Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Dec. 19, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Desert Hawk Gold Corp. | |
Entity Central Index Key | 0001168081 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | No | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 26,631,603 | |
Entity Filer Number | 333-169701 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | NV |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash | $ 7,185 | $ 4,212 |
Inventories (Note 6) | 363,708 | 371,778 |
Prepaid expenses and other current assets | 46,785 | 102,251 |
Total Current Assets | 417,678 | 478,241 |
INVENTORIES, non-current (Note 6) | 1,630,858 | 1,686,592 |
PROPERTY AND EQUIPMENT, net (Note 7) | 3,523,588 | 3,621,436 |
MINERAL PROPERTIES AND INTERESTS, net (Note 8) | 1,205,387 | 1,205,387 |
RECLAMATION BONDS (Note 5) | 753,230 | 753,054 |
TOTAL ASSETS | 7,530,741 | 7,744,710 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 696,116 | 679,580 |
Accrued liabilities-officer and other wages (Note 15) | 859,039 | 709,577 |
Interest payable - related parties (Notes 9 and 10) | 422,722 | 317,436 |
Convertible debt - related parties (Note 9) | 1,350,000 | 1,278,000 |
Obligation under capital lease - related party (Note 10) | 68,180 | 84,110 |
Short term note payable - related parties (Note 11) | 100,000 | |
Notes payable - equipment, current portion (Note 12) | 407,595 | 452,214 |
Notes payable - related parties (Note 13) | 625,000 | |
Total Current Liabilities | 3,903,652 | 4,145,917 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation (Note 14) | 1,101,005 | 1,046,621 |
Obligation under capital lease - related party (Note 10) | 24,464,670 | |
Notes payable - equipment (Note 12) | 16,817 | |
Total long-term liabilities | 1,101,005 | 25,528,108 |
TOTAL LIABILITIES | 5,004,657 | 29,674,025 |
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 4) | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 20,581,603 and 13,956,603 shares issued and outstanding | 20,453 | 13,828 |
Additional paid-in capital | 7,000,655 | 9,143,418 |
Accumulated deficit | (4,495,024) | (31,088,143) |
Total Stockholders’ (Deficit) | 2,526,084 | (21,929,315) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | 7,530,741 | 7,744,710 |
Series A Preferred Stock | ||
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 4) | ||
Preferred stock, value | 958 | |
Series A-1 Preferred Stock | ||
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 4) | ||
Preferred stock, value | ||
Series A-2 Preferred Stock | ||
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 4) | ||
Preferred stock, value | 180 | |
Series B Preferred Stock | ||
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 4) | ||
Preferred stock, value | $ 444 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 20,581,603 | 13,956,603 |
Common stock, shares outstanding | 20,581,603 | 13,956,603 |
Series A Preferred Stock [Member] | ||
Preferred stock, shares issued | 0 | 958,033 |
Preferred stock, shares outstanding | 0 | 958,033 |
Series A One Preferred Stock [Member] | ||
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Series A Two Preferred Stock [Member] | ||
Preferred stock, shares issued | 0 | 180,000 |
Preferred stock, shares outstanding | 0 | 180,000 |
Series B Preferred Stock [Member] | ||
Preferred stock, shares issued | 0 | 444,530 |
Preferred stock, shares outstanding | 0 | 444,530 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUE: | ||||
Concentrate sales | $ 211,812 | $ 80,485 | $ 211,812 | $ 162,763 |
EXPENSES: | ||||
General project costs | 6,810 | 67,997 | 763,194 | 435,884 |
Consulting | 1,498 | 36,289 | ||
Officers and directors fees | 63,000 | 58,000 | 189,000 | 185,537 |
Legal and professional | 39,736 | 14,952 | 123,878 | 55,009 |
General and administrative | 39,114 | 49,215 | 640,788 | 192,827 |
Depreciation and amortization | 107,755 | 110,954 | 313,346 | 322,182 |
Total Expenses | 256,415 | 302,616 | 2,030,206 | 1,227,728 |
OPERATING LOSS | (44,603) | (222,131) | (1,818,394) | (1,064,965) |
OTHER INCOME (EXPENSE) | ||||
Gain on extinguishment of DMRJ debt (Note 13 ) | 24,916,561 | |||
Interest and other income | 57 | 12 | 176 | 36 |
Interest and financing expense | (11,649) | (16,558) | (39,103) | (52,273) |
Interest expense - related party | (35,577) | (621,440) | (534,841) | (1,816,781) |
Total Other Income (Expense) | (47,169) | (637,986) | 24,342,793 | (1,869,018) |
INCOME (LOSS) BEFORE INCOME TAXES | (91,772) | (860,117) | 22,524,399 | (2,933,983) |
INCOME TAXES | ||||
NET INCOME ( LOSS) | (91,772) | (860,117) | 22,524,399 | (2,933,983) |
DEEMED CAPITAL CONTRIBUTION ON EXTINGUISHMENT OF PREFERRED STOCK (NOTE 13) | 4,068,720 | |||
NET INCOME ( LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (91,772) | $ (860,117) | $ 26,593,119 | $ (2,933,983) |
BASIC NET INCOME (LOSS) PER SHARE | $ 0 | $ (0.06) | $ 1.42 | $ (0.21) |
DILUTED NET INCOME (LOSS) PER SHARE | $ 0 | $ (0.06) | $ 1.21 | $ (0.21) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC | 20,581,603 | 13,656,603 | 18,696,072 | 13,656,603 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED | 20,581,603 | 13,656,603 | 22,078,058 | 13,656,603 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 22,524,399 | $ (2,933,983) |
Adjustments to reconcile net income (loss) to net cash used by operating activities: | ||
Depreciation and amortization | 313,346 | 322,182 |
Gain on extinguishment of DMRJ debt (Note 13) | (24,916,561) | |
Stock based compensation | 456,000 | |
Accretion of asset retirement obligation | 54,384 | 54,384 |
Changes in operating assets and liabilities: | ||
Inventories | 63,804 | 221,093 |
Prepaid expenses and other current assets | 55,466 | (5,066) |
Accounts payable and accrued expenses | 112,605 | (102,412) |
Accrued liabilities - officer wages | 149,462 | 150,769 |
