Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 12, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Desert Hawk Gold Corp. | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001168081 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 9,169,541 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
CURRENT ASSETS | ' | ' |
Cash | $5,190 | $12,300 |
Prepaid expenses and other current assets | 144,364 | 138,382 |
Total Current Assets | 149,554 | 150,682 |
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $202,131 and $153,394 | 243,951 | 285,338 |
MINERAL PROPERTIES AND LEASES (Note 4) | 835,556 | 835,556 |
RECLAMATION BONDS | 152,923 | 152,923 |
TOTAL ASSETS | 1,381,984 | 1,424,499 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 204,678 | 141,263 |
Accrued liabilities-officer wages (Note 9) | 296,000 | 131,000 |
Derivative liability-conversion option (Notes 6 and 7) | 296,876 | 140,798 |
Interest payable (Note 7) | 1,398,038 | 337,400 |
Note payable (Note 7) | 6,214,492 | 5,876,698 |
Convertible debt (Note 5) | 600,000 | 600,000 |
Total Current Liabilities | 9,010,084 | 7,227,159 |
Stock redeemable with gold proceeds (Note 8) | 130,000 | 130,000 |
Asset retirement obligation | 68,339 | 63,584 |
Total Long-Term Liabilities | 198,339 | 193,584 |
TOTAL LIABILITIES | 9,208,423 | 7,420,743 |
COMMITMENTS (Note 9) | ' | ' |
STOCKHOLDERS' (DEFICIT) (Note 3) | ' | ' |
Preferred Stock, $0.001 par value, 10,000,000 shares authorized Series A: 958,033 shares issued and outstanding | 958 | 958 |
Preferred Stock, $0.001 par value, 10,000,000 shares authorized Series A-1: No shares issued and outstanding | 0 | 0 |
Preferred Stock, $0.001 par value, 10,000,000 shares authorized Series A-2: 180,000 shares issued and outstanding | 180 | 180 |
Common stock, $0.001 par value, 100,000,000 shares authorized; 9,169,541 and 8,923,115 shares issued and outstanding, respectively | 9,041 | 8,795 |
Additional paid-in capital | 6,627,908 | 6,410,654 |
Accumulated deficit prior to exploration stage | -1,016,591 | -1,016,591 |
Accumulated deficit during exploration stage | -13,447,935 | -11,400,240 |
Total Stockholders' (Deficit) | -7,826,439 | -5,996,244 |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | $1,381,984 | $1,424,499 |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Balance sheet parentheticals | ' | ' |
Accumulated depreciation on Property and Equipment | $202,131 | $153,394 |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 50,000,000 |
Preferred Stock Series A, shares issued | 958,033 | 958,033 |
Preferred Stock Series A, shares outstanding | 958,033 | 958,033 |
Preferred Stock Series A 1, shares issued | 0 | 0 |
Preferred Stock Series A 1, shares outstanding | 0 | 0 |
Preferred Stock Series A-2, shares issued | 180,000 | 180,000 |
Preferred Stock Series A-2, shares outstanding | 180,000 | 180,000 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 9,169,541 | 8,923,115 |
Common Stock, shares outstanding | 9,169,541 | 8,923,115 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (USD $) | 3 Months Ended | 9 Months Ended | 53 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
INCOME EARNED DURING EXPLORATION STAGE | ' | ' | ' | ' | ' |
Concentrate sales | $0 | $0 | $0 | $0 | $969,905 |
EXPENSES | ' | ' | ' | ' | ' |
General project costs | 51,165 | 31,008 | 166,798 | 134,906 | 1,836,487 |
Exploration expense | 16,395 | 57,346 | 62,776 | 216,865 | 1,714,721 |
Consulting | 0 | 39,260 | 9,899 | 111,200 | 595,303 |
Officers and directors fees | 36,000 | 75,000 | 313,000 | 181,923 | 1,395,858 |
Legal and professional | 8,659 | 16,929 | 50,802 | 69,339 | 495,722 |
General and administrative | 13,501 | 35,226 | 73,674 | 118,686 | 672,606 |
Depreciation | 15,717 | 17,402 | 48,736 | 52,017 | 207,498 |
Total Expenses | 141,437 | 272,171 | 725,685 | 884,936 | 6,918,195 |
OPERATING LOSS | -141,437 | -272,171 | -725,685 | -884,936 | -5,948,290 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' | ' |
Interest and other income | 0 | 3,572 | 0 | 3,572 | 64,193 |
Income on joint venture agreement | 0 | 200,000 | 0 | 200,000 | 200,000 |
Change in fair value of derivatives (Note 6) | 5,669 | 42,958 | -156,078 | 67,347 | -162,201 |
Loss on extinguishment of debt (Note 7) | 0 | 0 | 0 | 0 | -3,069,404 |
Financing expense | 0 | -31,698 | 0 | -1,069,266 | -1,332,311 |
Interest expense | -400,255 | -224,183 | -1,165,932 | -684,970 | -3,199,922 |
Total Other Income (Expense) | -394,586 | -9,351 | -1,322,010 | -1,483,317 | -7,499,645 |
LOSS BEFORE INCOME TAXES | -536,023 | -281,522 | -2,047,695 | -2,368,253 | -13,447,935 |
INCOME TAXES | 0 | 0 | 0 | 0 | 0 |
NET LOSS | ($536,023) | ($281,522) | ($2,047,695) | ($2,368,253) | ($13,447,935) |
BASIC AND DILUTED NET LOSS PER SHARE | ($0.06) | ($0.03) | ($0.23) | ($0.28) | ' |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED | 9,116,290 | 8,430,578 | 8,999,399 | 8,394,924 | ' |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED (USD $) | 9 Months Ended | 53 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' | ' |
Net loss | ($2,047,695) | ($2,368,253) | ($13,447,935) |
Adjustments to reconcile net loss to net cash used by operating activities: | ' | ' | ' |
Depreciation | 48,736 | 52,017 | 207,498 |
Common stock issued for services | 150,000 | 0 | 680,009 |
Common stock issued for interest expense | 67,500 | 67,500 | 195,000 |
Preferred stock issued for financing agreement | 0 | 920,000 | 300,000 |
Accretion of debt-related discounts | 0 | 278,110 | 1,460,976 |
Accretion of asset retirement obligation | 4,755 | 4,320 | 10,518 |
Change in fair value of derivatives | 156,078 | -67,347 | 162,201 |
Loss on extinguishment of debt | 0 | 0 | 3,069,404 |
(Gain) on sale of marketable securities | 0 | 0 | -2,540 |
Changes in operating assets and liabilities: | ' | ' | ' |
(Increase) decrease in accounts receivable | 0 | 65,408 | 0 |
(Increase) decrease in prepaid expenses and other current assets | -5,982 | 28,343 | -144,364 |
Increase (decrease) in accounts payable and accrued expenses | 63,415 | 157,545 | 201,503 |
Increase (decrease) in accrued liabilities - officer wages | 165,000 | 0 | 255,309 |
Increase (decrease) in interest payable | 1,098,432 | 488,462 | 2,343,853 |
Net cash (used) by operating activities | -299,761 | -373,895 | -4,708,568 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' | ' |
Purchase of property and equipment | -7,349 | 0 | -435,453 |
Payments on mineral leases | 0 | -50,000 | -250,249 |
Acquisition of reclamation bonds | 0 | -600 | -110,122 |
Acquisition of notes receiveable | 0 | 0 | 27,500 |
