Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Oct. 19, 2018 | Jun. 30, 2017 | |
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-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Public Float | $ 3,784,537 | ||
Entity Common Stock, Shares Outstanding | 20,581,603 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash | $ 4,212 | $ 657,944 |
Inventories, current (Note 4) | 600,000 | 142,921 |
Prepaid expenses and other current assets | 102,251 | 132,747 |
Total Current Assets | 706,463 | 933,612 |
INVENTORIES, non-current, (Note 4) | 2,721,936 | 2,951,011 |
PROPERTY AND EQUIPMENT, net (Note 5) | 3,621,436 | 4,039,887 |
MINERAL PROPERTIES AND INTERESTS, net (Note 6) | 1,114,675 | 1,096,482 |
RECLAMATION BONDS (Note 6) | 753,054 | 752,754 |
TOTAL ASSETS | 8,917,564 | 9,773,746 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 679,580 | 744,943 |
Accrued liabilities - officer and other wages (Note 14) | 709,577 | 495,808 |
Interest payable - related parties (Note 7) | 317,436 | 192,842 |
Short-term notes payable - related party (Note 13) | 34,500 | |
Convertible debt - related parties (Note 7) | 1,278,000 | 850,000 |
Obligation under capital lease - related party, current portion (Note 8) | 84,110 | 120,461 |
Notes payable - equipment, current portion (Note 9) | 452,214 | 813,818 |
Note payable - related party (Note 10) | 625,000 | 625,000 |
Total Current Liabilities | 4,145,917 | 3,877,372 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation (Note 11) | 1,046,621 | 974,109 |
Obligation under capital lease - related party (Note 8) | 51,714 | |
Note and interest payable - related party (Note 10) | 24,464,670 | 21,225,102 |
Notes payable - equipment (Note 9) | 16,817 | 453,276 |
Total long-term liabilities | 25,528,108 | 22,704,201 |
TOTAL LIABILITIES | 29,674,025 | 26,581,573 |
COMMITMENTS AND CONTINGENCIES (Notes 12, 13, 14, and 15) | ||
STOCKHOLDERS' (DEFICIT) (Note 3) | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 13,956,603 and 13,656,603 shares issued and outstanding, respectively | 13,828 | 13,528 |
Additional paid-in capital | 9,143,418 | 9,131,718 |
Accumulated deficit | (29,915,289) | (25,954,655) |
Total Stockholders' (Deficit) | (20,756,461) | (16,807,827) |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | 8,917,564 | 9,773,746 |
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 | Dec. 31, 2017 | Dec. 31, 2016 |
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 | 13,956,603 | 13,656,603 |
Common stock, shares outstanding | 13,956,603 | 13,656,603 |
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
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
REVENUE | ||
Concentrate sales | $ 162,762 | $ 1,278,726 |
EXPENSES | ||
General production costs | 591,725 | 1,620,841 |
Exploration expense | 1,300 | 18,640 |
Officers and directors fees | 252,000 | 180,000 |
Legal and professional | 71,349 | 57,640 |
General and administrative | 241,744 | 346,184 |
Abandonment of mineral property | 137,766 | |
Loss on exchange of equipment | 53,665 | |
Loss on impairment of equipment | 147,214 | |
Depreciation and amortization | 430,934 | 576,000 |
Total Expenses | 1,589,052 | 3,137,950 |
OPERATING LOSS | (1,426,290) | (1,859,224) |
OTHER INCOME (EXPENSE) | ||
Interest and other income | 167 | 8,726 |
Interest and financing expense | (93,312) | (99,602) |
Interest expense - related parties | (145,691) | (95,342) |
Interest expense - related party | (2,295,508) | (2,008,831) |
Total Other Income (Expense) | (2,534,344) | (2,195,049) |
LOSS BEFORE INCOME TAXES | (3,960,634) | (4,054,273) |
INCOME TAXES | ||
NET LOSS | $ (3,960,634) | $ (4,054,273) |
BASIC AND DILUTED NET LOSS PER SHARE | $ (0.29) | $ (0.3) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED | 13,682,082 | 13,432,219 |
Statements of Stockholders' (De
Statements of Stockholders' (Deficit) - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit |
Balance at Dec. 31, 2015 | $ (12,765,554) | $ 1,582 | $ 13,228 | $ 9,120,018 | $ (21,900,382) |
Balance, Shares at Dec. 31, 2015 | 1,582,563 | 13,356,603 | |||
Common stock issued in connection with extension of convertible debt (Note 3) | 12,000 | $ 300 | 11,700 | ||
Common stock issued in connection with extension of convertible debt, Shares (Note 3) | 300,000 | ||||
Net loss for the year ended | (4,054,273) | (4,054,273) | |||
Balance at Dec. 31, 2016 | (16,807,827) | $ 1,582 | $ 13,528 | 9,131,718 | (25,954,655) |
Balance, Shares at Dec. 31, 2016 | 1,582,563 | 13,656,603 | |||
Common stock issued in connection with extension of convertible debt (Note 3) | 12,000 | $ 300 | 11,700 | ||
Common stock issued in connection with extension of convertible debt, Shares (Note 3) | 300,000 | ||||
Net loss for the year ended | (3,960,634) | (3,960,634) | |||
Balance at Dec. 31, 2017 | $ (20,756,461) | $ 1,582 | $ 13,828 | $ 9,143,418 | $ (29,915,289) |
Balance, Shares at Dec. 31, 2017 | 1,582,563 | 13,956,603 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,960,634) | $ (4,054,273) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 430,934 | 576,000 |
Common stock issued for financing expense | 12,000 | 12,000 |
Accretion of asset retirement obligation | 72,512 | 72,512 |
Abandonment of mineral property | 137,766 | |
Loss on exchange of equipment | 53,665 | |
Loss on impairment of equipment | 147,214 | |
Changes in operating assets and liabilities: | ||
Inventories | (228,004) | (540,125) |
Prepaid expenses and other current assets | 30,496 | (86,995) |
Accounts payable and accrued expenses | (65,363) | 26,879 |
Accrued liabilities - officer and other wages | 213,769 | 186,923 |
Interest payable - related parties | 124,594 | 95,342 |
Interest payable - related party | 2,295,508 | 2,008,831 |
Net cash (used) by operating activities | (1,074,188) | (1,364,261) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (30,676) | (51,696) |
Additions to reclamation bonds | (300) | (682,684) |
Refund of reclamation bonds | 1,348,000 | |
Net cash provided (used) by investing activities | (30,976) | 613,620 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from short-term notes payable - related parties | 89,500 | |
Proceeds from convertible debt - related parties | 428,000 | 250,000 |
Proceeds from note payable - related party | 944,060 | 2,470,000 |
Payment of note payable - related party | (900,000) | |
Payment of short term notes payable - related parties | (34,500) | (55,000) |
Payment of notes payable - equipment | (798,063) | (563,981) |
Payment of obligation under capital lease - related party | (88,065) | (14,443) |
Net cash provided by financing activities | 451,432 | 1,276,076 |
NET INCREASE (DECREASE) IN CASH | (653,732) | 525,435 |
CASH, BEGINNING OF YEAR | 657,944 | 132,509 |
CASH, END OF YEAR | 4,212 | 657,944 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest, net of amount capitalized | 93,312 | 104,944 |
Noncash investing and financing activities: | ||
Equipment acquired with notes payable - equipment | 28,992 | |
Equipment acquired with obligation under capital lease | 186,618 | |
Accounts payable paid with exchange of equipment | 36,000 | |
Equipment note revised through repossession of equipment | $ 78,692 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2017 | |
Organization and Description of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Desert Hawk Gold Corp. (the “Company”) was incorporated on November 5, 1957, in the State of Idaho as Lucky Joe Mining Company. On July 17, 2008, the Company merged with its wholly-owned subsidiary, Lucky Joe Mining Company, a Nevada corporation, for the sole purpose of effecting a change in domicile from the State of Idaho to the State of Nevada. Lucky Joe Mining Company (Nevada) was the continuing and surviving corporation, each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada). On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp. On June 30, 2014, the Company dissolved its sole subsidiary, Blue Fin Capital, Inc. As a result, the Company has no subsidiaries. The Company never successfully generated any revenue and eventually abandoned the mining business, remaining dormant until it recommenced its mining activities on May 1, 2009. During the year ended December 31, 2009, the Company entered into Joint Venture Agreements with the Clifton Mining Company, the Woodman Mining Company and the Moeller Family Trust for the lease of certain of their property interests in the Gold Hill Mining District of Utah. In 2011, the Company entered into an agreement with DMRJ Group, (a Platinum Partners related entity), which allowed for long term funding of the Kiewit project and helped to provide cash flow for operations during the period from 2009 until 2014 while the permitting process was ongoing. The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014. Construction at the site was substantially complete at September 30, 2014. Revenue from the heap leach operation began in October 2014 with the first sales of gold concentrate. Production commenced and revenues of approximately $6,000,000 from sales of gold concentrate have been received through December 31, 2017. Ongoing undercapitalization has continued to hamper the Company’s ability to operate. Subsequent to year end, on March 8, 2018, the Company successfully finalized an agreement with the trustees of DMRJ Group which eliminated the note and interest payable to DMRJ in exchange for $625,000. In addition, all outstanding shares of preferred stock were retired and cancelled. See Notes10 and 15. The Company has been temporarily shut down due to this development since third quarter of 2017 and is seeking further capitalization to be able to resume production in 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Accounting Method The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees The Company accounts for stock-based compensation to employees as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 Compensation-Stock Compensation Equity-Based Payments to Non-Employees Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating gold ounces in inventories, the recoverability of the cost of mining claims, asset retirement obligation, stock-based compensation, determination of the fair value of common stock issued, deferred tax assets and related valuation allowances. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to conform prior periods’ amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ deficit, and cash flows previously reported. Cash and Cash Equivalents The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less when purchased to be cash equivalents. Inventories The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered. The Company records ore on leach pad, solution in carbon columns in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value. Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, equipment, and mineral properties; and mine administrative expenses. Revenue from the sale of silver is accounted for as by-product and is deducted from production costs. Costs are removed from ore on leach pads as ounces are recovered, based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of December 31, 2017, the Company had a limited operating history and actual results only over a short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests with only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold, at each balance sheet date that the Company expects to recover during the next 12 to 18 months. See Note 4. Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts and any resulting gain or loss is reflected in results of operations. See Note 5. Mineral Properties and Leases The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights. Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations. Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing. These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. The Company does not have proven and probable reserves at this time. See Note 6. Mineral Exploration and Development Costs The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining Provision for Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC Topic 740- Income When applicable, the Company will recognize a liability for unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2017 or 2016. See Note 12. Earnings Per Share Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. At December 31, 2017 and December 31, 2016, common stock equivalents outstanding are as follows: December 31, 2017 December 31, 2016 Convertible debt 3,728,886 1,878,511 Convertible preferred stock 47,211,002 47,211,002 Total 50,939,888 49,089,513 However, the diluted earnings per share are not presented because its effect would be anti-dilutive. Revenue Recognition Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. Reclamation and Remediation The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. A corresponding asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation, the liability is adjusted when there are changes in the estimated future cash flows due to change in estimated costs or change in time until reclamation will commence. Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates. For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed. Financial Instruments The Company’s financial instruments include cash, reclamation bonds, short-term note payable – related parties, notes payable – equipment, obligation under capital lease – related party, notes payable – related party, and convertible debt – related parties. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2017 and December 31, 2016. Fair Value Measurements The Company discloses the following information for each class of assets and liabilities that are measured at fair value: 1. the fair value measurement; 2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); 3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and 5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. At December 31, 2017 and December 31, 2016, the Company has no assets nor liabilities that require measurement at fair value on a recurring basis. Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through December 31, 2017, which raises substantial doubt about the Company’s ability to continue as a going concern. In addition, current liabilities exceed current assets by $3,011,454 at December 31, 2017. 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. See Note 10 - Note and Interest Payable – Related Party. Although production has begun, it has not yet reached optimum levels. The timing and amount of capital requirements will depend on a number of factors, including demand for products, metals market pricing, and the availability of opportunities for expansion through affiliations and other business relationships. Management intends to continue to seek new capital from equity securities issuances to provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. If the going concern assumption were not appropriate for these financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. New Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 Revenue Recognition, replacing guidance currently codified in ASC 605-10 Revenue Recognition-Overall. The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. The Company has performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it will not change the timing of revenue recognition or amounts of revenue recognized compared to how revenue is recognized under current policies. ASU No. 2014-09 will require additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the potential impact of implementing this update on the financial statements. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance and our method of adoption. In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance and our method of adoption. In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock [Abstract] | |
CAPITAL STOCK | NOTE 3 – CAPITAL STOCK Common Stock The Company is authorized to issue 100,000,000 shares of common stock. All shares have equal voting rights and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. 2017 Activity The Company failed to repay the convertible debt loan in full on the November 30, 2017 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 and these shares have been recorded as issued as of November 30, 2017. This issuance was valued at an estimated $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. 2016 Activity The Company failed to repay the convertible debt loan in full on the November 30, 2016 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, 2016. This issuance was valued at an estimated $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. Preferred Stock The Company’s Articles of Incorporation authorize 10,000,000 shares of $0.001 par value Preferred Stock available for issuance with such rights and preferences, including liquidation, dividend, conversion, and voting rights, as the Board of Directors may determine. Series A Each share of Series A Preferred Stock is convertible into shares of the Company’s common stock at the rate of one common share for each preferred share converted, subject to adjustment in the event the Company effects a reverse or forward split of its outstanding shares or a reclassification of its common stock. At December 31, 2017 and 2016, 958,033 shares of Series A Preferred Stock are issued and outstanding. These shares can be converted into 958,033 shares of common stock. The Company has the right to mandate conversion if its stock has traded on the OTC Bulletin Board or on an exchange at a volume weighted average price per share of not less than $1.40 for each day over a period of 30 consecutive days with average trading volume per day of not less than 50,000 shares. The conversion ratio of the Series A Preferred Stock is determined according to a formula computed by dividing the stated value of the preferred stock, which is designated as $0.70 per share, by the conversion price of the preferred stock, which is $0.70 per share, subject to the following limitations and conditions: ● If the Company issues or sells shares of its common stock, or grants options or other convertible securities which are exercisable or convertible into its common shares, at prices less than the conversion price of its Series A shares, then the conversion price of the Series A shares will be reduced to this lower sale or conversion price. ● The Series A shares may not be converted into common shares if the beneficial owner of such shares would thereafter exceed 4.9% of the outstanding common shares. The Series A shares have the following rights and preferences: ● The holders of the Series A shares are entitled to any dividends declared by the Company. ● In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or a change of control transaction or the sale or lease of all or substantially all of the Company’s assets without the majority consent of the holders of the Series A shares, the holders of the Series A shares will be entitled to receive ratably an amount of the funds available for liquidation equal to the issue price of the Series A shares plus any accrued and unpaid dividends. Any remaining funds available for distribution will be distributed pro rata among the holders of the common stock and the Series A shares assuming conversion of the Series A shares. ● The holders of the Series A shares are entitled to the number of votes equal to the number of whole shares of common stock into which the Series A shares are convertible. The Series A shares vote together with the holders of the common stock, except as provided by law. In addition, so long as the principal or accrued interest on any DMRJ Group loan is outstanding, the Company is prohibited from taking the certain corporate actions without the separate consent of persons owning a majority of the Series A preferred shares. ● The Company has the right to create and issue additional classes