Interest payable - related parties | 105,286 | 87,928 |
Interest payable - DMRJ | 451,891 | 1,707,418 |
Net cash used by operating activities | (629,918) | (939,873) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (38,500) | (30,678) |
Increase in reclamation bonds | (176) | (169) |
Net cash used by investing activities | (38,676) | (30,847) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock | 1,475,000 | |
Proceeds from (payment on) short term note payable | (34,500) | |
Proceeds from short term notes payable - related parties | 100,000 | 944,060 |
Proceeds from convertible debt - related parties | 72,000 | 178,000 |
Payment on note payable - DMRJ | (625,000) | |
Payment of obligation under capital lease - related party | (15,930) | (88,065) |
Payment of notes payable - equipment | (334,503) | (651,350) |
Net cash provided by financing activities | 671,567 | 348,145 |
NET INCREASE (DECREASE) IN CASH | 2,973 | (622,575) |
CASH, BEGINNING OF PERIOD | 4,212 | 657,944 |
CASH, END OF PERIOD | 7,185 | 35,369 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Extinguishment of preferred stock (Note 13) | 4,068,720 | |
Equipment acquired with notes payable - equipment (Note 12) | 141,631 | |
Accounts payable settled with notes payable - equipment (Note 12) | $ 131,436 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Desert Hawk Gold Corp. (the "Company"), a Nevada Corporation, was incorporated on November 5, 1957. The Company commenced its current 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 $7,200,000 from sales of gold and other metals concentrate have been received through December 31, 2018. Ongoing undercapitalization has continued to hamper the Company's ability to operate. Due to lack of funding, the Company has been temporarily shut down since third quarter of 2017. Subsequent to year end, on March 7, 2019, the Company successfully finalized a lending agreement with PDK Utah Holdings, LLC that enabled production to resume in 2019. See Note 19. On March 8, 2018, the Company successfully finalized an agreement with the trustees of DMRJ Group ("DMRJ") which eliminated the note and interest payable balance of $25,541,561 due to DMRJ in exchange for $625,000. In addition, all outstanding shares of preferred stock held by DMRJ were retired and cancelled. See Notes 4 and 13. |
Revision of Previously Issued F
Revision of Previously Issued Financial Statements for Immaterial Misstatements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS FOR IMMATERIAL MISSTATEMENTS | NOTE 2 – REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS FOR IMMATERIAL MISSTATEMENTS In November 2018, management determined inventory was overstated since the beginning of production in 2014 based on an error in estimating the gold ounces contained in the ore on the leach pad. The valuation of inventory requires management to develop estimates of recoverable gold on the leach pad. Factors considered in this estimate include 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 miscalculation was primarily due to usage of an incorrect bench height measurement which resulted in an overstatement of tonnage contained in the pit. The accumulated overstatement of inventory was $1,263,566 through December 31, 2017. In addition, as a result of the change in estimated gold ounces, amortization of mineral properties was also miscalculated because it is based on units of production. Mineral properties were understated by $90,712 at December 31, 2017. Management assessed the materiality of the effect of the errors on our prior annual financial statements, both quantitatively and qualitatively, in accordance with the Securities and Exchange Commission's ("SEC") Staff Accounting Bulletin ("SAB") No. 99, "Materiality" and SAB No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements." We concluded the error was not material to any previously issued financial statements. Consequently, we will correct this error prospectively and revise our financial statements when the balance sheets, statements of operations and cash flows for such prior periods are included in future filings ("the Revisions"). The Revisions have no net impact on revenue or net cash provided by operating activities as previously reported. The adjustments at September 30, 2018 to record the cumulative amounts related to this overstatement for prior periods through September 30, 2017 were: At September 30, 2017 As previously reported Adjustment As Revised Balance sheet Inventories, current portion $ 500,000 $ - $ 500,000 Current assets 673,182 - 673,182 Inventories, long term 3,730,190 (1,270,506 ) 1,477,968 Mineral properties and interest, net 1,114,675 1,205,387 Total assets 9,019,444 (1,270,506 ) 7,839,650 Accumulated deficit (28,955,189 ) (1,270,506 ) (30,134,983 ) Total shareholders' equity (deficit) (19,808,361 ) (1,270,506 ) (20,988,155 ) Total liabilities and shareholders' equity (deficit) 9,019,444 (1,270,506 ) 7,839,650 Three month period ended Statement of operations General project costs 74,938 (6,941 ) 67,997 Net income (loss) (867,058 ) 6,941 (860,117 ) Basic and diluted income (loss) per share (0.06 ) - (0.06 ) Nine month period ended September 30, 2017 Statement of operations General project costs 502,435 (66,551 ) 435,884 Net income (loss) (3,000,534 ) 66,551 (2,933,983 ) Basic and diluted income (loss) per share (0.22 ) 0.01 (0.21 ) Statement of cash flows Net income (loss) (3,000,534 ) (66,551 ) (2,933,983 ) Change in inventory (154,542 ) 66,551 (221,093 ) Cash flow from operating activities (939,873 ) - (939,873 ) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In the opinion of management, the accompanying unaudited interim balance sheets and statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of September 30, 2018, and the results of its operations and its cash flows for the nine months ended September 30, 2018 and 2017. The operating and financial results for the Company for the nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America ("U.S. GAAP") and are presented in U.S. dollars. These unaudited interim financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017 filed with the Securities and Exchange Commission on October 26, 2018. Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees All transactions in which goods or services are received for the issuance of shares of the Company's common stock or options to purchase shares of common stock are accounted for based on the fair value of the goods or services received or the fair value of the equity interest issued, whichever is more reliably measurable. The Company estimates the fair value of stock-based compensation using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected life"), the estimated volatility of the Company's common stock price over the expected term ("volatility"), the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of the fair value of stock-based compensation. 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; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses. Revenue from the sale of silver is accounted for as by-product and is deducted from production costs. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of September 30, 2018, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months. Revenue Recognition Sales of gold concentrate sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of the Company's concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to the estimated settlement metals prices until final settlement by the customer. Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. See Note 16. Earnings (loss) 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. Three months ended Nine months ended 2018 2017 2018 2017 Net income (loss) $ (91,772 ) $ (860,117 ) $ 22,524,399 (2,933,983 ) Deemed capital contribution on extinguishment of preferred stock - - 4,068,720 - Net income (loss) available to common shareholders - basic (91,772 ) (860,117 ) 26,593,119 (2,933,983 ) Interest expense on convertible notes payable -related parties - - 55,561 - Net income (loss) available to common shareholders - diluted $ (91,772 ) $ (860,117 ) $ 26,648,680 $ (2,073,868 ) Weighted average shares outstanding - basic 20,581,603 13,656,603 18,696,072 13,656,603 Dilutive shares – convertible notes payable – related parties - - 3,381,986 - Weighted average shares outstanding - diluted 20,581,603 13,656,603 22,078,058 13,656,603 Basic income (loss) per share $ (0.00 ) $ (0.06 ) $ 1.42 $ (0.21 ) Diluted income (loss) per share $ (0.00 ) $ (0.06 ) $ 1.21 $ (0.21 ) Excluded in diluted income (loss) per share as inclusion would have an antidilutive effect: Convertible debt – related parties 3,381,986 3,036,498 - 3,036,498 Convertible preferred stock 47,211,002 - 47,211,002 Stock options 2,400,000 - 2,400,000 - 5,781,986 50,247,500 2,400,000 50,247,500 Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit of $4,495,024 through September 30, 2018 and negative working capital of $3,485,974 which raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Although production has restarted in 2019, 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. Although management has procured funding through a lender (Note 19) they intend 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 Accounting Standards Updates Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition, replacing guidance previously codified in Subtopic 605-10 Revenue Recognition-Overall. The new ASU establishes a 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 adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospective transition approach. The Company performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it does not change the timing of revenue recognition or amounts of revenue recognized compared to how it recognized revenue under previous policies. Revenues involve a very small number of types of contracts and customers. In addition, revenue contracts do not involve multiple types of performance obligations. Concentrate sales involve variable consideration as they are subject to changes in metals prices between the time of shipment and their final settlement. However, the Company is able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and values are adjusted each period until final settlement. Also, it is unlikely a significant reversal of revenue for any one concentrate lot will occur. Adoption of ASU No. 2014-09 involves additional disclosures, where applicable, concerning (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. See Note 16 for information on the Company's sales of products. 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 of 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 adopted this update as of January 1, 2018 and there were no material impacts on its financial statements. 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 adopted this update as of January 1, 2018, and there were no material impacts on its financial statements. 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 Company adopted this update as of January 1, 2018. It will apply the applicable provisions of the update to any future acquisitions. Accounting Standards Updates to Become Effective in Future Periods 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. Upon implementation of the new guidance, the Company will be required to recognize a liability and right-of-use asset for its operating leases. The Company has elected the transition option to apply the new guidance at the effective date without adjusting comparative periods presented. The Company's operating leases, which will be impacted upon adoption, are not significant and management anticipates no material impact upon adoption on January 1, 2019. 