Proceeds from marketable securities | 0 | 0 | 48,920 |
Net cash (used) by investing activities | -7,349 | -50,600 | -719,404 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' | ' |
Proceeds from convertible notes payable | 0 | 0 | 600,000 |
Proceeds from notes payable | 300,000 | 0 | 3,850,000 |
Payment of note payable - equipment | 0 | 0 | -15,995 |
Proceeds from issuance of common stock | 0 | 20,150 | 1,363,833 |
Proceeds from issuance of common stock with redemption features | 0 | 0 | 130,000 |
Proceeds from issuance of preferred stock | 0 | 0 | 958 |
Financing fees paid | 0 | 0 | -521,281 |
Net cash provided by financing activities | 300,000 | 20,150 | 5,407,515 |
NET INCREASE (DECREASE) IN CASH | -7,110 | -404,345 | -20,457 |
CASH, BEGINNING OF PERIOD | 12,300 | 415,090 | 25,647 |
CASH, END OF PERIOD | 5,190 | 10,745 | 5,190 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ' | ' | ' |
Interest paid in cash | 0 | 0 | 13,664 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ' | ' | ' |
Common stock issued for mineral lease | 0 | 0 | 525,000 |
Common stock issued as incentive with convertible notes | 0 | 0 | 510,000 |
Common stock issued for reclamation bond | 0 | 0 | 42,802 |
Equipment acquired with note payable | 0 | 0 | 15,995 |
Preferred stock issued in connection with debt amendment | 0 | 920,000 | 1,620,000 |
Common stock payable for accrued liabilities-officer wages | 150,000 | 0 | 281,259 |
Common stock issued for accrued interest | 0 | 22,500 | 22,500 |
Interest payable converted to note payable | $37,794 | $0 | $923,315 |
ORGANIZATION_AND_DESCRIPTION_O
ORGANIZATION AND DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2013 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' |
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS | |
Desert Hawk Gold Corp. (the “Company”) was incorporated on November 5, 1957, in the State of Idaho as Lucky Joe Mining Company. On July 17, 2008, the Company merged with its wholly-owned subsidiary, Lucky Joe Mining Company, a Nevada corporation, for the sole purpose of effecting a change in domicile from the State of Idaho to the State of Nevada. Lucky Joe Mining Company (Nevada) was the continuing and surviving corporation and each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada). On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp. | |
The Company was originally incorporated to pursue the mining business through the acquisition of prospective mining claims in the Wallace and Kellogg mining districts of Northern Idaho. The Company never successfully generated any revenue or joint ventures from any of the activities it pursued and abandoned the mining business as a viable business model when the commodity prices cycled downward. The Company remained dormant until it recommenced its mining activities and entered the exploration stage on May 1, 2009. The Company is considered an exploration stage company and its financial statements are presented in a manner similar to a development stage company as defined in ASC 915-10-05 and interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7. | |
Blue Fin Capital, Inc. (“Blue Fin”), a Utah corporation owning mining claims in Arizona, is a wholly-owned subsidiary of the Company and all inter-company accounts have been eliminated. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2013 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
In the opinion of management, the accompanying unaudited interim consolidated balance sheets and consolidated statements of operations and of cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of September 30, 2013, and the results of its operations and its cash flows for the three and nine months ended September 30, 2013 and 2012. The operating and financial results for the Company for the three and nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. These unaudited interim consolidated financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2012 filed with the Securities and Exchange Commission on April 16, 2013. | |
Mineral Exploration and Development Costs | |
The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining. All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and will be amortized on units of production basis over proven and probable reserves. | |
Mineral Properties and Leases | |
The Company capitalizes costs for acquiring mineral properties and expenses costs to maintain mineral rights and leases as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations. See Note 4. | |
Earnings Per Share | |
Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. At September 30, 2013 and September 30, 2012, common stock equivalents outstanding are 857,143 shares into which the convertible debt (Note 5) can be converted and 2,758,033 shares of common stock into which the preferred stock (Note 7) can be converted. However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses. | |
Going Concern | |
As shown in the accompanying financial statements, the Company is in default on its note payable and has an accumulated deficit incurred through September 30, 2013, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. | |
The Company will need significant funding to continue operations and increase development through the next fiscal year. The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships. Management intends to continue to seek new capital from equity securities issuances to provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. | |
The final operating permit necessary to begin operations at the Kiewit property is expected to be obtained in 2013. If this permit is not received, the Company will not be able to move forward with its operations plan, which would affect its ability to continue as a going concern. | |
If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. | |
Reclassifications | |
Certain reclassifications have been made to conform data from prior periods to the current presentation. These reclassifications have no effect on the results of operations or stockholders’ deficit. |
CAPITAL_STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2013 | |
CAPITAL STOCK | ' |
CAPITAL STOCK | ' |
NOTE 3 - CAPITAL STOCK | |
Common Stock | |
The Company is authorized to issue 100,000,000 shares of common stock. All shares have equal voting rights and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. | |
2013 Activity | |
The Company issued a total of 96,426 shares of stock to the note holders of the convertible debt for interest expense during the nine months ended September 30, 2013. The shares were valued at $.70 per share. See Note 5. | |
