Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Apr. 24, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Desert Hawk Gold Corp. | |
Entity Central Index Key | 1,168,081 | |
Trading Symbol | DHGC | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,956,603 |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash | $ 49,755 | $ 132,509 |
Accounts receivable | 83,210 | |
Inventories (Note 4) | 3,063,583 | 2,553,807 |
Prepaid expenses and other current assets | 27,352 | 45,752 |
Total Current Assets | 3,223,900 | 2,732,068 |
PROPERTY AND EQUIPMENT, net (Note 5) | 4,516,247 | 4,584,394 |
MINERAL PROPERTIES AND INTERESTS, net (Note 6) | 1,252,441 | 1,314,006 |
RECLAMATION BONDS (Note 6) | 1,419,029 | 1,418,070 |
TOTAL ASSETS | 10,411,617 | 10,048,538 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 876,505 | 754,064 |
Accrued liabilities-officer wages (Note 13) | 398,885 | 308,885 |
Interest payable (Notes 7, 8 and 9) | 142,500 | 97,500 |
Interest payable - related party (Note 10) | 6,248,152 | 5,230,779 |
Convertible debt (Note 7) | 600,000 | 600,000 |
Obligation under capital lease - related party (Note 8) | 85,904 | |
Notes payable - equipment (Note 9) | 852,933 | 803,388 |
Note payable - related party (Note 10) | 14,060,492 | 13,040,492 |
Total Current Liabilities | 23,265,371 | 20,835,108 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation (Note 12) | 937,853 | 901,597 |
Obligation under capital lease - related party (Note 8) | 99,714 | |
Notes payable - equipment (Note 9) | 681,089 | 1,077,387 |
Total Long-Term Liabilities | 1,718,656 | 1,978,984 |
TOTAL LIABILITIES | 24,984,027 | 22,814,092 |
COMMITMENTS AND CONTINGENCIES (Notes 11, 12, 14 and 15) | ||
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 | (23,707,238) | (21,900,382) |
Total Stockholders' (Deficit) | (14,572,410) | (12,765,554) |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | 10,411,617 | 10,048,538 |
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 | $ 444 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 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 | 13,356,603 | 13,356,603 |
Common stock, shares outstanding | 13,356,603 | 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 | 444,530 |
Preferred stock, shares outstanding | 444,530 | 444,530 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUE: | ||||
Concentrate sales | $ 503,441 | $ 854,772 | $ 795,133 | $ 2,094,641 |
EXPENSES | ||||
General project costs | 412,185 | 558,734 | 782,119 | 1,585,327 |
Exploration expense | 2,680 | 3,366 | 9,680 | 9,270 |
Consulting | 5,650 | 1,343 | 12,062 | 1,343 |
Officers and directors fees | 45,000 | 48,423 | 90,000 | 89,961 |
Legal and professional | 20,124 | 19,946 | 45,508 | 45,871 |
General and administrative | 106,927 | 96,873 | 183,280 | 233,683 |
Depreciation and amortization | 158,969 | 158,812 | 305,988 | 300,148 |
Loss on exchange of equipment | 51,222 | 51,222 | ||
Total Expenses | 802,757 | 887,497 | 1,479,859 | 2,265,603 |
OPERATING LOSS | (299,316) | (32,725) | (684,726) | (170,962) |
OTHER INCOME (EXPENSE) | ||||
Interest and other income | 518 | 477 | 995 | 857 |
Interest and financing cost expense | (71,104) | (56,695) | (105,752) | (80,840) |
Interest expense - related party | (502,067) | (443,602) | (1,017,373) | (893,991) |
Total Other Income (Expense) | (572,653) | (499,820) | (1,122,130) | (973,974) |
LOSS BEFORE INCOME TAXES | (871,969) | (532,545) | (1,806,856) | (1,144,936) |
INCOME TAXES | ||||
NET LOSS | $ (871,969) | $ (532,545) | $ (1,806,856) | $ (1,144,936) |
BASIC AND DILUTED NET LOSS PER SHARE | $ (0.07) | $ (0.04) | $ (0.14) | $ (0.09) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED | 13,356,603 | 13,056,603 | 13,356,603 | 13,056,603 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,806,856) | $ (1,144,936) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 305,988 | 430,309 |
Loss on exchange of equipment | 51,222 | |
Accretion of asset retirement obligation | 36,256 | 29,966 |
Loss on stock redeemed with gold proceeds | 12,797 | |
Changes in operating assets and liabilities: | ||
Inventories | (509,776) | (384,715) |
Accounts receivable | (83,210) | |
Prepaid expenses and other current assets | 18,400 | 102,847 |
Accounts payable and accrued expenses | 158,441 | 129,172 |
Accrued liabilities - officer wages | 90,000 | 5,500 |
Interest payable | 45,000 | 45,000 |
Interest payable - related party | 1,017,373 | 893,991 |
Net cash provided (used) by operating activities | (677,162) | 119,931 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (48,888) | (214,474) |
Increase in reclamation bonds | (959) | (4,058) |
Net cash (used) by investing activities | (49,847) | (218,532) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable-related party | 1,020,000 | 250,000 |
Payment of note payable - equipment | (375,745) | (214,992) |
Net cash provided by financing activities | 644,255 | 35,008 |
NET INCREASE (DECREASE) IN CASH | (82,754) | (63,593) |
CASH, BEGINNING OF PERIOD | 132,509 | 161,645 |
CASH, END OF PERIOD | 49,755 | 98,052 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Equipment acquired under capital lease | 185,618 | |
Accounts payable converted to notes payable - equipment | 150,375 | |
Addition to redemption of gold proceeds payable | 94,797 | |
Equipment acquired with notes payable - equipment | 28,992 | 1,624,276 |
Accounts payable satisfied through exchange of equipment | $ 36,000 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2016 | |
