Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Apr. 14, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Desert Hawk Gold Corp. | ||
Entity Central Index Key | 1,168,081 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 4,847,721 | ||
Entity Common Stock, Shares Outstanding | 13,356,603 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash | $ 132,509 | $ 161,645 |
Inventories (Note 5) | 2,553,807 | 1,745,377 |
Prepaid expenses and other current assets | 45,752 | 142,825 |
Total Current Assets | 2,732,068 | 2,049,847 |
PROPERTY AND EQUIPMENT, net (Note 6) | 4,584,394 | 3,190,156 |
MINERAL PROPERTIES AND INTERESTS, net (Note 7) | 1,314,006 | 1,372,887 |
RECLAMATION BONDS (Note 7) | 1,418,070 | 1,412,804 |
TOTAL ASSETS | 10,048,538 | 8,025,694 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 754,064 | 870,168 |
Accrued liabilities - officer wages (Note 4 and 15) | 308,885 | 247,500 |
Interest payable (Notes 8 ) | 97,500 | 7,500 |
Note payable - related party (Note 10) | 5,230,779 | 3,375,652 |
Convertible debt (Note 8) | 600,000 | 600,000 |
Notes payable - equipment, current portion (Note 9) | 803,388 | 146,171 |
Note payable - related party (Note 10) | $ 13,040,492 | 2,124,348 |
Stock redeemable with gold proceeds (Note 11) | 82,000 | |
Total Current Liabilities | $ 20,835,108 | 7,453,339 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation (Note 13) | 901,597 | 740,268 |
Notes payable - equipment (Note 9) | $ 1,077,387 | 372,388 |
Note payable - related party (Note 10) | 9,665,144 | |
Total Long-Term Liabilities | $ 1,978,984 | 10,777,800 |
TOTAL LIABILITIES | $ 22,814,092 | $ 18,231,139 |
COMMITMENTS (Note 15) | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 13,356,603 and 13,056,603 shares issued and outstanding, respectively | $ 13,228 | $ 12,928 |
Additional paid-in capital | 9,120,018 | 8,328,806 |
Accumulated deficit | (21,900,382) | (18,548,567) |
Total Stockholders' (Deficit) | (12,765,554) | (10,205,445) |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | 10,048,538 | 8,025,694 |
Series A Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred stock, value | $ 958 | $ 958 |
Series A-1 Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred stock, value | ||
Series A-2 Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred stock, value | $ 180 | $ 180 |
Series B Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred stock, value | $ 444 | $ 250 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 13,056,603 | 13,356,603 |
Common stock, shares outstanding | 13,056,603 | 13,356,603 |
Series A Preferred Stock | ||
Preferred Stock, shares issued | 958,033 | 958,033 |
Preferred Stock, shares outstanding | 958,033 | 958,033 |
Series A-1 Preferred Stock | ||
Preferred Stock, shares issued | ||
Preferred Stock, shares outstanding | ||
Series A-2 Preferred Stock | ||
Preferred Stock, shares issued | 180,000 | 180,000 |
Preferred Stock, shares outstanding | 180,000 | 180,000 |
Series B Preferred Stock | ||
Preferred Stock, shares issued | 444,530 | 249,603 |
Preferred Stock, shares outstanding | 444,530 | 249,603 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
REVENUE: | ||
Concentrate sales | $ 3,275,457 | $ 1,224,892 |
EXPENSES | ||
General production costs | 2,662,228 | 1,235,091 |
Exploration expense | 14,078 | 39,170 |
Officers and directors fees | 180,000 | 308,670 |
Legal and professional | 63,184 | 109,958 |
General and administrative | 293,064 | 217,922 |
Depreciation and amortization | 583,467 | 179,971 |
Total Expenses | 3,796,021 | 2,090,782 |
OPERATING LOSS | (520,564) | (865,890) |
OTHER INCOME (EXPENSE) | ||
Interest and other income | $ 2,065 | 8,797 |
Change in fair value of derivatives | 6,673 | |
Financing expense | $ (791,706) | (1,010,412) |
Interest expense | (2,041,610) | (1,511,370) |
Total Other Income (Expense) | (2,831,251) | (2,506,312) |
LOSS BEFORE INCOME TAXES | $ (3,351,815) | $ (3,372,202) |
INCOME TAXES | ||
NET LOSS | $ (3,351,815) | $ (3,372,202) |
BASIC AND DILUTED NET LOSS PER SHARE | $ (0.26) | $ (0.29) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 13,079,617 | 11,657,051 |
Statement Of Stockholders' (Def
Statement Of Stockholders' (Deficit) - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2013 | $ (8,215,778) | $ 1,138 | $ 9,373 | $ 6,950,076 | $ (15,176,365) |
Balance, shares at Dec. 31, 2013 | 1,138,033 | 9,501,683 | |||
Common stock issued for interest | 82,500 | $ 118 | 82,382 | ||
Common stock issued for interest, shares | 117,854 | ||||
Common stock issued in connection with extension of to convertible debt | 12,000 | $ 300 | 11,700 | ||
Common stock issued in connection with amendment to convertible debt, shares | 300,000 | ||||
Common stock issued for officer wages | 125,483 | $ 3,137 | 122,346 | ||
Common stock issued for officer wages, shares | 3,137,066 | ||||
Preferred stock issued in connection with amendment to note payable - related party | 998,412 | $ 250 | 998,162 | ||
Preferred stock issued in connection with amendment to note payable - related party, shares | 249,603 | ||||
Expiration of conversion option | 164,140 | 164,140 | |||
Net loss | (3,372,202) | (3,372,202) | |||
Balance at Dec. 31, 2014 | (10,205,445) | $ 1,388 | $ 12,928 | 8,328,806 | (18,548,567) |
Balance, shares at Dec. 31, 2014 | 1,387,636 | 13,056,603 | |||
Common stock issued in connection with extension of to convertible debt | 12,000 | $ 300 | 11,700 | ||
Common stock issued in connection with amendment to convertible debt, shares | 300,000 | ||||
Preferred stock issued in connection with amendment to note payable - related party | 740,776 | $ 185 | 740,591 | ||
Preferred stock issued in connection with amendment to note payable - related party, shares | 185,194 | ||||
Preferred stock issued in connection with anti-dilution provisions (Note 3) | 38,930 | $ 9 | 38,921 | ||
Preferred stock issued in connection with anti-dilution provisions, shares (Note 3) | 9,733 | ||||
Net loss | (3,351,815) | (3,351,815) | |||
Balance at Dec. 31, 2015 | $ (12,765,554) | $ 1,582 | $ 13,228 | $ 9,120,018 | $ (21,900,382) |
Balance, shares at Dec. 31, 2015 | 1,582,563 | 13,356,603 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,351,815) | $ (3,372,202) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | $ 583,467 | 179,971 |
Common stock issued for interest expense | 82,500 | |
Common stock issued for officer wages | 85,483 | |
Common stock issued for financing expense | $ 12,000 | 12,000 |
Preferred stock issued for financing expense | 779,706 | 998,412 |
Accretion of asset retirement obligation | $ 59,778 | 13,781 |
Change in fair value of derivatives | (6,673) | |
Loss on common stock redeemed with gold proceeds | $ 12,798 | 8,608 |
Loss on disposal of mineral properties and interests | 2,735 | |
Changes in operating assets and liabilities: | ||
Inventories | $ (596,189) | (1,524,115) |
Prepaid expenses and other current assets | 97,073 | (39,757) |
Accounts payable and accrued expenses | (60,526) | 615,590 |
Accrued liabilities - officer wages | 61,385 | (44,500) |
Interest payable | 90,000 | 7,500 |
Interest payable - related party | 1,855,127 | 1,416,879 |
Net cash (used) by operating activities | (457,196) | (1,563,788) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (374,165) | (2,352,711) |
Additions to reclamation bonds | $ (5,266) | (1,350,193) |
Refund of reclamation bonds | 92,705 | |
Net cash provided (used) by investing activities | $ (379,431) | (3,610,199) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable - related party | 1,251,000 | 5,525,000 |
Payment of note payable - equipment | (443,509) | (197,891) |
Net cash provided by financing activities | 807,491 | 5,327,109 |
NET INCREASE (DECREASE) IN CASH | (29,136) | 153,122 |
CASH, BEGINNING OF YEAR | 161,645 | 8,523 |
CASH, END OF YEAR | 132,509 | 161,645 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest, net of amount capitalized | 87,384 | 2,623 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Equipment acquired with note payable - equipment | $ 1,655,349 | 716,450 |
Fair value of cancelled conversion option | 164,140 | |
Common stock issued for accrued liabilities-officer wages | $ 40,000 | |
Account payable paid with note payable - equipment | $ 150,376 | |
Gold loan payable converted to accounts payable | $ 94,798 | $ 56,608 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Description of Business [Abstract] | |
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, 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. On June 30, 2014, the Company dissolved its sole subsidiary, Blue Fin Capital, Inc. As a result the Company has no subsidiaries. The Company never successfully generated any revenue and eventually abandoned the mining business, remaining dormant until it recommenced its mining activities on May 1, 2009. During the year ended December 31, 2009, the Company entered into Joint Venture Agreements with the Clifton Mining Company, the Woodman Mining Company and the Moeller Family Trust for the lease of certain of their property interests in the Gold Hill Mining District of Utah. In 2011, the Company entered into an agreement with DMRJ Group which allowed for long term funding of the Kiewit project and helped to provide cash flow for operations during the period from 2009 until 2014 while the permitting process was ongoing. The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014. Construction at the site was substantially complete at September 30, 2014. Revenue from the heap leach operation began in October 2014 with the first sales of gold concentrate. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. Accounting Method The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees The Company accounts for stock based compensation to employees as required by ASC Topic 718 Compensation-Stock Compensation Equity-Based Payments to Non-Employees Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating gold ounces in inventories, the recoverability of the cost of mining claims, asset retirement obligation, deferred tax assets and related valuation allowances. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to conform prior periods’ data to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ deficit, and cash flows previously reported. Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less when purchased to be cash equivalents. Inventories The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered. The Company records ore on leach pad, ore in carbon column in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value. Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, equipment, and mineral properties; and mine administrative expenses. Revenue from the sale of silver is accounted for as by-product and is deducted from production costs. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of December 31, 2015, the Company had a limited operating history and actual results only over a short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests with only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12 to 18 months. Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts and any resulting gain or loss is reflected in results of operations. See Note 6. Mineral Properties and Leases The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights. Upon reaching the production stage, the capitalized costs are 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. Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing. These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. The Company does not have proven and probable reserves at this time. See Note 7. Mineral Exploration and Development Costs The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining Provision for Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC Topic 740- Income Taxes The Company recognized no increase in the liability for unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2015 or 2014. See Note 13. 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 December 31, 2015 and December 31, 2014, common stock equivalents outstanding are as follows: December 31, 2015 December 31, 2014 Convertible debt 996,429 857,143 Convertible preferred stock 47,211,002 27,718,333 Total 48,207,431 28,575,476 However, the diluted earnings per share are not presented because its effect would be anti-dilutive. Revenue Recognition Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. Reclamation and Remediation The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. A corresponding asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation, the liability is adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates. For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed. Financial Instruments The Company's financial instruments include cash, reclamation bonds, notes payable – equipment, notes payable – related party, and convertible debt. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2015 and December 31, 2014. Fair Value Measurements The Company discloses the following information for each class of assets and liabilities that are measured at fair value: 1. the fair value measurement; 2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); 3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and 5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through December 31, 2015, which raises substantial doubt about the Company’s ability to continue as a going concern. In addition, current liabilities exceed current assets by $18,103,040 at December 31, 2015. As discussed in Note 10, if the Company is unable to repay the outstanding amount due to DMRJ Group, DMRJ Group could foreclose on its security interest and would take control of or liquidate the Company’s mining leases and other assets. 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. Although production has begun, it has not yet reached optimum levels. The timing and amount of capital requirements will depend on a number of factors, including demand for products, metals market pricing, 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. If the going concern assumption were not appropriate for these 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. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements—Going Concern.” The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of ASU No. 2014-15 on the Company’s financial statements once adopted. In May 2014, the FASB issued ASU No. 2014-09 Revenue Recognition, replacing guidance currently codified in Subtopic 605-10 Revenue Recognition-Overall with various SEC Staff Accounting Bulletins providing interpretive guidance. The guidance establishes a new five step principle-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. ASU No. 2014-09 is effective for annual and interim reporting periods beginning after December 15, 2017. We are in the process of evaluating this guidance and our method of adoption. In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. The update provides for inventory to be measured at the lower of cost and net realizable value, and is effective for the fiscal years beginning after December 15, 2016. We are currently evaluating the potential impact of implementing this update on the financial statements. In November 2015, the FASB issued ASU No. 2015-17 Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740). The update is designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial position. The FASB has proposed the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016. ASU No. 2015-17 is not expected to have a material impact on our financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
Capital stock [Abstract] | |
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. 2015 Activity The Company failed to repay the convertible debt loan in full on the November 30, 2015 maturity date. Under the terms of the debt agreements, the Company issued a total of 300,000 shares of common stock to the note holders. This issuance was valued at $0.04 per share ($12,000) which was determined by management to be the fair value of a share of common stock based upon a third party valuation performed in 2014. The issuance was accounted for as financing expense. See Note 8. The Thirteenth Amendment to the Investment Agreement with DMRJ Group (see Note 10) dated August 2015 contained provisions for shares of common stock to be issued to the Company’s President, Rick Havenstrite, if he operates within 10% of the approved budget over twelve months from the date of the amendment. The number of shares to potentially be issued to the Company’s President will be equal to 2.5% of the amount of fully outstanding shares of the Company on a fully diluted basis. 2014 Activity The Company issued a total of 117,854 shares of stock to the note holders of the convertible debt for interest expense through November 30, 2014. These shares were valued at a fair value of $82,500 based upon the stated interest rate contained in the debt agreements. The Company failed to repay the loan in full on the November 30, 2014 maturity date, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders. This issuance was valued at $0.04 per share ($12,000) which was determined by management to be the fair value of a share of common stock. The issuance was accounted for as financing expense. See Note 8. On May 1, 2014, the Company issued 3,137,066 shares to its President, Rick Havenstrite as a management incentive. Also, as a part of this agreement, Mr. Havenstrite agreed to forgive $40,000 of accrued but unpaid wages. The issued shares were valued at $0.04 per share. Based on this rate, the fair value of the shares issued to Mr. Havenstrite was determined to be $125,483. Of this amount, $85,483 was recognized as officers and directors fees during the year ended December 31, 2014 and $40,000 was recognized as a reduction of accrued officer wages. Preferred Stock The Company's Articles of Incorporation authorize 10,000,000 shares of $0.001 par value Preferred Stock available for issuance with such rights and preferences, including liquidation, dividend, conversion, and voting rights, as the Board of Directors may determine. Series A Each share of Series A Preferred Stock is convertible into shares of the Company’s common stock at the rate of one common share for each preferred share converted, subject to adjustment in the event the Company effects a reverse or forward split of its outstanding shares or a reclassification of its common stock. At December 31, 2015 and 2014, 958,033 shares of Series A Preferred Stock are issued and outstanding. These shares can be converted into 958,033 shares of common stock. The Company has the right to mandate conversion if its stock has traded on the OTC Bulletin Board or on an exchange at a volume weighted average price per share of not less than $1.40 for each day over a period of 30 consecutive days with average trading volume per day of not less than 50,000 shares. The conversion ratio of the Series A Preferred Stock is determined according to a formula computed by dividing the stated value of the preferred stock, which is designated as $0.70 per share, by the conversion price of the preferred stock, which is $0.70 per share, subject to the following limitations and conditions: ● If the Company issues or sells shares of its common stock, or grants options or other convertible securities which are exercisable or convertible into its common shares, at prices less than the conversion price of its Series A shares, then the conversion price of the Series A shares will be reduced to this lower sale or conversion price. ● The Series A 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. The Series A shares have the following rights and preferences: ● The holders of the Series A shares are entitled to any dividends declared by the Company. ● In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or a change of control transaction or the sale or lease of all or substantially all of the Company’s assets without the majority consent of the holders of the Series A shares, the holders of the Series A shares will be entitled to receive ratably an amount of the funds available for liquidation equal to the issue price of the Series A shares plus any accrued and unpaid dividends. Any remaining funds available for distribution will be distributed pro rata among the holders of the common stock and the Series A shares assuming conversion of the Series A shares. ● The holders of the Series A shares are entitled to the number of votes equal to the number of whole shares of common stock into which the Series A shares are convertible. The Series A shares vote together with the holders of the common stock, except as provided by law. In addition, so long as the principal or accrued interest on any DMRJ Group loan is outstanding, the Company is prohibited from taking the certain corporate actions without the separate consent of persons owning a majority of the Series A preferred shares ● The Company has the right to create and issue additional classes or series of preferred shares so long as the new class or series does not have preferences, limitations, or relative rights which are superior or senior to the preferences, limitations and relative rights granted the holders of the Series A shares. ● The holders of the Series A shares have preemptive rights to purchase shares of common stock in any offering by the Company. ● There are no redemption or sinking fund provisions applicable to the Series A shares. Series A-1 and A-2 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. At December 31, 2015 and 2014, there are no shares of Series A-1 Preferred Stock outstanding and 180,000 shares of Series A-2 Preferred Stock outstanding. The Series A-2 Preferred Stock outstanding can be converted into 1,800,000 shares of common stock. The Series A-1 and A-2 shares have the following additional rights and preferences: ● The holders of the Series A-1 and A-2 shares have no preference as to any dividends declared by the Company. ● In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or a change of control transaction or the sale or lease of all or substantially all of the Company’s assets without the majority consent of the holders of the Series A-1 and A-2 shares, the holders of the Series A shares will be entitled to receive ratably an amount of the funds available for liquidation equal to the issue price of the Series A shares plus any accrued and unpaid dividends. Any remaining funds available for distribution will be distributed pro rata among the holders of the common stock and the Series A, A-1 and A-2. ● The holders of the Series A-1 and A-2 shares are entitled to the number of votes equal to the number of whole shares of common stock into which the Series A-1 or A-2 shares are convertible. The Series A-1 and A-2 shares vote together with