On April 30, 2013, a Seventh Amendment to the DMRJ Group funding was agreed upon. This Amendment became effective on June 27, 2013 and, as a result of the terms of the amendment, on July 11, 2013, 150,000 shares of common stock valued at $1.00 per share were issued to Robert Jorgensen, a former director and officer. The stock was payable to Mr. Jorgensen at June 30, 2013 and was issued on July 11, 2013. | |
2012 Activity | |
In January 2012, an equity financing was completed with the sale of 17,522 shares of common stock, providing $20,150 in proceeds. | |
In September 2012, an equity financing was initiated which resulted in sale of 130,000 shares of common stock during the 4th quarter of 2012, providing proceeds of $130,000. Under the terms of this offering, for a period of 12 months after commencement of operations at the Kiewit project, stock could be converted to cash generated from the sale of gold. Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option. Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce. See Note 8 for further information on the accounting of this issuance. | |
On December 3, 2012, 321,428 shares of common stock were issued to two holders of convertible debt, with 150,000 shares issued to each of the two debt holders as penalty shares for the extension of the due date of the notes. The due date of the convertible debt was then extended for one year to November 30, 2013. The remaining 21,348 shares of common stock were issued to the convertible debt note holders as interest for the months of October and November 2012. The shares were valued at $.70 per share for interest expense. See Note 5 for further information regarding this issuance. | |
During 2012, the Company issued a total of 160,710 shares of stock to the note holders of the convertible debt for interest expense for the quarter ended December 31, 2011 and for each quarter ended in 2012. The shares were valued at $.70 per share. | |
Preferred Stock | |
In connection with the Fourth Amendment to the DMRJ Group funding, on May 3, 2011, the Company created and designated 2,500,000 shares of its authorized preferred stock as Series A-1 Preferred Stock and 1,000,000 shares as Series A-2 Preferred Stock. During the quarter ended June 30, 2011, 100,000 shares of Series A-2 Preferred Stock were issued. On June 29, 2012, an additional 80,000 shares of Series A-2 Preferred Stock were issued in connection with the Forbearance Agreement of the DMRJ Group funding arrangement. These shares are convertible by the holder into 800,000 shares of the Company’s common stock. At September 30, 2013 and December 31, 2012, a total of 180,000 shares of Series A-2 preferred stock were outstanding. | |
In addition, as part of the Fourth Amendment, beginning July 1, 2011, quarterly dividends in the amount of 10% of net income are due to all Series A-1 and A-2 Preferred stockholders for each quarter that the Company has consolidated net income. The Company also cannot pay any dividends on the common stock until the preferred dividends are paid. As of September 30, 2013, no dividends have been paid by the Company because there has been no net income. | |
Each share of Series A-1 Preferred Stock and Series A-2 Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to (i) for the Series A-1 Preferred Stock, ten times the Series A-1 issue price ($0.70) divided by the conversion price for Series A-1 Preferred and (ii) for the Series A-2 Preferred Stock, ten times the Series A-2 issue price ($1.00) divided by the conversion price for such Series A-2 Preferred Stock. The initial conversion price of the Series A-1 Preferred Stock is $0.70 per share and the initial conversion price of the Series A-2 Preferred Stock is $1.00. If the Company issues or sells shares of its common stock, or grants options or other convertible securities which are exercisable or convertible into common shares, at prices less than the conversion price of Series A-1 or A-2 shares, except in certain exempted situations, then the conversion price of the Series A-1 and A-2 shares will be reduced to this lower of the sale or conversion price. The Series A-1 and A-2 shares may not be converted into common shares if the beneficial owner of such shares would thereafter exceed 4.9% of the outstanding common shares. See Note 7 for further information. | |
MINERAL_PROPERTIES_AND_INTERES
MINERAL PROPERTIES AND INTERESTS | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
MINERAL PROPERTIES AND INTERESTS | ' | ||||||||
MINERAL PROPERTIES AND INTERESTS | ' | ||||||||
NOTE 4 – MINERAL PROPERTIES AND LEASES | |||||||||
Mineral properties and leases as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Yellow Hammer site | |||||||||
Initial lease fee | $ | 175,000 | $ | 175,000 | |||||
Asset retirement obligation | 30,908 | 30,908 | |||||||
Total | 205,908 | 205,908 | |||||||
Kiewit, Cactus Mill and all other sites | |||||||||
Initial lease fee | 600,000 | 600,000 | |||||||
Asset retirement obligation | 26,913 | 26,913 | |||||||
Total | 626,913 | 626,913 | |||||||
Blue Fin claims | |||||||||
Initial purchase price | 2,735 | 2,735 | |||||||
Total | 2,735 | 2,735 | |||||||
Total Mineral Properties and Leases | $ | 835,556 | $ | 835,556 | |||||
The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting of 247 unpatented claims, including the unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands. All but four of these mining claims and leases were obtained under the terms of the Amended and Restated Lease Agreement effective July 24, 2009, with Clifton Mining Company and Woodman Mining Company as lessors. Rights to the four Yellow Hammer patented claims were obtained under the terms of the Amended and Restated Lease Agreement dated July 24, 2009, with the Jeneane C. Moeller Family Trust. The properties are located approximately 190 miles west-southwest of Salt Lake City, Utah, and 56 miles south southeast of Wendover, Utah. Annual lease fees are required on the 247 claims that make up the Company’s Gold Hill property. Annual claims fees are currently $140 per claim plus administrative fees. | |||||||||
On February 7, 2012, we signed a letter of intent with Shoshone Silver/Gold Mining Company (“Shoshone”) whereby Shoshone would have acquired a 50% interest in our mineral properties located in Tooele County, Utah. Under the terms of the deal, Shoshone had a 120-day exclusive right to provide $10 million, for which $100,000 was advanced to us as a nonrefundable deposit. The joint venture had not been finalized as of June 30, 2012 and an additional deposit of $100,000 was agreed to as of June 29, 2012 to extend the agreement until September 30, 2012. Although this additional deposit was received, other terms of the extension were not met and effective July 21, 2012, the joint venture agreement was terminated and the $200,000 received was recognized as a gain on termination of a joint venture agreement in the third quarter of 2012. | |||||||||