or series of preferred shares so long as the new class or series does not have preferences, limitations, or relative rights which are superior or senior to the preferences, limitations and relative rights granted the holders of the Series A shares. ● The holders of the Series A shares have preemptive rights to purchase shares of common stock in any offering by the Company. ● There are no redemption or sinking fund provisions applicable to the Series A shares. Series A-1 and A-2 Each share of Series A-1 Preferred Stock and Series A-2 Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to (i) for the Series A-1 Preferred Stock, ten times the Series A-1 issue price ($0.70) divided by the conversion price for Series A-1 Preferred and (ii) for the Series A-2 Preferred Stock, ten times the Series A-2 issue price ($1.00) divided by the conversion price for such Series A-2 Preferred Stock. The initial conversion price of the Series A-1 Preferred Stock is $0.70 per share and the initial conversion price of the Series A-2 Preferred Stock is $1.00. At December 31, 2017 and 2016, there are no shares of Series A-1 Preferred Stock outstanding and 180,000 shares of Series A-2 Preferred Stock outstanding. The Series A-2 Preferred Stock outstanding can be converted into 1,800,000 shares of common stock. The Series A-1 and A-2 shares have the following additional rights and preferences: ● The holders of the Series A-1 and A-2 shares have no preference as to any dividends declared by the Company. ● In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, or a change of control transaction or the sale or lease of all or substantially all of the Company’s assets without the majority consent of the holders of the Series A-1 and A-2 shares, the holders of the Series A shares will be entitled to receive ratably an amount of the funds available for liquidation equal to the issue price of the Series A shares plus any accrued and unpaid dividends. Any remaining funds available for distribution will be distributed pro rata among the holders of the common stock and the Series A, A-1 and A-2. ● The holders of the Series A-1 and A-2 shares are entitled to the number of votes equal to the number of whole shares of common stock into which the Series A-1 or A-2 shares are convertible. The Series A-1 and A-2 shares vote together with the holders of the common stock, except as provided by law. In addition, the Company is prohibited from taking the certain actions without the separate consent of persons owning a majority of the Series A-1 and A-2 preferred shares. ● The holders of record of the Series A-1 and Series A-2 shares, voting together as a single class, have the right to elect two directors of the Board, to remove any such directors elected by them and to fill any vacancy caused by the death, resignation or removal of such directors. ● The conversion prices of the Series A-1 and Series A-2 shares are subject to the following limitations and conditions: o If the Company issues or sells shares of its common stock, or grants options or other convertible securities which are exercisable or convertible into the Company’s common shares, at prices less than the conversion price of our Series A- or A-2 shares, except in certain exempted situations, then the conversion price of the Series A-1 and A-2 shares will be reduced to this lower sale or conversion price. o The Series A-1 and A-2 shares may not be converted into common shares if the beneficial owner of such shares would thereafter exceed 4.9% of the outstanding common shares. ● The holders of the Series A-1 and A-2 shares have preemptive rights to purchase shares of the Company’s common stock in any offering by the Company. ● There are no redemption or sinking fund provisions applicable to the Series A-1 or A-2 shares. Series B Each share of Series B Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to 100 shares of common stock. At December 31, 2017 and 2016, there are 444,530 shares of Series B Preferred Stock outstanding. These shares can be converted into 44,452,969 shares of common stock. The Certificate of Designations for the Series B Preferred Stock allows for the issuance of additional shares of Series B Preferred Stock in the event the Company issues any common or preferred stock, which would keep the holder’s beneficial ownership of the Company the same as it was prior to the issuance. The Series B shares have the following additional rights and preferences: ● The holders of the Series B shares have rights to any dividends declared by us on an as converted basis. ● In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary the available assets of the Company shall be distributed subject to the following priority: o First, the holders of each share of Series A Preferred Stock, Series A-1 Preferred Stock, Series A-2 Preferred Stock and Series B Preferred Stock then outstanding shall receive out of the available assets and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any available assets on any junior securities, an amount per share equal to the Series A, A-1, A-2 and B liquidation preferences. If upon any liquidation, such available assets shall be insufficient to permit the holders of the Series A, A-1, A-2, and B Preferred Stock to receive their full liquidation preference, then such available assets shall be distributed ratably among the preferred holders in proportion to their full liquidation preference each holder is otherwise entitled to receive. o After distribution to the preferred holders of their full liquidation preference, the remaining available assets, if any, shall be distributed ratably among the preferred holders and Common Stock, based on the number of shares of Common Stock held (or deemed held) by each holder assuming all preferred shares had been converted into shares of Common Stock immediately prior to such liquidation. ● The holders of the Series B shares are entitled to the number of votes equal to the number of whole shares of common stock into which the Series B shares are convertible. The Series B shares vote together with the holders of the Common Stock, except as provided by law. ● The conversion price of the Series B preferred stock is subject to the following limitations and conditions: o If the Company issues or sells shares of common stock, implement a stock split, or declare a dividend, then the conversion price of the Series B shares will be adjusted. o The conversion price of the Series B shares will be adjusted in the event of a reclassification, exchange, substitution, merger, or consolidation. ● The Company has the right to create and issue additional classes or series of preferred shares so long as the new class or series does not have preferences, limitations, or relative rights which are superior or senior to the preferences, limitations and relative rights granted the holders of the Series B shares. ● The Series B shares also have anti-dilution protection in the case of issuance of any additional shares of common stock or common stock equivalents. DMRJ Group agreed to waive this anti-dilution clause for the shares issued to the convertible debt holders on December 2, 2016. In addition, DMRJ Group agreed to waive its senior secured status on all debt owned by the convertible debt holders. See Note 10. At December 31, 2017 and 2016 DMRJ Group beneficially owns 75% of the Company on a fully diluted basis with total preferred shares convertible into 47,211,002 shares of common stock. Subsequent to year end, on March 8, 2018, all of the outstanding preferred shares were retired and cancelled. See Note 15. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 4 – INVENTORIES The following table provides the components of inventories: December 31, 2017 2016 Ore on leach pad $ 3,321,936 $ 3,051,766 Carbon column in process - 31,214 Dore finished goods - 10,952 Total 3,321,936 3,093,932 Less: current portion (600,000 ) (142,921 ) Non-current inventories $ 2,721,936 $ 2,951,011 Inventories at December 31, 2017 and 2016 are allocated between current and non-current based on estimated expected sales for the subsequent fiscal year. Inventories are valued at the lower of cost or net realizable value which was cost at December 31, 2017 and December 31, 2016. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 – PROPERTY AND EQUIPMENT The following is a summary of property, equipment, and accumulated depreciation at December 31, 2017 and December 31, 2016: December 31, 2017 2016 Equipment $ 3,077,482 $ 3,046,803 Furniture and fixtures 6,981 6,981 Electronic and computerized equipment 52,874 52,874 Vehicles 67,115 67,115 3,204,452 3,173,773 Less accumulated depreciation (1,593,238 ) (1,144,108 ) 1,611,214 2,029,665 Kiewit property facilities 2,497,436 2,497,436 Less accumulated amortization (487,214 ) (487,214 ) 2,010,222 2,010,222 Total $ 3,621,436 $ 4,039,887 In November 2016, five pieces of mining equipment financed by CAT Financial were returned to CAT. See Note 9. |
Mineral Properties, Interests a
Mineral Properties, Interests and Reclamation Bonds | 12 Months Ended |
Dec. 31, 2017 | |
Mineral Properties, Interests and Reclamation Bonds [Abstract] | |
