CFO | $ | 18,289 | $ | 16,774 | ||||
The Company had an outstanding balance due to CMOW of $71,238 and $8,174 as of March 31, 2015 and December 31, 2014, respectively. | ||||||||
Ireland Inc. – The Company leases corporate office space under a sublease agreement with Ireland Inc. (“Ireland”). NMC is a shareholder in both the Company and Ireland. Additionally, one of the Company’s directors is the CFO, Treasurer and a director of Ireland and the Company’s CEO provides consulting services to Ireland. The lease agreement commenced September 1, 2013, is for a two year period and requires monthly lease payments of $2,819 for the first year and $1,667 for the second year. The lease agreement did not require payment of a security deposit. | ||||||||
Total rent expense incurred under this sublease agreement was $5,001 and $8,457 for the three month periods ended March 31, 2015 and 2014, respectively. At March 31, 2015, the Company had an outstanding balance due to Ireland of $3,334. No amounts were due to Ireland as of December 31, 2014. | ||||||||
DESCRIPTION_OF_BUSINESS_HISTOR1
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (Policies) | 3 Months Ended | ||
Mar. 31, 2015 | |||
Accounting Policies [Abstract] | |||
Description of business | Description of business - Searchlight Minerals Corp. (the “Company”) has been in the exploration stage since its formation, and the Company has not yet realized any revenues from its planned operations. The Company is primarily focused on the exploration, acquisition and development of mining and mineral properties. Upon the location of commercially minable reserves, the Company plans to prepare for mineral extraction and enter the development stage. | ||
History | History - The Company was incorporated on January 12, 1999 pursuant to the laws of the State of Nevada under the name L.C.M. Equity, Inc. From 1999 to 2005, the Company operated primarily as a biotechnology research and development company with its headquarters in Canada and an office in the United Kingdom (the “UK”). On November 2, 2001, the Company entered into an acquisition agreement with Regma Bio Technologies, Ltd. pursuant to which Regma Bio Technologies, Ltd. entered into a reverse merger with the Company with the surviving entity named “Regma Bio Technologies Limited”. On November 26, 2003, the Company changed its name from “Regma Bio Technologies Limited” to “Phage Genomics, Inc.” (“Phage”). | ||
In February 2005, the Company announced its reorganization from a biotechnology research and development company to a company focused on the development and acquisition of mineral properties. In connection with its reorganization the Company entered into mineral option agreements to acquire an interest in the Searchlight mining claims. Also in connection with its corporate restructuring, its Board of Directors approved a change in its name from Phage to "Searchlight Minerals Corp.” effective June 23, 2005. | |||
Going concern | Going concern - The accompanying consolidated financial statements were prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The going concern basis of presentation assumes that the Company will continue in operation for the next twelve months and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the Company’s inability to continue as a going concern. The Company’s history of losses, working capital deficit, capital deficit, minimal liquidity and other factors raise substantial doubt about the Company’s ability to continue as a going concern. In order for the Company to continue operations beyond the next twelve months and be able to discharge its liabilities and commitments in the normal course of business it must raise additional equity or debt capital and continue cost cutting measures. There can be no assurance that the Company will be able to achieve sustainable profitable operations or obtain additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to management. | ||
If the Company continues to incur operating losses and does not raise sufficient additional capital, material adverse events may occur including, but not limited to, 1) a reduction in the nature and scope of the Company’s operations and 2) the Company’s inability to fully implement its current business plan. There can be no assurance that the Company will successfully improve its liquidity position. The accompanying consolidated financial statements do not reflect any adjustments that might be required resulting from the adverse outcome relating to this uncertainty. | |||
As of March 31, 2015, the Company had cumulative net losses of $56,775,380 from operations and had not commenced its commercial mining and mineral processing operations; rather it is still in the exploration stage. For the three month period ended March 31, 2015, the Company incurred a net loss of $1,369,571, had negative cash flows from operating activities of $988,405 and will incur additional future losses due to planned continued exploration expenses. In addition, the Company had a working capital deficit totaling $4,727,715 at March 31, 2015. | |||
To address liquidity constraints, the Company will seek additional sources of capital through the issuance of equity or debt financing. Additionally, the Company has reduced expenses and elected to defer payment of certain obligations. Cash conservation measures include, but are not limited to, the deferred payment of outsourced consulting fees where available, deferred payment of current and future board fees and reduction of staffing levels. The Company has deferred payment of officer salaries, monthly legal retainer fees, and the Verde River Iron Company, LLC (“VRIC”) monthly payable. These activities have reduced the required cash outlay of the Company’s business significantly. The Company is focused on continuing to reduce costs and obtaining additional funding. There is no assurance that such funding will be available on terms acceptable to the Company, or at all. If the Company raises additional funds by selling additional shares of capital stock, securities convertible into shares of capital stock or the issuance of convertible debt, the ownership interest of the Company’s existing common stock holders will be diluted. | |||
Basis of presentation | Basis of presentation - The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The Company’s fiscal year-end is December 31. | ||
These condensed consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. All such adjustments are, in the opinion of management, of a normal recurring nature. The results reported in these interim condensed consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on April 13, 2015. | |||
Principles of consolidation | Principles of consolidation - The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clarkdale Minerals, LLC (“CML”) and Clarkdale Metals Corp. (“CMC”). Significant intercompany accounts and transactions have been eliminated. | ||
Use of estimates | Use of estimates - The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring management’s estimates and assumptions include the valuation of stock-based compensation and derivative liabilities, impairment analysis of long-lived assets, and realizability of deferred tax assets. Actual results could differ from those estimates. | ||
Capitalized interest cost | Capitalized interest cost - The Company capitalizes interest cost related to acquisition, development and construction of property and equipment which is designed as integral parts of the manufacturing process. The capitalized interest is recorded as part of the asset it relates to and will be amortized over the asset’s useful life once production commences. | ||
Mineral properties | Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Once mineral reserves are established, development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the proven and probable reserves. | ||
Mineral exploration and development costs | Mineral exploration and development costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in mineral exploration and evaluation expense. | ||
Property and equipment | Property and equipment - Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 15 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operating expenses. | ||
Impairment of long-lived assets | Impairment of long-lived assets - The Company reviews and evaluates its long-lived assets for impairment at each balance sheet date due to its planned exploration stage losses and documents such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property. | ||