On March 20, 2013, the Confederated Tribes of the Goshute Reservation outlined in a letter to the BLM their review of the Kiewit Mine Project Draft Environmental Assessment. The letter alleged the Environmental Assessment as being flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources. The BLM is working with the Goshute Tribe to bring this permitting process to a conclusion. | |||||||||
Exploration Expenses | |||||||||
Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2013 and 2012 were as follows: | |||||||||
Three | Three | Nine | Nine | ||||||
Months | Months | Months | Months | ||||||
Ended | Ended | Ended | Ended | ||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||
2013 | 2012 | 2013 | 2012 | ||||||
Assaying | $ | - | $ | 940 | $ | 2,156 | $ | 13,541 | |
Permitting | 15,345 | 56,406 | 57,470 | 203,247 | |||||
Maps and miscellaneous | 1,050 | - | 3,150 | 77 | |||||
Total Exploration Expenses | $ | 16,395 | $ | 57,346 | $ | 62,776 | $ | 216,865 |
CONVERTIBLE_DEBT
CONVERTIBLE DEBT | 9 Months Ended |
Sep. 30, 2013 | |
CONVERTIBLE DEBT | ' |
CONVERTIBLE DEBT | ' |
NOTE 5 – CONVERTIBLE DEBT | |
On November 18, 2009, the Company issued convertible promissory notes to two of its minority shareholders for a total of $600,000. The notes bear interest at 15% per annum. Interest is payable in equal monthly installments of $7,500. The notes were originally convertible at any time at a rate of $1.50 per share, but on July 14, 2010, the promissory notes were amended thereby reducing the conversion price to $.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group. See Note 7. The notes are convertible into potentially 857,143 shares of common stock and principal and interest were due in full November 30, 2012. | |
On July 5, 2011 the Company entered into an agreement with the two holders of the convertible debt to begin paying their monthly interest in stock rather than cash. The note holders were issued 64,284 shares of stock each in 2012 to settle accrued interest for 2012 and have been issued 48,213 shares of common stock each to settle accrued interest for the first three quarters of 2013. | |
The Company failed to repay the loan in full on the maturity date, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders. This stock was valued at $1.00, the price of recent stock sales, and was accounted for as financing expense in 2012. As part of this agreement, the due date of the note was extended to November 30, 2013, with interest continuing to be paid with shares of common stock each quarter. | |
DERIVATIVE_LIABILITIES
DERIVATIVE LIABILITIES | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
DERIVATIVE LIABILITIES | ' | ||||||||||
DERIVATIVE LIABILITIES | ' | ||||||||||
NOTE 6 – DERIVATIVE LIABILITIES | |||||||||||
The fair value of outstanding derivative instruments not designed as hedging instruments on the accompanying Consolidated Balance Sheets at September 30, 2013 and December 31, 2012 for the conversion option on the DMRJ Group debt was $296,876 and $140,798, respectively. | |||||||||||
A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company’s derivatives using the following assumptions at September 30, 2013 and December 31, 2012: | |||||||||||
Number of | Volatility | Risk- | Expected | Stock | |||||||
Shares | Free Rate | Life | price | ||||||||
(in years) | |||||||||||
30-Sep-13 | |||||||||||
Conversion option | 449,330 | 116.28% | 0.02% | 2 | $1.00 | ||||||
31-Dec-12 | |||||||||||
Conversion option | 437,227 | 80.91% | 0.03% | 0.18 | $1.00 |
DMRJ_GROUP_FUNDING
DMRJ GROUP FUNDING | 9 Months Ended |
Sep. 30, 2013 | |
DMRJ GROUP FUNDING | ' |
DMRJ GROUP FUNDING | ' |
NOTE 7 – DMRJ GROUP FUNDING | |
2012 Activity | |
On June 29, 2012, the Company entered into a forbearance agreement with DMRJ Group which extended the due date of the June 30, 2012 loan payment to September 30, 2012 in exchange for 80,000 shares of Series A-2 Preferred Stock. The value of this issuance was determined by calculating the number of common shares into which the Series A-2 Preferred shares are convertible (800,000 common shares) times the fair value for shares of common stock on the date of issuance ($1.15). The Company recognized this amount of $920,000 as loss on extinguishment of debt. Pursuant to the Investment Agreement, on June 30, 2012, the Company had been obligated to repay $1,550,000 of the funds previously loaned by DMRJ Group. | |
The Company failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement. | |
On October 17, 2012, the Company entered into a Fifth Amendment to the Investment Agreement with DMRJ Group. The Fifth Amendment provided for the Company to receive up to $100,000 in additional funds in two advances (the “October Term Loan Advances”) of $50,000 each. Only one of these $50,000 advances was taken in 2012. In addition, the maturity date of the entire loan balance due to DMRJ Group was moved from December 31, 2012 to December 15, 2012. The amount was not paid on December 15, 2012 and remained unpaid at December 31, 2012. | |
2013 Activity | |
On January 29, 2013, the Company entered into a Sixth Amendment to the Investment Agreement with DMRJ Group. The Sixth Amendment provides for the Company to receive additional funds in one advance (the “January Term Loan Advance”) of $50,000. This advance was received in February 2013 and replaced the second October Term Loan Advance, which had never been drawn. In addition, the maturity date of the entire loan balance due to DMRJ Group was moved from December 15, 2012 to March 5, 2013. The March 5, 2013 payment was not made. | |
On April 30, 2013, the Company agreed to the terms of a Seventh Amendment to the Investment Agreement with DMRJ Group. This Amendment became effective on June 26, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from March 5, 2013 to June 30, 2013. The Seventh Amendment provides for the Company to receive additional funds in two advances of $50,000. The first advance, the “April Term Loan Advance”, was received on May 2, 2013 and the second advance, the “May Term Loan Advance” was received on June 26, 2013. The June 30, 2013 payment was not made. | |