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 and each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada). On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp. On June 30, 2014, the Company dissolved its sole subsidiary, Blue Fin Capital, Inc. As a result, the Company has no subsidiaries. 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, a Platinum Partners related entity managed by Platinum Partners’ Credit Fund (PPCO), 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 (see Note 10). 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 Kiewit heap leach operation began in October 2014 with the first sales of gold and silver. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 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 June 30, 2016, and the results of its operations and its cash flows for the six months ended June 30, 2016 and 2015. The operating and financial results for the Company for the six months ended June 30, 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”) and are presented in U.S. dollars. These unaudited interim financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission on April 14, 2016. 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 June 30, 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 June 30, 2016 and June 30, 2015, common stock equivalents outstanding are as follows: June 30, 2016 June 30, 2015 Convertible debt 857,142 895,714 Convertible preferred stock 47,211,002 27,718,333 Total 48,068,144 28,614,047 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 June 30, 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 | 6 Months Ended |
Jun. 30, 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 six 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 debt agreements (see Note 7), the Company issued a total of 300,000 shares of common stock to the note holders on December 2, 2015. 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. The Thirteenth Amendment to the Investment Agreement with DMRJ Group, a fund owned by Platinum Partners’ Credit fund (PPCO), (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 operating 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. These shares have not been issued. Preferred Stock 2016 Activity No shares of preferred stock have been issued during the first six months of 2016. See Note 15 – Subsequent Events regarding the return of DMRJ Group’s equity shares as part of a reorganization with court appointed trustees. 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. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2016 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 4 – INVENTORIES The following table provides the components of inventories: June 30, December 31, Ore on leach pad $ 2,942,897 $ 2,404,657 Carbon column in process 115,810 144,512 Dore finished goods 4,876 4,638 Total $ 3,063,583 $ 2,553,807 Inventories are valued at the lower of cost or net realizable value, which at June 30, 2016 is cost. |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 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 June 30, 2016 and December 31, 2015: June 30, December 31, 2016 2015 Equipment $ 3,350,564 $ 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 3,487,334 3,275,240 Less accumulated depreciation (985,293 ) (768,072 ) 2,502,041 2,507,168 Kiewit property facilities 2,497,435 2,451,973 Less accumulated amortization (483,229 ) (374,747 ) 2,014,206 2,077,226 Total $ 4,516,247 $ 4,584,394 |
Mineral Properties and Interest
Mineral Properties and Interests | 6 Months Ended |
Jun. 30, 2016 | |
Mineral Properties and Interests [Abstract] | |
MINERAL PROPERTIES AND INTERESTS | NOTE 6 – MINERAL PROPERTIES AND INTERESTS Mineral properties and interests as of June 30, 2016 and December 31, 2015 are as follows: June 30, December 31, 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 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 (338,498 ) (276,933 ) 477,442 539,006 Total $ 1,252,441 $ 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. Funds of $92,705 were received in April 2014 by the Company for these refunded reclamation bonds. Total reclamation bonds posted at June 30, 2016 and December 31, 2015 are $1,419,029 and $1,418,070, respectively. |
Convertible Debt
Convertible Debt | 6 Months Ended |
Jun. 30, 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 $7,500. The notes were originally convertible at any time at a rate of $1.50 per share, but on July 14, 2010 the promissory notes were amended thereby reducing the conversion price to $0.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group (see Note 10). The notes are convertible into potentially 857,142 shares of common stock and principal and interest were initially due November 30, 2012. On July 5, 2011, the Company entered into an agreement with the two holders of the convertible debt to begin paying their monthly interest in stock rather than cash. Interest was paid with stock through November 30, 2014 and it was agreed that interest will be paid in cash thereafter, however, no cash payments for interest have been made. Accrued interest payable at June 30, 2016 and 2015 includes $142,500 and $97,500, respectively, for these notes. The Company failed to repay the loan in full on the November 30, 2012, November 30, 2013, November 30, 2014 and 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. |
Obligation Under Capital Lease
Obligation Under Capital Lease - Related Party | 6 Months Ended |
Jun. 30, 2016 | |
Obligation Under Capital Lease - Related Party [Abstract] | |
OBLIGATION UNDER CAPITAL LEASE - RELATED PARTY | NOTE 8 – OBLIGATION UNDER CAPITAL LEASE - RELATED PARTY A capital lease was entered into on June 20, 2016 with RMH Overhead, LLC for the purchase of mining and crushing equipment. RMH Overhead, LLC is an entity owned by the Company’s president, Rick Havenstrite. For the periods ended June 30, 2016 and December 31, 2015, equipment includes assets under capital lease amounting to $185,618 and $0, respectively. The lease is being amortized over the estimated useful life of the equipment. Accumulated amortization at June 30, 2016 and December 31, 2015 was $0. At June 30, 2016, the estimated future minimum lease payments under the capital lease was as follows: Year ending June 30, 2017 $ 108,000 2018 108,000 Total 216,000 Less: Implied interest (30,382 ) Net present value 185,618 Less: Capital lease obligations-current portion (85,904 ) Long-term capital lease obligations $ 99,714 |
Notes Payable - Equipment
Notes Payable - Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Notes Payable - Equipment [Abstract] | |