The tests for long-lived assets in the exploration, development or production stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts. | |||
The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value. | |||
Deferred financing fees | Deferred financing fees – Deferred financing fees represent fees paid in connection with obtaining debt financing. These fees are amortized using the effective interest method over the term of the financing. | ||
Convertible notes - derivative liabilities | Convertible notes – derivative liabilities – The Company evaluates the embedded features of convertible notes to determine if they are required to be bifurcated and recorded as a derivative liability. If more than one feature is required to be bifurcated, the features are accounted for as a single compound derivative. The fair value of the compound derivative is recorded as a derivative liability and a debt discount. The carrying value of the convertible notes is recorded on the date of issuance at its original value less the fair value of the compound derivative. | ||
The derivative liability is measured at fair value on a recurring basis with changes reported in other income (expense). Fair value is determined using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The debt discount is amortized to non-cash interest expense using the effective interest method over the life of the notes. If a conversion of the underlying note occurs, a proportionate share of the unamortized amount is immediately expensed. | |||
Reclamation and remediation costs | Reclamation and remediation costs - For its exploration stage properties, the Company accrues the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. | ||
Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised. | |||
The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known. | |||
Fair value of financial instruments | Fair value of financial instruments - The Company’s financial instruments consist principally of derivative liabilities and the VRIC payable. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial instruments within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The hierarchy is prioritized into three levels defined as follows: | ||
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | ||
Level 2 | Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and | ||
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | ||
The Company’s financial instruments consist of the VRIC payable (described in Note 9), derivative liabilities and convertible notes (described in Note 7). The VRIC payable and the convertible notes are classified within Level 2 of the fair value hierarchy. The fair value of the VRIC payable approximates carrying value as the imputed interest rate is considered to approximate a market interest rate. The fair value of the convertible notes approximates carrying value as the interest rate is considered to approximate a market interest rate. | |||
The Company calculates the fair value of its derivative liabilities using various models which are all Level 3 inputs. The fair value of the derivative warrant liability (described in Note 6) is calculated using the Binomial Lattice model, and the fair value of the derivative liability - convertible notes (described in Note 8) is calculated using a model which incorporates estimated probabilities and inputs calculated by both the Binomial Lattice model and present values. The change in fair value of the derivative liabilities is classified in other income (expense) in the consolidated statement of operations. The Company generally does not use derivative financial instruments to hedge exposures to cash flow, market or foreign currency risks. | |||
There have been no changes in the valuation techniques used for the derivative liabilities. The Company does not have any non-financial assets or liabilities that it measures at fair value. During the three months ended March 31, 2015 and 2014, there were no transfers of assets or liabilities between levels. | |||
Per share amounts | Per share amounts - Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as when the exercise price of the instrument exceeds the fair market value of the Company’s common stock and when a net loss is reported. The dilutive effect of convertible debt securities is reflected in the diluted earnings (loss) per share calculation using the if-converted method. Conversion of the debt securities is not assumed for purposes of calculating diluted earnings (loss) per share if the effect is anti-dilutive. At March 31, 2015 and 2014, 65,420,053 and 36,798,697 stock options, warrants and common shares issuable upon the conversion of notes were outstanding, respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive. | ||
Stock-based compensation | Stock-based compensation - Stock-based compensation awards are recognized in the consolidated financial statements based on the grant date fair value of the award which is estimated using the Binomial Lattice option pricing model. The Company believes that this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock. | ||
The fair value of performance-based stock option grants is determined on their grant date through the use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements. | |||
The Company accounts for stock options issued to non-employees based on the estimated fair value of the awards using the Binomial Lattice option pricing model. The measurement of stock-based compensation to non-employees is subject to periodic adjustments as the underlying equity instruments vest, and the resulting change in value, if any, is recognized in the Company’s consolidated statements of operations during the period the related services are rendered. | |||
Income taxes | Income taxes - The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. | ||
For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, and is reflected as an increase to the total purchase price which is then applied to the underlying acquired assets in the absence of there being a goodwill component associated with the acquisition transactions. | |||
Recent accounting standards | Recent accounting standards - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption. | ||
In April 2015, the FASB issued Accounting Standard Update (“ASU”) 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. This update simplifies the presentation of debt issuance costs by requiring debt issuance costs to be presented as a deduction from the corresponding debt liability. The update is effective in fiscal years, including interim periods, beginning after December 15, 2015, and early adoption is permitted. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity. | |||
In November 2014, the FASB issued ASU 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. The ASU clarifies how current guidance should be interpreted in evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the amendments clarify that an entity should consider all relevant terms and features, including the embedded derivative feature being evaluated for bifurcation, in evaluating the nature of a host contract. The ASU is effective for fiscal years and interim periods beginning after December 15, 2015. The Company is currently assessing the impact, if any, of implementing this guidance on its consolidated financial position, results of operations and liquidity. | |||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and, if so, disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt. The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows. | |||
In June 2014, the FASB issued ASU 2014-12, Compensation - Stock Compensation - Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period, which is effective for financial statements issued for interim and annual periods beginning on or after December 15, 2015. The guidance requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition and should not be reflected in the estimate of the grant-date fair value of the award. Adoption of the new guidance is not expected to have an impact on the consolidated financial position, results of operations or cash flows. | |||
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
PROPERTY AND EQUIPMENT [Abstract] | ||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment consisted of the following: | |||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||
