Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 23, 2016 | |
Document and Entity Information | ||
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-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 13,356,603 |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash | $ 41,510 | $ 132,509 |
Accounts Receivable | 89,834 | |
Inventories (Note 4) | 2,666,439 | $ 2,553,807 |
Prepaid expenses and other current assets | 37,647 | 45,752 |
Total Current Assets | 2,835,430 | 2,732,068 |
PROPERTY AND EQUIPMENT, net (Note 5) | 4,632,808 | 4,584,394 |
MINERAL PROPERTIES AND INTERESTS, net (Note 6) | 1,287,983 | 1,314,006 |
RECLAMATION BONDS | 1,418,547 | 1,418,070 |
TOTAL ASSETS | 10,174,768 | 10,048,538 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 751,179 | 754,064 |
Accrued liabilities-officer wages (Note 13) | 353,885 | 308,885 |
Interest payable (Note 7) | 120,000 | 97,500 |
Interest payable - related party (Note 9) | 5,732,846 | 5,230,779 |
Convertible debt (Note 7) | 600,000 | 600,000 |
Notes payable - equipment (Note 8) | 842,603 | 803,388 |
Note payable - related party (Note 9) | 13,590,492 | 13,040,492 |
Total Current Liabilities | 21,991,005 | 20,835,108 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation (Note 11) | 919,725 | 901,597 |
Notes payable - equipment (Note 8) | 964,478 | 1,077,387 |
Total Long-Term Liabilities | 1,884,203 | 1,978,984 |
TOTAL LIABILITIES | $ 23,875,208 | $ 22,814,092 |
COMMITMENTS (Note 13) | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 13,356,603 shares issued and outstanding | $ 13,228 | $ 13,228 |
Additional paid-in capital | 9,120,018 | 9,120,018 |
Accumulated deficit | (22,835,268) | (21,900,382) |
Total Stockholders' (Deficit) | (13,700,440) | (12,765,554) |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | 10,174,768 | 10,048,538 |
Series A Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized | $ 958 | $ 958 |
Series A-1 Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized | ||
Series A-2 Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized | $ 180 | $ 180 |
Series B Preferred Stock | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Preferred Stock, $0.001 par value, 10,000,000 shares authorized | $ 444 | $ 444 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
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 | 13,056,603 |
Common stock, shares outstanding | 13,056,603 | 13,056,603 |
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 | 249,603 | 249,603 |
Preferred stock, shares outstanding | 249,603 | 249,603 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
REVENUE: | ||
Concentrate sales | $ 291,693 | $ 1,239,869 |
EXPENSES | ||
General project costs | 387,631 | 1,026,593 |
Exploration expense | 7,000 | 5,904 |
Officers and directors fees | 45,000 | 41,538 |
Legal and professional | 25,383 | 25,925 |
General and administrative | 65,069 | 136,810 |
Depreciation and amortization | 147,019 | 141,336 |
Total Expenses | 677,102 | 1,378,106 |
OPERATING LOSS | (385,409) | (138,237) |
OTHER INCOME (EXPENSE) | ||
Interest and other income | 477 | 380 |
Interest expense | (47,887) | (31,932) |
Interest expense - related party | (502,067) | (442,602) |
Total Other Income (Expense) | (549,477) | (474,154) |
LOSS BEFORE INCOME TAXES | $ (934,886) | $ (612,391) |
INCOME TAXES | ||
NET LOSS | $ (934,886) | $ (612,391) |
BASIC AND DILUTED NET LOSS PER SHARE | $ (0.07) | $ (0.05) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED | 13,356,603 | 13,056,603 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (934,886) | $ (612,391) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 163,974 | 270,909 |
Accretion of asset retirement obligation | $ 18,128 | 14,983 |
Loss on sale of equipment | 1,008 | |
Loss on stock redeemed with gold proceeds | $ 8,748 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | $ (89,834) | |
Inventories | (112,632) | $ 82,665 |
Prepaid expenses and other current assets | 8,105 | 67,554 |
Accounts payable and accrued expenses | (2,885) | (118,505) |
Accrued liabilities - officer wages | 45,000 | (18,000) |
Interest payable | 22,500 | 22,500 |
Interest payable - related party | 502,067 | 443,602 |
Net cash provided (used) by operating activities | (380,463) | 163,073 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (157,370) | (128,731) |
Acquisition of reclamation bonds | $ (477) | (3,581) |
Proceeds from sale of equipment | 9,192 | |
Net cash (used) by investing activities | $ (157,847) | $ (123,120) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable-related party | 550,000 | |
Payment of note payable - equipment | (102,689) | $ (44,482) |
Net cash provided (used) by financing activities | 447,311 | (44,482) |
NET INCREASE (DECREASE) IN CASH | (90,999) | (4,529) |
CASH, BEGINNING OF PERIOD | 132,509 | 161,645 |
CASH, END OF PERIOD | 41,510 | 157,116 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Equipment acquired with notes payable - equipment | $ 28,992 | 1,624,276 |
Accounts payable converted to notes payable - equipment | 150,376 | |
Addition to redemption of gold proceeds payable | $ 62,748 |
Organization and Description of