the holders of the common stock, except as provided by law. In addition, the Company is prohibited from taking the certain actions without the separate consent of persons owning a majority of the Series A-1 and A-2 preferred shares. ● The holders of record of the Series A-1 and Series A-2 shares, voting together as a single class, have the right to elect two directors of the Board, to remove any such directors elected by them and to fill any vacancy caused by the death, resignation or removal of such directors. ● The conversion prices of the Series A-1 and Series A-2 shares are subject to the following limitations and conditions: ○ If the Company issues or sells shares of its common stock, or grants options or other convertible securities which are exercisable or convertible into the Company’s common shares, at prices less than the conversion price of our Series A- 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 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. ● The holders of the Series A-1 and A-2 shares have preemptive rights to purchase shares of the Company’s common stock in any offering by the Company. ● There are no redemption or sinking fund provisions applicable to the Series A-1 or A-2 shares. Series B Each share of Series B Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to 100 shares of common stock. At December 31, 2015 and 2014, there are 444,530 and 249,603 shares, respectively, of Series B Preferred Stock outstanding. These shares can be converted into 44,452,969 and 24,960,300 shares of common stock, respectively. The Certificate of Designations for the Series B Preferred Stock allows for the issuance of additional shares of Series B Preferred Stock in the event the Company issues any common or preferred stock, which would keep the holder’s beneficial ownership of the Company the same as it was prior to the issuance. The Series B shares have the following additional rights and preferences: ● The holders of the Series B shares have rights to any dividends declared by us on an as converted basis. ● In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary the available assets of the Company shall be distributed subject to the following priority: ○ First, the holders of each share of Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series B Preferred Stock then outstanding shall receive out of the available assets and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any available assets on any junior securities, an amount per share equal to the Series A, A-1, A-2 and B liquidation preferences. If upon any liquidation, such available assets shall be insufficient to permit the holders of the Series A, A-1, A-2, and B Preferred Stock to receive their full liquidation preference, then such available assets shall be distributed ratably among the preferred holders in proportion to their full liquidation preference each holder is otherwise entitled to receive. ○ After distribution to the preferred holders of their full liquidation preference, the remaining available assets, if any, shall be distributed ratably among the preferred holders and Common Stock, based on the number of shares of Common Stock held (or deemed held) by each holder assuming all preferred shares had been converted into shares of Common Stock immediately prior to such liquidation. ● The holders of the Series B shares are entitled to the number of votes equal to the number of whole shares of common stock into which the Series B shares are convertible. The Series B shares vote together with the holders of the Common Stock, except as provided by law. ● The conversion price of the Series B preferred stock is subject to the following limitations and conditions: ○ If we issue or sell shares of our common stock, implement a stock split, or declare a dividend, then the conversion price of the Series B shares will be adjusted. ○ The conversion price of the Series B shares will be adjusted in the event of a reclassification, exchange, substitution, merger, or consolidation. ● We have the right to create and issue additional classes or series of preferred shares so long as the new class or series does not have preferences, limitations, or relative rights which are superior or senior to the preferences, limitations and relative rights granted the holders of the Series B shares. ● The Series B shares also have anti-dilution protection in the case of issuance of any additional shares of common stock or common stock equivalents. 2015 Activity On August 31, 2015, as part of the Thirteenth Amendment to the Investment Agreement with DMRJ Group (see Note 10), the Company issued 185,194 shares of Series B Preferred Stock to DMRJ Group. The issuance of these shares was determined to meet the requirements of a substantial modification and thus was accounted for using debt extinguishment accounting guidelines. During the year ended December 31, 2015, financing expense of $740,776 was recorded in association with this share issuance, using an estimated fair value of the equivalent shares of $0.04. As a result of this issuance, DMRJ Group beneficially owned approximately 77% of the Company (on a fully-diluted basis). DMRJ Group is considered a related party. In connection with the 300,000 shares of common stock issued to note holders of convertible debt (see above), the Company issued 9,733 shares of Series B Preferred Stock to satisfy the anti-dilution provisions associated with Series B Preferred Stock. During the year ended December 31, 2015, financing expense in the amount of $38,930 was recorded in association with this share issuance, using an estimated fair value of the equivalent shares of $0.04. This issuance maintains the current 77% beneficial ownership of the Company by DMRJ Group, with total preferred shares convertible into 47,211,002 shares of common stock. 2014 Activity On February 19, 2014, as part of the Tenth Amendment to the Investment Agreement with DMRJ Group (see Note 10), the Company issued 249,603 shares of Series B Preferred Stock to DMRJ Group. The issuance of these shares was determined to meet the requirements of a substantial modification and thus was accounted for using debt extinguishment accounting guidelines. During the year ended December 31, 2015, financing expense of $998,412 was recorded in association with this share issuance, using an estimated fair value of the equivalent common shares of $0.04. In connection with the Tenth Amendment, the Company also amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude the issuances of certain securities from triggering adjustments. |
Stock Plan
Stock Plan | 12 Months Ended |
Dec. 31, 2015 | |
Stock Plan [Abstract] | |
STOCK PLAN | NOTE 4 - STOCK PLAN The Company’s Board of Directors approved the adoption of the 2008 Stock Option/Stock Issuance Plan (the “Plan”) on July 12, 2008, pursuant to which the Company may grant incentive and non-qualified stock options or shares of common stock to employees and consultants, including directors and officers, from time to time. The Plan authorized the issuance of 3,000,000 shares of the Company’s common stock for grants of shares or the exercise of stock options granted under the Plan. The Plan was amended in February 2010 and again in March 2014 when available shares were increased to 4,256,733. The Plan was designed to continue in effect until all of the stock available for grant or issuance has been acquired through exercise of options or grants of shares, or until July 12, 2018, whichever is earlier. All of the available shares have been issued to authorized recipients. The Plan may also be terminated in the event of certain corporate transactions such as a merger or consolidation or the sale, transfer or other disposition of all or substantially all of the Company’s assets. The exercise price of each option is established by the plan administrator. Additionally, the plan administrator will fix the terms of each option, but no option will be granted for a term in excess of ten years. Stock issued under the Plan may be granted for cash or other consideration determined by the plan administrator. Options and stock granted under the Plan may vest immediately or upon terms established by the plan administrator. During the year ended December 31, 2014, 3,137,066 shares of common stock were issued under this plan to its President, Rick Havenstrite. See Note 3. With this issuance, a total of 4,256,733 shares have been granted which is the total authorized number of shares under the Plan. As of December 31, 2014, the Plan was no longer in effect. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 5 – INVENTORIES The following table provides the components of inventories: December 31 2015 2014 Ore on leach pad $ 2,404,657 $ 1,508,761 Carbon column in process 144,512 211,115 Dore finished goods 4,638 25,501 Total $ 2,553,807 $ 1,745,377 Inventories are valued at the lower of average cost or market value, which at December 31, 2015 and 2014 is average cost. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 - PROPERTY AND EQUIPMENT The following is a summary of property, equipment, and accumulated depreciation at December 31, 2015 and December 31, 2014: December 31, 2015 2014 Equipment $ 3,154,755 $ 1,465,827 Furniture and fixtures 10,781 10,781 Electronic and computerized equipment 52,874 19,011 Vehicles 56,830 65,330 3,275,240 1,560,949 Less accumulated depreciation (768,072 ) (357,983 ) 2,507,168 1,202,966 Kiewit property facilities 2,451,973 2,153,411 Less accumulated amortization (374,747 ) (166,221 ) 2,077,226 1,987,190 Total $ 4,584,394 $ 3,190,156 Interest costs of $0 and $177,747 was capitalized in 2015 and 2014, respectively for construction costs of the heap leach facility. |
Mineral Properties and Interest
Mineral Properties and Interests | 12 Months Ended |
Dec. 31, 2015 | |
Mineral Properties and Interests [Abstract] | |
MINERAL PROPERTIES AND INTERESTS | NOTE 7 – MINERAL PROPERTIES AND INTERESTS Mineral properties and interests as of December 31, 2015 and December 31, 2014 are as follows: December 31, 2015 2014 Initial lease fee Yellow Hammer Site $ 175,000 $ 175,000 Kiewit, Cactus Mill and all other sites 600,000 600,000 775,000 775,000 Asset retirement costs Kiewit Site 789,026 687,475 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 815,939 714,388 1,590,939 1,489,388 Accumulated amortization (276,933 ) (116,501 ) Total $ 1,314,006 $ 1,372,887 On January 6, 2014, the Company obtained the final permit necessary to commence construction of the heap leach pad and process facility. On February 20, 2014, the Kiewit reclamation bond in the amount of $1,348,000 was posted with the State of Utah, Division of Oil, Gas and Mining. This newly calculated bond amount includes bonding for the Yellow Hammer Small Mine and the Yellow Hammer Exploration sites along with the Herat Exploration site. As such, the asset retirement obligation for these sites was absorbed by the new bond. Funds of $92,705 were received in April 2014 by the Company for these refunded reclamation bonds. Total reclamation bonds posted at December 31, 2015 and December 31, 2014 are $1,418,070 and $1,412,804, respectively. |
Convertible Debt
Convertible Debt | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Debt [Abstract] | |