MINERAL PROPERTIES, INTERESTS AND RECLAMATION BONDS | NOTE 6 – MINERAL PROPERTIES, INTERESTS AND RECLAMATION BONDS Mineral properties and interests as of December 31, 2017 and December 31, 2016 are as follows: December 31, 2017 2016 Initial lease fee Kiewit, Cactus Mill and all other sites 600,000 600,000 600,000 600,000 Asset retirement costs Kiewit Site 789,026 789,026 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 815,939 815,939 1,415,939 1,415,939 Accumulated amortization (301,264 ) (319,457 ) Total $ 1,114,675 $ 1,096,482 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, the Company obtained the final permit necessary to commence construction of the heap leach pad and process facility. On February 20, 2014, the Kiewit reclamation bond in the amount of $1,348,000 was posted with the State of Utah, Division of Oil, Gas and Mining (DOGM). This bond amount included bonding for the Yellow Hammer Small Mine and the Yellow Hammer Exploration sites along with the Herat Exploration site. As such, the reclamation 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. 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% of the bond amount ($674,000) into an escrow account with the bonding company. The surety bond carries an annual bonding fee of $40,400 which is expensed as a financing fee. Total reclamation bonds posted at December 31, 2017 and 2016 are $753,054 and $752,754, respectively, which consists of the above escrowed amount along with certificate of deposits held with the state of Utah for the remaining bonds on the property, including exploration bonds. Subsequent to December 31, 2017, the Company became aware that the bonding company had inappropriately released the escrowed funds to another unrelated company. On September 28, 2018, the bonding company redeposited the $674,000 in escrow for the benefit of the Company. 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 is 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 in the amount of $50,000 per year for the Clifton Shears-Smelter Tunnel property were not made by the due dates in 2016 or 2017, but were later paid (in 2017) for each of the two years for the Clifton Shears-Smelter Tunnel property. 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. Royalty expense of $9,785 and $75,838 was recognized during the years ended December 31, 2017 and 2016. 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. |
Convertible Debt - Related Part
Convertible Debt - Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Convertible Debt - Related Parties [Abstract] | |
CONVERTIBLE DEBT - RELATED PARTIES | NOTE 7 – CONVERTIBLE DEBT – RELATED PARTIES On November 18, 2009, the Company issued convertible promissory notes, to two of its minority shareholders, for a total of $600,000. The notes bore interest at 15% per annum. Interest-only was payable in equal monthly installments of $7,500. The notes are convertible at a rate of $0.70 per share. The Company failed to repay the notes in full on the November 30, 2012 through the 2017 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. In 2014, 2015, 2016 and 2017, the annual issuance of shares of common stock was valued at an estimated $0.04 (total $12,000) each and was accounted for as financing expense. The due date of the note was extended each year and has now been extended to November 30, 2018. Interest has not been paid since November 2014 and accrued interest payable on these notes at December 31, 2017 and 2016 is $277,500 and $187,500, respectively. Per the terms of the notes, interest on these notes is not convertible to common stock. On October 14, 2016, the Company issued convertible promissory notes, convertible in shares of the Company’s common stock at $0.25 per share, to its two existing convertible debt holders in the amount of $125,000 each, at 10% interest, due in full on September 30, 2018. These notes were amended in February 2018 to extend the due date of the notes and the accrued interest to May 31, 2019. Accrued interest payable on these notes at December 31, 2017 and 2016 is $30,344 and $5,342, respectively. Interest on these notes is convertible to common stock. On August 7, 2017, the convertible debt holders agreed to fund up to an additional aggregate of $500,000 under terms similar to existing convertible debt agreements. These funds were to be used to sustain minimum operations of the Company until resolution of the DMRJ Group debt with its trustees (Note 10). At December 31, 2017, $428,000 of these funds had been advanced. The remaining $72,000 was advanced in 2018 with the final advance on February 9, 2018. Accrued interest payable on these notes at December 31, 2017 and December 31, 2016 is $9,592 and $0, respectively. On February 28, 2018, these notes were amended to postpone the maturity date and interest payment date to May 31, 2019. At December 31, 2017, total due to the convertible debt holders is $1,278,000 of which $428,000 is classified as long term and $850,000 is classified as current. Accrued interest payable at December 31, 2017 and December 31, 2016 of $317,436 and $192,842, respectively. In addition, the Company entered into a short-term loan with one of the convertible debt holders on September 29, 2016 in the amount of $50,000. This short-term loan was repaid in full to the investor, with no interest paid, on October 14, 2016. At December 31, 2017, the number of shares to be issued upon conversion of notes is 3,728,886 shares. |
Obligation Under Capital Lease
Obligation Under Capital Lease - Related Party | 12 Months Ended |
Dec. 31, 2017 | |
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 mining and crushing equipment, some of which had been previously owned by the Company. RMH Overhead, LLC is an entity owned by the Company’s president, Rick Havenstrite. For the years ended December 31, 2017 and 2016, equipment includes assets under capital lease amounting to $185,618 and $185,618, respectively. The lease is being amortized over the estimated useful life of the equipment. Accumulated amortization at December 31, 2017 and 2016 was $39,775 and $13,258. At December 31, 2017, the estimated future minimum lease payments under the capital lease was $90,000 of which $5,890 is implied interest. |
Notes Payable - Equipment
Notes Payable - Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable - Equipment [Abstract] | |
NOTES PAYABLE - EQUIPMENT | NOTE 9 – NOTES PAYABLE – EQUIPMENT The following is a summary of the equipment notes payable: December 31, December 31, 2016 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 47,154 $ 73,203 Note payable to Komatsu Financial, uncollateralized, due in 12 monthly installments of $3,223, beginning in April 2016, including interest at 1.16%. -0- 9,668 Note payable to CAT Financial, collateralized by used mining equipment due in 36 monthly installments of varying amounts including interest at 4.68%. The equipment has been returned to CAT. See below. 266,675 881,894 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in monthly installments of $11,674 including interest at 2.99%. 149,687 282,675 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%. 5,515 19,654 $ 469,031 $ 1,267,094 Current portion (452,214 ) (813,818 ) Long term portion $ 16,817 $ 453,276 Principal payments are as follows: 2018 452,214 2019 16,817 $ 469,031 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 $372,129, for a net carrying value of $1,128,759. The note payable due to CAT at the time of disposition was $960,585. 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. As of October 18, 2018, seven of those payments have been made. The loss on impairment of equipment in the amount of $147,214 was recognized in the 4 th |
Note Payable - Related Party
Note Payable - Related Party | 12 Months Ended |
Dec. 31, 2017 | |
Note Payable - Related Party [Abstract] | |
NOTE PAYABLE - RELATED PARTY | NOTE 10 – NOTE PAYABLE – RELATED PARTY At December 31, 2017 and 2016, DMRJ Group beneficially owned approximately 75% of the Company (on a fully-diluted basis) with Series A, A-2 and B preferred stock 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 operated under the Fourteenth Amendment to the Investment Agreement dated December 22, 2016. The Amendments have provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement. The total due to DMRJ Group at December 31, 2017 and December 31, 2016 is as follows: December 31, December 31, 2017 2016 Principal $ 15,554,552 $ 14,610,492 Interest payable 9,535,118 7,239,610 $ 25,089,670 $ 21,850,102 On March 8, 2018, the note and interest payable owed to DMRJ Group was settled for payment of $625,000. See Note 15. 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; ● 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. 2017 Activity At December 31, 2017, 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. See Note 15. 2016 Activity At December 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. See Note 15. Several term loan advances were received from DMRJ Group by the Company between February 9, 2016 and December 29, 2016 totaling $2,470,000. A loan payment of $900,000 was made to DMRJ Group on July 8, 2016. The advances bear interest at 15% per annum and became 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. A Fourteenth Amendment to the Investment Agreement was entered into on December 22, 2016 which allowed for additional funding in the amount of up to $600,000 from DMRJ Group and its affiliated fund managers. This $600,000 was drawn on December 29, 2016 which brought the total funds drawn from DMRJ Group and its affiliates for 2016 to $2,470,000. DMRJ Trustees 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 the management of the DMRJ Group. At December 31, 2017, the DMRJ Group continued to operate through the direction of its court appointed trustees. See Note 15. |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation [Abstract] | |