Depreciation | Value | Depreciation | Value | |||||||||||||||||
Furniture and fixtures | $ | 38,255 | $ | -37,607 | $ | 648 | $ | 38,255 | $ | -37,476 | $ | 779 | ||||||||
Lab equipment | 249,061 | -248,320 | 741 | 249,061 | -247,356 | 1,705 | ||||||||||||||
Computers and equipment | 68,558 | -56,020 | 12,538 | 68,558 | -54,025 | 14,533 | ||||||||||||||
Vehicles | 47,675 | -45,633 | 2,042 | 47,675 | -45,458 | 2,217 | ||||||||||||||
Slag conveyance equipment | 300,916 | -300,916 | - | 300,916 | -300,916 | - | ||||||||||||||
Demo module building | 6,630,063 | -4,029,612 | 2,600,451 | 6,630,063 | -3,863,860 | 2,766,203 | ||||||||||||||
Grinding circuit | 913,679 | -14,167 | 899,512 | 913,679 | -11,667 | 902,012 | ||||||||||||||
Extraction circuit | 938,352 | -321,915 | 616,437 | 938,352 | -274,997 | 663,355 | ||||||||||||||
Leaching and filtration | 1,300,618 | -1,105,525 | 195,093 | 1,300,618 | -1,040,494 | 260,124 | ||||||||||||||
Fero-silicate storage | 4,326 | -1,839 | 2,487 | 4,326 | -1,731 | 2,595 | ||||||||||||||
Electrowinning building | 1,492,853 | -634,463 | 858,390 | 1,492,853 | -597,141 | 895,712 | ||||||||||||||
Site improvements | 1,677,843 | -622,389 | 1,055,454 | 1,675,906 | -591,259 | 1,084,647 | ||||||||||||||
Site equipment | 360,454 | -344,945 | 15,509 | 360,454 | -338,588 | 21,866 | ||||||||||||||
Construction in progress | 1,102,014 | - | 1,102,014 | 1,102,014 | - | 1,102,014 | ||||||||||||||
$ | 15,124,667 | $ | -7,763,351 | $ | 7,361,316 | $ | 15,122,730 | $ | -7,404,968 | $ | 7,717,762 | |||||||||
CLARKDALE_SLAG_PROJECT_Tables
CLARKDALE SLAG PROJECT (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Business Combinations [Abstract] | ||||||||
Schedule of Clarkdale Slag Project | The following table reflects the recorded purchase consideration for the Clarkdale Slag Project: | |||||||
Purchase price: | ||||||||
Cash payments | $ | 10,100,000 | ||||||
Joint venture option acquired in 2005 for cash | 690,000 | |||||||
Warrants issued for joint venture option | 1,918,481 | |||||||
Common stock issued | 66,879,375 | |||||||
Monthly payments, current portion | 167,827 | |||||||
Monthly payments, net of current portion | 2,333,360 | |||||||
Acquisition costs | 127,000 | |||||||
Total purchase price | 82,216,043 | |||||||
Net deferred income tax liability assumed - Clarkdale Slag Project | 48,076,734 | |||||||
Total | $ | 130,292,777 | ||||||
The following table reflects the components of the Clarkdale Slag Project: | ||||||||
Allocation of acquisition cost: | ||||||||
Clarkdale Slag Project (including net deferred income tax liability assumed of $48,076,734) | $ | 120,766,877 | ||||||
Land - smelter site and slag pile | 5,916,150 | |||||||
Land | 3,300,000 | |||||||
Income property and improvements | 309,750 | |||||||
Total | $ | 130,292,777 | ||||||
The following table sets forth the change in the Slag Project for the three month period ended March 31, 2015 and the year ended December 31, 2014: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Slag Pile, beginning balance | $ | 121,829,655 | $ | 121,759,811 | ||||
Capitalized interest costs | 13,454 | 69,844 | ||||||
Slag Pile, ending balance | $ | 121,843,109 | $ | 121,829,655 | ||||
ACCOUNTS_PAYABLE_AND_ACCRUED_L1
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES [Abstract] | ||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities at March 31, 2015 and December 31, 2014 consisted of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Trade accounts payable | $ | 969,429 | $ | 728,021 | ||||
Accrued compensation and related taxes | 201,593 | 88,293 | ||||||
Accrued interest | 23,867 | 81,637 | ||||||
$ | 1,194,889 | $ | 897,951 | |||||
DERIVATIVE_WARRANT_LIABILITY_T
DERIVATIVE WARRANT LIABILITY (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Derivative [Line Items] | |||||||||||||
Schedule Of Fair Value Assumptions Warrants | With respect to the extensions, the Company did not recognize any additional expense as the fair values of the warrants were calculated at zero using the Binomial Lattice model with the following assumptions: | ||||||||||||
November 11, | October 25, | November 1, | |||||||||||
2014 | 2013 | 2012 | |||||||||||
Risk-free interest rate | 0.14 | % | 0.11 | % | 0.19 | % | |||||||
Expected volatility | 142.72 | % | 114.79 | % | 94.94 | % | |||||||
Expected life (years) | 1 | 1 | 1 | ||||||||||
Schedule of Assumptions used to Establish Valuation of Warrants | The Company estimates the fair value of the derivative liabilities by using the Binomial Lattice pricing-model, with the following assumptions used for the three month period ended March 31, 2015 and the year ended December 31, 2014: | ||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Dividend yield | - | - | |||||||||||
Expected volatility | 63.85% | 29.38% - 153.76% | |||||||||||
Risk-free interest rate | 0.11% - 0.14% | 0.02% - 0.26% | |||||||||||
Expected life (years) | 0.6 | 0.10 – 1.0 | |||||||||||
Warrant [Member] | |||||||||||||
Derivative [Line Items] | |||||||||||||
Schedule of Changes in Fair Value of Derivative Liabilities | The following table sets forth the changes in the fair value of derivative liability for the three month period ended March 31, 2015 and the year ended December 31, 2014: | ||||||||||||
March 31, | December 31, | ||||||||||||
2015 | 2014 | ||||||||||||
Beginning balance | $ | - | $ | -81,574 | |||||||||
Adjustment to warrants | - | - | |||||||||||
Change in fair value | - | 81,574 | |||||||||||
Ending balance | $ | - | $ | - | |||||||||
CONVERTIBLE_NOTES_Tables
CONVERTIBLE NOTES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Convertible Debt [Abstract] | ||||||||
Convertible Debt | The carrying value of the convertible debt, net of discount was comprised of the following: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Convertible notes at face value | $ | 4,069,000 | $ | 4,000,000 | ||||
Issuance of additional notes | - | 69,000 | ||||||
Unamortized discount | -923,906 | -981,620 | ||||||
Convertible notes, net of discount | $ | 3,145,094 | $ | 3,087,380 | ||||
Schedule Of Notes Payable | The effective interest rate on the Notes is 15.4% which included the following components and amounts for the three months ended: | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Interest rate at 7% | $ | 71,191 | $ | 70,000 | ||||
Amortization of debt discount | 57,714 | 53,510 | ||||||
Amortization of deferred financing fees | 5,994 | 5,557 | ||||||
Interest expense - convertible notes | $ | 134,899 | $ | 129,067 | ||||
DERIVATIVE_LIABILITY_CONVERTIB1
DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Schedule Of Fair Value Assumptions | Assumptions used for the three months ended March 31, 2015 and 2014 included redemption and conversion estimates/behaviors, estimates regarding future anti-dilutive financing agreements and the following other significant estimates: | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Expected volatility | 105.61 | % | 96.46 | % | ||||
Risk-free interest rate | 1.13 | % | 1.73 | % | ||||
Expected life (years) | 2 | 3 | ||||||
Convertible Notes Payable [Member] | ||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||||||
Schedule Of Derivative Liabilities At Fair Value | The following table sets forth the changes in the fair value of the derivative liability for the three month period ended March 31, 2015 and the year ended December 31, 2014: | |||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Beginning balance | $ | 1,218,619 | $ | 755,709 | ||||
Issuance of convertible debt | - | 9,519 | ||||||
Change in fair value | 252,593 | 453,391 | ||||||
Ending balance | $ | 1,471,212 | $ | 1,218,619 | ||||
VRIC_PAYABLE_RELATED_PARTY_Tab
VRIC PAYABLE - RELATED PARTY (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Other Liabilities Disclosure [Abstract] | |||||
Schedule of Future Principal Payments on VRIC Payable | The following table represents future minimum payments on the VRIC payable for each of the twelve month periods ending March 31: | ||||
2016 | $ | 450,000 | |||
2017 | 311,195 | ||||
Thereafter | - | ||||
Total minimum payments | 761,195 | ||||
Less: amount representing interest | -63,051 | ||||
Present value of minimum payments | 698,144 | ||||
VRIC payable, current portion | 398,451 | ||||
VRIC payable, net of current portion | $ | 299,693 | |||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | ||||||
Mar. 31, 2015 | |||||||