Organization and Description of Business | 3 Months Ended |
Mar. 31, 2016 | |
Organization and Description of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Desert Hawk Gold Corp., a Nevada corporation, (the “ Company 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 I, LLC, a Delaware limited liability company (“ DMRJ Group |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In the opinion of management, the accompanying unaudited interim balance sheets and statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of March 31, 2016, and the results of its operations and its cash flows for the three months ended March 31, 2016 and 2015. The operating and financial results for the Company for the three months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“ U.S. GAAP 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; depreciation and 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 March 31, 2016, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and 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 12-18 months. Revenue Sales of all metals products are recorded as revenues when title and risk of loss transfer to the purchaser. Sales to the purchaser are recorded at gross sales price, with charges for treatment, refining, smelting and other charges included as part of general project costs. Earnings (loss) Per Share Basic earnings (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company. At March 31, 2016 and March 31, 2015, common stock equivalents outstanding are as follows: March 31, 2016 March 31, 2015 Convertible debt 1,028,574 857,143 Convertible preferred stock 47,211,002 27,718,333 Total 48,239,576 28,575,476 However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses. Going Concern As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through March 31, 2016, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The 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. The Company will need significant funding to continue operations and increase development through the next fiscal year. This funding is expected to come via sales revenues and loan funds, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships. 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. |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2016 | |
Capital stock [Abstract] | |
CAPITAL STOCK | NOTE 3 – CAPITAL STOCK Common Stock 2016 Activity No shares of common stock have been issued during the first three months of 2016. 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 7. The Thirteenth Amendment to the Investment Agreement with DMRJ Group (see Note 9) 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. Preferred Stock 2016 Activity No shares of preferred stock have been issued during the first three months of 2016. 2015 Activity On August 31, 2015, as part of the Thirteenth Amendment to the Investment Agreement with DMRJ Group (see Note 9), 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. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 4 – INVENTORIES The following table provides the components of inventories: March 31, December 31, Ore on leach pad $ 2,463,599 $ 2,404,657 Carbon column in process 197,051 144,512 Dore finished goods 5,789 4,638 Total $ 2,666,439 $ 2,553,807 Inventories are valued at the lower of production cost or net realizable value, which at March 31, 2016 is cost. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 - PROPERTY AND EQUIPMENT The following is a summary of property, equipment, and accumulated depreciation at March 31, 2016 and December 31, 2015: March 31, December 31, 2016 2015 Equipment $ 3,279,370 $ 3,154,755 Furniture and fixtures, temporary housing 10,781 10,781 Electronic and computerized equipment 52,874 52,874 Vehicles 73,115 56,830 3,416,140 3,275,240 Less accumulated depreciation (889,067 ) (768,072 ) 2,527,073 2,507,168 Kiewit property facilities 2,497,435 2,451,973 Less accumulated amortization (391,700 ) (374,747 ) 2,105,735 2,077,226 Total $ 4,632,808 $ 4,584,394 |
Mineral Properties and Interest
Mineral Properties and Interests | 3 Months Ended |
Mar. 31, 2016 | |
Mineral Properties and Interests [Abstract] | |
MINERAL PROPERTIES AND INTERESTS | NOTE 6 – MINERAL PROPERTIES AND INTERESTS Mineral properties and interests as of March 31, 2016 and December 31, 2015 are as follows: March 31, December 31, 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 789,026 789,026 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 Total 815,939 815,939 Accumulated amortization (302,956 ) (276,933 ) Total $ 1,287,983 $ 1,314,006 The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting of 247 unpatented claims, including the unpatented mill site claim, and two Utah state mineral leases located on state trust lands. Annual claims fees are currently $155 per claim plus administrative fees. On January 6, 2014, we 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 March 31, 2016 and December 31, 2015 are $1,418,547 and $1,418,070, respectively. |
Convertible Debt
Convertible Debt | 3 Months Ended |
Mar. 31, 2016 | |
Convertible Debt [Abstract] | |