CONVERTIBLE DEBT | NOTE 8 – 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-only is payable in equal monthly installments of $7,500. The notes are convertible at a rate of $0.70 per share which at December 31, 2015 was 996,429 shares of common stock. 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 Company failed to repay the loan in full on the November 30, 2012, November 30, 2013, November 30, 2014 and November 20, 2015 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. In both 2014 and 2015, the stock was valued at $0.04 (total $12,000) and was accounted for as financing expense. As part of this agreement, the due date of the note was extended each year and has now been extended to November 30, 2016. Interest was paid with shares of common stock through November 30, 2014 to be paid in cash thereafter. Interest has not been paid since November 2014 and accrued interest payable at December 31, 2015 and 2014 is $97,500 and $7,500, respectively. See Note 16 – Subsequent Events. |
Notes Payable - Equipment
Notes Payable - Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable Equipment [Abstract] | |
NOTES PAYABLE - EQUIPMENT | NOTE 9 – NOTES PAYABLE – EQUIPMENT The following is a summary of the equipment notes payable: December 31, December 31, 2014 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 91,080 $ - Note payable to Komatsu Financial, collateralized by a Komatsu PC400, due in 12 monthly installments of $3,223, beginning in April 2016, including interest at 1.16%. 38,674 - Note payable to CAT Financial, collateralized by five pieces of used mining equipment due in 36 monthly installments of $49,242 including interest at 4.68%. Interest only payments during four months of each year increasing the remaining payment amounts due to $82,096. 1,347,751 - Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%. 5,472 - Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in monthly installments of $11,674 including interest at 2.99%. 388,055 492,955 Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,647 including interest at 2.5%. 9,743 25,604 1,880,775 $ 518,559 Current portion (803,388 ) (146,171 ) Long Term portion $ 1,077,387 $ 372,388 Principal payments are as follows: 2016 $ 803,388 2017 813,165 2018 247,405 2019 16,817 2020 - $ 1,880,775 |
Note Payable - Related Party
Note Payable - Related Party | 12 Months Ended |
Dec. 31, 2015 | |
Note Payable Related Party [Abstract] | |
NOTE PAYABLE - RELATED PARTY | NOTE 10 – NOTE PAYABLE – RELATED PARTY DMRJ Group beneficially owns approximately 77% of the Company (on a fully-diluted basis) with shares convertible to 47,211,002 shares of common stock (See Note 3). They are considered a related party. In July 2010, the Company entered into an Investment Agreement with DMRJ Group. The Agreement has been modified numerous times and currently operates under the Thirteenth Amendment to the Investment Agreement dated August 31, 2015. The Amendments have provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement. The total due to DMRJ Group at December 31, 2015 and December 31, 2014 is as follows: December 31, 2015 2014 Principal Current portion $ 13,040,492 $ 2,124,348 Long term portion - 9,665,144 13,040,492 11,789,492 Interest Current portion 5,230,779 3,375,652 Long term portion - - 5,230,779 3,375,652 Total $ 18,271,271 $ 15,165,144 The Investment Agreement contains certain negative covenants which prohibit us from the following actions or activities: ● ● Creating any significant liens on any of our properties or assets; ● Enter into any sale and lease-back transaction involving any of our properties; ● Make any investments in or loans or advances to other parties; ● Engage in any merger, consolidation, sale of assets or acquisition transaction, except for the purchase or sale of inventory or certain limited investments; ● Declare or pay any dividends; ● Engage in any business transactions with affiliates; ● Make capital expenditures except as permitted in the agreement pertaining to our current mining business; ● Create any lease obligations; ● Amend, supplement or modify any existing indebtedness; ● Enter into any swap, forward, future or derivative transaction; ● Make any change in our accounting policies or reporting practices; ● Form additional subsidiaries; or ● At December 31, 2015, the Company has failed to pay certain obligations in violation of these covenants. DMRJ Group has been informed of the default and has indicated it has no present intent to declare an event of default under the Investment Agreement, as amended. 2015 Activity An Eleventh Amendment to the Investment Agreement was entered into on March 17, 2015 which established new minimum principal and interest payment dates which were then revised with the Twelfth and Thirteenth Amendments to the Investment Agreement. The Twelfth Amendment was entered into on June 5, 2015 and allowed for additional funding in the amount of $850,000 for the purpose of additional working capital, financing of the expansion into the east extension of the current pit boundary and to provide for crushing equipment to allow crushing to be done in-house. The Thirteenth Amendment to the Investment Agreement was entered into on August 31, 2015 and allowed for additional funding of up to $525,000. In addition, the amendment (1) required the Company to issue 185,194 shares of Series B Preferred Stock (see Note 3), (2) incorporated anti-dilution provisions, and (3) contained provisions for shares of common stock to be issued to the Company’s President, Rick Havenstrite, if he operates within 10% of the approved budget over twelve months from the date of the amendment. The number of shares to be issued to the Company’s President will be equal to 2.5% of the amount of fully outstanding shares of the Company on a fully diluted basis. During 2015, $1,251,000 was loaned to the Company pursuant to the Twelfth and Thirteenth Amendments. This funding was used for working capital and to prepare for a drilling program within the existing boundary of the Kiewit Exploration Permit. Although the maturity date for the loan was set in the Tenth Amendment at October 31, 2016, the Thirteenth Amendment established new minimum principal and interest payment dates beginning in June 2016 as follows: June 30, 2016 $ 500,000 September 30, 2016 800,000 December 31, 2016 600,000 February 28, 2017 500,000 May 31, 2017 2,250,000 August 31, 2017 2,250,000 Total per Minimum Payment Schedule $ 6,900,000 In accordance with the agreement, all payments will be applied first to accrued but unpaid interest and second to outstanding principal. The Company’s ability to meet these minimum payments will be dependent upon a number of factors including production variables, metals market pricing, demand for products and services, and the availability of opportunities for expansion through affiliations and other business relationships. In addition to the minimum payments detailed above, on the last business day of each month, commencing October 31, 2014, the Company will pay to DMRJ Group an amount equal to 100% of all cash flows from operations for the immediately preceding month, if any, less mutually agreed upon capital expenditures (and if an agreement on capital expenditures is not reached, then 100% of cash flows from operations) subject to a minimum cash balance of $200,000 to be maintained by the Company, until such time as the unpaid principal amount outstanding and all accrued interest has been paid in full. All payments will be applied first to accrued but unpaid interest and second to outstanding principal. No payments have been made under this provision. 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 the Company’s mining leases and other assets. 2014 Activity In January 2014, pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount of $25,000. The January 31, 2014 loan payment that was due was not made. On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. The Tenth Amendment provided for funding of mining operations through a series of advances totaling a maximum of $5,700,000 over five months. A total of $5,500,000 was drawn under this Amendment. As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016. The interest rate on the loan balance was reduced from 24% to 15% and minimum principal and interest payment amounts were established. The first minimum payment, due February 28, 2015, was not made. In 2014, the first of these loans, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit. A total of $5,525,000 was drawn during the year ended December 31, 2014 in connection with the Tenth Amendment. In addition, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock. See Note 3. Onsite construction of the project was essentially complete at December 31, 2014. 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 the Company’s mining leases and other assets. |
Stock Redeemable with Gold Proc
Stock Redeemable with Gold Proceeds | 12 Months Ended |
Dec. 31, 2015 | |
Stock Redeemable with Gold Proceeds [Abstract] | |
STOCK REDEEMABLE WITH GOLD PROCEEDS | NOTE 11 – STOCK REDEEMABLE WITH GOLD PROCEEDS An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of the Company’s 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, the shares can be redeemed for cash generated from the sale of gold for a period of 12 months after commencement of operations at the Kiewit project. Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option. Each investor received 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 shares should be recorded as a liability and not as equity. Once sales of concentrate began in 2014, all investors in this equity financing had opted to convert their shares for cash from 5% of the gold sales. Based on the sales price of gold sold the conversion period, $151,406 in gold proceeds is due to be paid to investors. Of this amount, $130,000 represents return of the funds originally invested, and the remaining $21,406 represents the difference between the $1,000 per ounce that the investors paid for the gold shares and the net sales price of the gold allocated to this financing. The $21,406 has been offset against revenue. Payments of these funds due to investors have not yet begun due to cash flow considerations. It is anticipated that these payments will be made in 2016. |
Remediation Liability and Asset
Remediation Liability and Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2015 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | |
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION | NOTE 12 - REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION Remediation, reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties. The Company uses assumptions about future costs, capital costs and reclamation costs. Such assumptions are based on the Company’s current mining plan and the best available information for making such estimates. In calculating the present value of the asset retirement obligation the Company used a credit adjusted risk free interest rate of 8% to 10% and projected mine lives of five to 12 years, depending on the site. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions. Changes in the reclamation liability for the years ended December 31, 2015 and 2014 are as follows: 2015 2014 Reclamation and remediation liability, beginning of year $ 740,268 $ 69,920 Obligations incurred and change in estimate 101,551 656,567 Accretion expense 59,778 13,781 Reclamation and remediation liability, end of year $ 901,597 $ 740,268 |
Provision For Income Taxes