STOCKHOLDERS' EQUITY [Abstract] | |||||||
Schedule Of Outstanding Warrants Issued To Investors To Purchase Common Stock | The following summarizes the exercise price per share and expiration date of our outstanding warrants issued to investors to purchase common stock at March 31, 2015: | ||||||
Shares Underlying Outstanding Warrants | Exercise Price | Expiration Date | |||||
7,750,000 | $ | 0.375 | Jun-15 | ||||
3,184,818 | 1.36 | Nov-15 | |||||
5,323,768 | 1.39 | Nov-15 | |||||
7,042,387 | 1.85 | Nov-15 | |||||
1,000,000 | 0.375 | Jun-17 | |||||
316,752 | 0.3 | Sep-19 | |||||
2,197,500 | 0.3 | Oct-19 | |||||
1,000,000 | 0.3 | Nov-19 | |||||
1,498,750 | 0.3 | Dec-19 | |||||
3,981,000 | 0.5 | Dec-19 | |||||
4,250,000 | 0.5 | Mar-20 | |||||
37,544,975 | |||||||
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Schedule of Assumptions Used to Estimate Fair Value of Stock Based Compensation Awards | For both service-based and performance-based stock option grants, the Company estimates the fair value of stock-based compensation awards by using the Binomial Lattice option pricing model with the following assumptions used for the three month periods ended: | ||||||||||||||||
March 31, | March 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Risk-free interest rate | 0.24% - 1.37% | 0.39% - 1.73% | |||||||||||||||
Dividend yield | - | - | |||||||||||||||
Expected volatility | 91.23% - 105.19% | 98.65% - 105.87% | |||||||||||||||
Expected life (years) | 1.00 - 4.25 | 2.00 - 4.25 | |||||||||||||||
Summary of Stock-based Compensation Activity | The following table summarizes the Company’s stock-based compensation activity for the three month period ended March 31, 2015: | ||||||||||||||||
Number of | Weighted | Weighted | Weighted | Aggregate | |||||||||||||
Shares | Average | Average | Average | Intrinsic | |||||||||||||
Grant | Exercise Price | Remaining | Value | ||||||||||||||
Date Fair | Contractual | ||||||||||||||||
Value | Life | ||||||||||||||||
(Years) | |||||||||||||||||
Outstanding, December 31, 2014 | 17,387,745 | $ | 0.24 | $ | 0.55 | 4.53 | |||||||||||
Options/warrants granted | 54,000 | 0.12 | 0.33 | 5 | |||||||||||||
Options/warrants expired | - | - | - | - | |||||||||||||
Options/warrants exercised | - | - | - | - | |||||||||||||
Outstanding, March 31, 2015 | 17,441,745 | $ | 0.25 | $ | 0.55 | 4.32 | $ | 52,578 | |||||||||
Exercisable, March 31, 2015 | 17,091,745 | $ | 0.23 | $ | 0.53 | 4.27 | $ | 52,578 | |||||||||
Schedule of Changes to Stock Based Compensation Awards Subject to Vesting | The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the three month period ended March 31, 2015: | ||||||||||||||||
Number of | Weighted | ||||||||||||||||
Shares Subject | Average | ||||||||||||||||
to Vesting | Grant Date | ||||||||||||||||
Fair Value | |||||||||||||||||
Unvested, December 31, 2014 | 350,000 | $ | 0.93 | ||||||||||||||
Options/warrants granted | - | - | |||||||||||||||
Options/warrants vested | - | - | |||||||||||||||
Unvested, March 31, 2015 | 350,000 | $ | 0.93 | ||||||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Income Tax Disclosure [Abstract] | ||||||||
Schedule of Net Deferred Tax Assets and Liabilities | Significant components of the Company’s net deferred income tax assets and liabilities at March 31, 2015 and December 31, 2014 were as follows: | |||||||
March 31, 2015 | December 31, 2014 | |||||||
Deferred income tax assets: | ||||||||
Net operating loss carryforward | $ | 18,944,766 | $ | 18,520,488 | ||||
Option compensation | 1,467,477 | 1,451,484 | ||||||
Property, plant & equipment | 1,330,212 | 1,264,961 | ||||||
Gross deferred income tax assets | 21,742,455 | 21,236,933 | ||||||
Less: valuation allowance | -422,759 | -480,288 | ||||||
Net deferred income tax assets | 21,319,696 | 20,756,645 | ||||||
Deferred income tax liabilities: | ||||||||
Acquisition related liabilities | -48,224,926 | -48,304,113 | ||||||
Net deferred income tax liability | $ | -26,905,230 | $ | -27,547,468 | ||||
Schedule of Reconciliation of Deferred Income Tax Benefit | A reconciliation of the deferred income tax benefit for the three month periods ended March 31, 2015 and 2014 at US federal and state income tax rates to the actual tax provision recorded in the financial statements consisted of the following components: | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Deferred tax benefit at statutory rates | $ | 704,133 | $ | 572,140 | ||||
State deferred tax benefit, net of federal benefit | 60,354 | 49,041 | ||||||
Increase (decrease) in deferred tax benefit from: | ||||||||
Change in valuation allowance | 57,529 | 100,186 | ||||||
Change in state NOL’s | -59,531 | -47,874 | ||||||
Gain (loss) on the change in fair value of derivative liabilities | -95,985 | 75,429 | ||||||
Other permanent differences | -24,262 | -25,535 | ||||||
Deferred income tax benefit | $ | 642,238 | $ | 723,387 | ||||
RELATED_PARTY_TRANSACTIONS_Tab
RELATED PARTY TRANSACTIONS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Nanominerals Corporation [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Schedule of Related Party Transactions | The following table provides details of transactions between the Company and NMC for the three months ended: | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Reimbursement of expenses | $ | - | $ | 4,376 | ||||
Consulting services provided | 30,000 | 30,000 | ||||||
Advance royalty payments | 45,000 | 45,000 | ||||||
Mineral and exploration expense – related party | $ | 75,000 | $ | 79,376 | ||||
Cupit Milligan Ogden Williams Certified Public Accountants [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Schedule of Related Party Transactions | The following table provides details of transactions between the Company and CMOW and the direct benefit to Mr. Williams for the three month periods ended: | |||||||
March 31, | March 31, | |||||||
2015 | 2014 | |||||||
Accounting support services | $ | 63,064 | $ | 43,011 | ||||
Direct benefit to CFO | $ | 18,289 | $ | 16,774 | ||||
DESCRIPTION_OF_BUSINESS_HISTOR2
DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (Additional Information) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Accumulated deficit during exploration stage | $56,775,380 | |
Net loss | -1,369,571 | -911,299 |
Cash flows from operating activities | -988,405 | -1,234,600 |
Working Capital Deficit | $4,727,715 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 65,420,053 | 36,798,697 |
Minimum [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, estimated useful lives | 3 years | |
Maximum [Member] | ||
Organization And Summary Of Significant Accounting Policies [Line Items] | ||
Property and equipment, estimated useful lives | 15 years |
RESTRICTED_CASH_Details_Textua
RESTRICTED CASH (Details Textual) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Restricted Cash and Cash Equivalents | $227,345 | $0 |
PROPERTY_AND_EQUIPMENT_Additio
PROPERTY AND EQUIPMENT (Additional Information) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $358,383 | $378,825 |
Operating Leases, Rent Expense | 5,001 | 8,457 |
Proceeds from Sale of Property, Plant, and Equipment | $457,548 | $0 |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Cost | $15,124,667 | $15,122,730 |
Accumulated Depreciation | -7,763,351 | -7,404,968 |
Net Book Value | 7,361,316 | 7,717,762 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 38,255 | 38,255 |
Accumulated Depreciation | -37,607 | -37,476 |
Net Book Value | 648 | 779 |
Lab Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 249,061 | 249,061 |
Accumulated Depreciation | -248,320 | -247,356 |
Net Book Value | 741 | 1,705 |
Computers and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 68,558 | 68,558 |
Accumulated Depreciation | -56,020 | -54,025 |
Net Book Value | 12,538 | 14,533 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 47,675 | 47,675 |
Accumulated Depreciation | -45,633 | -45,458 |
Net Book Value | 2,042 | 2,217 |
Slag conveyance equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 300,916 | 300,916 |
Accumulated Depreciation | -300,916 | -300,916 |
Net Book Value | 0 | 0 |
Demo Module Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 6,630,063 | 6,630,063 |
Accumulated Depreciation | -4,029,612 | -3,863,860 |
Net Book Value | 2,600,451 | 2,766,203 |
Grinding Circuit [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 913,679 | 913,679 |
Accumulated Depreciation | -14,167 | -11,667 |
Net Book Value | 899,512 | 902,012 |