CONVERTIBLE DEBT | NOTE 7 – 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 $3,750 to each of the note holders. The notes were originally convertible at any time at a rate of $1.50 per share, but on July 14, 2010 the promissory notes were amended thereby reducing the conversion price to $0.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group (see Note 9). At March 31, 2016, the notes, and all accrued and unpaid interest, are convertible into potentially 1,028,574 shares of common stock, and principal and interest and are due November 30, 2016, unless extended through the issuance of penalty shares. 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 the November 30, 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. 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 stock through November 30, 2014 and will be paid in cash thereafter. Accrued interest payable at March 31, 2016 and December 31, 2015 includes $120,000 and $97,500, respectively, for these notes. |
Notes Payable Equipment
Notes Payable Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Notes Payable Equipment [Abstract] | |
NOTES PAYABLE - EQUIPMENT | NOTE 8 – NOTES PAYABLE – EQUIPMENT The following is a summary of the equipment notes payable: March 31, December 31, 2015 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 90,096 91,080 Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%. Interest only payments during four months of each year increase the remaining payment amounts due to $82,096. 1,270,922 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%. 3,974 5,472 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,674 including interest at 2.99%. 369,503 388,055 Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,647 including interest at 2.5%. 4,920 9,743 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 38,674 Note payable to Star Capital, LLC collateralized by a 2009 Multiquip generator, due in 24 monthly installments of $1,412, beginning in March 2016, including interest at 11.4%. 28,992 - 1,807,081 1,880,775 Current portion (842,603 ) (803,388 ) Long Term portion $ 964,478 $ 1,077,387 Principal payments are as follows for the twelve months ended March 31, 2017 $ 842,603 2018 822,932 2019 131,879 2020 9,667 Total $ 1,807,081 During the first quarter 2015, an accounts payable balance of $150,375 relating to lease costs for equipment was converted to Notes payable – equipment when the Company acquired the equipment. |
Note Payable - Related Party
Note Payable - Related Party | 3 Months Ended |
Mar. 31, 2016 | |
Note Payable Related Party [Abstract] | |
NOTE PAYABLE - RELATED PARTY | NOTE 9 – 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. 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 at March 31, 2016 and December 31, 2015 is as follows: March 31, December 31, 2016 2015 Principal Current $ 13,590,492 $ 13,040,492 Long-term - - Total 13,590,492 13,040,492 Interest payable Current 5,732,846 5,230,779 Long-term - - $ 19,323,338 $ 18,271,271 The Investment Agreement contains certain negative covenants which prohibit us from the following actions or activities: ● Incurring any indebtedness except in limited circumstances; ● 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, except for dividends to DMRJ Group; ● 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 ● Modify or grant a waiver or release under or terminate any principal lease agreement or other material contract. At March 31, 2016, 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. 2016 Activity Several term loan advances were received from DMRJ Group by the Company between February 9, 2016 and March 21, 2016 totaling $550,000. These advances bear interest at 15% per annum and become due on October 31, 2016 with the remainder of the note due to DMRJ Group. These funds were used for working capital and equipment debt repayment. 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 2015, a total of $925,000 has been 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. The Thirteenth Amendment also established new minimum principal and interest payment dates beginning in June 2016 as follows, with the remaining balance to be due thereafter, pursuant to the terms of the Tenth Amendment, whereby all funds in excess of $200,000 working capital, are to be remitted on a quarterly basis in payment of the remaining loan payable: 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 Regardless of the above minimum payment schedule, the loan from DMRJ Group has a due date of October 31, 2016. 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. |
Stock Redeemable with Gold Proc
Stock Redeemable with Gold Proceeds | 3 Months Ended |
Mar. 31, 2016 | |
Stock Redeemable With Gold Proceeds [Abstract] | |