NOTES PAYABLE - EQUIPMENT | NOTE 9 – NOTES PAYABLE – EQUIPMENT The following is a summary of the equipment notes payable: June 30, December 31, Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 85,923 $ 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 varying amounts including interest at 4.68%. A loan revision to convert to interest only payments during four months of each year increased the remaining payment amounts due to $82,096. 1,038,623 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%. 2,459 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%. 347,957 388,055 Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,647 including interest at 2.5%. 3,283 9,743 Note payable to Komatsu Financial, due in 12 monthly installments of $3,223, uncollateralized, beginning in April 2016, including interest at 1.16%. 29,005 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%. 26,772 - 1,534,022 1,880,775 Current portion (852,933 ) (803,388 ) Long term portion $ 681,089 $ 1,077,387 Principal payments are as follows for the twelve months ended June 30, 2017 $ 852,933 2018 580,781 2019 100,308 Total $ 1,534,022 During 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. In November 2016, five pieces of mining equipment financed by CAT Financial were repossessed by CAT. The equipment had an original cost of $1,500,888 and accumulated depreciation of $366,288, for an adjusted balance of $1,134,600. The note payable due to CAT at the time of disposition was $960,585. On July 31, 2017, a new agreement was made as explained in Note 15 - Subsequent Events. |
Note Payable - Related Party
Note Payable - Related Party | 6 Months Ended |
Jun. 30, 2016 | |
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 at June 30, 2016 operated 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 June 30, 2016 and December 31, 2015 is as follows: June 30, December 31, 2016 2015 Principal Current $ 14,060,492 $ 13,040,492 Long-term - - Total 14,060,492 13,040,492 Interest payable Current 6,248,152 5,230,779 Long-term - - $ 20,308,644 $ 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 June 30, 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 June 20, 2016 totaling $1,020,000. These advances bear interest at 15% per annum and become due on October 31, 2016 (see Note 15) with the remainder of the note due to DMRJ Group. These funds were used for working capital and equipment debt repayment. In the third quarter of 2016, control of the management of DMRJ Group, (a Platinum Partners related entity), was given to court appointed trustees of the two major funds of Platinum Partners. DMRJ Group is a fund managed by Platinum-related entities. On December 19th, 2016, the Securities and Exchange Commission (“SEC”) filed a Complaint (the “Complaint”) against Defendants Platinum Management, LLC (“Platinum Management”), Platinum Credit Management, L.P. (“Platinum Credit”), and management of the DMRJ Group, charging Defendants with a complex, multi-pronged, fraudulent scheme to inflate returns to investors, and cover up massive losses and liquidity problems. DMRJ Group effectively owns 77% of stock of the Company (on a fully diluted basis). See Note 15 – Subsequent Events for additional details of this development. 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 had 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 did not meet this payment date and is in default of the Investment Agreement (see Note 15). |
Stock Redeemable with Gold Proc
Stock Redeemable with Gold Proceeds | 6 Months Ended |
Jun. 30, 2016 | |
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. 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 had the option to convert their shares for cash from 5% of the gold sales, and all parties chose to convert. Amounts due to these shareholders are disclosed in the following table. The share conversion is complete at June 30, 2015 and amounts due to shareholders are past due. These amounts are reflected in the financial statements with ‘Accounts payable and accrued expenses’. Conversion Shares Due based on $1,000 Gold Price Additional Amount Based on Actual Gold Sales Price Total Due to Shareholders at June 30, 2016 Original Conversion Liability 130,000 Less Conversion: December 31, 2014 48,000 8,609 56,609 June 30, 2015 82,000 12,797 94,797 Total $ 130,000 $ 21,406 $ 151,406 Remaining balance to be redeemed at June 30, 2016 $ -0- |
Remediation Liability and Asset
Remediation Liability and Asset Retirement Obligation | 6 Months Ended |
Jun. 30, 2016 | |
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 periods ended June 30, 2016 and December 31, 2015 are as follows: Six months ended Year ended December 31, Reclamation and remediation liability, beginning of period $ 901,597 $ 740,268 Obligation incurred - 101,551 Accretion expense 36,256 59,778 Reclamation and remediation liability, end of period $ 937,853 $ 901,597 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS The Company recognized rent expense for rental of office space of $6,000 for the six months ended June 30, 2016 and 2015, respectively, 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 $6,000 during the six months ended June 30, 2016 and 2015, respectively, leaving a total of $13,750 remaining in accounts payable at June 30, 2016 which represents amounts due from prior years. During the six months ended June 30, 2016 and 2015, the Company recognized wage expense of $30,000, 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, totaling $86,192 and $56,192 remained unpaid at June 30, 2016 and December 31, 2015, respectively and is reflected in accrued liabilities – officer wages. During the six months ended June 30, 2016 and 2015, the Company recognized general project cost expense of $10,627 and $3,105, respectively, for geological services provided by Stuart Havenstrite, the father of Rick Havenstrite. $39,367 and $28,740 remain unpaid to Mr. Havenstrite at June 30, 2016 and December 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 six months ended June 30, 2016 and December 31, 2015 for accounting and engineering services in the amount of $38,055 and $44,538, respectively. On June 20, 2016, the Company entered into an equipment lease agreement with RMH Overhead, LLC, a company owned by Rick Havenstrite. RMH Overhead, LLC agreed to lease to the Company several pieces of crushing equipment, including a screen plant and four conveyor belts, along with a trackhoe previously owned by the Company. The terms of the lease are payments of $9,212 per month for 24 months, with an effective interest rate of 15%, after which the Company will take ownership of the equipment. The equipment can be purchased from RMH Overhead, LLC at any time without penalty. At June 30, 2016 and December 31, 2015, the remaining amount payable on leased equipment liability is $185,618 and $-0-. The Thirteenth Amendment to the Investment Agreement with DMRJ Group, a fund owned by Platinum Partners’ Credit fund (PPCO), (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 operating 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. These shares have not been issued. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES 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. See Note 15. 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 $29,748 and $46,907 was recognized during the quarters ended June 30, 2016 and 2015 with $118,160 still payable to Clifton Mining Company at June 30, 2016. See Note 15. Mining severance tax in the amount of $4,024, based on production, was accrued at June 30, 2016. Personal property tax due to Tooele County, Utah in the amount of $74,710, based on income projections, was accrued and past due at June 30, 2016. This amount has not yet been paid. 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. The agreement allows the Board to terminate Mr. Havenstrite’s employment at any time, providing for a severance payment upon termination without cause. As of June 30, 2016, and December 31, 2015, accrued compensation of $398,885 and $308,885, were due to directors and officers. Of the amounts accrued at June 30, 2016 and December 31, 2015, accrued compensation of $312,692 and $252,692 is due to Rick Havenstrite and $86,192 and $56,192 is due to Marianne Havenstrite, respectively. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS The Company failed to make interest payments required under the convertible notes (see Note 7) for all quarters beginning April 2016 through the current date. As a result, the Company was in default of the Notes. As per terms of the Investment Agreement, DMRJ Group was informed of this default and had indicated it had no intent to declare an event of default under the Investment Agreement. In addition, as per the terms of the notes, 300,000 penalty shares per year for 2016 and 2017 were issued to the convertible debt holders for failure to pay the convertible notes in November of 2016 and 2017. In addition, DMRJ Group (see Note 10) had previously agreed to subordinate to these debtholders Platinum’s interest in the collateral for the Senior Notes, as well as the principal and accrued but unpaid interest on the prior convertible debt (see Note 7) and on the amounts due on the gold loan redemptions (see Note 11). As part of the agreement for this loan, DMRJ Group agreed to waive the anti-dilution clause of their agreement with the Company. The Fourteenth Amendment to the Investment Agreement with DMRJ Group was entered into on December 22, 2016 and allowed for December 2016 Term Loan Advances in an amount up to $600,000. The advance was drawn in full. In the third quarter of 2016, control of the management of DMRJ Group, (a Platinum Partners related entity), was given to court appointed trustees of the two major funds of Platinum Partners. On December 19th, 2016, the Securities and Exchange Commission (“SEC”) filed a Complaint (the “Complaint”) against Defendants Platinum Management, LLC (“Platinum Management”), Platinum Credit Management, L.P. (“Platinum Credit”), and management of the DMRJ Group, charging defendants with a complex, multi-pronged, fraudulent scheme to inflate returns to investors, and cover up massive losses and liquidity problems. DMRJ Group effectively owned 77% of stock of the Company (on a fully diluted basis). Funds in the amount of $944,060 were drawn from the receivers during the first two quarters of 2017 to help fund ongoing expenses. The Company was working toward a reorganization and recapitalization with the trustees of the two funds and finalized an agreement which closed on March 8, 2018. This agreement discharged all of the debt owed by the Company to DMRJ Group and its related affiliates and returned all of their equity to the Company in exchange for $625,000. The debt and equity were retired and cancelled by the Company. The owners of the convertible debt agreed to fund this payment in full, and to agree to certain concessions on their outstanding notes with the Company, in exchange for 4,500,000 shares of the Company’s Common Stock. All signatures from the court appointed trustees, and funding by the Company, have been received and the agreement was finalized on March 7, 2018. The Company has been temporarily shut down due to this development since third quarter of 2017. The Company expects to release an offering in the near future to fund short-term operations while preparing to re-open the operation. On February 28, 2018, the terms were changed for the 15% convertible promissory notes, convertible at $.70 per share, to two of the Company’s minority shareholders. The notes, for a total amount due of $600,000, were amended changing the interest rate from 15% to 10% effective March 1, 2018 and allowing for accrued interest to be payable in full on May 31, 2019. The amendment further waives the default provision in the notes for past due interest. One of the convertible debt holders issued two short-term loans to the Company which were subsequently repaid. On September 29, 2016, $50,000 was loaned at no interest and was repaid to the debtholder on October 14, 2016. On November 5, 2016, an additional $25,000 was loaned to the Company at 10% interest and was repaid including interest of $438 on January 18, 2017. These loan funds were used for operating capital. On October 14, 2016, the Company issued convertible promissory notes to its two convertible debt holders in the amount of $125,000 each (Senior Notes), at 10% interest, convertible at $.25 per share, due in full on September 30, 2018. Interest is payable on September 30, 2017 and is payable quarterly thereafter. On August 7, 2017, the convertible debt holders