Provision For Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Provision For Income Taxes [Abstract] | |
PROVISION FOR INCOME TAXES | NOTE 13 – PROVISION FOR INCOME TAXES The Company did not recognize a tax provision (benefit) for the years ended December 31, 2015 and 2014 because the Company has net operating loss carry forwards. A reconciliation of the tax benefit that would have been recognized using the Company’s statutory income tax rate for the years ended December 31, 2015 and 2014 is as follows: 2015 2014 Federal income tax benefit based on statutory rate $ (1,173,000 ) (35.0 )% $ (1,180,000 ) (35.0 )% Effect of non-deductible items 100 - 200 - Increase in valuation allowance 1,172,900 35.0 % 1,179,800 35.0 % Total taxes on income (loss) $ - - $ - - Significant components of the deferred tax assets for the years ended December 31, 2015 and 2014 are as follows: 2015 2014 Deferred tax asset: Net operating loss carry forward $ 6,131,000 $ 4,998,000 Exploration costs 266,000 306,000 Financing costs 296,000 265,000 Other 61,900 13,000 6,754,900 5,582,000 Deferred tax asset valuation allowance (6,754,900 ) (5,582,000 ) Net deferred tax asset $ - $ - At December 31, 2015, the Company had net operating loss carry forwards of approximately $17.5 million which expire through 2035. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended exploration stage activities. Deferred tax assets assume an effective tax rate of 35%, and are offset by a valuation allowance, which increased by approximately $1,172,900 and $1,179,800 during the years ended December 31, 2015 and 2014, respectively. The Company has no tax position at December 31, 2015 or 2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2015 or 2014. The Company’s federal income tax returns from 2013 through 2015 remain open and subject to examination. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 – RELATED PARTY TRANSACTIONS The Company recognized rent expense for rental of office space of $12,000 and $11,000 in 2015 and 2014 to be paid to RMH Overhead, LLC, a company owned by Rick Havenstrite, the Company’s President and a director. Of the amounts recognized as expense, RMH Overhead, LLC was paid $12,000 and $10,000 in 2015 and 2014, respectively, leaving a total of $13,750 remaining in accounts payable at December 31, 2015 including amounts due from prior years. In addition, the Company purchased equipment for $16,500 from RMH Overhead, LLC during 2014, $12,000 of which remains unpaid at December 31, 2015. The Company additionally owes $4,015 to Rick Havenstrite at December 31, 2015 for supplies purchased by him for the Company during 2015. All of these amounts are reflected in the accounts payable for the Company. During the years ended December 31, 2015 and December 31, 2014, the Company recognized wage expense of $60,000 and $55,731, respectively, for office and accounting services performed by Marianne Havenstrite, wife of Rick Havenstrite, who became an officer of the Company during 2013. Of these amounts, $56,192 and $28,500 remains unpaid at December 31, 2015 and 2014, respectively and is reflected in accrued liabilities – officer wages. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments [Abstract] | |
COMMITMENTS | NOTE 15 – 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 penalty 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 on this property in 2015 or in 2014. No penalty payment has been made on this property and no official forfeiture notice has been received regarding this nonpayment of the annual penalty payment. 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 property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three year period, it will be required to make annual penalty payments to Clifton Mining in the amount of $50,000 per location. In 2014, the Company had not begun commercial production and the payments due on July 24, 2014 were paid and accepted by Clifton Mining for the Clifton Shears and Kiewit properties. The Cane Springs property penalty payment was not made in 2013 and this claim was released back to Clifton Mining at that time. Production at the Kiewit property has since begun. Royalty expense of $194,033 and $72,655 was recognized in 2015 and 2014 with $98,368 still payable to Clifton Mining Company at December 31, 2015. This amount is expected to be paid in 2016. Mining severance tax based on production, in the amount of $3,726 was accrued at December 31, 2015. This amount was paid when due in March 2016. 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 former directors. Each agreement was for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year. Termination agreements have been reached with the former CEO and one former director, providing for payment of accrued compensation and consulting payable over several months commencing with the funding of the Kiewit project. These termination payments were completed in 2015. In September 2010 we entered into an employment agreement with Mr. Havenstrite as President of our company. The term of the agreement is for four years, expiring September 1, 2014, with automatic one-year extensions unless notice is given by either party. Mr. Havenstrite is required under the terms of the agreement to devote a minimum of 75% of his business time to the affairs of our company. Nevertheless, he may serve on the board of directors or serve as an officer of up to three companies not engaged in business which may reasonably compete with our business, provided that he would not be required to render any material services with respect to the operations or affairs of any other business which would exceed 25% of his entire business time. In spite of the minimum percentage of his time required in his employment agreement, Mr. Havenstrite currently devotes approximately 90% of his time, or approximately 50 hours per week, to our business and approximately 10%, or 5 hours per week, of his business time to Overhead Door Company of Sierra/Nevada, Inc., his overhead door business in Reno, Nevada. He does not anticipate devoting more than 20% of his time to the business of his overhead door company during the term of his employment contract with us. The annual base salary is $120,000 plus performance compensation of between 10% and 100% of the annual base salary based upon fulfillment of annual performance goals established by the Board of Directors or the Compensation Committee (if any). In the event we terminate the agreement without cause or if the agreement is constructively terminated by us, we have agreed to pay Mr. Havenstrite a severance package equal to three times the initial base salary if such termination occurs on or before August 31, 2011, and one and one-half times the largest annual base salary plus the largest annual performance compensation received by Mr. Havenstrite under the Agreement if such termination occurs after August 31, 2011, payable 75% within 30 days and the balance within 30 days of the first anniversary of the termination. As of December 31, 2015 and December 31, 2014, accrued compensation of $308,885 and $247,500, and consulting fees payable of $0 and $15,000, respectively, were due to directors and officers. Of the amounts accrued at December 31, 2015 and 2014, accrued compensation of $252,692 and $165,000 is due to Rick Havenstrite and $56,192 and $28,500 is due to Marianne Havenstrite. In addition, on May 1, 2014 Rick Havenstrite was awarded 3,137,066 shares of common stock as a management incentive. As part of this award, Mr. Havenstrite agreed to forgive $40,000 in accrued compensation. See Note 3. In addition, in accordance with the employment agreement with Rick Havenstrite dated September 13, 2010, if he is terminated without cause he shall be entitled to any unpaid portion of his base salary and to a severance benefit equal to 1½ times the Initial Base Salary. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Pursuant to the Thirteenth Amendment of the Investment Agreement with DMRJ Group, the Company has borrowed an additional $550,000 in advances for working capital and ongoing equipment expenses through April 14, 2016. On April 10, 2016, the Company failed to make interest payments required under the convertible notes (see Note 8). As a result, the Company is in default of the Notes. DMRJ Group has been informed of the default and has indicated it has no present intent to declare an event of default under the Investment Agreement, as amended. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Accounting Method | Accounting Method The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. |
Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees | Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees The Company accounts for stock based compensation to employees as required by ASC Topic 718 Compensation-Stock Compensation Equity-Based Payments to Non-Employees |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating gold ounces in inventories, the recoverability of the cost of mining claims, asset retirement obligation, deferred tax assets and related valuation allowances. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to conform prior periods’ data to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ deficit, and cash flows previously reported. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the Statement of Cash Flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less when purchased to be cash equivalents. |
Inventories | Inventories The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered. The Company records ore on leach pad, ore in carbon column in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value. Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, equipment, and mineral properties; and mine administrative expenses. Revenue from the sale of silver is accounted for as by-product and is deducted from production costs. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of December 31, 2015, the Company had a limited operating history and actual results only over a short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests with only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12 to 18 months. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts and any resulting gain or loss is reflected in results of operations. See Note 6. |
Mineral Properties and Leases | Mineral Properties and Leases The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights. Upon reaching the production stage, the capitalized costs are 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. Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing. These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. The Company does not have proven and probable reserves at this time. See Note 7. |
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 |
Provision for Taxes | Provision for Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC Topic 740- Income Taxes The Company recognized no increase in the liability for unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2015 or 2014. See Note 13. |
Earnings Per Share | 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 December 31, 2015 and December 31, 2014, common stock equivalents outstanding are as follows: December 31, 2015 December 31, 2014 Convertible debt 996,429 857,143 Convertible preferred stock 47,211,002 27,718,333 Total 48,207,431 28,575,476 However, the diluted earnings per share are not presented because its effect would be anti-dilutive. |