STOCK REDEEMABLE WITH GOLD PROCEEDS | NOTE 10 – 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. Shares will be converted on whole ounces only. 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 conversion shares should be recorded as a liability and not as equity. Once sales of concentrate began in 2014, all investors in this equity financing opted to convert their shares for cash from 5% of the gold sales. Based on the sales price of gold sold during the conversion period, $151,406 in gold proceeds is due to be paid to investors at March 31, 2016 and December 31, 2015. 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, respectively was recognized during the years ended December 31, 2015 and 2014. Payments of these funds due to investors have not yet begun, due to cash flow, and are included in accounts payable and accrued liabilities. These shares will not be cancelled until final payment is made. It is anticipated that these payments will be made in 2016. |
Remediation Liability and Asset
Remediation Liability and Asset Retirement Obligation | 3 Months Ended |
Mar. 31, 2016 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | |
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION | NOTE 11 – 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 periods ended March 31, 2016 and December 31, 2015 are as follows: Three months ended Year ended December 31, Reclamation and remediation liability, beginning of period $ 901,597 $ 740,268 Obligation incurred - 101,551 Accretion expense 18,128 59,778 Reclamation and remediation liability, end of period $ 919,725 $ 901,597 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS The Company recognized rent expense for rental of office space of $3,000 for the three months ended March 31, 2016 and 2015, respectively, 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 $3,000 during the quarters ending March 31, 2016 and 2015, respectively, leaving a total of $13,750 remaining in accounts payable at March 31, 2016 including amounts due from prior years. In addition, the Company purchased equipment for $16,500 from Overhead Door Co. of SNR, another company owned by Rick Havenstrite, during 2014, $12,000 of which remains unpaid at March 31, 2016. The Company additionally owes $2,401 to Rick Havenstrite at March 31, 2016 for supplies purchased by him for the Company during 2015, and $3,600 to Overhead Door Co. of SNR for expenses incurred on behalf of the Company during the first quarter of 2016. All of these amounts are reflected in the accounts payable for the Company. During the quarters ended March 31, 2016 and March 31, 2015, the Company recognized wage expense of $15,000, respectively, for office and accounting services performed by Marianne Havenstrite, wife of Rick Havenstrite, who became an officer of the Company during 2013. Part of these amounts, in combination with amounts from prior years, total $71,192 and $28,500 remaining unpaid at March 31, 2016 and 2015, respectively and is reflected in accrued liabilities – officer wages. During the three months ended March 31, 2016 and 2015, the Company recognized general project cost expense of $6,667 and $6,958, respectively, for geological services provided by Stuart Havenstrite, the father of Rick Havenstrite. $35,407 and $20,901 remain unpaid to Mr. Havenstrite at March 31, 2016 and March 31, 2015. These amounts are included in accounts payable at those dates. Payments were also made to other family members of Rick and Marianne Havenstrite for the three months ended March 31, 2016 and 2015 for accounting and engineering services in the amount of $18,440 and $21,460, respectively. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2016 | |
Commitments [Abstract] | |
COMMITMENTS | NOTE 13 – 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 to date in 2016 or in 2015. 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 $17,160 and $73,012 was recognized during the quarters ended March 31, 2016 and 2015 with $103,746 still payable to Clifton Mining Company at March 31, 2016. This amount is expected to be paid in 2016. Mining severance tax in the amount of $1,931, based on production, was accrued at March 31, 2016. Personal property tax due to Tooele County, Utah in the amount of $71,398, based on income projections, was accrued and past due at March 31, 2016. Employment Agreements In September 2010 the Company entered into an employment agreement with Mr. Havenstrite as President of the Company, which is ongoing. The agreement requires Mr. Havenstrite to meet certain time requirements and limits the number of other board member obligations in which he can participate. The agreement allows for a base annual salary of $120,000 plus certain performance compensation upon fulfillment of established goals, allows the Board to terminate Mr. Havenstrite’s employment at any time, providing for a severance payment upon termination without cause. As of March 31, 2016 and March 31, 2015, accrued compensation of $353,885 and $193,500, and consulting fees payable of $0 and $15,000, respectively, were due to directors and officers. Of the amounts accrued at March 31, 2016 and 2015, accrued compensation of $282,693 and $165,000 is due to Rick Havenstrite and $71,192 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 14 – SUBSEQUENT EVENTS On April 10, 2016, the Company failed to make interest payments required under the convertible notes (see Note 7). 