On July 24, 2013, the Company agreed to the terms of an Eighth Amendment to the Investment Agreement with DMRJ Group. This Amendment became effective on July 24, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from June 30, 2013 to September 30, 2013. The Eighth Amendment provided for the Company to receive additional funds in two advances. The first advance, the “July Term Loan Advance”, in the amount of $100,000, was received on July 24, 2013 and the second advance, the “Additional July Term Loan Advance” was received on August 23, 2013 in the amount of $50,000. | |
The September 30, 2013 payment was not made and a Ninth Amendment to the Investment Agreement was entered into on October 24, 2013. See Note 10 for the terms of this agreement. If the Company is unable to repay the outstanding balance by the maturity date, DMRJ Group could foreclose on its security interest and would take control of or liquidate our mining leases and other assets. |
STOCK_REDEEMABLE_WITH_GOLD_PRO
STOCK REDEEMABLE WITH GOLD PROCEEDS | 9 Months Ended |
Sep. 30, 2013 | |
STOCK REDEEMABLE WITH GOLD PROCEEDS | ' |
STOCK REDEEMABLE WITH GOLD PROCEEDS | ' |
NOTE 8 – STOCK REDEEMABLE WITH GOLD PROCEEDS | |
An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of our common stock. This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of the Company’s common stock. Under the terms of this offering, for a period of 12 months after commencement of operations at the Kiewit project, the shares can be redeemed for cash generated from the sale of gold. Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option. Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce. Due to the redemption feature of these shares, management has concluded that the proceeds from these stock sales should be recorded as a liability and not as equity. | |
COMMITMENTS
COMMITMENTS | 9 Months Ended |
Sep. 30, 2013 | |
COMMITMENTS | ' |
COMMITMENTS | ' |
NOTE 9– COMMITMENTS | |
Mining Properties | |
During the year ended December 31, 2009 the Company entered into a Joint Venture Agreement with the Moeller Family Trust for the lease of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah. Pursuant to the agreement, if the Company does not place the Yellow Hammer property into commercial production within a three-year period it will be required to make annual payments to the Trust of $50,000. The Yellow Hammer operated for several months in 2011. Under the terms of the Joint Venture agreement, the Company is required to pay a 6% net smelter royalty on the production of base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold and silver, as applicable. There were no sales and no royalty expense to date in 2013 or in 2012. | |
Also during the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company and the Woodman Mining Company for the lease of their property interests in the Gold Hill Mining District of Utah. Under the terms of the Joint Venture Agreement, the Company is required to pay a 4% net smelter royalty on base metals in all other areas except for production from the Kiewit gold property and a net smelter royalty on gold and silver, except for production from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable. The Company is also required to pay a 6% net smelter return on any production from the Kiewit gold property. Additionally, if the Company does not place the Kiewit, Clifton Shears/smelter tunnel deposit, and the Cane Springs deposit into commercial production within a three year period, it will be required to make annual payments to Clifton Mining in the amount of $50,000 per location. The Company did not begin commercial production thus, pursuant to this agreement, the Company made $50,000 annual holding fee payments in 2012 on the Kiewit and the Clifton Shears properties and a partial annual holding fee payment of $10,000 on the Cane Springs property. Payments on the Kiewit and the Clifton Shears properties, due on July 24, 2013, were made and accepted by Clifton Mining. The Cane Springs property payment was not made and this claim was released back to Clifton Mining. | |
In September 2009, the Company acquired all of the rights and interests of Clifton Mining in a $42,802 reclamation contract and cash surety deposit with the State of Utah Division of Oil Gas and Mining for the property. As consideration for Clifton Mining selling its interest in the reclamation contract and surety deposit, the Company issued 60,824 shares to Clifton Mining. For a period of two years the Company had the right to repurchase the shares for $48,000, or during the 180-day period after this two year period, Clifton Mining had the option to put the shares to the Company for $48,000. The put option expired on March 30, 2012. | |
Employment Agreements | |
In September 2010, the Company entered into employment agreements with its former Chief Executive Officer (“CEO”) and its President and entered into a consulting agreement with one of its directors. Each agreement was for an initial term of between three months and four years and provided for base salaries or fees of $120,000 per year. The Company owed $131,259 to the CEO at December 31, 2010 for amounts due under the provisions of the agreement and prior similar agreements. On May 3, 2011, this payable was satisfied with the issuance of 138,000 shares of stock to the former CEO. As of September 30, 2013, compensation has not been paid to these three individuals for many months. | |
In connection with entering into the Seventh Amendment to the Investment Agreement, the Company entered into an agreement on June 18, 2013 with one of its directors to terminate the consulting agreement dated September 1, 2010, as amended on May 3, 2011, between him and the Company. Under the terms of the termination agreement, the Company has agreed to pay the director a fee of $70,000 at the rate of $5,000 per month beginning with the first month following the date on which the Company receives funding for its mining project, which is not expected to occur until after receipt of the necessary mining permits. Because the necessary permits have not been received, this fee has not yet been paid. The director has agreed to voluntarily resign as a director and any office held by him upon receipt of the funding by the Company. The effective date of the termination of the consulting agreement was made retroactive to April 30, 2013. Pursuant to the terms of the termination agreement, the Company has agreed to indemnify the director to the fullest extent provided by Nevada law for his service as a director or consultant. | |