ASSET RETIREMENT OBLIGATION | NOTE 11 – ASSET RETIREMENT OBLIGATION 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 asset retirement obligation for the years ended December 31, 2017 and 2016 are as follows: 2017 2016 Asset retirement obligation, beginning of year $ 974,109 $ 901,597 Accretion expense 72,512 72,512 Asset retirement obligation, end of year $ 1,046,621 $ 974,109 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 12 – INCOME TAXES There was no income tax provision (benefit) for the years ended December 31, 2017 and 2016. The components of the Company’s net deferred tax assets are as follows: 2017 2016 Deferred tax asset: Net operating loss carryforward $ 5,482,000 $ 7,742,000 Equipment impairment 37,000 61,000 Exploration costs 113,000 233,000 Financing costs 1,000 (16,000 ) Other 76,000 107,000 Total deferred tax assets 5,709,000 8,127,000 Valuation allowance (5,709,000 ) (8,127,000 ) Net deferred tax assets $ - $ - Deferred income taxes arise from timing differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. A deferred tax asset valuation allowance is recorded when it is more likely than not that deferred tax assets will not be realized. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax assets, a valuation allowance equal to 100% of the deferred tax assets has been recorded at December 31, 2017 and 2016. On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company did not incur any net income tax benefit or provision for the year ended December 31, 2017 as a result of the changes to tax laws and tax rates under the Act. The Company’s net deferred tax asset was reduced by approximately $3.8 million during the year ended December 31, 2017, which consisted primarily of the re-measurement of federal deferred tax assets from 35% to 21%. A reconciliation between the statutory federal income tax rate and the Company’s tax provision (benefit) is as follows: December 31, December 31, Amount computed using the statutory rate $ (1,387,000 ) (35 )% $ (1,419,000 ) (35 )% Other - - 900 - Impact of change in statutory tax rate 3,805,000 96 % - - Change in valuation allowance (2,418,000 ) (61 )% 1,418,100 35 % Total income tax provision (benefit) $ - -% $ - -% At December 31, 2017, the Company had federal net operating loss carry forwards of approximately $26.1 million which expire in fiscal years ending 2028 through 2037. During the years ended December 31, 2017 and 2016, there were no material uncertain tax positions taken by the Company. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2017 and 2016. The Company’s federal income tax returns for fiscal years 2014 through 2017 remain open and subject to examination. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS In addition to transactions disclosed in Note 7, 8 and 10, the Company had the following related party transactions. On November 15, 2016, a short-term loan in the amount of $25,000 was obtained from West C Street, one of the Company’s convertible debt holders. Funds were used for operating capital. This amount was repaid to West C Street on January 18, 2017 along with accrued interest of $438. In addition, a short-term loan totaling $9,500, also for working capital, was obtained from our President, Rick Havenstrite, with draws on multiple dates in November and December 2016. This loan was repaid in full on January 3, 2017 with no interest paid. The Company recognized rent expense for rental of office space of $12,000 each for the years ended December 31, 2017 and 2016, 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 $12,000 and $8,000 during the years ended December 31, 2017 and 2016, respectively, leaving a total of $16,750 and $17,750 remaining in accounts payable at December 31, 2017 and 2016, respectively, including amounts from prior years. As of December 31, 2017 and December 31, 2016, accrued compensation of $709,577 and $495,808 was due to directors and officers. Of the amounts accrued at December 31, 2017 and December 31, 2016, accrued compensation of $491,692 and $372,692 is due to Rick Havenstrite and $173,885 and $113,885 is due to Marianne Havenstrite, Treasurer and Principal Financial Officer. In addition, $44,000 and $9,231 was due to other directors and employees at December 31, 2017 and December 31, 2016, respectively. During the years ended December 31, 2017 and 2016, the Company recognized general project cost expense of $-0- and $10,627, respectively, for geological services provided by Stuart Havenstrite, the father of Rick Havenstrite. $39,367 remains unpaid to Mr. Havenstrite at both December 31, 2017 and December 31, 2016. These amounts are included in accounts payable at those dates. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES In addition to commitments disclosed in Notes 6, 7, 8, 9, 10, 11 and 12 the Company had the following commitments and contingencies. Personal property tax and other accrued liabilities Personal property tax for Tooele County, Utah is billed and becomes due on November 30 of each year. At December 31, 2017, $24,859 was due for 2017, $76,279 was due for 2016 and $86,302 was due for 2015, including interest and penalties, for a total of $187,440 due to Tooele County at December 31, 2017. These amounts remain unpaid and are included in Accounts payable and accrued expenses on the balance sheet. Proceeds of $130,000 were raised in 2012 from the sale of stock, with shares redeemable for cash generated from the sale of gold. Based on gold prices during the conversion period in 2014, conversion amounts due to shareholders is $151,406. At December 31, 2017 this amount remains unpaid and is included in Accounts payable and accrued expenses on the balance sheet. 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS Note Payable – Wheeler Machinery In November 2015, a rental agreement for crushing equipment was entered into with Wheeler Machinery. Effective June 6, 2018, an agreement to convert the rental equipment to a purchase contract in the amount of $273,067 was finalized and the first of seven equal monthly payments of $39,009 were to be made. As of October 18, 2018, three of the seven monthly payments had been made. At the conclusion of the seven payments, the crushing equipment will be owned by the Company. Convertible Debt – Related Parties 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 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. On August 7, 2017, the convertible debt holders agreed to fund an additional aggregate of $500,000 under similar terms. On February 28, 2018, both of these notes were amended to allow for the maturity date and the payment date for accrued interest to be changed to May 31, 2019. On July 3, 2018, a short-term loan of $100,000 was received from one of the two convertible debt holders. Terms are 10% interest and a 2% loan initiation fee. This loan has not yet been paid. Note and Interest Payable – Related Party Revenue On July 6, 2018, the Company negotiated an arrangement for a one-time sale of gold concentrate to H & H Metals. On July 6, 2018, proceeds of $68,785 were received which represents an advance against a future sale of metals, estimated at 90% of the value of the gold, and silver byproduct. Stock Offering On February 28, 2018, the Company entered into a Stock Purchase Agreement with each of the two convertible debt holders pursuant to which the Company received a total of $625,000 in exchange for the issuance of a total 4,500,000 shares of the Company’s common stock and various concessions on existing convertible debt agreements. A stock offering was initiated on February 23, 2018 for sale of common stock shares at $0.40 per share, to raise up to $1,600,000. The offering expired on June 30, 2018. As of October 18, 2018 a total of 2,125,000 shares of stock have been issued and funds of $850,000 have been raised through this offering, with proceeds used for working capital in a limited re-opening of the mining operations. H and H Metals Corp. purchased 1,250,000 shares of the stock and have become a related party based on number of shares owned. Stock Plan Effective February 23, 2018, the Board approved and adopted the 2018 Stock Incentive Plan (the “2018 Plan”) pursuant to which 2,400,000 shares of the Company’s common stock were authorized. Options to purchase shares of common stock issued under this plan will fully vest upon grant. The aggregate fair value of the common stock options becoming exercisable for the first time during any calendar year cannot exceed $100,000 per optionee. On February 23, 2018, the Board approved the grant of an aggregate of 2,400,000 options under the 2018 Plan exercisable at $0.40 per share which expire February 23, 2023 in the amounts and to the following: ● Rick Havenstrite, President and CEO – 1,000,000 options ● Howard Crosby, Director – 1,000,000 options ● John Ryan, Director – 200,000 options ● Linde Havenstrite, Project Engineer – 200,000 options |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Accounting Method | Accounting Method The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. |
Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees | Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees The Company accounts for stock-based compensation to employees as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718 Compensation-Stock Compensation Equity-Based Payments to Non-Employees |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating gold ounces in inventories, the recoverability of the cost of mining claims, asset retirement obligation, stock-based compensation, determination of the fair value of common stock issued, deferred tax assets and related valuation allowances. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to conform prior periods’ amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders’ deficit, and cash flows previously reported. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less when purchased to be cash equivalents. |
Inventories | Inventories The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered. The Company records ore on leach pad, solution in carbon columns in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value. Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, equipment, and mineral properties; and mine administrative expenses. Revenue from the sale of silver is accounted for as by-product and is deducted from production costs. Costs are removed from ore on leach pads as ounces are recovered, based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of December 31, 2017, the Company had a limited operating history and actual results only over a short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests with only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold, at each balance sheet date that the Company expects to recover during the next 12 to 18 months. See Note 4. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts and any resulting gain or loss is reflected in results of operations. See Note 5. |