Extraction Circuit [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 938,352 | 938,352 |
Accumulated Depreciation | -321,915 | -274,997 |
Net Book Value | 616,437 | 663,355 |
Leaching And Filtration [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,300,618 | 1,300,618 |
Accumulated Depreciation | -1,105,525 | -1,040,494 |
Net Book Value | 195,093 | 260,124 |
Fero-silicate storage [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 4,326 | 4,326 |
Accumulated Depreciation | -1,839 | -1,731 |
Net Book Value | 2,487 | 2,595 |
Electrowinning Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,492,853 | 1,492,853 |
Accumulated Depreciation | -634,463 | -597,141 |
Net Book Value | 858,390 | 895,712 |
Site improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,677,843 | 1,675,906 |
Accumulated Depreciation | -622,389 | -591,259 |
Net Book Value | 1,055,454 | 1,084,647 |
Site equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 360,454 | 360,454 |
Accumulated Depreciation | -344,945 | -338,588 |
Net Book Value | 15,509 | 21,866 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 1,102,014 | 1,102,014 |
Accumulated Depreciation | 0 | 0 |
Net Book Value | $1,102,014 | $1,102,014 |
CLARKDALE_SLAG_PROJECT_Additio
CLARKDALE SLAG PROJECT (Additional Information) (Details) (USD $) | 3 Months Ended | 1 Months Ended | ||||
Mar. 31, 2015 | Feb. 15, 2007 | Mar. 31, 2014 | Jul. 25, 2011 | Dec. 31, 2010 | 20-May-05 | |
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Advance royalty payment amount | $45,000 | $45,000 | ||||
Accumulated Capitalized Interest Costs | 1,076,232 | 1,062,778 | ||||
Purchase of assets, purchase price | 130,292,777 | |||||
Land Smelter Site And Slag Pile [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Allocation of acquisition cost | 5,916,150 | |||||
Land [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Allocation of acquisition cost | 3,300,000 | |||||
Building and Building Improvements [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Allocation of acquisition cost | 309,750 | |||||
Nanominerals Corporation [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Advance royalty payment amount | 15,000 | 660,000 | ||||
Clarkdale Slag Project [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Purchase of assets, ownership interest acquired | 100.00% | |||||
Allocation of acquisition cost | 120,766,877 | 120,766,877 | ||||
Purchase of assets, purchase price | 130,292,777 | 130,300,000 | ||||
Clarkdale Slag Project [Member] | Land Smelter Site And Slag Pile [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Allocation of acquisition cost | 5,916,150 | |||||
Clarkdale Slag Project [Member] | Land [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Allocation of acquisition cost | 3,300,000 | |||||
Clarkdale Slag Project [Member] | Building and Building Improvements [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Allocation of acquisition cost | 309,750 | |||||
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Joint venture ownership interest | 50.00% | 50.00% | ||||
Additional contingent payment | 1,320,000 | |||||
Royalty payment percentage | 2.50% | |||||
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | Scenario, Previously Reported [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Joint venture ownership interest | 50.00% | 50.00% | ||||
Royalty payment percentage | 5.00% | 5.00% | ||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Common stock issued | 16,825,000 | |||||
Common stock issued, per share | $3.98 | |||||
Monthly payments, current portion | 30,000 | |||||
Monthly payment Period | 90 days | |||||
Additional contingent payment | 6,400,000 | |||||
Advance royalty payment amount | 500,000 | |||||
Royalty payment percentage | 2.50% | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Minimum [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Advance royalty payment amount | 500,000 | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Royalty Payments [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Monthly payments, current portion | 30,000 | |||||
Additional contingent payment | 500,000 | |||||
Royalty payment percentage | 2.50% | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Cash Flow [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Additional contingent payment | 3,500,000 | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | On Execution Of Letter Agreement [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Monthly payments, current portion | 200,000 | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | On Closing Date [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Monthly payments, current portion | $9,900,000 | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Scenario, Previously Reported [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Joint venture ownership interest | 50.00% | |||||
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | Nanominerals Corporation [Member] | ||||||
Noncash or Part Noncash Acquisitions [Line Items] | ||||||
Royalty payment percentage | 2.50% |
CLARKDALE_SLAG_PROJECT_Purchas
CLARKDALE SLAG PROJECT (Purchase Consideration for Clarkdale Slag Project) (Details) (USD $) | 1 Months Ended | 3 Months Ended |
Feb. 15, 2007 | Mar. 31, 2015 | |
Purchase price: | ||
Total | $130,292,777 | |
Clarkdale Slag Project [Member] | ||
Purchase price: | ||
Cash payments | 10,100,000 | |
Joint venture option acquired in 2005 for cash | 690,000 | |
Warrants issued for joint venture option | 1,918,481 | |
Common stock issued | 66,879,375 | |
Acquisition costs | 127,000 | |
Total purchase price | 82,216,043 | |
Net deferred income tax liability assumed - Clarkdale Slag Project | 48,076,734 | |
Total | 130,300,000 | 130,292,777 |
Clarkdale Slag Project [Member] | Current Liabilities [Member] | ||
Purchase price: | ||
Monthly payments, current portion | 167,827 | |
Clarkdale Slag Project [Member] | Noncurrent Liabilities [Member] | ||
Purchase price: | ||
Monthly payments, net of current portion | $2,333,360 |
CLARKDALE_SLAG_PROJECT_Compone
CLARKDALE SLAG PROJECT (Components of Clarkdale Slag Project) (Details) (USD $) | 1 Months Ended | 3 Months Ended |
Feb. 15, 2007 | Mar. 31, 2015 | |
Purchase price: | ||
Total | $130,292,777 | |
Land - smelter site and slag pile [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | 5,916,150 | |
Land [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | 3,300,000 | |
Building and Building Improvements [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | 309,750 | |
Clarkdale Slag Project [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | 120,766,877 | 120,766,877 |
Total | 130,300,000 | 130,292,777 |
Clarkdale Slag Project [Member] | Land - smelter site and slag pile [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | 5,916,150 | |
Clarkdale Slag Project [Member] | Land [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | 3,300,000 | |
Clarkdale Slag Project [Member] | Building and Building Improvements [Member] | ||
Purchase price: | ||
Allocation of acquisition cost | $309,750 |
CLARKDALE_SLAG_PROJECT_Changes
CLARKDALE SLAG PROJECT (Changes in the Slag Project) (Details) (Slag Project [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Slag Project [Member] | ||
Noncash or Part Noncash Acquisitions [Line Items] | ||
Slag Pile, beginning balance | $121,829,655 | $121,759,811 |
Capitalized interest costs | 13,454 | 69,844 |
Slag Pile, ending balance | $121,843,109 | $121,829,655 |
ACCOUNTS_PAYABLE_AND_ACCRUED_L2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Accounts Payable And Accrued Liabilities [Line Items] | ||
Trade accounts payable | $969,429 | $728,021 |
Accrued compensation and related taxes | 201,593 | 88,293 |
Accrued interest | 23,867 | 81,637 |
Accounts payable and accrued liabilities | $1,194,889 | $897,951 |
DERIVATIVE_WARRANT_LIABILITY_A
DERIVATIVE WARRANT LIABILITY (Additional Information) (Details) (USD $) | 3 Months Ended | 0 Months Ended | |||
Mar. 31, 2015 | Nov. 12, 2009 | Dec. 31, 2014 | Mar. 23, 2015 | Jun. 07, 2012 | |
Warrant [Member] | |||||
Derivative [Line Items] | |||||
Warrants expiration date | 12-Nov-15 | ||||
Derivative Liability, Number of Instruments Held | 8,508,588 | 8,153,697 | |||
Warrant [Member] | Maximum [Member] | |||||
Derivative [Line Items] | |||||
Exercise price of warrant | 1.85 | ||||
Warrant [Member] | Minimum [Member] | |||||
Derivative [Line Items] | |||||
Exercise price of warrant | 1.36 | ||||