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. Director Appointments On April 25, 2016, David Levy resigned as a director of the Company. Mr. Levy’s resignation was not caused by any disagreement with the Company known to the Company. On April 25, 2016, the Board of Directors of the Company increased the number of authorized directors from three to five and appointed Howard Crosby, Michael P. Kurtanjek, and John May as directors of the Company to fill the vacancy left by Mr. Levy’s resignation as a director and the increase of the number of authorized directors. There are no arrangements or understandings between Messrs. Crosby, Kurtanjek, and May and any other persons pursuant to which Messrs. Crosby, Kurtanjek, and May were selected as directors. At this time, Messrs. Crosby, Kurtanjek, and May have not been appointed to any committees and there are currently no plans for their appointment to any committees. CEO Appointment On April 25, 2016, the Board of Directors of the Company appointed Howard Crosby, age 62, as Chief Executive Officer and Principal Executive Officer of the Company. There are no arrangements or understandings between Mr. Crosby and any other persons pursuant to which Mr. Crosby was selected as Chief Executive Officer and Principal Executive Officer. There are no family relationship between Mr. Crosby and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. Chairman Appointment In conjunction with Mr. Crosby’s appointment as a director of the Company, Mr. Crosby was appointed as the Chairman of the Board of Directors. COO Appointment On April 25, 2016, Rick Havenstrite, the Company’s current President and director, was appointed as the Company’s Chief Operating Officer. Mr. Havenstrite will no longer serve as the Company’s Principal Executive Officer but will remain as the Company’s President. CFO Appointment On April 25, 2016, the Board of Directors of the Company appointed John Ryan, age 54, as Chief Financial Officer and Principal Financial and Accounting Officer of the Company. There are no arrangements or understandings between Mr. Ryan and any other persons pursuant to which Mr. Ryan was selected as Chief Financial Officer and Principal Financial and Accounting Officer. There are no family relationship between Mr. Ryan and any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. On April 20, 2016, a shareholder owning all of the Series A-2 Convertible Preferred Shares of the Company, pursuant to the Certificate of Designations, Preferences, and Rights of the Series A-1 and A-2 Convertible Preferred Stock, provided a consent to the expansion of the number of directors from three to five and a waiver of its right to appoint two members of the Board of Directors of the Company. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
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; depreciation and 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 March 31, 2016, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and 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 12-18 months. |
Revenue | Revenue Sales of all metals products are recorded as revenues when title and risk of loss transfer to the purchaser. Sales to the purchaser are recorded at gross sales price, with charges for treatment, refining, smelting and other charges included as part of general project costs. |
Earnings (loss) Per Share | Earnings (loss) Per Share Basic earnings (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company. At March 31, 2016 and March 31, 2015, common stock equivalents outstanding are as follows: March 31, 2016 March 31, 2015 Convertible debt 1,028,574 857,143 Convertible preferred stock 47,211,002 27,718,333 Total 48,239,576 28,575,476 However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses. |
Going Concern | Going Concern As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through March 31, 2016, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. The 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. The Company will need significant funding to continue operations and increase development through the next fiscal year. This funding is expected to come via sales revenues and loan funds, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships. 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. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of common stock equivalents outstanding | March 31, 2016 March 31, 2015 Convertible debt 1,028,574 857,143 Convertible preferred stock 47,211,002 27,718,333 Total 48,239,576 28,575,476 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventories [Abstract] | |
Schedule of components of inventories | March 31, December 31, Ore on leach pad $ 2,463,599 $ 2,404,657 Carbon column in process 197,051 144,512 Dore finished goods 5,789 4,638 Total 2,666,439 $ 2,553,807 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property and Equipment [Abstract] | |
Summary of property, equipment, and accumulated depreciation | March 31, December 31, 2016 2015 Equipment $ 3,279,370 $ 3,154,755 Furniture and fixtures, temporary housing 10,781 10,781 Electronic and computerized equipment 52,874 52,874 Vehicles 73,115 56,830 3,416,140 3,275,240 Less accumulated depreciation (889,067 ) (768,072 ) 2,527,073 2,507,168 Kiewit property facilities 2,497,435 2,451,973 Less accumulated amortization (391,700 ) (374,747 ) 2,105,735 2,077,226 Total $ 4,632,808 $ 4,584,394 |