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 | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Capital stock | NOTE 4 – 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. 2018 Activity On March 8, 2018, the Company sold 4,500,000 shares of common stock to the convertible debt holders for $625,000 in cash and several concessions as to the convertibility, due dates and default provisions on their outstanding debt. See Note 9. During the nine months ended September 30, 2018, the Company also sold 2,125,000 shares of its common stock at $0.40 per share for cash proceeds of $850,000. Preferred Stock The Company’s Articles of Incorporation authorized 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. At December 31, 2017, DMRJ Group beneficially owned 77% of the Company on a fully diluted basis. On March 8, 2018, the Company finalized an agreement with the trustees of DMRJ, who owned all of the Series A, A-2 and Series B outstanding preferred stock. This agreement discharged all of the debt owed by the Company to DMRJ and its related affiliates and returned all of the shares of preferred stock to the Company in exchange for $625,000. The Company then cancelled all of the preferred shares of stock. As a result, DMRJ relinquished all ownership in the Company. See Note 13. |
Reclamation Bonds
Reclamation Bonds | 9 Months Ended |
Sep. 30, 2018 | |
Reclamation Bonds [Abstract] | |
Reclamation Bonds | NOTE 5 – RECLAMATION BONDS At September 30, 2018 and 2017, the Company has a surety bond of $674,000 in an escrow account with the bonding company for reclamation of its property. This escrowed amount is held at Bank of New York, Mellon for the Company’s benefit. It may not be released to the Company without the prior consent of the surety bondholder. The escrowed amount does not earn interest. Total reclamation bonds posted at September 30, 2018 and December 31, 2017 are $753,230 and $753,054, 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. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 6 – INVENTORIES The following table provides the components of inventories: September 30, December 31, (revised) Ore on leach pad $ 1,994,566 $ 2,058,370 Total 1,994,566 2,058,370 Less: current portion (363,708 ) (371,778 ) Non-current inventories $ 1,630,858 $ 1,686,592 Inventories are allocated between current and non-current based on estimated expected sales for the subsequent fiscal year. Inventories at September 30, 2018 and December 31, 2017 were valued at net realizable value because costs were greater than the market price for gold at both period-end dates. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 7 – PROPERTY AND EQUIPMENT The following is a summary of property and equipment at September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 Equipment $ 3,252,007 $ 2,919,165 Furniture and fixtures 6,981 6,981 Electronic and computerized equipment 52,874 52,874 Vehicles 108,089 67,115 3,419,951 3,046,135 Less accumulated depreciation (1,906,584 ) (1,434,921 ) 1,513,367 1,611,214 Kiewit property facilities 2,497,435 2,497,436 Less accumulated amortization (487,214 ) (487,214 ) 2,010,221 2,010,222 Total $ 3,523,588 $ 3,621,436 For the Kiewit property facilities, amortization expense is based on units of production which resulted in no amortization in the nine months ended September 30, 2018 and 2017 due to the lack of production. |
Mineral Properties and Interest
Mineral Properties and Interests | 9 Months Ended |
Sep. 30, 2018 | |
Mineral Industries Disclosures [Abstract] | |
Mineral Properties and Interests | NOTE 8 – MINERAL PROPERTIES AND INTERESTS Mineral properties and interests as of September 30, 2018 and December 31, 2017 are as follows: September 30, December 31, Initial lease fee Kiewit and Cactus Mill $ 600,000 $ 600,000 Asset retirement obligation Kiewit Site 789,026 789,026 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 Total 815,939 815,939 Accumulated amortization (210,552 ) (210,552 ) 605,387 605,387 Total $ 1,205,387 $ 1,205,387 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. As part of the Pre-Paid Forward Gold Purchase Agreement finalized in March 2019, the number of claims held was reduced to a total of 76 claims. See Note 19. In 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. Royalty expense of $11,360 and $9,785 was recognized during the nine months ended September 30, 2018 and 2017, respectively. Amortization expense is based on units of production resulting in no amortization in the nine-month periods ended September 30, 2018 and 2017, due to the lack of production. As part of the Pre-Paid Forward Gold Purchase Agreement finalized in March 2019, these royalties were bought out by the Company from Clifton Mining Company and two other minority royalty holders. During first quarter of 2019, the Company and Clifton Mining Company entered into a Second Amended and Restated Lease Agreement (the “Amended Lease”). Under the terms of this Amended Lease, the Company relinquished its leasehold interest in all but 10 of the patented mining claims, for which it retained only the surface rights, and 66 of the unpatented lode mining claims previously held by the Company. See Note 19. |
Convertible Debt _ Related Part