Private Placement [Member] | |||||
Derivative [Line Items] | |||||
Exercise price of warrant | $1.85 | $0.50 | |||
Warrants expiration date | 12-Nov-12 | ||||
Warrants issued | 354,891 | ||||
Private Placement [Member] | Luxor Capital Partners LP [Member] | |||||
Derivative [Line Items] | |||||
Total number of warrants that anti dilution rights were waived on | 4,252,883 | ||||
Exercise price of warrant | $1.39 | ||||
Private Placement [Member] | Stock Issuance Costs [Member] | |||||
Derivative [Line Items] | |||||
Shares of common stock that can be purchased by the warrants | 6,341,263 | ||||
Private Placement [Member] | Scenario Cumulative Adjustment [Member] | |||||
Derivative [Line Items] | |||||
Shares of common stock that can be purchased by the warrants | 2,167,325 |
DERIVATIVE_WARRANT_LIABILITY_S
DERIVATIVE WARRANT LIABILITY (Schedule of Fair Value of Warrants) (Details) (Warrant [Member]) | 0 Months Ended | 1 Months Ended | |
Nov. 11, 2014 | Oct. 25, 2013 | Nov. 01, 2012 | |
Warrant [Member] | |||
Derivative [Line Items] | |||
Risk-free interest rate | 0.14% | 0.11% | 0.19% |
Expected volatility | 142.72% | 114.79% | 94.94% |
Expected life (years) | 1 year | 1 year | 1 year |
DERIVATIVE_WARRANT_LIABILITY_C
DERIVATIVE WARRANT LIABILITY (Changes in Fair Value of Derivative Liabilities) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | ||
Beginning balance | $0 | ($81,574) |
Adjustment to warrants | 0 | 0 |
Change in fair value | 0 | 81,574 |
Ending balance | $0 | $0 |
DERIVATIVE_WARRANT_LIABILITY_A1
DERIVATIVE WARRANT LIABILITY (Assumptions Used to Estimates Fair Value of Derivative Liabilities) (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Derivative [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility | 63.85% | |
Expected life (years) | 7 months 6 days | |
Minimum [Member] | ||
Derivative [Line Items] | ||
Expected volatility | 29.38% | |
Risk-free interest rate | 0.11% | 0.02% |
Expected life (years) | 1 month 6 days | |
Maximum [Member] | ||
Derivative [Line Items] | ||
Expected volatility | 153.76% | |
Risk-free interest rate | 0.14% | 0.26% |
Expected life (years) | 1 year |
CONVERTIBLE_NOTES_Additional_I
CONVERTIBLE NOTES (Additional Information) (Details) (USD $) | 1 Months Ended | 3 Months Ended | ||
Sep. 18, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 10, 2014 | |
Debt Conversion [Line Items] | ||||
Percentage Of Principal Balance Payable Upon Change Of Control | 120.00% | |||
Debt Instrument, Convertible, Conversion Price | $0.39 | |||
Deferred Finance Costs, Noncurrent, Net | $91,407 | $97,401 | ||
Notes Payable Additional Issuance | 0 | 69,000 | 69,000 | |
Restricted Cash and Cash Equivalents | 227,345 | 0 | ||
Convertible Notes Payable [Member] | ||||
Debt Conversion [Line Items] | ||||
Proceeds from Convertible Debt | 4,000,000 | |||
Debt Instrument, Term | 5 years | |||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 7.00% | |||
Debt Instrument, Debt Default, Percentage Of Interest | 9.00% | |||
Percentage Of Principal Balance Payable Upon Change Of Control | 120.00% | |||
Additional Secured Indebtedness Amount | 600,000 | |||
Debt Instrument, Convertible, Conversion Price | $0.40 | $0.39 | ||
Debt Conversion, Converted Instrument, Shares Issued | 10,433,333 | |||
Deferred Finance Costs, Noncurrent, Net | 126,446 | |||
Derivative Liability | $1,261,285 | |||
Debt Instrument, Interest Rate, Stated Percentage | 15.40% |
CONVERTIBLE_NOTES_Schedule_of_
CONVERTIBLE NOTES (Schedule of Carrying value of the Convertible debt) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 10, 2014 |
Debt Conversion [Line Items] | |||
Convertible notes at face value | $4,069,000 | $4,000,000 | |
Issuance of additional notes | 0 | 69,000 | 69,000 |
Unamortized discount | -923,906 | -981,620 | |
Convertible notes, net of discount | $3,145,094 | $3,087,380 |
CONVERTIBLE_NOTES_Schedule_of_1
CONVERTIBLE NOTES (Schedule of Components and amounts of effective interest rate) (Details) (Notes Payable, Other Payables [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Notes Payable, Other Payables [Member] | ||
Debt Conversion [Line Items] | ||
Interest rate at 7% | $71,191 | $70,000 |
Amortization of debt discount | 57,714 | 53,510 |
Amortization of deferred financing fees | 5,994 | 5,557 |
Interest expense - convertible notes | $134,899 | $129,067 |
DERIVATIVE_LIABILITY_CONVERTIB2
DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Additional Information) (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Debt Instrument, Convertible, Conversion Price | $0.39 |
Percentage Of Principal Balance Payable Upon Change Of Control | 120.00% |
Private Placement [Member] | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Proceeds from Issuance of Long-term Debt, Total | $4,069,000 |
DERIVATIVE_LIABILITY_CONVERTIB3
DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Schedule of Other significant estimates) (Details) (Convertible Notes Payable [Member]) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Convertible Notes Payable [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Expected volatility | 105.61% | 96.46% |
Risk-free interest rate | 1.13% | 1.73% |
Expected life (years) | 2 years | 3 years |
DERIVATIVE_LIABILITY_CONVERTIB4
DERIVATIVE LIABILITY - CONVERTIBLE NOTES (Schedule of fair value of the derivative liability) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Derivative Liability And Convertible Debt [Line Items] | ||
Ending balance | $0 | $1,218,619 |
Convertible Notes Payable [Member] | ||
Derivative Liability And Convertible Debt [Line Items] | ||
Beginning balance | 1,218,619 | 755,709 |
Issuance of convertible debt | 0 | 9,519 |
Change in fair value | 252,593 | 453,391 |
Ending balance | $1,471,212 | $1,218,619 |
VRIC_PAYABLE_RELATED_PARTY_Add
VRIC PAYABLE - RELATED PARTY (Additional Information) (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 18, 2014 | |
Recorded Unconditional Purchase Obligation [Line Items] | |||
Additional Paid in Capital | $255,000 | ||
Clarkdale Slag Project [Member] | |||
Recorded Unconditional Purchase Obligation [Line Items] | |||
Capitalized Interest Costs, Including Allowance for Funds Used During Construction, Total | 13,454 | 19,615 | |
Clarkdale Slag Project [Member] | Verde River Iron Company Limited Liability Company [Member] | |||
Recorded Unconditional Purchase Obligation [Line Items] | |||
Monthly payments | 30,000 | ||
Effective interest rate used for present value of monthly payment | 8.00% | ||
Purchase of assets, Present value of monthly payment commitment | 2,501,187 | ||
Purchase of assets, imputed interest on the monthly payment commitment | $1,128,813 | ||
Expected term used for present value of monthly payment | 10 years |
VRIC_PAYABLE_RELATED_PARTY_Fut
VRIC PAYABLE - RELATED PARTY (Future Principal Payments on VRIC Payable) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | ||
2016 | $450,000 | |
2017 | 311,195 | |
Thereafter | 0 | |
Total minimum payments | 761,195 | |
Less: amount representing interest | -63,051 | |
Present value of minimum payments | 698,144 | |
VRIC payable, current portion | 398,451 | 315,552 |
VRIC payable, net of current portion | $299,693 | $382,592 |
STOCKHOLDERS_EQUITY_Additional
STOCKHOLDERS' EQUITY (Additional Information) (Details) (USD $) | 1 Months Ended | ||||
Mar. 23, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 18, 2015 | Nov. 12, 2009 | |
Stockholders Equity Note [Line Items] | |||||
Proceeds from Issuance of Private Placement | $1,500,000 | ||||
Interest Payable | 23,867 | 81,637 | |||
Convertible Notes Payable [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Interest Payable | $129,115 | ||||
Common Stock [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Shares Issued, Price Per Share | $0.25 | ||||
Shares, Issued | 516,460 | ||||
Private Placement [Member] | |||||
Stockholders Equity Note [Line Items] | |||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.50 | $1.85 | |||
Common Stock Units Issued During Period | 4,250,000 | ||||
Common Stock Unit Price Per Share | $0.35 |
STOCKHOLDERS_EQUITY_Schedule_O
STOCKHOLDERS' EQUITY (Schedule Of Outstanding Warrants Issued To Investors To Purchase Common Stock) (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 37,544,975 |
Class Of Warrant Or Right One [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 7,750,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.38 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Jun-15 |