Mineral Properties and Leases | Mineral Properties and Leases The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights. Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations. Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing. These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. The Company does not have proven and probable reserves at this time. See Note 6. |
Mineral Exploration and Development Costs | Mineral Exploration and Development Costs The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining |
Provision for Taxes | Provision for Taxes Income taxes are provided based upon the liability method of accounting pursuant to ASC Topic 740- Income When applicable, the Company will recognize a liability for unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2017 or 2016. See Note 12. |
Earnings Per Share | Earnings Per Share Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. At December 31, 2017 and December 31, 2016, common stock equivalents outstanding are as follows: December 31, 2017 December 31, 2016 Convertible debt 3,728,886 1,878,511 Convertible preferred stock 47,211,002 47,211,002 Total 50,939,888 49,089,513 However, the diluted earnings per share are not presented because its effect would be anti-dilutive. |
Revenue Recognition | Revenue Recognition Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured. Revenue from the sale of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. |
Reclamation and Remediation | Reclamation and Remediation The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. A corresponding asset is also recorded and depreciated over the life of the asset. After the initial measurement of the asset retirement obligation, the liability is adjusted when there are changes in the estimated future cash flows due to change in estimated costs or change in time until reclamation will commence. Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates. For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed. |
Financial Instruments | Financial Instruments The Company’s financial instruments include cash, reclamation bonds, short-term note payable – related parties, notes payable – equipment, obligation under capital lease – related party, notes payable – related party, and convertible debt – related parties. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2017 and December 31, 2016. |
Fair Value Measurements | Fair Value Measurements The Company discloses the following information for each class of assets and liabilities that are measured at fair value: 1. the fair value measurement; 2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); 3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date and a description of where those unrealized gains or losses are reported in the statement of operations; and 5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. At December 31, 2017 and December 31, 2016, the Company has no assets nor liabilities that require measurement at fair value on a recurring basis. |
Going Concern | Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through December 31, 2017, which raises substantial doubt about the Company’s ability to continue as a going concern. In addition, current liabilities exceed current assets by $3,011,454 at December 31, 2017. 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. See Note 10 - Note and Interest Payable – Related Party. Although production has begun, it has not yet reached optimum levels. The timing and amount of capital requirements will depend on a number of factors, including demand for products, metals market pricing, and the availability of opportunities for expansion through affiliations and other business relationships. Management intends to continue to seek new capital from equity securities issuances to provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. If the going concern assumption were not appropriate for these financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09 Revenue Recognition, replacing guidance currently codified in ASC 605-10 Revenue Recognition-Overall. The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. The Company has performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it will not change the timing of revenue recognition or amounts of revenue recognized compared to how revenue is recognized under current policies. ASU No. 2014-09 will require additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the potential impact of implementing this update on the financial statements. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance and our method of adoption. In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this guidance and our method of adoption. In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date. Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of common stock equivalents outstanding | December 31, 2017 December 31, 2016 Convertible debt 3,728,886 1,878,511 Convertible preferred stock 47,211,002 47,211,002 Total 50,939,888 49,089,513 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories [Abstract] | |
Schedule of components of inventories | December 31, 2017 2016 Ore on leach pad $ 3,321,936 $ 3,051,766 Carbon column in process - 31,214 Dore finished goods - 10,952 Total 3,321,936 3,093,932 Less: current portion (600,000 ) (142,921 ) Non-current inventories $ 2,721,936 $ 2,951,011 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Summary of property, equipment, and accumulated depreciation | December 31, 2017 2016 Equipment $ 3,077,482 $ 3,046,803 Furniture and fixtures 6,981 6,981 Electronic and computerized equipment 52,874 52,874 Vehicles 67,115 67,115 3,204,452 3,173,773 Less accumulated depreciation (1,593,238 ) (1,144,108 ) 1,611,214 2,029,665 Kiewit property facilities 2,497,436 2,497,436 Less accumulated amortization (487,214 ) (487,214 ) 2,010,222 2,010,222 Total $ 3,621,436 $ 4,039,887 |
Mineral Properties, Interests_2
Mineral Properties, Interests and Reclamation Bonds (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Mineral Properties, Interests and Reclamation Bonds [Abstract] | |
Schedule of mineral properties and interests | December 31, 2017 2016 Initial lease fee Kiewit, Cactus Mill and all other sites 600,000 600,000 600,000 600,000 Asset retirement costs Kiewit Site 789,026 789,026 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 815,939 815,939 1,415,939 1,415,939 Accumulated amortization (301,264 ) (319,457 ) Total $ 1,114,675 $ 1,096,482 |
Notes Payable - Equipment (Tabl
Notes Payable - Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes Payable - Equipment [Abstract] | |
Schedule of the equipment notes payable | December 31, December 31, 2016 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 47,154 $ 73,203 Note payable to Komatsu Financial, uncollateralized, due in 12 monthly installments of $3,223, beginning in April 2016, including interest at 1.16%. -0- 9,668 Note payable to CAT Financial, collateralized by used mining equipment due in 36 monthly installments of varying amounts including interest at 4.68%. The equipment has been returned to CAT. See below. 266,675 881,894 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in monthly installments of $11,674 including interest at 2.99%. 149,687 282,675 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%. 5,515 19,654 $ 469,031 $ 1,267,094 Current portion (452,214 ) (813,818 ) Long term portion $ 16,817 $ 453,276 |
Schedule of principal payments | 2018 452,214 2019 16,817 $ 469,031 |
Note Payable - Related Party (T
Note Payable - Related Party (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Note Payable - Related Party [Abstract] | |
Schedule of due to DMRJ | December 31, December 31, 2017 2016 Principal $ 15,554,552 $ 14,610,492 Interest payable 9,535,118 7,239,610 $ 25,089,670 $ 21,850,102 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Asset Retirement Obligation [Abstract] | |
Schedule of asset retirement obligations | 2017 2016 Asset retirement obligation, beginning of year $ 974,109 $ 901,597 Accretion expense 72,512 72,512 Asset retirement obligation, end of year $ 1,046,621 $ 974,109 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Schedule of components of deferred tax assets | 2017 2016 Deferred tax asset: Net operating loss carryforward $ 5,482,000 $ 7,742,000 Equipment impairment 37,000 61,000 Exploration costs 113,000 233,000 Financing costs 1,000 (16,000 ) Other 76,000 107,000 Total deferred tax assets 5,709,000 8,127,000 Valuation allowance (5,709,000 ) (8,127,000 ) Net deferred tax assets $ - $ - |
Schedule of reconciliation between the statutory federal income tax rate and the Company's tax provision (benefit) | December 31, December 31, Amount computed using the statutory rate $ (1,387,000 ) (35 )% $ (1,419,000 ) (35 )% Other - - 900 - Impact of change in statutory tax rate 3,805,000 96 % - - Change in valuation allowance (2,418,000 ) (61 )% 1,418,100 35 % Total income tax provision (benefit) $ - -% $ - -% |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Organization and Description of Business (Textual) | ||
Revenues from sales of gold concentrate, description | Production commenced and revenues of approximately $6,000,000 from sales of gold concentrate have been received through December 31, 2017. Ongoing undercapitalization has continued to hamper the Company's ability to operate. | |
Note and interest payable to DMRJ | $ 625,000 | $ 625,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies [Abstract] | ||
Convertible debt | 3,728,886 | 1,878,511 |
Convertible preferred stock | 47,211,002 | 47,211,002 |
Total | 50,939,888 | 49,089,513 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | Dec. 31, 2017USD ($) |
Summary of Significant Accounting Policies (Textual) | |