Revenue Recognition | Revenue Recognition Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. |
Reclamation and Remediation | Reclamation and Remediation The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. A corresponding asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation, the liability is adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates. For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed. |
Financial Instruments | Financial Instruments The Company's financial instruments include cash, reclamation bonds, notes payable – equipment, notes payable – related party, and convertible debt. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2015 and December 31, 2014. |
Fair Value Measurements | Fair Value Measurements The Company discloses the following information for each class of assets and liabilities that are measured at fair value: 1. the fair value measurement; 2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); 3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and 5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. |
Going Concern | Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through December 31, 2015, which raises substantial doubt about the Company’s ability to continue as a going concern. In addition, current liabilities exceed current assets by $18,103,040 at December 31, 2015. As discussed in Note 10, if the Company is unable to repay the outstanding amount due to DMRJ Group, DMRJ Group could foreclose on its security interest and would take control of or liquidate the Company’s mining leases and other assets. 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. Although production has begun, it has not yet reached optimum levels. The timing and amount of capital requirements will depend on a number of factors, including demand for products, metals market pricing, 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. If the going concern assumption were not appropriate for these 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements—Going Concern.” The provisions of ASU No. 2014-15 require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The Company is currently assessing the impact of ASU No. 2014-15 on the Company’s financial statements once adopted. In May 2014, the FASB issued ASU No. 2014-09 Revenue Recognition, replacing guidance currently codified in Subtopic 605-10 Revenue Recognition-Overall with various SEC Staff Accounting Bulletins providing interpretive guidance. The guidance establishes a new five step principle-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. ASU No. 2014-09 is effective for annual and interim reporting periods beginning after December 15, 2017. We are in the process of evaluating this guidance and our method of adoption. In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory. The update provides for inventory to be measured at the lower of cost and net realizable value, and is effective for the fiscal years beginning after December 15, 2016. We are currently evaluating the potential impact of implementing this update on the financial statements. In November 2015, the FASB issued ASU No. 2015-17 Income Taxes - Balance Sheet Classification of Deferred Taxes (Topic 740). The update is designed to reduce complexity of reporting deferred income tax liabilities and assets into current and non-current amounts in a statement of financial position. The FASB has proposed the presentation of deferred income taxes, changes to deferred tax liabilities and assets be classified as non-current in the statement of financial position. The update is effective for fiscal years beginning after December 15, 2016. ASU No. 2015-17 is not expected to have a material impact on our financial statements. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of common stock equivalents outstanding | December 31, 2015 December 31, 2014 Convertible debt 996,429 857,143 Convertible preferred stock 47,211,002 27,718,333 Total 48,207,431 28,575,476 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories [Abstract] | |
Components of inventories | December 31 2015 2014 Ore on leach pad $ 2,404,657 $ 1,508,761 Carbon column in process 144,512 211,115 Dore finished goods 4,638 25,501 Total $ 2,553,807 $ 1,745,377 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Summary of property, equipment and accumulated depreciation | December 31, 2015 2014 Equipment $ 3,154,755 $ 1,465,827 Furniture and fixtures 10,781 10,781 Electronic and computerized equipment 52,874 19,011 Vehicles 56,830 65,330 3,275,240 1,560,949 Less accumulated depreciation (768,072 ) (357,983 ) 2,507,168 1,202,966 Kiewit property facilities 2,451,973 2,153,411 Less accumulated amortization (374,747 ) (166,221 ) 2,077,226 1,987,190 Total $ 4,584,394 $ 3,190,156 |
Mineral Properties and Intere27
Mineral Properties and Interests (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Mineral Properties and Interests [Abstract] | |
Schedule of mineral properties and interests | December 31, 2015 2014 Initial lease fee Yellow Hammer Site $ 175,000 $ 175,000 Kiewit, Cactus Mill and all other sites 600,000 600,000 775,000 775,000 Asset retirement costs Kiewit Site 789,026 687,475 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 815,939 714,388 1,590,939 1,489,388 Accumulated amortization (276,933 ) (116,501 ) Total $ 1,314,006 $ 1,372,887 |
Notes Payable - Equipment (Tabl
Notes Payable - Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Notes Payable Equipment [Abstract] | |
Schedule of the equipment notes payable | December 31, December 31, 2014 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 91,080 $ - Note payable to Komatsu Financial, collateralized by a Komatsu PC400, due in 12 monthly installments of $3,223, beginning in April 2016, including interest at 1.16%. 38,674 - Note payable to CAT Financial, collateralized by five pieces of used mining equipment due in 36 monthly installments of $49,242 including interest at 4.68%. Interest only payments during four months of each year increasing the remaining payment amounts due to $82,096. 1,347,751 - Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%. 5,472 - Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in monthly installments of $11,674 including interest at 2.99%. 388,055 492,955 Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,647 including interest at 2.5%. 9,743 25,604 1,880,775 $ 518,559 Current portion (803,388 ) (146,171 ) Long Term portion $ 1,077,387 $ 372,388 |
Schedule of principal payments | Principal payments are as follows: 2016 $ 803,388 2017 813,165 2018 247,405 2019 16,817 2020 - $ 1,880,775 |
Note Payable - Related Party (T
Note Payable - Related Party (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Note Payable Related Party [Abstract] | |
Schedule of due to DMRJ | December 31, 2015 2014 Principal Current portion $ 13,040,492 $ 2,124,348 Long term portion - 9,665,144 13,040,492 11,789,492 Interest Current portion 5,230,779 3,375,652 Long term portion - - 5,230,779 3,375,652 Total $ 18,271,271 $ 15,165,144 |
Schedule of new minimum principal and interest payment | June 30, 2016 $ 500,000 September 30, 2016 800,000 December 31, 2016 600,000 February 28, 2017 500,000 May 31, 2017 2,250,000 August 31, 2017 2,250,000 Total per Minimum Payment Schedule $ 6,900,000 |
Remediation Liability and Ass30
Remediation Liability and Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | |
Schedule of changes in reclamation liability | 2015 2014 Reclamation and remediation liability, beginning of year $ 740,268 $ 69,920 Obligations incurred and change in estimate 101,551 656,567 Accretion expense 59,778 13,781 Reclamation and remediation liability, end of year $ 901,597 $ 740,268 |
Provision For Income Taxes (Tab
Provision For Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Provision For Income Taxes [Abstract] | |
Schedule of reconciliation of the tax benefit | 2015 2014 Federal income tax benefit based on statutory rate $ (1,173,000 ) (35.0 )% $ (1,180,000 ) (35.0 )% Effect of non-deductible items 100 - 200 - Increase in valuation allowance 1,172,900 35.0 % 1,179,800 35.0 % Total taxes on income (loss) $ - - $ - - |
Schedule of significant components of deferred tax assets | 2015 2014 Deferred tax asset: Net operating loss carry forward $ 6,131,000 $ 4,998,000 Exploration costs 266,000 306,000 Financing costs 296,000 265,000 Other 61,900 13,000 6,754,900 5,582,000 Deferred tax asset valuation allowance (6,754,900 ) (5,582,000 ) Net deferred tax asset $ - $ - |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details) - shares | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of Significant Accounting Policies [Abstract] | ||
Convertible debt | 996,429 | 857,143 |
Convertible preferred stock | 47,211,002 | 27,718,333 |
Total | 48,207,431 | 28,575,476 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Textual) | Dec. 31, 2015USD ($) |
Summary of Significant Accounting Policies (Textual) | |
Current liabilities exceed current assets | $ 18,103,040 |
Capital Stock (Details)
Capital Stock (Details) | May. 01, 2014USD ($)$ / sharesshares | Feb. 19, 2014USD ($)$ / sharesshares | Nov. 30, 2015USD ($)$ / sharesshares | Aug. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | Nov. 30, 2014$ / shares | Jan. 31, 2014USD ($) | May. 03, 2011$ / sharesshares |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||||
Loan maturity date | Nov. 30, 2016 | ||||||||
Additional number of shares issue, value | $ | $ 125,483 | ||||||||
Share price per share | $ / shares | $ 0.04 | $ 0.04 | |||||||
Officers and directors fees | $ | $ 180,000 | 308,670 | |||||||
Loan advances | $ | $ 25,000 | ||||||||
Fully diluted convertible shares | DMRJ Group beneficially owns approximately 77% of the Company (on a fully-diluted basis) with shares convertible to 47,211,002 shares of common stock (See Note 3). | ||||||||
Company agreed to issue additional shares | $ | $ 82,500 | ||||||||
Series A Preferred Stock [Member] | |||||||||
Preferred Stock, Shares Issued | 958,033 | 958,033 | |||||||
Preferred Stock, shares outstanding | 958,033 | 958,033 | |||||||
Preferred stock conversion, description | The Company has the right to mandate conversion if its stock has traded on the OTC Bulletin Board or on an exchange at a volume weighted average price per share of not less than $1.40 for each day over a period of 30 consecutive days with average trading volume per day of not less than 50,000 shares. | ||||||||
Conversion of preferred stock, number of shares issued | 958,033 | ||||||||
conversion ratio | 0.70 | ||||||||
Series B Preferred Stock [Member] | |||||||||
Fair value of shares issued | $ | $ 38,930 | ||||||||
Preferred Stock, Shares Issued | 444,530 | 249,603 | |||||||
Preferred Stock, shares outstanding | 444,530 | 249,603 | |||||||
Preferred stock conversion, description | Each share of Series B Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to 100 shares of common stock. | ||||||||
Company agreed to issue additional shares, shares | 185,194 | ||||||||
Conversion of preferred stock outstanding into common stock | 44,452,969 | 24,960,300 | |||||||
Series A-1 Preferred Stock [Member] | |||||||||
Preferred Stock, Shares Issued | |||||||||
Preferred Stock, shares outstanding | |||||||||
Series A-2 Preferred Stock | |||||||||
Preferred Stock, Shares Issued | 180,000 | 180,000 | |||||||