In connection with entering into the Seventh Amendment to the Investment Agreement, the Company entered into an agreement on June 24, 2013 with its former CEO and director to terminate the employment agreement dated September 1, 2010, as amended on May 3, 2011, between him and the Company. Under the terms of the termination agreement, the Company has agreed to pay the former CEO and director a fee of $120,000 at the rate of $6,000 per month beginning with the first month following the date on which the Company receives funding for its mining project, which is not expected to occur until after receipt of the necessary mining permits. Because the necessary permits have not been received, this fee has not yet been paid. The Company also issued 150,000 shares of common stock to this director under the terms of the termination agreement. This stock was payable on June 30, 2013 and was issued on July 11, 2013. The stock was valued at $1.00 per share which was the value of the last stock offering prior to this issuance. The effective date of the termination of the employment agreement was made retroactive to April 30, 2013. Pursuant to the terms of the termination agreement, the Company has agreed to indemnify the former CEO and director to the fullest extent provided by Nevada law for his service as an officer, director or employee. | |
Accruals for officers and directors pursuant to termination agreements total $190,000 as of September 30, 2013. Of this amount, $70,000 in consulting fees and $2,000 rent payable are included in accounts payable and accrued expenses, and $118,000 of accrued wages is included in accrued liabilities-officer wages. Accrued wages to other officers total $178,000 as of September 30, 2013. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
NOTE 10 – SUBSEQUENT EVENTS | |
DMRJ Group Loan | |
On October 24, 2013, the Company entered into a Ninth Amendment to the Investment Agreement. As a provision of this amendment the maturity date of the entire loan balance due to DMRJ Group was moved from September 30, 2013 to January 31, 2014. The Ninth Amendment provides for the Company to receive additional funds in four advances of $25,000 each. The advances, designated the “October 2013 Term Loan Advances” are to be used for ordinary course general corporate purposes. The advances may be drawn for four successive calendar months commencing in October 2013 in the aggregate principal amount of $25,000 each for an aggregate of up to $100,000. The interest rate on these advances remains at 2% per month from the date hereof until such amounts have been paid in full. | |
If the Company is unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate our mining leases and other assets. | |
ACCOUNTING_POLICIES_Policies
ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
ACCOUNTING POLICIES | ' |
Mineral Exploration and Development Costs | ' |
Mineral Exploration and Development Costs | |
The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining. All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and will be amortized on units of production basis over proven and probable reserves. | |
Mineral Properties and Leases | ' |
Mineral Properties and Leases | |
The Company capitalizes costs for acquiring mineral properties and expenses costs to maintain mineral rights and leases as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations. See Note 4. | |
Earnings Per Share, Policy | ' |
Earnings Per Share | |
Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. At September 30, 2013 and September 30, 2012, common stock equivalents outstanding are 857,143 shares into which the convertible debt (Note 5) can be converted and 2,758,033 shares of common stock into which the preferred stock (Note 7) can be converted. However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses. | |
Going Concern Policy | ' |
Going Concern | |
As shown in the accompanying financial statements, the Company is in default on its note payable and has an accumulated deficit incurred through September 30, 2013, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. | |
The Company will need significant funding to continue operations and increase development through the next fiscal year. The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships. Management intends to continue to seek new capital from equity securities issuances to provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. | |
The final operating permit necessary to begin operations at the Kiewit property is expected to be obtained in 2013. If this permit is not received, the Company will not be able to move forward with its operations plan, which would affect its ability to continue as a going concern. | |
If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. | |
Reclassification, Policy | ' |
Reclassifications | |
Certain reclassifications have been made to conform data from prior periods to the current presentation. These reclassifications have no effect on the results of operations or stockholders’ deficit. |
MINERAL_PROPERTIES_AND_INTERES1
MINERAL PROPERTIES AND INTERESTS (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
MINERAL PROPERTIES AND INTERESTS (Tables) | ' | ||||||||
Mineral Properties and Interest | ' | ||||||||
Mineral properties and leases as of September 30, 2013 and December 31, 2012 are as follows: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Yellow Hammer site | |||||||||
Initial lease fee | $ | 175,000 | $ | 175,000 | |||||
Asset retirement obligation | 30,908 | 30,908 | |||||||
Total | 205,908 | 205,908 | |||||||
Kiewit, Cactus Mill and all other sites | |||||||||
Initial lease fee | 600,000 | 600,000 | |||||||
Asset retirement obligation | 26,913 | 26,913 | |||||||
Total | 626,913 | 626,913 | |||||||
Blue Fin claims | |||||||||
Initial purchase price | 2,735 | 2,735 | |||||||
Total | 2,735 | 2,735 | |||||||
Total Mineral Properties and Leases | $ | 835,556 | $ | 835,556 | |||||
Exploration Expenditures | ' | ||||||||
Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2013 and 2012 were as follows: | |||||||||
Three | Three | Nine | Nine | ||||||
Months | Months | Months | Months | ||||||
Ended | Ended | Ended | Ended | ||||||
Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||
2013 | 2012 | 2013 | 2012 | ||||||
Assaying | $ | - | $ | 940 | $ | 2,156 | $ | 13,541 | |
Permitting | 15,345 | 56,406 | 57,470 | 203,247 | |||||
Maps and miscellaneous | 1,050 | - | 3,150 | 77 | |||||
Total Exploration Expenses | $ | 16,395 | $ | 57,346 | $ | 62,776 | $ | 216,865 |
DERIVATIVE_LIABILITIES_Tables
DERIVATIVE LIABILITIES (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