Convertible Debt – Related Parties | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt – Related Parties | NOTE 9 – CONVERTIBLE DEBT – RELATED PARTIES 2009 Convertible Notes: 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 were 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. Subsequent to September 30, 2018, the Company failed to repay the notes on the November 2018 maturity date. The Company issued shares of common stock valued at $.40 per share based on the cash price of common stock sales during 2018 which was recognized as financing expense. The due date of the note was extended to May 31, 2019. Interest has not been paid since November 2014. Per the terms of the notes, interest on these notes is not convertible to common stock. On February 28, 2018, the notes 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 waived the default provision in the notes for past due interest. In addition, as part of the agreement, the convertible feature of the notes was removed. 2016 Convertible Notes: On October 14, 2016, the Company issued additional convertible promissory notes to the convertible debt holders for a total of $250,000. The notes bore interest at 10% per annum and were due in full on September 30, 2018. The notes were convertible at a rate of $0.25 per share. These notes were amended in February 2018 to extend the due date of the notes and the accrued interest to May 31, 2019. Interest on these notes is convertible to common stock. 2017 Convertible Notes: 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. 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. On February 28, 2018, these notes were amended to postpone the maturity date and interest payment date to May 31, 2019. Accrued interest payable to related parties on the above notes payable was $422,722 and $317,436 at September 30, 2018 and December 31, 2017, respectively. Interest expense recognized on these loans was $71,260 and 57,398 during the nine-month periods ended September 30, 2018 and 2017, respectively. These loans were paid in full, including accrued interest, on March 7, 2019. See Note 19. |
Obligation Under Capital Lease
Obligation Under Capital Lease - Related Party | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
OBLIGATION UNDER CAPITAL LEASE - RELATED PARTY | NOTE 10 – 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. At September 30, 2018 and 2017, equipment includes assets under capital lease amounting to $185,618 and $185,618, respectively. The equipment is being amortized over the estimated useful life of the equipment. Accumulated amortization at September 30, 2018 and December 31, 2017 was $59,663 and $39,775. At September 30, 2018, the estimated future minimum lease payments under the capital lease was $72,000 of which $3,820 is implied interest. The initial lease term was for 24 months, which expired June 20, 2018. The eight future minimum lease payments of $9,000 each plus financing costs were overdue at September 30, 2018. These lease payments were paid in full, including accrued interest and late fees, in March 2019. See Note 19. |
Short-Term Notes Payable _ Rela
Short-Term Notes Payable – Related Parties | 9 Months Ended |
Sep. 30, 2018 | |
Short term Notes Payable Related Parties [Abstract] | |
Short-Term Notes Payable – Related Parties | NOTE 11 – SHORT-TERM NOTES PAYABLE – RELATED PARTIES In the quarter ending September 30, 2018, the Company entered into a short-term note payable with one of the convertible debt holders (See Note 9) for a total of $100,000. The note bears interest at 10%, had a 2% loan initiation fee, and is due in full on March 31, 2019. Accrued interest payable to related parties on this note at September 30, 2018 and September 30, 2017 was $2,438 and nil, respectively. Interest expense recognized on these notes was $2,438 and nil during the nine-month periods ended September 30, 2018 and 2017, respectively. This short-term note was repaid in full to the lender, including 10% interest and a 2% loan initiation fee, in March 2019. See Note 19. |
Notes Payable _ Equipment
Notes Payable – Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Notes Payable - Equipment [Abstract] | |
NOTES PAYABLE – EQUIPMENT | NOTE 12 – NOTES PAYABLE – EQUIPMENT The following is a summary of the equipment notes payable: September 30, December 31, 2017 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 30,893 $ 47,154 Note payable to CAT Financial, collateralized by used crushing equipment, due in 9 monthly installments of $39,009. See below. 195,067 - Note payable to CAT Financial, collateralized by used mining equipment due in 36 monthly installments of varying amounts including interest at 4.68%. 117,002 266,675 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,674 including interest at 2.99%. 64,633 149,687 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%. - 5,515 407,595 469,031 Current portion (407,595 ) (452,214 ) Long term portion $ - $ 16,817 In November 2016, five pieces of mining equipment financed by CAT Financial were repossessed by CAT. The note payable due to CAT at the time of disposition was $960,585. The loss on impairment of equipment in the amount of $147,214 was recognized in the 2016. On July 31, 2017, a new agreement was made with Wheeler Machinery and CAT Financial for the return of four pieces of this equipment to the Company. The equipment temporarily remained in the possession of Wheeler Machinery and a new payment schedule was established. In May 2018, a note for the remaining payments due for $273,067 was formalized. Of this amount, $141,631 represented the value of the equipment and the remaining amount of $131,436 was to settle accounts payable for past due rent. The equipment was refurbished and returned to the site in 2019. All of the above notes were paid in full in March 2019 as part of funding from a Pre-Paid Forward Gold Purchase Agreement. See Note 19. |
Note Payable - Dmrj
Note Payable - Dmrj | 9 Months Ended |
Sep. 30, 2018 | |
Note Payable - Related Party [Abstract] | |