Mineral Properties and Intere24
Mineral Properties and Interests (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Mineral Properties and Interests [Abstract] | |
Schedule of mineral properties and interests | March 31, December 31, 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 789,026 789,026 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 Total 815,939 815,939 Accumulated amortization (302,956 ) (276,933 ) Total $ 1,287,983 $ 1,314,006 |
Notes Payable - Equipment (Tabl
Notes Payable - Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Notes Payable Equipment [Abstract] | |
Schedule of the equipment notes payable | March 31, December 31, 2015 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 90,096 91,080 Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%. Interest only payments during four months of each year increase the remaining payment amounts due to $82,096. 1,270,922 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%. 3,974 5,472 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,674 including interest at 2.99%. 369,503 388,055 Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,647 including interest at 2.5%. 4,920 9,743 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 38,674 Note payable to Star Capital, LLC collateralized by a 2009 Multiquip generator, due in 24 monthly installments of $1,412, beginning in March 2016, including interest at 11.4%. 28,992 - 1,807,081 1,880,775 Current portion (842,603 ) (803,388 ) Long Term portion $ 964,478 $ 1,077,387 |
Schedule of principal payments | Principal payments are as follows for the twelve months ended March 31, 2017 $ 842,603 2018 822,932 2019 131,879 2020 9,667 Total $ 1,807,081 |
Note Payable - Related Party (T
Note Payable - Related Party (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Note Payable Related Party [Abstract] | |
Schedule of due to DMRJ | March 31, December 31, 2016 2015 Principal Current $ 13,590,492 $ 13,040,492 Long-term - - Total 13,590,492 13,040,492 Interest payable Current 5,732,846 5,230,779 Long-term - - $ 19,323,338 $ 18,271,271 |
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 Ass27
Remediation Liability and Asset Retirement Obligation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | |
Schedule of asset retirement obligations | Three months ended Year ended December 31, Reclamation and remediation liability, beginning of period $ 901,597 $ 740,268 Obligation incurred - 101,551 Accretion expense 18,128 59,778 Reclamation and remediation liability, end of period $ 919,725 $ 901,597 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details) - shares | Mar. 31, 2016 | Mar. 31, 2015 |
Summary of Significant Accounting Policies [Abstract] | ||
Convertible debt | 1,028,574 | 857,143 |
Convertible preferred stock | 47,211,002 | 27,718,333 |
Total | 48,239,576 | 28,575,476 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Capital Stock [Line Items] | ||||
Common stock, shares issued | 13,056,603 | 13,056,603 | ||
Fully diluted convertible shares | DMRJ Group (see Note 9) 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. | |||
Beneficial ownership, percentage | 77.00% | |||
Total preferred shares convertible | 47,211,002 | 27,718,333 | ||
Series B Preferred Stock [Member] | ||||
Capital Stock [Line Items] | ||||
Preferred stock, shares issued | 249,603 | 249,603 | ||
Financing costs | $ 740,776 | |||
DMRJ [Member] | Series B Preferred Stock [Member] | ||||
Capital Stock [Line Items] | ||||
Preferred stock, shares issued | 185,194 | |||
DMRJ [Member] | Series B Preferred Stock [Member] | 2015 Activity [Member] | ||||
Capital Stock [Line Items] | ||||
Share price per share | $ 0.04 | |||
Preferred stock, shares issued | 9,733 | |||
Financing costs | $ 38,930 | |||
Common Stock [Member] | ||||
Capital Stock [Line Items] | ||||
Common stock, shares issued | ||||
Share price per share | $ 0.04 | |||
Common Stock [Member] | 2015 Activity [Member] | ||||
Capital Stock [Line Items] | ||||
Additional number of shares issue | 300,000 | |||
Additional number of shares issue, value | $ 12,000 | |||
Preferred Stock [Member] | ||||
Capital Stock [Line Items] | ||||
Share price per share | $ 0.04 | |||
Fully diluted convertible shares | DMRJ Group beneficially owned approximately 77% of the Company (on a fully-diluted basis). DMRJ Group is considered a related party. |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of Inventory, current | ||
Ore on leach pad | $ 2,463,599 | $ 2,404,657 |
Carbon column in process | 197,051 | 144,512 |
Dore finished goods | 5,789 | 4,638 |
Total | $ 2,666,439 | $ 2,553,807 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Total | $ 4,632,808 | $ 4,584,394 |
Property, Plant and Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,416,140 | 3,275,240 |
Less accumulated depreciation | (889,067) | (768,072) |
Property and equipment, Total | 2,527,073 | 2,507,168 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,279,370 | 3,154,755 |
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 | 52,874 |