funded an additional aggregate of $500,000 under similar terms. These funds were used to sustain minimum operations of the Company until resolution of the DMRJ Group debt with the trustees. On February 28, 2018 both of these notes were amended to allow for the maturity date and payment date for accrued interest to be changed to May 31, 2019. In November 2016, five pieces of mining equipment financed by CAT Financial were repossessed by CAT. The equipment had an original cost of $1,500,888 and accumulated depreciation of $366,288, for an adjusted balance of $1,134,600. The note payable due to CAT at the time of disposition was $960,585. The cost of the equipment and the corresponding note payable was reflected on the balance sheet until final disposition of the equipment. On July 31, 2017, a new agreement was made with Wheeler Machinery and CAT financial for the return of four pieces of this equipment. While the equipment will temporarily remain in the possession of Wheeler Machinery, a new payment schedule was agreed upon which requires 10 equal payments of $39,934 beginning in October 2017. At this time four of those payments have been made. In the event the terms of the new agreement are not met, freight and interest penalties may be assessed and there could be a payment due to CAT for these fees and for the deficit on the return of the equipment. Management has not made an estimate of this additional loss, if any. 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 non-performance 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. A letter of default was received from the Moeller Family Trust in September 2016 demanding the past due non-performance payment for the Yellow Hammer property. The payment was not made and the property was returned to the Moeller Family Trust. The mineral property lease, in the amount of $175,000, less accumulated amortization of $37,214, was recognized as a loss on abandonment in the amount of $137,766 at September 30, 2016. 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 non-performance 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. Non-performance payments for the Clifton Shears-Smelter Tunnel property were not made by the due dates in 2015 or 2016. The Cane Springs property non-performance 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. A letter of default on the Clifton Shears properties dated September 19, 2016 was received by the Company with a 30 day period for curing the default. On October 17, 2016, past due royalties of $128,868 and the $50,000 non-performance payments for each of 2015 and 2016 on the Clifton Shears-Smelter Tunnel property were paid to Clifton Mining, who then acknowledged the cure of default. On July 7, 2016, the Company replaced the $1,348,000 cash reclamation bond with a surety bond in the same amount. A condition of the surety bond was the deposit of 50% ($674,000) of the bond amount into an escrow account with the bonding company. The surety bond carries an annual bonding fee of $40,400. On April 3, 2017, two directors of the Company stepped down from their positions, leaving Rick Havenstrite and Howard Crosby as directors. On April 6, 2017, the Board reduced the number of authorized directors to three and appointed John P. Ryan as a director. In addition, Howard Crosby stepped down from his position as CEO and Rick Havenstrite was appointed to fill the position of CEO. Effective February 23, 2018, the Board approved and adopted the 2018 Stock Incentive Plan (the “ 2018 Plan ● Rick Havenstrite – 1,000,000 options; ● Howard Crosby – 1,000,000 options; ● John Ryan – 200,000 options; and ● Linde Havenstrite – 200,000 options. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 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 June 30, 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 June 30, 2016 and June 30, 2015, common stock equivalents outstanding are as follows: June 30, 2016 June 30, 2015 Convertible debt 857,142 895,714 Convertible preferred stock 47,211,002 27,718,333 Total 48,068,144 28,614,047 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 June 30, 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 Accoun22
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of common stock equivalents outstanding | June 30, 2016 June 30, 2015 Convertible debt 857,142 895,714 Convertible preferred stock 47,211,002 27,718,333 Total 48,068,144 28,614,047 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Inventories [Abstract] | |
Schedule of components of inventories | June 30, December 31, Ore on leach pad $ 2,942,897 $ 2,404,657 Carbon column in process 115,810 144,512 Dore finished goods 4,876 4,638 Total $ 3,063,583 $ 2,553,807 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property and Equipment [Abstract] | |
Summary of property, equipment, and accumulated depreciation | June 30, December 31, 2016 2015 Equipment $ 3,350,564 $ 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 3,487,334 3,275,240 Less accumulated depreciation (985,293 ) (768,072 ) 2,502,041 2,507,168 Kiewit property facilities 2,497,435 2,451,973 Less accumulated amortization (483,229 ) (374,747 ) 2,014,206 2,077,226 Total $ 4,516,247 $ 4,584,394 |
Mineral Properties and Intere25
Mineral Properties and Interests (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Mineral Properties and Interests [Abstract] | |
Schedule of mineral properties and interests | June 30, December 31, 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 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 (338,498 ) (276,933 ) 477,442 539,006 Total $ 1,252,441 $ 1,314,006 |
Obligation Under Capital Leas26
Obligation Under Capital Lease - Related Party (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Obligation Under Capital Lease - Related Party [Abstract] | |
Schedule of estimated future minimum lease payments under the capital lease | Year ending June 30, 2017 $ 108,000 2018 108,000 Total 216,000 Less: Implied interest (30,382 ) Net present value 185,618 Less: Capital lease obligations-current portion (85,904 ) Long-term capital lease obligations $ 99,714 |
Notes Payable - Equipment (Tabl