Preferred Stock, shares outstanding | 180,000 | 180,000 | |||||||
Conversion of preferred stock outstanding into common stock | 1,800,000 | ||||||||
Rick Havenstrite, President [Member] | |||||||||
Reduction of accrued officer wages | $ | $ 40,000 | ||||||||
Company agreed to issue additional shares, shares | 3,137,066 | ||||||||
Common Stock [Member] | |||||||||
Voting right description | 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. | ||||||||
Additional number of shares issue | 3,137,066 | ||||||||
Additional number of shares issue, value | $ | $ 3,137 | ||||||||
Company agreed to issue additional shares, shares | 117,854 | ||||||||
Company agreed to issue additional shares | $ | $ 118 | ||||||||
Common Stock [Member] | 2015 Activity [Member] | |||||||||
Loan maturity date | Nov. 30, 2016 | ||||||||
Additional number of shares issue | 300,000 | ||||||||
Additional number of shares issue, value | $ | $ 12,000 | ||||||||
Share price per share | $ / shares | $ 0.04 | ||||||||
Common Stock [Member] | 2014 Activity [Member] | |||||||||
Shares issued on convertible debt interest expense | 117,854 | ||||||||
Fair vlaue shares issued on convertible debt interest expense | $ | $ 82,500 | ||||||||
Loan maturity date | Nov. 30, 2014 | ||||||||
Additional number of shares issue | 300,000 | ||||||||
Additional number of shares issue, value | $ | $ 12,000 | ||||||||
Share price per share | $ / shares | $ 0.04 | ||||||||
Common Stock [Member] | Rick Havenstrite, President [Member] | 2014 Activity [Member] | |||||||||
Shares issued as management incentive, shares | 3,137,066 | ||||||||
Share price per share | $ / shares | $ 0.04 | ||||||||
Shares issued as management incentive | $ | $ 125,483 | ||||||||
Forgiveness of accrued but unpaid wages | $ | 40,000 | ||||||||
Officers and directors fees | $ | 85,483 | ||||||||
Reduction of accrued officer wages | $ | $ 40,000 | ||||||||
Preferred Stock [Member] | Series A-1 Preferred Stock [Member] | |||||||||
Preferred stock, shares authorized | 2,500,000 | ||||||||
Share price per share | $ / shares | $ 0.70 | ||||||||
Preferred Stock [Member] | DMRJ [Member] | 2015 Activity [Member] | |||||||||
Share price per share | $ / shares | $ 0.04 | $ 0.04 | |||||||
Fully diluted convertible shares | This issuance would maintain the current 77% beneficial ownership of the Company by DMRJ Group, with total preferred shares convertible into 47,211,002 shares of common stock. DMRJ is considered a related party. | DMRJ Group beneficially owned approximately 77% of the Company (on a fully-diluted basis). | |||||||
Company agreed to issue additional shares, shares | 185,194 | ||||||||
Financing costs | $ | $ 38,930 | $ 740,776 | |||||||
Conversion of preferred stock, number of shares issued | 47,211,002 | ||||||||
Preferred Stock [Member] | DMRJ [Member] | 2014 Activity [Member] | |||||||||
Share price per share | $ / shares | $ 0.04 | ||||||||
Company agreed to issue additional shares, shares | 249,603 | ||||||||
Financing costs | $ | $ 998,412 |
Stock Plan (Details)
Stock Plan (Details) - shares | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 31, 2014 | Jul. 12, 2008 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment award, Shares issued in period | 4,256,733 | ||
President [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment award, Shares issued in period | 3,137,066 | ||
2008 Stock option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized under stock option plan | 4,256,733 | 3,000,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Components of inventories | ||
Ore on leach pad | $ 2,404,657 | $ 1,508,761 |
Carbon column in process | 144,512 | 211,115 |
Dore finished goods | 4,638 | 25,501 |
Total | $ 2,553,807 | $ 1,745,377 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Net Total | $ 4,584,394 | $ 3,190,156 |
Property, Plant and Equipment [Member] | ||
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Gross | 3,275,240 | 1,560,949 |
Less accumulated depreciation | (768,072) | (357,983) |
Property and equipment, Net Total | 2,507,168 | 1,202,966 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Gross | 3,154,755 | 1,465,827 |
Property, Plant and Equipment [Member] | Furniture and fixtures, temporary housing [Member] | ||
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Gross | 10,781 | 10,781 |
Property, Plant and Equipment [Member] | Electronic and computerized equipment [Member] | ||
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Gross | 52,874 | 19,011 |
Property, Plant and Equipment [Member] | Vehicles [Member] | ||
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Gross | 56,830 | 65,330 |
Finite-Lived Intangible Assets [Member] | Kiewit property facilities [Member] | ||
Summary of property, equipment and accumulated depreciation | ||
Property and equipment, Gross | 2,451,973 | 2,153,411 |
Less accumulated depreciation | (374,747) | (166,221) |
Property and equipment, Net Total | $ 2,077,226 | $ 1,987,190 |
Property and Equipment (Detai38
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property and Equipment (Textual) | ||
Construction costs of heap leach facility include capitalized interest | $ 0 | $ 177,747 |
Mineral Properties and Intere39
Mineral Properties and Interests (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Initial lease fee | ||
Yellow Hammer Site | $ 175,000 | $ 175,000 |
Kiewit, Cactus Mill and all other sites | 600,000 | 600,000 |
Total | 775,000 | 775,000 |
Asset retirement obligation | ||
Kiewit Site | 789,026 | 687,475 |
Kiewit Exploration | 10,780 | 10,780 |
Cactus Mill | 16,133 | 16,133 |
Total | 815,939 | 714,388 |
Total Costs | 1,590,939 | 1,489,388 |
Accumulated amortization | (276,933) | (116,501) |
Total | $ 1,314,006 | $ 1,372,887 |
Mineral Properties and Intere40
Mineral Properties and Interests (Details Textual) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2014 | Feb. 20, 2014 | |
Mineral properties and interests (Textual) | ||||
Claims fees (per claim) | $ 155 | |||
Kiewit reclamation bond, Amount | $ 1,348,000 | |||
Refunded reclamation bonds | $ 92,705 | |||
Total reclamation bonds posted amount | $ 1,418,070 | $ 1,412,804 |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | Nov. 18, 2009 | Nov. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 |
Convertible Debt (Textual) | |||||||
Convertible debt | $ 600,000 | $ 600,000 | |||||
Interest payable | 15.00% | ||||||
Periodic payment of interest | $ 7,500 | ||||||
Conversion price (per shares) | $ 0.70 | ||||||
Accrued interest payable | $ 97,500 | $ 7,500 | |||||
Common stock conversion | 996,429 | ||||||
Loan maturity date | Nov. 30, 2016 | ||||||
Share price per share | $ 0.04 | $ 0.04 | |||||
Financing expense | $ 12,000 | ||||||
Additional shares of common stock issued to debt holders | 300,000 | 300,000 | 300,000 | 300,000 |
Notes Payable - Equipment (Deta
Notes Payable - Equipment (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Notes payable | $ 1,880,775 | $ 518,559 |
Current portion | 803,388 | 146,171 |
Long Term portion | 1,077,387 | $ 372,388 |
Komatsu Financial, collateralized by Komatsu Telehandler lift [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 91,080 | |
Komatsu Financial, collateralized by a Komatsu PC400 [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 38,674 | |
CAT Financial, collateralized by five pieces of used mining equipment [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 1,347,751 | |
HCE Funding, collateralized by a Perkins Elmer AA machine [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 5,472 | |
Komatsu Financial, collateralized by a Komatsu D275 dozer [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 388,055 | $ 492,955 |
Komatsu Financial, collateralized by a Komatsu PC400 Excavator [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 9,743 | $ 25,604 |
Notes Payable - Equipment (De43
Notes Payable - Equipment (Details 1) | Dec. 31, 2015USD ($) |
5 Year Maturity: | |
2,016 | $ 803,388 |
2,017 | 813,165 |
2,018 | 247,405 |
2,019 | 16,817 |
2,020 | $ 1,880,775 |
Notes Payable - Equipment (De44
Notes Payable - Equipment (Details Textual) | 12 Months Ended | |
Dec. 31, 2015USD ($)Installments | Nov. 18, 2009 | |
Notes Payable Equipment (Textual) | ||
Note payable amount (remaining installments) | $ 6,900,000 | |
Interest rate | 15.00% | |
Komatsu Financial, collateralized by Komatsu Telehandler lift [Member] | ||
Notes Payable Equipment (Textual) | ||
Number of installment (in monthly) | Installments | 48 | |
Note payable amount (remaining installments) | $ 2,441 | |
Interest rate | 4.99% | |
Komatsu Financial, collateralized by a Komatsu PC400 [Member] | ||
Notes Payable Equipment (Textual) | ||
Number of installment (in monthly) | Installments | 12 | |
Note payable amount (remaining installments) | $ 3,223 | |
Interest rate | 1.16% | |
CAT Financial, collateralized by five pieces of used mining equipment [Member] | ||
Notes Payable Equipment (Textual) | ||
Number of installment (in monthly) | Installments | 36 | |
Note payable amount (remaining installments) | $ 49,242 | |
Interest rate | 4.68% | |
Loan payments | $ 82,096 | |
HCE Funding, collateralized by a Perkins Elmer AA machine [Member] | ||
Notes Payable Equipment (Textual) | ||
Note payable amount (first installment) | $ 7,600 | |
Number of installment (in monthly) | Installments | 22 | |
Note payable amount (remaining installments) | $ 520 | |
Interest rate | 5.00% | |
Komatsu Financial, collateralized by a Komatsu D275 dozer [Member] | ||
Notes Payable Equipment (Textual) | ||
Note payable amount (remaining installments) | $ 11,674 | |
Interest rate | 2.99% | |
Komatsu Financial, collateralized by a Komatsu PC400 Excavator [Member] | ||
Notes Payable Equipment (Textual) | ||
Number of installment (in monthly) | Installments | 24 | |
Note payable amount (remaining installments) | $ 1,647 | |
Interest rate | 2.50% |
Note Payable - Related Party (D
Note Payable - Related Party (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Principal [Abstract] | ||
Current portion | $ 13,040,492 | $ 2,124,348 |
Long term portion | 9,665,144 | |
Interest [Abstract] | ||
Current portion | $ 97,500 | 7,500 |
Dmrj [Member] | ||
Principal [Abstract] | ||
Current portion | $ 13,040,492 | 2,124,348 |
Long term portion | 9,665,144 | |
Total | $ 13,040,492 | 11,789,492 |
Interest [Abstract] | ||
Current portion | $ 5,230,779 | $ 3,375,652 |
Long term portion | ||
Total | $ 5,230,779 | $ 3,375,652 |
Total | $ 18,271,271 | $ 15,165,144 |
Note Payable - Related Party 46
Note Payable - Related Party (Details 1) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | $ 6,900,000 |
June 30, 2016 [Member] | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | 500,000 |
September 30, 2016 [Member] | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | 800,000 |
December 31, 2016 [Member] | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | 600,000 |
February 28, 2017 [Member] | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | 500,000 |
May 31, 2017 [Member] | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | 2,250,000 |
August 31, 2017 [Member] | |
Debt Instrument [Line Items] | |
Debt minimum principal and interest payment | $ 2,250,000 |
Note Payable - Related Party 47
Note Payable - Related Party (Details Textual) - USD ($) | Feb. 19, 2014 | Aug. 31, 2015 | Aug. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 31, 2014 |