Class Of Warrant Or Right Two [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 3,184,818 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.36 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Nov-15 |
Class Of Warrant Or Right Three [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 5,323,768 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.39 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Nov-15 |
Class Of Warrant Or Right Four [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 7,042,387 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $1.85 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Nov-15 |
Class Of Warrant Or Right Five [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 1,000,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.38 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Jun-17 |
Class Of Warrant Or Right Six [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 316,752 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.30 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Sep-19 |
Class Of Warrant Or Right Seven [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 2,197,500 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.30 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 31-Oct-19 |
Class Of Warrant Or Right Eight [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 1,000,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.30 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 30-Nov-19 |
Class Of Warrant Or Right Nine [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 1,498,750 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.30 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 31-Dec-19 |
Class Of Warrant Or Right Ten [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 3,981,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.50 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 31-Dec-19 |
Class Of Warrant Or Right Eleven [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 4,250,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $0.50 |
Class of Warrant or Right, Expiration Date of Warrants or Rights | 31-Mar-20 |
STOCKBASED_COMPENSATION_Additi
STOCK-BASED COMPENSATION (Additional Information) (Details) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 23, 2015 | Jan. 13, 2014 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares available for issuance for stock option awards | 5,533,576 | ||||
Expenses related to vesting and granting of stock-based compensation awards | $42,088 | $33,025 | |||
Stock option granted, weighted average exercise price | $0.33 | ||||
Stock option outstanding | 17,441,745 | 17,387,745 | |||
Unrecognized compensation cost related to unvested stock-based compensation awards | 10,966 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 0 | 74,731 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Ending Balance | 350,000 | 350,000 | |||
Weighted Average Period For Recognized Costs | 9 months | ||||
Weighted Average Period For Recognized Expenses | 9 months | ||||
Non Employee Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted, shares | 659,890 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 18,000 | ||||
Value of common stock per quarter directors can choice to receive | 9,000 | ||||
Stock option granted, weighted average exercise price | $0.83 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | 31,544 | ||||
Consultant Awards [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted, shares | 200,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Incremental Compensation Cost | $5,011 | ||||
Performance Shares [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares, Ending Balance | 250,000 | ||||
Stock Option Plan 2007 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares available for issuance for stock option awards | 1,047,953 | ||||
Stock option plan, maximum options to purchase shares of common stock that may be granted | 4,000,000 | ||||
Stock option granted, shares | 2,952,047 | ||||
Stock option granted, weighted average exercise price | $0.61 | ||||
Stock option outstanding | 2,763,618 | ||||
Stock Option Plan 2007 [Member] | Minimum [Member] | Nonqualified Stock Options [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option plan, exercise price as a percentage of fair market value | 85.00% | ||||
Stock Option Plan 2009 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares available for issuance for stock option awards | 3,812,500 | ||||
Stock option plan, maximum options to purchase shares of common stock that may be granted | 7,250,000 | ||||
Stock option granted, shares | 3,437,500 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 500,000 | ||||
Stock option granted, weighted average exercise price | $0.68 | ||||
Stock option outstanding | 3,397,500 | ||||
Stock Option Plan 2009 [Member] | Non-Management Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted, shares | 54,000 | 54,000 | |||
Stock option, expiration date | 31-Mar-20 | 31-Mar-19 | |||
Stock option granted, weighted average exercise price | $0.33 | $0.26 | |||
Stock Option Plan 2009 [Member] | Directors Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common shares available for issuance for stock option awards | 673,123 | ||||
Stock option plan, maximum options to purchase shares of common stock that may be granted | 2,750,000 | ||||
Stock option granted, shares | 2,076,877 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee | 250,000 | ||||
Stock option granted, weighted average exercise price | $0.72 | ||||
Stock option outstanding | 2,065,627 | ||||
Stock Option Plan 2009 [Member] | Directors Plan [Member] | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option plan, exercise price as a percentage of fair market value | 100.00% | ||||
Stock Option Plan 2009 [Member] | For grantees who own more than 10% of the Company's common stock on the grant date [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option plan, exercise price as a percentage of fair market value | 110.00% | ||||
Outside of Plans [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted, shares | 9,215,000 | ||||
Stock option granted, weighted average exercise price | $0.47 |
STOCKBASED_COMPENSATION_Assump
STOCK-BASED COMPENSATION (Assumptions Used to Estimate Fair Value of Stock-Based Compensation Awards) (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.24% | 0.39% |
Expected volatility | 91.23% | 98.65% |
Expected life (years) | 1 year | 2 years |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.37% | 1.73% |
Expected volatility | 105.19% | 105.87% |
Expected life (years) | 4 years 3 months | 4 years 3 months |
STOCKBASED_COMPENSATION_StockB
STOCK-BASED COMPENSATION (Stock-Based Compensation Activity) (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Number of Shares | ||
Outstanding | 17,387,745 | |
Options/warrants granted | 54,000 | |
Options/warrants vested | 0 | |
Options/warrants exercised | 0 | |
Outstanding | 17,441,745 | 17,387,745 |
Exercisable | 17,091,745 | |
Weighted Average Grant Date Fair Value | ||
Outstanding | $0.24 | |
Options/warrants granted | $0.12 | |
Options/warrants expired | $0 | |
Options/warrants exercised | $0 | |
Outstanding | $0.25 | $0.24 |
Exercisable | $0.23 | |
Weighted Average Exercise Price | ||
Outstanding | $0.55 | |
Options/warrants granted | $0.33 | |
Options/warrants expired | $0 | |
Options/warrants exercised | $0 | |
Outstanding | $0.55 | $0.55 |
Exercisable | $0.53 | |
Weighted Average Remaining Contractual Life (Years) | ||
Outstanding | 4 years 3 months 25 days | 4 years 6 months 11 days |
Options/warrants granted | 5 years | |
Exercisable | 4 years 3 months 7 days | |
Aggregate Intrinsic Value | ||
Outstanding | $52,578 | |
Exercisable | $52,578 |
STOCKBASED_COMPENSATION_Change
STOCK-BASED COMPENSATION (Changes of Stock-Based Compensation Awards Subject to Vesting) (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Number of Shares Subject to Vesting | |
Unvested | 350,000 |
Options/warrants granted | 0 |
Options/warrants vested | 0 |
Unvested | 350,000 |
Weighted Average Grant Date Fair Value | |
Unvested | $0.93 |
Options/warrants granted | $0 |
Options/warrants vested | $0 |
Unvested | $0.93 |
STOCKHOLDER_RIGHTS_AGREEMENT_A
STOCKHOLDER RIGHTS AGREEMENT (Additional Information) (Details) | Mar. 31, 2015 |
Stockholder Rights Agreement [Line Items] | |