Notes Payable - Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Notes Payable - Equipment [Abstract] | |
Schedule of the equipment notes payable | June 30, December 31, Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 85,923 $ 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 varying amounts including interest at 4.68%. A loan revision to convert to interest only payments during four months of each year increased the remaining payment amounts due to $82,096. 1,038,623 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%. 2,459 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%. 347,957 388,055 Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,647 including interest at 2.5%. 3,283 9,743 Note payable to Komatsu Financial, due in 12 monthly installments of $3,223, uncollateralized, beginning in April 2016, including interest at 1.16%. 29,005 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%. 26,772 - 1,534,022 1,880,775 Current portion (852,933 ) (803,388 ) Long term portion $ 681,089 $ 1,077,387 |
Schedule of principal payments | Principal payments are as follows for the twelve months ended June 30, 2017 $ 852,933 2018 580,781 2019 100,308 Total $ 1,534,022 |
Note Payable - Related Party (T
Note Payable - Related Party (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Note Payable - Related Party [Abstract] | |
Schedule of due to DMRJ | June 30, December 31, 2016 2015 Principal Current $ 14,060,492 $ 13,040,492 Long-term - - Total 14,060,492 13,040,492 Interest payable Current 6,248,152 5,230,779 Long-term - - $ 20,308,644 $ 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 |
Stock Redeemable with Gold Pr29
Stock Redeemable with Gold Proceeds (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stock Redeemable with Gold Proceeds [Abstract] | |
Schedule of amounts due to shareholders | Conversion Shares Due based on $1,000 Gold Price Additional Amount Based on Actual Gold Sales Price Total Due to Shareholders at June 30, 2016 Original Conversion Liability 130,000 Less Conversion: December 31, 2014 48,000 8,609 56,609 June 30, 2015 82,000 12,797 94,797 Total $ 130,000 $ 21,406 $ 151,406 Remaining balance to be redeemed at June 30, 2016 $ -0- |
Remediation Liability and Ass30
Remediation Liability and Asset Retirement Obligation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Remediation Liability and Asset Retirement Obligation [Abstract] | |
Schedule of asset retirement obligations | Six months ended Year ended December 31, Reclamation and remediation liability, beginning of period $ 901,597 $ 740,268 Obligation incurred - 101,551 Accretion expense 36,256 59,778 Reclamation and remediation liability, end of period $ 937,853 $ 901,597 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details) - shares | Jun. 30, 2016 | Jun. 30, 2015 |
Summary of Significant Accounting Policies [Abstract] | ||
Convertible debt | 857,142 | 895,714 |
Convertible preferred stock | 47,211,002 | 27,718,333 |
Total | 48,068,144 | 28,614,047 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Dec. 02, 2015 | Aug. 31, 2015 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Capital Stock [Line Items] | |||||
Common stock, shares issued | 13,356,603 | 13,356,603 | |||
Fully diluted convertible shares | DMRJ Group, a fund owned by Platinum Partners' Credit fund (PPCO), (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 operating 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. These shares have not been issued. | ||||
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 | 444,530 | 444,530 | |||
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 | ||||
Additional number of shares issue, value | $ 12,000 | ||||
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 | ||||
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. |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of Inventory, current | ||
Ore on leach pad | $ 2,942,897 | $ 2,404,657 |
Carbon column in process | 115,810 | 144,512 |
Dore finished goods | 4,876 | 4,638 |
Total | $ 3,063,583 | $ 2,553,807 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Total | $ 4,516,247 | $ 4,584,394 |
Property, Plant and Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,487,334 | 3,275,240 |
Less accumulated depreciation | (985,293) | (768,072) |
Property and equipment, Total | 2,502,041 | 2,507,168 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,350,564 | 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 | (483,229) | (374,747) |
Property and equipment, Total | $ 2,014,206 | $ 2,077,226 |
Mineral Properties and Intere35
Mineral Properties and Interests (Details) - USD ($) | Jun. 30, 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 | (338,498) | (276,933) |
Mineral properties after accumulated depletion | 477,442 | 539,006 |
Total | $ 1,252,441 | $ 1,314,006 |
Mineral Properties and Intere36
Mineral Properties and Interests (Details Textual) - USD ($) | 6 Months Ended | |||
Jun. 30, 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 | $ 1,419,029 | $ 1,418,070 |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) | Jul. 14, 2010 | Nov. 18, 2009 | Jun. 30, 2016 | Dec. 31, 2015 | Nov. 30, 2015 | 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) | $ 1.5 | |||||||
Reduction of conversion price | $ 0.70 | |||||||
Additional shares of common stock issued to debt holders | 300,000 | 300,000 | 300,000 | 300,000 | ||||
Accrued interest payable | $ 142,500 | $ 97,500 | ||||||
Common stock conversion | 857,142 | |||||||
Common stock and principal and interest were initially due date | Nov. 30, 2012 |
Obligation Under Capital Leas38
Obligation Under Capital Lease - Related Party (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Year ending June 30, | ||
2,017 | $ 108,000 | |
2,018 | 108,000 | |
Total | 216,000 | |
Less: Implied interest | (30,382) | |
Net present value | 185,618 | |
Less: Capital lease obligations-current portion | 85,904 | |
Long-term capital lease obligations | $ 99,714 |
Obligation Under Capital Leas39
Obligation Under Capital Lease - Related Party (Details Textual) - RMH Overhead, LLC [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Obligation Under Capital Lease-Related Party (Textual) | ||
Equipment includes assets under capital lease amount | $ 185,618 | $ 0 |