Property, Plant and Equipment [Member] | Vehicles [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 73,115 | 56,830 |
Finite-Lived Intangible Assets [Member] | Kiewit property facilities [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 2,497,435 | 2,451,973 |
Less accumulated depreciation | (391,700) | (374,747) |
Property and equipment, Total | $ 2,105,735 | $ 2,077,226 |
Mineral Properties and Intere32
Mineral Properties and Interests (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
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 | 789,026 |
Kiewit Exploration | 10,780 | 10,780 |
Cactus Mill | 16,133 | 16,133 |
Total | 815,939 | 815,939 |
Accumulated amortization | (302,956) | (276,933) |
Total | $ 1,287,983 | $ 1,314,006 |
Mineral Properties and Intere33
Mineral Properties and Interests (Details Textual) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | 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 | $ 1,418,547 | $ 1,418,070 |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | Jul. 14, 2010 | Nov. 18, 2009 | Nov. 30, 2012 | Mar. 31, 2016 | Dec. 31, 2015 | Nov. 30, 2014 | Nov. 30, 2013 |
Convertible Debt (Textual) | |||||||
Convertible debt | $ 600,000 | $ 600,000 | $ 600,000 | ||||
Interest payable | 15.00% | ||||||
Periodic payment of interest | $ 3,750 | ||||||
Conversion price (per shares) | $ 1.5 | ||||||
Reduction of conversion price | $ 0.7 | ||||||
Additional shares of common stock issued to debt holders | 300,000 | 300,000 | 300,000 | ||||
Accrued interest payable | $ 120,000 | $ 97,500 | |||||
Common stock conversion | 1,028,574 |
Notes Payable - Equipment (Deta
Notes Payable - Equipment (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Notes payable | $ 1,807,081 | $ 1,880,775 |
Current portion | (842,603) | (803,388) |
Long Term portion | 964,478 | 1,077,387 |
Komatsu Financial, collateralized by Komatsu Telehandler lift [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 90,096 | 91,080 |
CAT Financial, collateralized by five pieces of used mining equipment [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 1,270,922 | 1,347,751 |
HCE Funding, collateralized by a Perkins Elmer AA machine [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 3,974 | 5,472 |
Komatsu Financial, collateralized by a Komatsu D275 dozer [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 369,503 | 388,055 |
Komatsu Financial, collateralized by a Komatsu PC400 Excavator [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 4,920 | 9,743 |
Komatsu Financial, collateralized by a Komatsu PC400 [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 38,674 | $ 38,674 |
Star Capital, LLC collateralized by a 2009 Multiquip generator [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 28,992 |
Notes Payable - Equipment (De36
Notes Payable - Equipment (Details 1) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of principal payment | ||
2,017 | $ 842,603 | |
2,018 | 822,932 | |
2,019 | 131,879 | |
2,020 | 9,667 | |
Total | $ 1,807,081 | $ 1,880,775 |
Notes Payable - Equipment (De37
Notes Payable - Equipment (Details Textual) | 3 Months Ended | ||
Mar. 31, 2016USD ($)Installments | Mar. 31, 2015USD ($) | Nov. 18, 2009 | |
Notes Payable Equipment (Textual) | |||
Note payable amount (remaining installments) | $ 6,900,000 | ||
Interest rate | 15.00% | ||
Accounts payable converted to notes payable - equipment | $ 150,376 | ||
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% | ||
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 (first installment) | $ 21,000 | ||
Number of installment (in monthly) | Installments | 47 | ||
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% | ||
Komatsu Financial, collateralized by a Komatsu PC400 [Member] | |||
Notes Payable Equipment (Textual) | |||
Note payable amount (first installment) | $ 3,223 | ||
Number of installment (in monthly) | Installments | 12 | ||
Interest rate | 1.16% | ||
Star Capital, LLC collateralized by a 2009 Multiquip generator [Member] | |||
Notes Payable Equipment (Textual) | |||
Note payable amount (first installment) | $ 1,412 | ||
Number of installment (in monthly) | Installments | 24 | ||
Interest rate | 11.40% |
Note Payable - Related Party (D
Note Payable - Related Party (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Principal | ||
Current | $ 13,590,492 | $ 13,040,492 |
Interest payable | ||
Current | 120,000 | 97,500 |
Total | 19,323,338 | 18,271,271 |
Dmrj [Member] | ||
Principal | ||
Current | $ 13,590,492 | $ 13,040,492 |
Long-term | ||
Total | $ 13,590,492 | $ 13,040,492 |
Interest payable | ||
Current | $ 5,732,846 | $ 5,230,779 |
Long-term | ||
Total | $ 19,323,338 | $ 18,271,271 |
Note Payable - Related Party 39
Note Payable - Related Party (Details 1) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
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 40
Note Payable - Related Party (Details Textual) - USD ($) | 2 Months Ended | 3 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | Jun. 30, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | |
Note Payable - Related Party (Textual) | ||||