Minimum Percentage Of Ownership Acquired Or To Be Acquired Upon Which Purchase Rights Become Exercisable | 15.00% |
Luxor Capital Partners LP [Member] | |
Stockholder Rights Agreement [Line Items] | |
Percentage Of Ownership Interests | 15.00% |
Luxor Capital Partners LP [Member] | Maximum [Member] | |
Stockholder Rights Agreement [Line Items] | |
Percentage Of Ownership Interests | 26.00% |
PROPERTY_RENTAL_AGREEMENTS_AND1
PROPERTY RENTAL AGREEMENTS AND LEASES (Additional Information) (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Operating Leased Assets [Line Items] | |
Operating Leases, Income Statement, Minimum Lease Revenue | $1,700 |
INCOME_TAXES_Additional_Inform
INCOME TAXES (Additional Information) (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Internal Revenue Service (IRS) [Member] | |
Operating Loss Carryforwards [Line Items] | |
Cumulative net operating losses for income tax purposes | 51,500,746 |
Internal Revenue Service (IRS) [Member] | Minimum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards Expiration Year | 2025 |
Internal Revenue Service (IRS) [Member] | Maximum [Member] | |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards Expiration Year | 2035 |
State and Local Jurisdiction [Member] | |
Operating Loss Carryforwards [Line Items] | |
Cumulative net operating losses for income tax purposes | 22,906,432 |
Operating Loss Carryforwards Expiration Year | 2035 |
INCOME_TAXES_Significant_Compo
INCOME TAXES (Significant Components of Net Deferred Income Tax Assets and Liabilities) (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Deferred income tax assets: | ||
Net operating loss carryforward | $18,944,766 | $18,520,488 |
Option compensation | 1,467,477 | 1,451,484 |
Property, plant & equipment | 1,330,212 | 1,264,961 |
Gross deferred income tax assets | 21,742,455 | 21,236,933 |
Less: valuation allowance | -422,759 | -480,288 |
Net deferred income tax assets | 21,319,696 | 20,756,645 |
Deferred income tax liabilities: | ||
Acquisition related liabilities | -48,224,926 | -48,304,113 |
Net deferred income tax liability | ($26,905,230) | ($27,547,468) |
INCOME_TAXES_Reconciliation_of
INCOME TAXES (Reconciliation of Tax Benefit at United States Federal and State Income Tax Rates to Actual Tax Provision) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax benefit at statutory rates | $704,133 | $572,140 |
State deferred tax benefit, net of federal benefit | 60,354 | 49,041 |
Increase (decrease) in deferred tax benefit from: | ||
Change in valuation allowance | 57,529 | 100,186 |
Change in state NOLbs | -59,531 | -47,874 |
Gain (loss) on the change in fair value of derivative liabilities | -95,985 | 75,429 |
Other permanent differences | -24,262 | -25,535 |
Deferred income tax benefit | $642,238 | $723,387 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Additional Information) (Details) (USD $) | 1 Months Ended | 0 Months Ended | 3 Months Ended | 1 Months Ended | ||||
Sep. 18, 2013 | Jun. 07, 2012 | Mar. 31, 2015 | Feb. 15, 2007 | Mar. 31, 2014 | Jul. 25, 2011 | Dec. 31, 2010 | 20-May-05 | |
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Advance royalty payment amount | 45,000 | $45,000 | ||||||
Cash penalties as a percentage of purchase price paid by investors | 1.00% | 1.00% | ||||||
Potential Liability for Severance Agreements | 112,500 | |||||||
Long-term Construction Loan | 3,500,000 | |||||||
Long-term Construction Loan, Current | 1,200,000 | |||||||
Additional Notes Payables [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Payment, Period | 18,000 | |||||||
Maximum [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Cash penalties as a percentage of purchase price paid by investors | 3.00% | 3.00% | ||||||
Payment, Period | 121,500 | |||||||
Maximum [Member] | Convertible Notes Payable [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Payment, Period | 120,000 | |||||||
Nanominerals Corporation [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Advance royalty payment amount | 15,000 | 660,000 | ||||||
Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Additional contingent payment | 1,320,000 | |||||||
Royalty payment percentage | 2.50% | |||||||
Joint venture ownership interest | 50.00% | 50.00% | ||||||
Scenario, Previously Reported [Member] | Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Royalty payment percentage | 5.00% | 5.00% | ||||||
Joint venture ownership interest | 50.00% | 50.00% | ||||||
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Additional contingent payment | 6,400,000 | |||||||
Advance royalty payment amount | 500,000 | |||||||
The Minimum project royalty payments that should be made for the advance royalty not to remains payable | 500,000 | |||||||
Royalty payment percentage | 2.50% | |||||||
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Minimum [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Advance royalty payment amount | 500,000 | |||||||
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Royalty Payments [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Additional contingent payment | 500,000 | |||||||
Royalty payment percentage | 2.50% | |||||||
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Cash Flow [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Additional contingent payment | 3,500,000 | |||||||
Verde River Iron Company Limited Liability Company [Member] | Clarkdale Slag Project [Member] | Nanominerals Corporation [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Royalty payment percentage | 2.50% | |||||||
Verde River Iron Company Limited Liability Company [Member] | Scenario, Previously Reported [Member] | Clarkdale Slag Project [Member] | ||||||||
Commitments and Contingencies Disclosure [Line Items] | ||||||||
Joint venture ownership interest | 50.00% |
CONCENTRATION_OF_CREDIT_RISK_A
CONCENTRATION OF CREDIT RISK (Additional Information) (Details) (USD $) | Mar. 31, 2015 |
Concentration Risk [Line Items] | |
Deposits In Excess Of Insured Limits | $1,242,163 |
Maximum [Member] | |
Concentration Risk [Line Items] | |
Insurance Available For Cash At Each Bank | $250,000 |
RELATED_PARTY_TRANSACTIONS_Add
RELATED PARTY TRANSACTIONS (Additional Information) (Details) (USD $) | 1 Months Ended | 3 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | |||||
Operating Leases, Rent Expense | $5,001 | $8,457 | |||
Nanominerals Corporation [Member] | |||||
Related Party Transaction [Line Items] | |||||
Fee and expenses incurred to related party | 15,000 | ||||
Due to Related Parties, Current | 88,365 | 13,365 | |||
Nanominerals Corporation [Member] | Clarkdale Slag Project [Member] | |||||
Related Party Transaction [Line Items] | |||||
Royalty payment percentage | 2.50% | ||||
Cupit Milligan Ogden Williams Certified Public Accountants [Member] | |||||
Related Party Transaction [Line Items] | |||||
Fee and expenses incurred to related party | 63,064 | 43,011 | |||
Outstanding balance due to related party | 71,238 | 8,174 | |||
Ireland Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Operating Leases, Rent Expense | 1,667 | 2,819 | |||
Operating Lease Frequency Of Periodic Payment | monthly | ||||
Outstanding balance due to related party | 3,334 | 0 | |||
Operating Leases, Rent Expense, Sublease Rentals | $5,001 | $8,457 |
RELATED_PARTY_TRANSACTIONS_Com
RELATED PARTY TRANSACTIONS (Company and NMC) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Related Party Transactions [Member] | ||
Related Party Transaction [Line Items] | ||
Mineral and exploration expense - related party | $75,000 | $79,376 |
Nanominerals Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Fee and expenses incurred to related party | 15,000 | |
Advance royalty payments | 45,000 | 45,000 |
Nanominerals Corporation [Member] | Reimbursements [Member] | ||
Related Party Transaction [Line Items] | ||
Fee and expenses incurred to related party | 0 | 4,376 |
Nanominerals Corporation [Member] | Consulting Fees [Member] | ||
Related Party Transaction [Line Items] | ||
Fee and expenses incurred to related party | $30,000 | $30,000 |
RELATED_PARTY_TRANSACTIONS_Com1
RELATED PARTY TRANSACTIONS (Company and CMOW) (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cupit Milligan Ogden Williams Certified Public Accountants [Member] | ||
Related Party Transaction [Line Items] | ||
Fee and expenses incurred to related party | $63,064 | $43,011 |
Chief Financial Officer [Member] | ||
Related Party Transaction [Line Items] | ||
Fee and expenses incurred to related party | $18,289 | $16,774 |