Accumulated amortization | $ 0 | $ 0 |
Notes Payable - Equipment (Deta
Notes Payable - Equipment (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Notes payable | $ 1,534,022 | $ 1,880,775 |
Current portion | (852,933) | (803,388) |
Long Term portion | 681,089 | 1,077,387 |
Komatsu Financial, collateralized by a Komatsu Telehandler lift [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 85,923 | 91,080 |
CAT Financial, collateralized by five pieces of used mining equipment [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 1,038,623 | 1,347,751 |
HCE Funding, collateralized by a Perkins Elmer AA machine [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 2,459 | 5,472 |
Komatsu Financial, collateralized by a Komatsu D275 dozer [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 347,957 | 388,055 |
Komatsu Financial, collateralized by a Komatsu PC400 Excavator [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 3,283 | 9,743 |
Komatsu Financial [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 29,005 | 38,674 |
Star Capital, LLC, collateralized by a 2009 Multiquip generator [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 26,772 |
Notes Payable - Equipment (De41
Notes Payable - Equipment (Details 1) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of principal payment | ||
2,017 | $ 852,933 | |
2,018 | 580,781 | |
2,019 | 100,308 | |
Total | $ 1,534,022 | $ 1,880,775 |
Notes Payable - Equipment (De42
Notes Payable - Equipment (Details Textual) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2016USD ($) | Mar. 31, 2015USD ($) | Jun. 30, 2016USD ($)Installments | Jun. 30, 2015USD ($) | Dec. 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 | $ 150,375 | $ 150,375 | ||||
Adjusted balance of equipment | $ 4,516,247 | $ 4,584,394 | ||||
Komatsu Financial, collateralized by a 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 | |||||
Interest rate | 4.68% | |||||
Loan payments | $ 82,096 | |||||
CAT Financial, collateralized by five pieces of used mining equipment [Member] | Forecast [Member] | ||||||
Notes Payable Equipment (Textual) | ||||||
Note payable amount (remaining installments) | $ 960,585 | |||||
Equipment original cost | 1,500,888 | |||||
Accumulated depreciation | 366,288 | |||||
Adjusted balance of equipment | $ 1,134,600 | |||||
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 [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 ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Principal | ||
Current | $ 14,060,492 | $ 13,040,492 |
Interest payable | ||
Current | 142,500 | 97,500 |
DMRJ [Member] | ||
Principal | ||
Current | 14,060,492 | 13,040,492 |
Long-term | ||
Total | 14,060,492 | 13,040,492 |
Interest payable | ||
Current | 6,248,152 | 5,230,779 |
Long-term | ||
Total | $ 20,308,644 | $ 18,271,271 |
Note Payable - Related Party 44
Note Payable - Related Party (Details 1) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | $ 6,900,000 |
June 30, 2016 [Member] | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | 500,000 |
September 30, 2016 [Member] | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | 800,000 |
December 31, 2016 [Member] | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | 600,000 |
February 28, 2017 [Member] | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | 500,000 |
May 31, 2017 [Member] | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | 2,250,000 |
August 31, 2017 [Member] | |
Debt Instrument [Line Items] | |
Total per Minimum Payment Schedule | $ 2,250,000 |
Note Payable - Related Party 45
Note Payable - Related Party (Details Textual) - USD ($) | 1 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |
Aug. 31, 2015 | Jun. 30, 2015 | Jun. 20, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Note Payable - Related Party (Textual) | |||||
Total amount drawn | $ 5,525,000 | ||||
DMRJ [Member] | |||||
Note Payable - Related Party (Textual) | |||||
Convertible shares of common stock | 47,211,002 | ||||
Ownership percentage of stock on a fully-diluted basis | 77.00% | ||||
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] | DMRJ [Member] | |||||
Note Payable - Related Party (Textual) | |||||
Percentage of interest rate | 15.00% | ||||
Total amount drawn | $ 1,020,000 | ||||
Notes payable due date | Oct. 31, 2016 |
Stock Redeemable with Gold Pr46
Stock Redeemable with Gold Proceeds (Details) | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Debt Conversion [Line Items] | |
Original Conversion Liability | $ 130,000 |
Conversion Shares Due based on $1,000 Gold Price | 130,000 |
Additional Amount Based on Actual Gold Sales Price | 21,406 |
Total Due to Shareholders | 151,406 |
Remaining balance to be redeemed at June 30, 2016 | 0 |
December 31, 2014 [Member] | |
Debt Conversion [Line Items] | |
Conversion Shares Due based on $1,000 Gold Price | 48,000 |
Additional Amount Based on Actual Gold Sales Price | 8,609 |
Total Due to Shareholders | 56,609 |
June 30, 2015 [Member] | |
Debt Conversion [Line Items] | |
Conversion Shares Due based on $1,000 Gold Price | 82,000 |
Additional Amount Based on Actual Gold Sales Price | 12,797 |
Total Due to Shareholders | $ 94,797 |
Stock Redeemable with Gold Pr47
Stock Redeemable with Gold Proceeds (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | |
Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2016 | |
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% | ||
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 Ass48
Remediation Liability and Asset Retirement Obligation (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2016 | Jun. 30, 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 | 36,256 | $ 29,966 | 59,778 |
Reclamation and remediation liability, end of period | $ 937,853 | $ 901,597 |
Remediation Liability and Ass49
Remediation Liability and Asset Retirement Obligation (Details Textual) | 6 Months Ended |
Jun. 30, 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 ($) | 1 Months Ended | 6 Months Ended | ||
Jun. 20, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | |
Relatted Party Transactions (Textual) | ||||