Fully diluted convertible shares | DMRJ Group (see Note 9) 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. | |||
Total amount drawn | $ 5,525,000 | |||
Additional Funding Agreement Terms [Member] | ||||
Note Payable - Related Party (Textual) | ||||
Additional funding amount | $ 525,000 | $ 850,000 | ||
Total amount drawn | $ 925,000 | |||
Working capital | $ 200,000 | |||
Convertible Notes Payable [Member] | ||||
Note Payable - Related Party (Textual) | ||||
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). | |||
Percentage of interest rate | 15.00% | |||
Total amount drawn | $ 550,000 |
Stock Redeemable with Gold Pr41
Stock Redeemable with Gold Proceeds (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Dec. 31, 2012 | Sep. 30, 2012 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Redeemable with Gold Proceeds (Textual) | |||||
Redemption, description | 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. Shares will be converted on whole ounces only. 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 | $ 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 agaisnt revenue | $ 12,797 | $ 8,609,000 | |||
Common Stock [Member] | |||||
Stock Redeemable with Gold Proceeds (Textual) | |||||
Stock issued during period, shares | 130,000 | 1,150,000 | |||
Stock issued during period, value | $ 130,000 |
Remediation Liability and Ass42
Remediation Liability and Asset Retirement Obligation (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | |||
Reclamation and remediation liability, beginning of period | $ 901,597 | $ 740,268 | $ 740,268 |
Obligation incurred | 101,551 | ||
Accretion expense | $ 18,128 | $ 14,983 | 59,778 |
Reclamation and remediation liability, end of period | $ 919,725 | $ 901,597 |
Remediation Liability and Ass43
Remediation Liability and Asset Retirement Obligation (Details Textual) | 3 Months Ended |
Mar. 31, 2016 | |
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 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Minimum [Member] | |||
Relatted Party Transactions (Textual) | |||
Risk free interest rate | 8.00% | ||
Estimated useful lives of mine property | 5 years | ||
Maximum [Member] | |||
Relatted Party Transactions (Textual) | |||
Risk free interest rate | 10.00% | ||
Estimated useful lives of mine property | 12 years | ||
Rick Havenstrite, President [Member] | |||
Relatted Party Transactions (Textual) | |||
Accounts payable | $ 2,401 | ||
RMH Overhead, LLC [Member] | |||
Relatted Party Transactions (Textual) | |||
Rent expense for office space | 3,000 | $ 3,000 | |
Accounts payable | 13,750 | ||
Purchase of equipment | 16,500 | ||
Marianne Havenstrite [Member] | |||
Relatted Party Transactions (Textual) | |||
Wage expense | 15,000 | 15,000 | |
Accrued liabilities | 71,192 | 28,500 | |
Stuart Havenstrite [Member] | |||
Relatted Party Transactions (Textual) | |||
Accounts payable | 35,407 | 20,901 | |
Recognized general project cost expense | 6,667 | 6,958 | |
Accounting and engineering services | 18,440 | $ 21,460 | |
Overhead Door Co. | |||
Relatted Party Transactions (Textual) | |||
Accounts payable | $ 3,600 | ||
Overhead Door Co. | Rick Havenstrite, President [Member] | |||
Relatted Party Transactions (Textual) | |||
Accounts payable | $ 12,000 |
Commitments (Details)
Commitments (Details) - USD ($) | May. 01, 2014 | Sep. 30, 2010 | Dec. 31, 2009 | Mar. 31, 2016 | Mar. 31, 2015 |
Commitments (Textual) | |||||
Royalty expense | $ 17,160 | $ 73,012 | |||
Mining severance amount | 1,931 | ||||
Base annual salary | $ 120,000 | ||||
Accrued compensation | 353,885 | 193,500 | |||
Consulting fees | 0 | 15,000 | |||
Personal property tax due | 71,398 | ||||
Rick Havenstrite [Member] | |||||
Commitments (Textual) | |||||
Accrued compensation | 282,693 | 165,000 | |||
Common stock awarded as management incentive | 3,137,066 | ||||
Marianne Havenstrite [Member] | |||||
Commitments (Textual) | |||||
Accrued compensation | $ 71,192 | 71,192 | |||
Moeller Family Trust [Member] | Mining Properties and Mineral Rights [Member] | |||||
Commitments (Textual) | |||||
Annual payments to trust amount | $ 50,000 | ||||
Percentage of royalty payments | 6.00% | ||||
Moeller Family Trust [Member] | Minimum [Member] | Mining Properties and Mineral Rights [Member] | |||||
Commitments (Textual) | |||||
Percentage of royalty payments | 2.00% | ||||
Moeller Family Trust [Member] | Maximum [Member] | Mining Properties and Mineral Rights [Member] | |||||
Commitments (Textual) | |||||
Percentage of royalty payments | 15.00% | ||||
Clifton Mining And Woodman Mining Company [Member] | Mining Properties and Mineral Rights [Member] | |||||
Commitments (Textual) | |||||
Annual payments to trust amount | $ 50,000 | ||||
Percentage of royalty payments | 6.00% | ||||
Royalty expense | $ 103,746 | ||||
Clifton Mining And Woodman Mining Company [Member] | Minimum [Member] | Mining Properties and Mineral Rights [Member] | |||||
Commitments (Textual) | |||||
Percentage of royalty payments | 2.00% | ||||
Clifton Mining And Woodman Mining Company [Member] | Maximum [Member] | Mining Properties and Mineral Rights [Member] | |||||
Commitments (Textual) | |||||
Percentage of royalty payments | 15.00% |