NOTE PAYABLE - DMRJ | NOTE 13 – NOTE PAYABLE - DMRJ In July 2010, the Company entered into an Investment Agreement with DMRJ. The Agreement had been modified numerous times and operated under the Fourteenth Amendment to the Investment Agreement dated December 22, 2016. The Amendments provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement. At December 31, 2017, DMRJ beneficially owned approximately 77% 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 4). The total due to DMRJ at September 30, 2018 and December 31, 2017 is as follows: September 30, December 31, 2018 2017 Principal $ - $ 15,554,552 Interest payable - 9,535,118 $ - $ 25,089,670 In the third quarter of 2016, control of the management of DMRJ was given to court appointed trustees of the two major funds of Platinum Partners. On March 8, 2018, the Company finalized an agreement with the trustees to discharge all of the amounts owed by the Company to DMRJ and to extinguish all of DMRJ's shares of the Company's preferred stock in exchange for $625,000. On the date of the agreement, the principal balance of the note was $15,554,552 and accrued interest payable was $9,987,009 for a total balance due of $25,541,561. As a result of the transaction, the Company recognized a gain on extinguishment of debt of $24,916,561. All of the preferred stock of the Company that had been issued to DMRJ in prior years was extinguished. The preferred stock was originally recorded for a total value $4,068,720. As a result of the extinguishment, the Company adjusted accumulated deficit for the value of the preferred stock. This amount is considered a capital contribution and has been added to net income attributable to common stockholders in the calculation of earnings per share for the nine months ended September 30, 2018. After the above transactions, DMRJ is no longer a shareholder (beneficially or otherwise) of the Company. The existing convertible debt holders funded the $625,000 and modifications to their existing convertible note terms were made in exchange for 4,500,000 shares of the Company's common stock. See Notes 4 and 9. |
Asset Retirement Obligation
Asset Retirement Obligation | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligation | NOTE 14 –ASSET RETIREMENT OBLIGATION Changes in the asset retirement obligation for the nine months ended September 30, 2018 and 2017 are as follows: September 30, September 30, 2018 2017 Asset retirement obligation, beginning of period $ 1,046,621 $ 974,109 Changes to estimated costs and timing to reclaim - - Accretion expense 54,384 54,384 Asset retirement obligation, end of period $ 1,101,005 $ 1,028,493 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15 – RELATED PARTY TRANSACTIONS In addition to transactions disclosed in Notes 9, 10 and 13, the Company had the following related party transactions. The Company recognized rent expense for rental of office space of $9,000 for the nine months ended September 30, 2018 and 2017, 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 $9,000 in current rents during the nine months ended September 30, 2018 and 2017, respectively, in addition to $1,000 in rents received in the period ended September 30, 2018 from prior years, leaving a total of $15,750 and $16,750 remaining in accounts payable at September 30, 2018 and December 31, 2017, respectively, all of which represents amounts due from prior years. At September 30, 2018 and December 31, 2017, accrued compensation of $859,039 and $709,577 was due to directors and officers. Of the amounts accrued at September 30, 2018 and December 31, 2017, accrued compensation of $563,231 and $491,693 is due to Rick Havenstrite. In addition, $79,000 and $44,000 was due to other directors at September 30, 2018 and December 31, 2017, respectively. The amount due at December 31, 2018 was paid in full in March 2019. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUE RECOGNITION | NOTE 16 – REVENUE RECOGNITION The Company's product consists of an unrefined gold concentrate, which is then refined offsite to become doré. For the three and nine months ended September 30, 2018, the Company had sales of gold concentrate in the amount of $211,812, all of which sold to H & H Metals. In the nine months ended September 30, 2017, we had gold concentrate sales of $162,763, all of which sold directly to Asahi. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer, and the transaction price can be determined or reasonably estimated. Sales and accounts receivable for sales are recorded net of charges for treatment and other charges which represent components of the transaction price. Charges are estimated by management upon transfer of risk based on contractual terms, and actual charges typically do not vary materially from management's estimates. 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. Costs charged by the refiner include fixed treatment, refining and costs per ton of concentrate and may include penalty charges for other metal content above a negotiated baseline as well as excessive moisture. Management has determined the performance obligation is met and title is transferred when the Company delivers the concentrate to the customer because, at that time, (i) legal title is transferred to the customer, (ii) the customer has accepted the concentrate lot and obtained the ability to realize all of the benefits from the product, (iii) the concentrate content specifications are known, have been communicated to the customer, and the customer has the significant risks and rewards of ownership to it, and (iv) we have the right to payment for the concentrate. The performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer. Sales of products by metal for the nine-month periods ended September 30, 2018 and September 30, 2017 were as follows: Three months ended Nine months ended 2018 2017 2018 2017 Gold $ 211,812 $ 80,485 $ 211,812 162,763 Silver (by-product) 2,715 2,559 2,715 4,860 Less: Smelter and refining charges (18,953 ) (1,726 ) (18,953 ) (5,039 ) Total $ 195,574 $ 81,318 $ 195,574 $ 162,584 At September 30, 2018 and December 31, 2017, we did not have a gold sales receivable balance. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 17 – STOCK-BASED COMPENSATION The Company has reserved 2,400,000 shares under its 2018 Stock Incentive Plan (the "Plan"). The Plan was adopted by the board of directors on March 28, 2018, retroactive to February 23, 2018, as a vehicle for the recruitment and retention of qualified employees, officers, directors, consultants, and other service providers. The Plan is administered by the Board of Directors. The Company may issue, to eligible persons, restricted common stock, incentive and non-statutory options, stock appreciation rights and restricted stock units. The terms and conditions of awards under the Plan will be determined by the Board of Directors. On February 23, 2018, the Board approved the grant of an aggregate of 2,400,000 non-statutory 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 The options were fully vested on the date of grant. The fair value of each option award is estimated using the Black-Scholes valuation model. Assumptions used in calculating the fair value during the nine-month period ended September 30, 2018 were as follows: Weighted Annual dividend yield - Expected life (years) 5.0 Risk-free interest rate 2.54 % Expected volatility based on comparable peers 51.2 % Common stock price based on most recent sale of common stock for cash $ 0.40 Stock based compensation cost for the nine-month period ended September 30, 2018 was $456,000, which was included in general and administrative expenses. Option activity for the nine-month period ended September 30, 2018 consists of the following: Stock Options Weighted Weighted Outstanding, December 31, 2017 - - - Issued 2,400,000 $ 0.40 5.0 Exercised -0- - - Expired -0- - Outstanding and exercisable, September 30, 2018 2,400,000 $ 0.40 4.4 No options were issued prior to the nine-month period ended September 30, 2018. The options have intrinsic value of nil at September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 – COMMITMENTS AND CONTINGENCIES In addition to commitments disclosed in Note 8, 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 September 30, 2018, $26,125 was due for 2017, $79,917 was due for 2016, and $90,013 was due for 2015 including interest and penalties, for a total of $196,055 due to Tooele County at September 30, 2018. At September 30, 2018 this amount remains unpaid and is included in accounts payable and accrued expenses on the balance sheet. These amounts were paid in full in March 2019. 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 September 30, 2018 and 2017, this amount remains unpaid and is included in accounts payable and accrued expenses on the balance sheet. Settlement of these amounts was made in full in March 2019. 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. This agreement was amended in 2019 to allow for a rate increase for Mr. Havenstrite to an annual rate of $144,000. The Board also agreed in 2019 to compensate its directors for their contributions to the management of the Company, with one director receiving $6,000 per month and the other two directors receiving $5,000 per quarter. At September 30, 2018 and December 31, 2017, accrued compensation of $780,039 and $665,577 were due to officers. Of the amounts accrued at September 30, 2018 and December 31, 2017, accrued compensation of $563,231 and $491,693 is due to Rick Havenstrite and $216,808 and $173,884 is due to Marianne Havenstrite, Treasurer and Principal Financial Officer. In addition, $64,000 and $44,000 was due to directors at September 30, 2018 and December 31, 2017, respectively. These amounts were paid in full in March 2019. See Note 19. Finder's Agreement On May 11, 2018, the Company agreed to an agreement with Mount Royal Consultants (Mount Royal) to assist in finding prospective investors. Mount Royal would receive a finder's fee of 7% for a connection with a company that resulted in a qualified investment consisting of equity securities or a fee of 3% for a connection with a company that resulted in a purchase of debt securities. On March 7, 2019, the Company closed a Pre-Paid Forward Gold Purchase Agreement (the "Purchase Agreement") to a buyer for the purchase of gold produced from the Company's mining property. This investment was considered to be a debt agreement and resulted in a payment to Mount Royal of $318,000, 3% of the $10,600,000 beneficially received by the Company from PDK Utah Holdings, LLC in 2019. On November 1, 2019, an additional payment of 3% of the Tranche II payment received by the Company resulted in a payment of $48,000 to Mount Royal. Future amounts to be received from PDK Utah Holdings, LLC would also be subject to this agreement. See Note 19. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 – SUBSEQUENT EVENTS Mining Leases During first quarter of 2019, the Company and Clifton Mining Company entered into a Second Amended and Restated Lease Agreement (the “Amended Lease”). Under the terms of the Amended Lease, the Company relinquished its leasehold interest in all but 10 of the patented mining claims, for which it retained only the surface rights, and 66 of the unpatented lode mining claims previously held by the Company. The mining claims retained by the Company represent the Kiewit area of interest. The Amended Lease term is 20 years and for so long thereafter as the mining claims are being actively used by the Company for commercial mining purposes. Under the terms of the Amended Lease the Company acquired and cancelled Clifton’s 5% royalty interest from production on the Kiewit project. The Company also acquired from third parties and cancelled the remaining 1% outstanding royalty interest thereon, for which the Company paid each party $50,000. As consideration for entering into the Amended Lease, the Company paid Clifton $3,000,000 and issued 5,500,000 shares of its common stock. In addition, the Company and Clifton entered into a Registration