DERIVATIVE LIABILITIES (Tables) | ' | ||||||||||
Schedule of Derivative Instruments | ' | ||||||||||
A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company’s derivatives using the following assumptions at September 30, 2013 and December 31, 2012: | |||||||||||
Number of | Volatility | Risk- | Expected | Stock | |||||||
Shares | Free Rate | Life | price | ||||||||
(in years) | |||||||||||
30-Sep-13 | |||||||||||
Conversion option | 449,330 | 116.28% | 0.02% | 2 | $1.00 | ||||||
31-Dec-12 | |||||||||||
Conversion option | 437,227 | 80.91% | 0.03% | 0.18 | $1.00 | ||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share (Details) | Sep. 30, 2013 | Sep. 30, 2012 |
Summary Of Significant Accounting Policies Earnings Per Share | ' | ' |
Common stock equivalents outstanding | 857,143 | 857,143 |
Common stock convertible into debt and preferred stock | 2,758,033 | 2,758,033 |
Capital_Stock_Common_Stock_Det
Capital Stock Common Stock (Details) (USD $) | Sep. 30, 2013 |
Capital Stock Common Stock | ' |
Common stocks shares authorized,, | 100,000,000 |
Shares of stock issued with a value to the holders of convertible debt as interest on debt for the months January through September 2013 | 96,426 |
The shares were valued at | $0.70 |
Number of common stock shares issued to Robert Jorgensen | 150,000 |
Shares of common stock valued at | $1 |
Capital_Stock_Common_Stock_Act
Capital Stock Common Stock Activity during 2012 (Details) (USD $) | Jun. 30, 2013 | Dec. 03, 2012 | Jan. 31, 2012 |
Capital Stock Common Stock Activity during 2012 | ' | ' | ' |
Finanicing raised through sales of common stock | $130,000 | ' | $20,150 |
Number of common stock shares sold | 130,000 | ' | 17,522 |
Stock could be converted to cash generated from sale of gold for a period in months | 12 | ' | ' |
Percentage of proceeds of gold produced during the first year to be allocated to fund this option | 5.00% | ' | ' |
Base price of gold per ounce for determining the value of total investment | $1,000 | ' | ' |
Shares of stock issued to the holders of convertible debt as interest on debt for the quarter ending December 21, 2011 and for each quarter ending 2012 | 160,710 | ' | ' |
Value per share of the shares issued | $0.70 | ' | ' |
Shares of stock issued to the two holders of convertible debt as penalty shares for the extension of due date of notes for one year to November 30, 2012 | ' | 321,428 | ' |
Shares issued to each of the debt holders | ' | 150,000 | ' |
Remaining common stock shares issued to convertible debt note holders as interest for the months of October and November 2012 | ' | 21,348 | ' |
Value per share of the shares issued to debt holders | ' | $0.70 | ' |
Capital_Stock_Preferred_Stock_
Capital Stock Preferred Stock (Details) | Sep. 30, 2013 | Jun. 29, 2013 | 3-May-12 |
Capital Stock Preferred Stock | ' | ' | ' |
Designated preferred stock shares series A | 0 | 0 | 0 |
Preferred stock shares series A issued to DMRJ Group | 0 | 0 | 0 |
Designated preferred stock shares series A 1 | 0 | 0 | 2,500,000 |
Designated preferred stock shares series A 2 | 0 | 80,000 | 1,000,000 |
Convertible by the holder into common stock | 0 | 800,000 | 0 |
Outstanding preferred stock shares series A 2 | 180,000 | 0 | 0 |
Capital_Stock_Preferred_Stock_1
Capital Stock Preferred Stock Series A 2 (Details) | 9 Months Ended |
Sep. 30, 2013 | |
Capital Stock Series A 2 Preferred Stock | ' |
Series A 2 Preferred Stock shares issued | 100,000 |
Number of convertible common stock shares | 1,000,000 |
Quarterly dividends are due to all Series A-1 and A-2 Preferred stockholders for each quarter that the Company has consolidated net income | 10.00% |
Capital_Stock_Preferred_Stock_2
Capital Stock Preferred Stock Convertible Price (Details) (USD $) | Sep. 30, 2013 |
Capital Stock Preferred Stock Convertible Price | ' |
Series A 1 Preferred Stock Issue Price. | ($0.70) |
Series A 2 Preferred Stock Issue Price. | ($1) |
Initial conversion price of Series A 1 Preferred stock. | $0.70 |
Initial conversion price of Series A 2 Preferred stock. | $1 |
Percentage of beneficial conversion feature. | 4.90% |
Additional series A 2 Preferred Stock Issued. | 80,000 |
Number of convertible common stock share. | 800,000 |
Total shares of Series A-2 preferred stock were outstanding. | 180,000 |
Mineral_Properties_And_Leases_
Mineral Properties And Leases (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Mineral Properties And Leases | ' | ' |
Initial Lease Fee" | $175,000 | $175,000 |
Asset retirement obligation. | 30,908 | 30,908 |
Total | 205,908 | 205,908 |
Initial Lease Fee. | 600,000 | 600,000 |
Asset retirement obligation' | 26,913 | 26,913 |
Total' | 626,913 | 626,913 |
Initial Purchase Price. | 2,735 | 2,735 |
Total'. | 2,735 | 2,735 |
Total Mineral Properties and Leases. | $835,556 | $835,556 |
Mineral_Properties_And_Leases_1
Mineral Properties And Leases Operating Interests Letter of Intent (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Mineral Properties And Leases Operating Interests Letter of Intent | ' |
Percentage of Interest agreed to be acquired by Shoshone in mineral properties located in Tooele County, Utah | 50.00% |
Non refundable deposit received to provide $10 million 120 day exclusive right by Shoshone | $100,000 |
Additional deposit received to extend the agreement to joint venture the property | 100,000 |
Amount Recognized as gain on termination of joint venture agreement during Sept, 2012 | $200,000 |
Mineral_Properties_And_Leases_2
Mineral Properties And Leases Operating Interests (Details) (USD $) | Sep. 30, 2013 |
Mineral Properties And Leases Operating Interests | ' |
Number of unpatented mining claims | 296 |
Number of patented mining claims | 42 |
Number of claims requiring annual lease fees | 296 |
Annual claim fees plus administrative fees per claim | $140 |
Mineral_Properties_And_Leases_3
Mineral Properties And Leases Exploration Expenditures (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Mineral Properties And Leases Exploration Expenditures | ' | ' | ' | ' |
Assaying | $0 | $940 | $2,156 | $13,541 |
Permitting | 15,345 | 56,406 | 57,470 | 203,247 |
Maps and miscellaneous | 1,050 | 0 | 3,150 | 77 |
Total Exploration Expenditures | $16,395 | $57,346 | $62,776 | $216,865 |
CONVERTIBLE_DEBT_Promissoy_Not
CONVERTIBLE DEBT Promissoy Notes (Details) (USD $) | Nov. 18, 2009 |
Convertible Debt Promissoy Notes | ' |
Convertible promissoy notes to two minority shareholders | $600,000 |
Interest rate of convertible promissoy notes | 15.00% |
Monthly interest payable | $7,500 |