Current liabilities exceed current assets | $ 3,011,454 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Voting rights, description | Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. | |
Share price per share | $ 0.04 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Conversion of issuance shares | 3,728,886 | |
DMRJ Group [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Conversion of issuance shares | 47,211,002 | 47,211,002 |
Beneficial ownership, percentage | 75.00% | 75.00% |
Series A Preferred Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Preferred stock, shares issued | 958,033 | 958,033 |
Preferred stock, shares outstanding | 958,033 | 958,033 |
Conversion of issuance shares | 958,033 | |
Beneficial ownership, percentage | 4.90% | |
Convertible promissory notes, description | The Company has the right to mandate conversion if its stock has traded on the OTC Bulletin Board or on an exchange at a volume weighted average price per share of not less than $1.40 for each day over a period of 30 consecutive days with average trading volume per day of not less than 50,000 shares. The conversion ratio of the Series A Preferred Stock is determined according to a formula computed by dividing the stated value of the preferred stock, which is designated as $0.70 per share, by the conversion price of the preferred stock, which is $0.70 per share. | |
Series B Preferred Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Preferred stock, shares issued | 444,530 | 444,530 |
Preferred stock, shares outstanding | 444,530 | 444,530 |
Conversion of issuance shares | 44,452,969 | |
Convertible promissory notes, description | Each share of Series B Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to 100 shares of common stock. | |
Series A-1 Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Conversion price per share | $ 0.70 | |
Initial conversion price per share | $ 0.70 | |
Series A-2 Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Preferred stock, shares issued | 180,000 | 180,000 |
Preferred stock, shares outstanding | 180,000 | 180,000 |
Conversion of issuance shares | 1,800,000 | |
Beneficial ownership, percentage | 4.90% | |
Conversion price per share | $ 1 | |
Initial conversion price per share | $ 1 | |
2016 Activity [Member] | Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional number of shares issued | 300,000 | |
Share price per share | $ 0.04 | |
Additional number of shares issued, value | $ 12,000 | |
2017 Activity [Member] | Common Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Additional number of shares issued | 300,000 | |
Share price per share | $ 0.04 | |
Additional number of shares issued, value | $ 12,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Ore on leach pad | $ 3,321,936 | $ 3,051,766 |
Carbon columns in process | 31,214 | |
Dore finished goods | 10,952 | |
Total | 3,321,936 | 3,093,932 |
Less: current portion | (600,000) | (142,921) |
Non-current inventories | $ 2,721,936 | $ 2,951,011 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Total | $ 3,621,436 | $ 4,039,887 |
Property, Plant and Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,204,452 | 3,173,773 |
Less accumulated depreciation | (1,593,238) | (1,144,108) |
Property and equipment, Total | 1,611,214 | 2,029,665 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,077,482 | 3,046,803 |
Property, Plant and Equipment [Member] | Furniture and fixtures, temporary housing [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 6,981 | 6,981 |
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 | 67,115 | 67,115 |
Finite-Lived Intangible Assets [Member] | Kiewit property facilities [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 2,497,436 | 2,497,436 |
Less accumulated depreciation | (487,214) | (487,214) |
Property and equipment, Total | $ 2,010,222 | $ 2,010,222 |
Mineral Properties, Interests_3
Mineral Properties, Interests and Reclamation Bonds (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Initial lease fee | ||
Kiewit, Cactus Mill and all other sites | $ 600,000 | $ 600,000 |
Total | 600,000 | 600,000 |
Asset retirement costs | ||
Kiewit Site | 789,026 | 789,026 |
Kiewit Exploration | 10,780 | 10,780 |
Cactus Mill | 16,133 | 16,133 |
Total | 815,939 | 815,939 |
Mineral properties net before accumulated amortization | 1,415,939 | 1,415,939 |
Accumulated amortization | (301,264) | (319,457) |
Total | $ 1,114,675 | $ 1,096,482 |
Mineral Properties, Interests_4
Mineral Properties, Interests and Reclamation Bonds (Details Textual) - USD ($) | Jul. 07, 2016 | Oct. 17, 2016 | Dec. 31, 2009 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 28, 2018 | Dec. 31, 2015 | Apr. 30, 2014 |
Mineral Properties and Interests; Reclamation Bonds (Textual) | ||||||||
Claims fees (per claim) | $ 155 | |||||||
Kiewit reclamation bond, amount | $ 1,348,000 | |||||||
Refunded reclamation bonds | $ 92,705 | |||||||
Total reclamation bonds posted amount | 753,054 | $ 752,754 | ||||||
Accumulated amortization | 301,264 | 319,457 | ||||||
Bond deposit | 674,000 | |||||||
Annual bonding fee | $ 40,400 | |||||||
Percentage of deposit bond into escrow account | 50.00% | |||||||
Joint Venture Agreement, description | The Company is also required to pay a 6% net smelter return on any production from the Kiewit gold property. | |||||||
Annual non-performance payments Trust | 50,000 | 50,000 | $ 50,000 | |||||
Royalty Expense | $ 128,868 | $ 9,785 | $ 75,838 | |||||
Escrow for the benefit | $ 674,000 | |||||||
Corporate Joint Venture [Member] | ||||||||
Mineral Properties and Interests; Reclamation Bonds (Textual) | ||||||||
Joint Venture Agreement, description | 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. |
Convertible Debt - Related Pa_2
Convertible Debt - Related Parties (Details) - USD ($) | Mar. 08, 2018 | Oct. 14, 2016 | Nov. 18, 2009 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 30, 2017 | Aug. 07, 2017 | Nov. 30, 2016 | Sep. 29, 2016 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 |
Convertible Debt - Related parties (Textual) | |||||||||||||
Convertible debt | $ 600,000 | $ 1,278,000 | $ 850,000 | ||||||||||
Convertible debt, noncurrent | 428,000 | ||||||||||||
Interest payable | 15.00% | ||||||||||||
Periodic payment of interest | $ 7,500 | ||||||||||||
Conversion price | $ 0.70 | ||||||||||||
Additional shares of common stock issued to debt holders | 300,000 | 300,000 | 300,000 | 300,000 | 300,000 | 300,000 | |||||||
Accrued interest payable | 277,500 | 187,500 | |||||||||||
Common stock conversion | 4,500,000 | ||||||||||||
Short-term loan | $ 34,500 | ||||||||||||
Share price per share | $ 0.04 | ||||||||||||
Financing expense | $ 12,000 | ||||||||||||
Accrued interest payable | $ 317,436 | 192,842 | |||||||||||
Shares to be issued upon conversion of notes | 3,728,886 | ||||||||||||
long term | $ 850,000 | ||||||||||||
Convertible Debt [Member] | |||||||||||||
Convertible Debt - Related parties (Textual) | |||||||||||||
Convertible debt | $ 125,000 | ||||||||||||
Interest payable | 10.00% | ||||||||||||
Conversion price | $ 0.25 | ||||||||||||
Accrued interest payable | 30,344 | 5,342 | |||||||||||
Common stock and principal and interest were initially due date | Sep. 30, 2018 | ||||||||||||
Short-term loan | $ 50,000 | ||||||||||||
DMRJ Group Debt [Member] | |||||||||||||
Convertible Debt - Related parties (Textual) | |||||||||||||
Convertible debt | 428,000 | $ 500,000 | |||||||||||
Accrued interest payable | $ 9,592 | $ 0 | |||||||||||
Convertible debt, description | The remaining $72,000 was advanced in 2018 with the final advance on February 9, 2018. |
Obligation under Capital Leas_2
Obligation under Capital Lease - Related Party (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Obligation Under Capital Lease - Related Party (Textual) | ||
Estimated future minimum lease payments | $ 90,000 | |
Implied interest | 5,890 | |
RMH Overhead, LLC [Member] | ||
Obligation Under Capital Lease - Related Party (Textual) | ||
Equipment includes assets under capital lease amount | 185,618 | $ 185,618 |
Accumulated amortization | $ 39,775 | $ 13,258 |
Notes Payable - Equipment (Deta
Notes Payable - Equipment (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Note payable | $ 469,031 | $ 1,267,094 |
Current portion | (452,214) | (813,818) |
Long term portion | 16,817 | 453,276 |
Komatsu Financial, collateralized by a Komatsu Telehandler lift [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 47,154 | 73,203 |
Komatsu Financial, uncollateralized [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 0 | 9,668 |
CAT Financial, Collateralized by used Mining Equipment [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 266,675 | 881,894 |
Komatsu Financial, Collateralized by a Komatsu D275 Dozer [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 149,687 | 282,675 |
Star Capital, LLC, Collateralized by a 2009 Multiquip Generator [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | $ 5,515 | $ 19,654 |
Notes Payable - Equipment (De_2
Notes Payable - Equipment (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule of principal payments | ||
2,018 | $ 452,214 | |
2,019 | 16,817 | |
Total | $ 469,031 | $ 1,267,094 |
Notes Payable - Equipment (De_3
Notes Payable - Equipment (Details Textual) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jul. 31, 2017 | Dec. 31, 2016USD ($) | Dec. 31, 2017USD ($)Installments | Dec. 31, 2016USD ($)Installments | Nov. 30, 2016USD ($) | Nov. 18, 2009 | |
Notes Payable - Equipment (Textual) | ||||||
Interest rate | 15.00% | |||||
Net carrying value | $ 4,039,887 | $ 3,621,436 | $ 4,039,887 | |||
Mining equipment financed, description | 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 | |||||
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% | |||||
Komatsu Financial, uncollateralized [Member] | ||||||
Notes Payable - Equipment (Textual) | ||||||
Note payable amount (first installment) | $ 3,223 | |||||
Number of installment (in monthly) | Installments | 12 | |||||