Fully diluted convertible shares | DMRJ Group, a fund owned by Platinum Partners' Credit fund (PPCO), (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 operating 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. These shares have not been issued. | |||
RMH Overhead, LLC [Member] | ||||
Relatted Party Transactions (Textual) | ||||
Rent expense for office space | $ 6,000 | $ 6,000 | ||
Accounts payable | 13,750 | |||
Terms of the lease | The terms of the lease are payments of $9,212 per month for 24 months, with an effective interest rate of 15%, after which the Company will take ownership of the equipment. | |||
Leased equipment liability payable | 185,618 | $ 0 | ||
Marianne Havenstrite [Member] | ||||
Relatted Party Transactions (Textual) | ||||
Wage expense | 30,000 | 30,000 | ||
Accrued liabilities | 86,192 | 56,192 | ||
Stuart Havenstrite [Member] | ||||
Relatted Party Transactions (Textual) | ||||
Accounts payable | 39,367 | 28,740 | ||
Recognized general project cost expense | 10,627 | $ 3,105 | ||
Accounting and engineering services | $ 38,055 | $ 44,538 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Sep. 30, 2010 | Dec. 31, 2009 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Commitments (Textual) | |||||
Royalty expense | $ 29,748 | $ 46,970 | |||
Mining severance amount | 4,024 | ||||
Base annual salary | $ 120,000 | ||||
Accrued compensation | 398,885 | $ 308,885 | |||
Personal property tax due | 74,710 | ||||
Rick Havenstrite [Member] | |||||
Commitments (Textual) | |||||
Accrued compensation | 312,692 | 252,692 | |||
Marianne Havenstrite [Member] | |||||
Commitments (Textual) | |||||
Accrued compensation | 86,192 | $ 56,192 | |||
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 | $ 118,160 | ||||
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% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 08, 2018 | Feb. 28, 2018 | Feb. 23, 2018 | Oct. 14, 2016 | Sep. 30, 2016 | Sep. 29, 2016 | Jul. 07, 2016 | Nov. 30, 2016 | Oct. 17, 2016 | Dec. 31, 2009 | Jun. 30, 2016 | Aug. 07, 2017 | Dec. 31, 2015 | Nov. 18, 2009 |
Subsequent Events (Textual) | ||||||||||||||
Penalty shares | 300,000 | |||||||||||||
Term loan advances amount | $ 600,000 | |||||||||||||
Equity Method Investment, Ownership Percentage | 77.00% | |||||||||||||
Fund ongoing expenses | $ 944,060 | |||||||||||||
Common stock conversion | 857,142 | |||||||||||||
Convertible debt issued | $ 130,000 | |||||||||||||
Conversion price (per shares) | $ 1.5 | |||||||||||||
Adjusted balance of equipment | 4,516,247 | $ 4,584,394 | ||||||||||||
Annual non-performance payments Trust | $ 50,000 | |||||||||||||
Yellow Hammer Site | 175,000 | 175,000 | ||||||||||||
Accumulated amortization | (338,498) | (276,933) | ||||||||||||
Joint Venture Agreement, description | 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. | |||||||||||||
Payments to Clifton Mining | $ 50,000 | |||||||||||||
Total reclamation bonds posted amount | $ 1,419,029 | $ 1,418,070 | ||||||||||||
Subsequent Event [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Total reclamation bonds posted amount | $ 1,348,000 | |||||||||||||
Bond deposit | $ 674,000 | |||||||||||||
Bond deposit, description | A condition of the surety bond was the deposit of 50% ($674,000) of the bond amount into an escrow account with the bonding company. | |||||||||||||
Annual bonding fee | $ 40,400 | |||||||||||||
Scenario, Forecast [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Common stock conversion | 4,500,000 | |||||||||||||
Convertible promissory notes, description | The terms were changed for the 15% convertible promissory notes, convertible at $.70 per share, to two of the Company's minority shareholders. The notes, for a total amount due of $600,000, were amended changing the interest rate from 15% to 10% effective March 1, 2018 and allowing for accrued interest to be payable in full on May 31, 2019. The amendment further waives the default provision in the notes for past due interest. | |||||||||||||
Convertible debt issued | $ 625,000 | $ 600,000 | ||||||||||||
Conversion price (per shares) | $ 0.25 | $ 0.70 | ||||||||||||
Interest paid | $ 438 | |||||||||||||
Convertible debt | $ 125,000 | 50,000 | ||||||||||||
Additional aggregate convertible debt | $ 25,000 | $ 500,000 | ||||||||||||
Convertible promissory notes, rate | 10.00% | 10.00% | ||||||||||||
Mining equipment financed, description | While the equipment will temporarily remain in the possession of Wheeler Machinery, a new payment schedule was agreed upon which requires 10 equal payments of $39,934 beginning in October 2017. At this time four of those payments have been made. | |||||||||||||
Yellow Hammer Site | $ 175,000 | |||||||||||||
Accumulated amortization | 37,214 | |||||||||||||
Recognized loss on abandonment amount | $ 137,766 | |||||||||||||
Past due royalties | $ 128,868 | |||||||||||||
Non performance payment | $ 50,000 | |||||||||||||
Scenario, Forecast [Member] | CAT Financial, collateralized by five pieces of used mining equipment [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Equipment original cost | $ 1,500,888 | |||||||||||||
Less accumulated depreciation | (366,288) | |||||||||||||
Adjusted balance of equipment | $ 1,134,600 | |||||||||||||
Scenario, Forecast [Member] | 2018 Plan [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Option authorized | 2,400,000 | |||||||||||||
Grant of an aggregate options | 2,400,000 | |||||||||||||
Exercisable per share | $ 0.40 | |||||||||||||
Debt termination, description | Terminate February 23, 2023. | |||||||||||||
Scenario, Forecast [Member] | 2018 Plan [Member] | Mr. Havenstrite [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Grant of an aggregate options | 1,000,000 | |||||||||||||
Scenario, Forecast [Member] | 2018 Plan [Member] | Howard Crosby [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Grant of an aggregate options | 1,000,000 | |||||||||||||
Scenario, Forecast [Member] | 2018 Plan [Member] | John Ryan [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Grant of an aggregate options | 200,000 | |||||||||||||
Scenario, Forecast [Member] | 2018 Plan [Member] | Linde Havenstrite [Member] | ||||||||||||||
Subsequent Events (Textual) | ||||||||||||||
Grant of an aggregate options | 200,000 |