Conversion price per share | $1.50 |
Reduced conversion price | $0.70 |
Convertible common stock shares | 857,143 |
Derivative_Liabilities_OutStan
Derivative Liabilities OutStanding Derivative Instruments (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Derivative Liabilities OutStanding Derivative Instruments | ' | ' |
The fair value of outstanding derivative instruments not designed as hedging instruments | $296,876 | $140,798 |
Derivative_Liability_Fair_Valu
Derivative Liability Fair Value (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Derivative Liability Fair Value | ' | ' |
Conversion Option Number Of Shares expected life 2 years and 0.2 years | 449,330 | 437,227 |
Conversion Option Volatility | 116.28% | 80.91% |
Conversion Option risk free rate | 2.10% | 3.50% |
Conversion Option Stock Price | $1 | $1 |
Conversion Option Expected life in years | 2 | 0.18 |
DMRJ_Group_Funding_Forbearance
DMRJ Group Funding Forbearance Agreement (Details) (USD $) | Jun. 29, 2012 |
DMRJ Group Funding Forbearance Agreement | ' |
Number of preferred stock shares series A 2 exchanged | 80,000 |
Amount of repayment obligation of previous loan from DMRJ Group | $1,550,000 |
Number of preferred stock shares series A 2 issued to DMRJ Group | 80,000 |
Value of preferred stock shares series A 2 | 920,000 |
Obligation to repay funds previously loaned by DMRJ Group. | 1,550,000 |
Convertible common stock shares,. | 800,000 |
Recent sales price of common stock | $1.15 |
Proceeds from equity financing | $3,000,000 |
Percentage of option to require the company to pay of the proceeds over $ 3000000 to DMRJ Group | 25 |
DMRJ_Group_Funding_Loan_paymen
DMRJ Group Funding Loan payment (Details) (USD $) | Sep. 30, 2013 |
DMRJ Group Funding Loan payment | ' |
Event of default in repaying the loan amount as per investment agreement | $4,495,000 |
DMRJ_Group_Funding_Fifth_Amend
DMRJ Group Funding Fifth Amendment to the Investment Agreement (Details) (USD $) | Oct. 17, 2012 |
DMRJ Group Funding Fifth Amendment to the Investment Agreement | ' |
Addtional Funds of $50000 each agreed to be provided by DMRJ as Term Loan Advances | $100,000 |
Actual Amount of Term Loan Advance availed by the company | 50,000 |
Amountof Term Loan Advance remained unpaid at the end of the year 2012 | $50,000 |
DMRJ_Group_Funding_Sixth_and_S
DMRJ Group Funding Sixth and Seventh Amendment to the Investment Agreement (Details) (USD $) | Jun. 30, 2013 | Apr. 30, 2013 | Jan. 29, 2013 |
DMRJ Group Funding Sixth and Seventh Amendment to the Investment Agreement | ' | ' | ' |
Addtional Funds agreed to be provided by DMRJ as January Term Loan Advance | $0 | $0 | $50,000 |
The Sixth Amendment provides for the Company to receive additional funds in two advances of $50,000. | 0 | 0 | 100,000 |
The Seventh and Eighth Amendment provides for the Company to receive additional funds in two advances of $50,000. | $100,000 | $100,000 | $0 |
Interest accruing at a rate percent per month | 2.00% | 2.00% | 2.00% |
STOCK_REDEEMABLE_WITH_GOLD_PRO1
STOCK REDEEMABLE WITH GOLD PROCEEDS (DETAILS) (USD $) | Sep. 30, 2013 |
STOCK REDEEMABLE WITH GOLD PROCEEDS | ' |
Finanicing raised through sales of common stock initiated in September 2012 | $1,150,000 |
Finanicing raised through sales of common stock,'' | 130,000 |
Number of common stock shares sold," | 130,000 |
Stock could be converted to cash generated from sale of gold for a period in months | 12 |
Percentage of proceeds of gold produced during the first year to be allocated to fund this option | 5.00% |
Base price of gold per ounce for determining the value of total investment | $1,000 |
Commitments_Clifton_Mining_Det
Commitments Clifton Mining (Details) (USD $) | Sep. 01, 2009 |
Commitments Clifton Mining | ' |
Value of reclamation contract and cash surety deposit | $42,802 |
Value of right to repurchase of shares by the company | 48,000 |
Value of the option to put the shares to the company | $48,000 |
Number of shares recordes as a derivative liability | 60,824 |
COMMITMENTS_Mining_Properties_
COMMITMENTS Mining Properties (Details) (USD $) | 12 Months Ended |
Dec. 31, 2009 | |
Commitments Mining Properties | ' |
Number of restricted common stock shares received by Moeller Family Trust | 250,000 |
Annual payments required to the Trust | $50,000 |
Percentage of required to pay of net smelter royalty | 6.00% |
Percentage of net smelter royalty on gold and silver minimum | 2.00% |
Percentage of net smelter royalty on gold and silver maximum | 15.00% |
Percentage of required to pay of net smelter royalty on base metals | 0.04 |
Annual payments to Clifton Mining per each of the three locations | 50,000 |
Partial payment to the Cane springs property | $10,000 |
COMMITMENTS_Employment_Agreeme
COMMITMENTS Employment Agreements (Details) (USD $) | Dec. 31, 2010 | Sep. 30, 2010 |
Commitments Employment Agreements | ' | ' |
Base salary or fees to CEO and President | $0 | $120,000 |
Amount owed by the company to the CEO | $131,259 | $0 |
Issuance of shares of stock to former CEO | 138,000 | 0 |
Recovered_Sheet1
Commitments Employment Agreements Parentheticals (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 |
Commitments Employment Agreements Parentheticals | ' | ' |
Shares of common stock to this director under the terms of the termination agreement. | 0 | 150,000 |
Accrued compensation | $191,000 | $0 |
Consulting payable due as per agreements | 70,000 | 0 |
Accrual for officers and directors pursuant to termination agreements total | 190,000 | 0 |
Rent payable are included in Accounts payable | 2,000 | 0 |
Accrued wages is included in Accrued liabilities-officer wages | 118,000 | 0 |
Accrued wages to other officers total | $178,000 | $0 |
Convertible_Debt_Agreement_Det
Convertible Debt Agreement (Details) (USD $) | Sep. 30, 2013 |
Convertible Debt Agreement | ' |
Number of shares issued to two convertible debt holders to settle accrued interest for the year 2012 | 64,284 |
Number of shares issued to two convertible debt holders to settle accrued interestfor the first quarter of 2013 | 48,213 |
Additional shares of common stock issued to the debt holders | 300,000 |
Stock was valued at per share value | $1 |
Subsequent_Events_DMRJ_Group_l
Subsequent Events DMRJ Group loan (Details) (USD $) | Jun. 14, 2013 |
Subsequent Events DMRJ Group loan | ' |
Additional loan proceeds to be received as per Eighth Amendment Investment Agreement | $100,000 |
Annual holding fee payments | $50,000 |
The interest rate on these advances remains at % per month from the date hereof until such amounts have been paid in full. | 2.00% |