Interest rate | 1.16% | 1.16% | ||||
CAT Financial, Collateralized by used Mining Equipment [Member] | ||||||
Notes Payable - Equipment (Textual) | ||||||
Number of installment (in monthly) | Installments | 36 | |||||
Interest rate | 4.68% | |||||
Komatsu Financial, Collateralized by a Komatsu D275 Dozer [Member] | ||||||
Notes Payable - Equipment (Textual) | ||||||
Note payable amount (remaining installments) | $ 11,674 | |||||
Interest rate | 2.99% | |||||
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 - CAT equipment [Member] | ||||||
Notes Payable - Equipment (Textual) | ||||||
Equipment original cost | $ 1,500,888 | |||||
Accumulated depreciation | 372,129 | |||||
Net carrying value | 1,128,759 | |||||
Note payable due to CAT | $ 960,585 | |||||
Loss on impairment of equipment | $ 147,214 |
Note Payable - Related Party (D
Note Payable - Related Party (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Principal | $ 625,000 | $ 625,000 |
DMRJ Group [Member] | ||
Related Party Transaction [Line Items] | ||
Principal | 15,554,552 | 14,610,492 |
Interest payable | 9,535,118 | 7,239,610 |
Total | $ 25,089,670 | $ 21,850,102 |
Note Payable - Related Party _2
Note Payable - Related Party (Details Textual) - USD ($) | 1 Months Ended | 11 Months Ended | 12 Months Ended | ||||
Dec. 29, 2016 | Dec. 22, 2016 | Dec. 29, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 19, 2018 | Mar. 08, 2018 | |
DMRJ Group [Member] | |||||||
Note Payable - Related Party (Textual) | |||||||
Ownership percentage of stock on a fully-diluted basis | 75.00% | 75.00% | |||||
Convertible shares of common stock | 47,211,002 | 47,211,002 | |||||
Total amount drawn | $ 600,000 | ||||||
Total funds drawn from DMRJ Group and its affiliates | $ 2,470,000 | ||||||
Subsequent Event [Member] | DMRJ Group [Member] | |||||||
Note Payable - Related Party (Textual) | |||||||
Settled for payment | $ 625,000 | ||||||
Investment Agreement [Member] | |||||||
Note Payable - Related Party (Textual) | |||||||
Additional funding amount | $ 600,000 | ||||||
Convertible Notes Payable [Member] | DMRJ Group [Member] | |||||||
Note Payable - Related Party (Textual) | |||||||
Percentage of interest rate | 15.00% | ||||||
Total amount drawn | $ 2,470,000 | ||||||
Notes payable due date | Oct. 31, 2016 | ||||||
Loan payment | $ 900,000 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Asset Retirement Obligation [Abstract] | ||
Asset retirement obligation, beginning of year | $ 974,109 | $ 901,597 |
Accretion expense | 72,512 | 72,512 |
Asset retirement obligation, end of year | $ 1,046,621 | $ 974,109 |
Asset Retirement Obligation (_2
Asset Retirement Obligation (Details Textual) | 12 Months Ended |
Dec. 31, 2017 | |
Maximum [Member] | |
Asset Retirement Obligation (Textual) | |
Risk free interest rate | 10.00% |
Estimated useful lives of mine property | 12 years |
Minimum [Member] | |
Asset Retirement Obligation (Textual) | |
Risk free interest rate | 8.00% |
Estimated useful lives of mine property | 5 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax asset: | ||
Net operating loss carryforward | $ 5,482,000 | $ 7,742,000 |
Equipment impairment | 37,000 | 61,000 |
Exploration costs | 113,000 | 233,000 |
Financing costs | 1,000 | (16,000) |
Other | 76,000 | 107,000 |
Total deferred tax assets | 5,709,000 | 8,127,000 |
Valuation allowance | (5,709,000) | (8,127,000) |
Net deferred tax assets |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes [Abstract] | ||
Amount computed using the statutory rate | $ (1,387,000) | $ (1,419,000) |
Other | 900 | |
Impact of change in statutory tax rate | 3,805,000 | |
Change in valuation allowance | (2,418,000) | 1,418,100 |
Total income tax provision (benefit) | ||
Amount computed using the statutory rate, percentage | (35.00%) | (35.00%) |
Other, percentage | ||
Impact of change in statutory tax rate, percentage | 96.00% | |
Change in valuation allowance, percentage | (61.00%) | 35.00% |
Total income tax provision (benefit), percentage |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Taxes (Textual) | ||
Federal net operating loss carry forwards | $ 26.1 | |
Operating loss carryforwards expiration date | Expire in fiscal years ending 2028 through 2037. | |
Federal income tax returns examination, description | The Company's federal income tax returns for fiscal years 2014 through 2017 remain open and subject to examination. | |
Percentage of deferred tax assets | 100.00% | 100.00% |
Net deferred tax asset reduced | $ 3.8 | |
Minimum [Member] | ||
Income Taxes (Textual) | ||
Percentage of re-measurement of federal deferred tax assets | 21.00% | |
Maximum [Member] | ||
Income Taxes (Textual) | ||
Percentage of re-measurement of federal deferred tax assets | 35.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Jan. 18, 2017 | Nov. 30, 2016 | Nov. 15, 2016 | |
Related Party Transactions (Textual) | |||||
Accrued compensation | $ 709,577 | $ 495,808 | |||
Accrued interest payable | 277,500 | 187,500 | |||
Short-term loan | 34,500 | ||||
Rick Havenstrite [Member] | |||||
Related Party Transactions (Textual) | |||||
Accounts payable | 39,367 | 39,367 | |||
Additional, short-term loan totaling | 9,500 | $ 9,500 | |||
Accrued compensation | 491,692 | 372,692 | |||
Other Directors [Member] | |||||
Related Party Transactions (Textual) | |||||
Accrued compensation | 44,000 | 9,231 | |||
RMH Overhead, LLC [Member] | |||||
Related Party Transactions (Textual) | |||||
Rent expense for rental of office space | 12,000 | 8,000 | |||
Accounts payable | 16,750 | 17,750 | |||
RMH Overhead, LLC [Member] | Rick Havenstrite [Member] | |||||
Related Party Transactions (Textual) | |||||
Rent expense for rental of office space | 12,000 | 12,000 | |||
Marianne Havenstrite [Member] | |||||
Related Party Transactions (Textual) | |||||
Accrued compensation | 173,885 | 113,885 | |||
Stuart Havenstrite [Member] | |||||
Related Party Transactions (Textual) | |||||
Recognized general project cost expense | $ 0 | $ 10,627 | |||
West C Street [Member] | |||||
Related Party Transactions (Textual) | |||||
Accrued interest payable | $ 438 | ||||
Short-term loan | $ 25,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2012 | Sep. 30, 2010 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies (Textual) | ||||||
Base annual salary | $ 120,000 | |||||
Interest and penalties | $ 24,859 | $ 76,279 | $ 86,302 | |||
Proceeds from the sale of stock | $ 130,000 | |||||
Conversion amounts due to shareholders | $ 151,406 | |||||
Tooele County [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Interest and penalties | $ 187,440 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 06, 2018 | Mar. 08, 2018 | Oct. 18, 2018 | Jul. 03, 2018 | Jun. 06, 2018 | Feb. 28, 2018 | Feb. 23, 2018 | Dec. 31, 2017 | Aug. 07, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Events (Textual) | |||||||||||
Convertible debt holders shares | 4,500,000 | ||||||||||
Convertible debt received | $ 625,000 | ||||||||||
Annual non-performance payments trust | $ 50,000 | $ 50,000 | $ 50,000 | ||||||||
Short term loan | $ 34,500 | ||||||||||
Convertible debt [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Additional aggregate convertible debt | $ 500,000 | ||||||||||
Subsequent Event [Member] | Stock Offering [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Convertible debt holders shares | 4,500,000 | ||||||||||
Convertible debt received | $ 625,000 | ||||||||||
Sale of common stock per share | $ 0.40 | ||||||||||
Sale of common stock shares raised | $ 1,600,000 | ||||||||||
Expired date | Jun. 30, 2018 | ||||||||||
Forecast [Member] | Stock Offering [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Shares of stock issued | 2,125,000 | ||||||||||
Funds raised through offering stock | $ 850,000 | ||||||||||
Forecast [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Option authorized | 2,400,000 | ||||||||||
Aggregate fair market value of the common stock becoming exercisable | $ 100,000 | ||||||||||
Grant of an aggregate options | 2,400,000 | ||||||||||
Exercisable per share | $ 0.40 | ||||||||||
Expired date | Feb. 23, 2023 | ||||||||||
Forecast [Member] | Revenue [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Proceeds received an advance | $ 68,785 | ||||||||||
Percentage of revenue product | 90.00% | ||||||||||
Forecast [Member] | Convertible debt [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
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 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. | ||||||||||
Note payable payments terms | Three of the seven monthly payments had been made. At the conclusion of the seven payments, the crushing equipment will be owned by the Company. | ||||||||||
Short term loan | $ 100,000 | ||||||||||
Short term loan terms | A short-term loan of $100,000 was received from one of the two convertible debt holders. Terms are 10% interest and a 2% loan initiation fee. This loan has not yet been paid. | ||||||||||
Forecast [Member] | Note payable - Wheeler Machinery [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Payment of first seven month rental equipment | $ 39,009 | ||||||||||
Rental equipment to a purchase contract | $ 273,067 | ||||||||||
Forecast [Member] | Rick Havenstrite [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Grant of an aggregate options | 1,000,000 | ||||||||||
Forecast [Member] | Howard Crosby [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Grant of an aggregate options | 1,000,000 | ||||||||||
Forecast [Member] | John Ryan [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Grant of an aggregate options | 200,000 | ||||||||||
Forecast [Member] | Linde Havenstrite [Member] | 2018 Stock Incentive Plan [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Grant of an aggregate options | 200,000 | ||||||||||
Forecast [Member] | H and H Metals Corp [Member] | |||||||||||
Subsequent Events (Textual) | |||||||||||
Shares of stock issued | 1,250,000 |