Fully diluted convertible shares | DMRJ Group beneficially owns approximately 77% of the Company (on a fully-diluted basis) with shares convertible to 47,211,002 shares of common stock (See Note 3). | ||||||
Loan advances | $ 25,000 | ||||||
Proceeds from note payable - related party | $ 1,251,000 | $ 5,525,000 | |||||
Debt Instrument, Description | The Company will pay to DMRJ Group an amount equal to 100% of all cash flows from operations for the immediately preceding month, if any, less mutually agreed upon capital expenditures (and if an agreement on capital expenditures is not reached, then 100% of cash flows from operations) subject to a minimum cash balance of $200,000 to be maintained by the Company. | ||||||
Investment Agreement , Description | (1) required the Company to issue 185,194 shares of Series B Preferred Stock (see Note 3), (2) incorporated anti-dilution provisions, and (3) contained provisions for shares of common stock to be issued to the Company's President, Rick Havenstrite, if he operates within 10% of the approved budget over twelve months from the date of the amendment. The number of shares to be issued to the Company's President will be equal to 2.5% of the amount of fully outstanding shares of the Company on a fully diluted basis. | ||||||
Term Loan [Member] | |||||||
Loan advances | $ 2,000,000 | ||||||
Total amount drawn | $ 5,525,000 | ||||||
Series B Preferred Stock [Member] | |||||||
Preferred Stock, shares issued | 444,530 | 249,603 | |||||
Number of share issue | 185,194 | ||||||
Maximum [Member] | |||||||
Percentage of interest rate | 24.00% | ||||||
Minimum [Member] | |||||||
Percentage of interest rate | 15.00% | ||||||
Additional Funding Agreement Terms [Member] | |||||||
Loan advances | $ 5,700,000 | ||||||
Additional funding amount | $ 525,000 | $ 850,000 | |||||
Total amount drawn | $ 5,500,000 |
Stock Redeemable with Gold Pr48
Stock Redeemable with Gold Proceeds (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2015 | |
Redemption, description | Under the terms of this offering, the shares could be redeemed for cash generated from the sale of gold for a period of 12 months after commencement of operations at the Kiewit project. Proceeds from 5% of the gold produced during the first year of production were to be allocated to fund this option. Each investor received 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. | ||
Percentage of conversion of shares for cash from gold sales | 5.00% | ||
Redemption of gold proceeds payable | $ 151,406 | ||
Equity financing, payment description | Of the amounts payable, $130,000 represents return of the funds originally invested, and the remaining $21,406 represents the difference between the $1,000 per ounce that the investors paid for the gold shares and the net sales price of the gold allocated to this financing. Offsets against revenue for $12,797 and $8,609. | ||
Common Stock [Member] | |||
Stock issued during period, shares | 130,000 | 1,150,000 | |
Stock issued during period, value | $ 130,000 |
Remediation Liability and Ass49
Remediation Liability and Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | ||
Reclamation and remediation liability, beginning of year | $ 740,268 | $ 69,920 |
Obligation incurred | 101,551 | 656,567 |
Accretion expense | 59,778 | 13,781 |
Reclamation and remediation liability, end of year | $ 901,597 | $ 740,268 |
Remediation Liability and Ass50
Remediation Liability and Asset Retirement Obligation (Details Textual) | Feb. 19, 2014 | Dec. 31, 2015 |
Remediation liability and asset retirement obligation (Textual) | ||
Risk free interest rate | 0.13% | |
Maximum [Member] | ||
Remediation liability and asset retirement obligation (Textual) | ||
Risk free interest rate | 10.00% | |
Estimated useful lives of mine property | 12 years | |
Minimum [Member] | ||
Remediation liability and asset retirement obligation (Textual) | ||
Risk free interest rate | 8.00% | |
Estimated useful lives of mine property | 5 years |
Provision For Income Taxes (Det
Provision For Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Provision For Income Taxes [Abstract] | ||
Federal income tax benefit based on statutory rate, Value | $ (1,173,000) | $ (1,180,000) |
Effect of non-deductible items, Value | 100 | 200 |
Increase in valuation allowance, Value | $ 1,172,900 | $ 1,179,800 |
Total taxes on income (loss), Value | ||
Federal income tax benefit based on statutory rate, Percentage | (35.00%) | (35.00%) |
Effect of non-deductible items, Percentage | ||
Increase in valuation allowance, Percentage | 35.00% | 35.00% |
Total taxes on income (loss), Percentage |
Provision For Income Taxes (D52
Provision For Income Taxes (Details 1) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax asset: | ||
Net operating loss carry forward | $ 6,131,000 | $ 4,998,000 |
Exploration costs | 266,000 | 306,000 |
Financing costs | 296,000 | 265,000 |
Other | 61,900 | 13,000 |
Gross, deferred tax assets | 6,754,900 | 5,582,000 |
Deferred tax asset valuation allowance | $ (6,754,900) | $ (5,582,000) |
Net deferred tax asset |
Provision For Income Taxes (D53
Provision For Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Provision For Income Taxes (Textual) | ||
Net operating loss carry forwards | $ 17,500 | |
Operating loss carryforwards expiration date | Through 2,035 | |
Effective tax rate | ||
Increase in valuation allowance, Value | $ 1,172,900 | $ 1,179,800 |
Federal income tax returns examination, Description | The Company's federal income tax returns from 2013 through 2015 remain open and subject to examination. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Purchase of equipment | $ 374,165 | $ 2,352,711 |
Rick Havenstrite, President [Member] | ||
Related Party Transaction [Line Items] | ||
Additionally amount owed to Rick Havenstrite | 4,015 | |
RMH Overhead, LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Rent expense for office space | 12,000 | 11,000 |
RMH Overhead expense recognized | 12,000 | 10,000 |
Accounts payable | 13,750 | |
Purchase of equipment | 165,000 | |
Unpaid services | 12,000 | 12,000 |
Marianne Havenstrite [Member] | ||
Related Party Transaction [Line Items] | ||
Wage expense | 60,000 | 55,731 |
Accrued liabilities | 56,192 | $ 28,500 |
Stuart Havenstrite [Member] | ||
Related Party Transaction [Line Items] | ||
Unpaid services | 18,276 | |
Accounting and engineering services | $ 61,153 |
Commitments (Details)
Commitments (Details) - USD ($) | May. 01, 2014 | Sep. 30, 2010 | Dec. 31, 2009 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2015 | Nov. 30, 2014 |
Commitments (Textual) | |||||||
Common stock, shares issued | 13,056,603 | 13,356,603 | |||||
Severance tax | $ 3,726 | ||||||
Share price per share | $ 0.04 | $ 0.04 | |||||
Mining severance tax, due date | Mar. 31, 2016 | ||||||
Officers and directors fees | $ 180,000 | $ 308,670 | |||||
Chief Executive Officer and President | |||||||
Commitments (Textual) | |||||||
Accrued compensation | 308,885 | ||||||
Rick Havenstrite, President [Member] | |||||||
Commitments (Textual) | |||||||
Common stock, shares issued | 3,137,066 | ||||||
Accrued compensation | 252,692 | 165,000 | |||||
Forgiveness of accrued compensation | $ 40,000 | ||||||
Marianne Havenstrite, Treasurer [Member] | |||||||
Commitments (Textual) | |||||||
Accrued compensation | 56,192 | 28,500 | |||||
Employment Agreements [Member] | Chief Executive Officer and President | |||||||
Commitments (Textual) | |||||||
Base salary or fees provided | $ 120,000 | 0 | 15,000 | ||||
Accrued compensation | $ 308,885 | 252,692 | |||||
Officers and directors fees | $ 120,000 | ||||||
Employment agreements, Description | September 2010 we entered into an employment agreement with Mr. Havenstrite as President of our company. The term of the agreement is for four years, expiring September 1, 2014, with automatic one-year extensions unless notice is given by either party. Mr. Havenstrite is required under the terms of the agreement to devote a minimum of 75% of his business time to the affairs of our company. Nevertheless, he may serve on the board of directors or serve as an officer of up to three companies not engaged in business which may reasonably compete with our business, provided that he would not be required to render any material services with respect to the operations or affairs of any other business which would exceed 25% of his entire business time. In spite of the minimum percentage of his time required in his employment agreement, Mr. Havenstrite currently devotes approximately 90% of his time, or approximately 50 hours per week, to our business and approximately 10%, or 5 hours per week, of his business time to Overhead Door Company of Sierra/Nevada, Inc., his overhead door business in Reno, Nevada. He does not anticipate devoting more than 20% of his time to the business of his overhead door company during the term of his employment contract with us. The annual base salary is $120,000 plus performance compensation of between 10% and 100% of the annual base salary based upon fulfillment of annual performance goals established by the Board of Directors or the Compensation Committee (if any). In the event we terminate the agreement without cause or if the agreement is constructively terminated by us, we have agreed to pay Mr. Havenstrite a severance package equal to three times the initial base salary if such termination occurs on or before August 31, 2011, and one and one-half times the largest annual base salary plus the largest annual performance compensation received by Mr. Havenstrite under the Agreement if such termination occurs after August 31, 2011, payable 75% within 30 days and the balance within 30 days of the first anniversary of the termination. | ||||||
Moeller Family Trust [Member] | Mining Properties [Member] | |||||||
Commitments (Textual) | |||||||
Annual payments to trust amount | $ 50,000 | ||||||
Percentage of royalty payments | 6.00% | ||||||
Moeller Family Trust [Member] | Minimum [Member] | Mining Properties [Member] | |||||||
Commitments (Textual) | |||||||
Percentage of royalty payments | 2.00% | ||||||
Moeller Family Trust [Member] | Maximum [Member] | Mining Properties [Member] | |||||||
Commitments (Textual) | |||||||
Percentage of royalty payments | 15.00% | ||||||
Clifton Mining And Woodman Mining Company [Member] | Mining Properties [Member] | |||||||
Commitments (Textual) | |||||||
Annual payments to trust amount | $ 50,000 | ||||||
Percentage of royalty payments | 4.00% | 6.00% | |||||
Clifton Mining And Woodman Mining Company [Member] | Mining Properties [Member] | Kiewit Gold Property [Member] | |||||||
Commitments (Textual) | |||||||
Percentage of royalty payments | 6.00% | ||||||
Royalty expense | $ 194,033 | $ 72,655 | |||||
Clifton Mining And Woodman Mining Company [Member] | Minimum [Member] | Mining Properties [Member] | |||||||
Commitments (Textual) | |||||||
Percentage of royalty payments | 2.00% | ||||||
Clifton Mining And Woodman Mining Company [Member] | Maximum [Member] | Mining Properties [Member] | |||||||
Commitments (Textual) | |||||||
Percentage of royalty payments | 15.00% | ||||||
Clifton Mining [Member] | |||||||
Commitments (Textual) | |||||||
Royalty payments still payable | $ 98,368 |
Subsequent Events (Details)
Subsequent Events (Details) | Mar. 30, 2016USD ($) |
DMRJ Group [Member] | Subsequent Event [Member] | |
Subsequent Events (Textual) | |
Advance for working capital and ongoing equipment expenses | $ 550,000 |