Rights Agreement to register for resale the shares issued to Clifton which requires the Company to register the shares within 18 months following the Initial Funding (see below). In the event the Company does not register the shares within the 18-month period, the Company is obligated to pay Clifton a royalty equal to 2.5% of the net smelter returns from the minerals generated from the Company’s mining claims. Gold Sale Funding Transaction and Amended Agreement During the first quarter of 2019, the Company entered into and closed a Pre-Paid Forward Gold Purchase Agreement (the “Purchase Agreement”) to a buyer for the purchase of gold produced from the Company’s mining property. Under the terms of the Purchase Agreement, the buyer has agreed to purchase a total of 73,910 ounces of gold from the Company in three tranches, with prepayment of the initial tranche in the amount of $11,200,000 having been made upon execution of the Purchase Agreement on March 7, 2019 (the “Initial Funding”), $4,500,000 for Tranche 2 to occur at least six months following the Initial Funding date, and $5,500,000 for Tranche 3 to occur at least 10 months following the Initial Funding date, provided that all conditions precedent for funding Tranches 2 and 3 are met. From the Initial Funding, the Company paid an upfront fee of $600,000 to buyer for expenses incurred in connection with the transaction. Under the terms of the Purchase Agreement the Company also agreed to deliver gold in certain quantities during agreed periods following prepayment of each tranche. As security for the obligations of the Company under the Purchase Agreement, the Company has granted the buyer a security interest in all of the assets of the Company and has issued and recorded a Leasehold Deed of Trust, Assignment of Leases, Rents, As Extracted Collateral and Contracts, Security Agreement and Fixture Filing. Concurrent with the Initial Funding, the Company granted a perpetual royalty to the buyer equal to 4% of the net smelter returns payable on all minerals mined, produced, or otherwise recovered from the Company’s mining properties, for which the buyer paid $2,200,000 to the Company. On October 31, 2019, the Company and the buyer amended the Purchase Agreement and entered into the Amended Pre-Paid Forward Agreement (the “Amended Agreement”) to adjust the second and third tranches paid to the Company, to reduce the total number of ounces of gold subject to the Purchase Agreement, and to revise other provisions therein. The second tranche was reduced from $4,500,000 to $1,600,000, and the third tranche was reduced from $5,500,000 to $1,400,000. The second tranche was received on November 1, 2019 upon execution of the Amended Agreement and the funds are to be dedicated to general capital expenditures in accordance with the revised budget furnished with the Amended Agreement. The amendment also reduced the total number of ounces of gold prepaid under the agreement. Under the terms of the Amended Agreement, the Company is obligated to deliver gold in the following quantities following prepayment of each tranche: ● Beginning the 21 st ● Beginning the 14 th ● Beginning the 13 th The Amended Agreement also alters the total amount that the buyer may reduce the number of ounces of gold to be delivered under the Amended Agreement in exchange for common shares of the Company. Under the Amended Agreement, the buyer may reduce the required number of ounces by up to 8,000 ounces in exchange for common shares of the Company. H&H Metals Agreement On March 29, 2018, the Company entered into a five-year Agency Agreement (the “Agency Agreement”) with H&H Metals Corp., a New York corporation (“H&H”). Under the terms of the Agency Agreement H&H agreed to provide us certain advisory services in regard to natural resources activities and to assist us in securing purchasers for minerals produced from its mining properties. As a condition for entering into the Purchase Agreement with PDK, we negotiated a termination of the Agency Agreement (the “Termination Agreement”). Under the terms of the Termination Agreement, we paid H&H $600,000, agreed to pay an additional $200,000 within 18 months, and $36,000 as a payment against the final shipment of ore by the Company. In addition, we appointed Phillip H. Holme, a principal of H&H, as a director of the Company upon the Initial Funding. Short-term Notes Payable – Related Parties Consultant Settlement Agreement During the first quarter of 2019, the Company terminated a consulting agreement and paid $600,000 to the consultant, with an agreement to pay an additional $200,000 within 18 months, and further agreed to pay $36,000 as a payment against the final shipment of ore by the Company. In addition, the Company issued 250,000 shares of its common stock to the consultant. A principal of the consulting company was also appointed a director of the Company. Repayment of Notes During the first quarter of 2019, the Company repaid convertible promissory notes and short-term notes payable to two of its minority shareholders in the amount of $2,103,289 including interest and fees. In addition, all of the notes payable – equipment and the leased equipment liability note were paid in full. Claim Acquisition The Company entered into an agreement dated March 26, 2019 with Ben Julian, LLC for an option to purchase 64 claims adjacent to the Kiewit property for a purchase price of $500,000. On June 13, 2019, an agreement between the Company, Clifton Mining Company and Ben Julian, LLC was signed in which the purchase option was exercised. The Company acquired 20 claims and Clifton Mining Company acquired the remaining 44 claims at a cost of $250,000 to each company. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees | Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees All transactions in which goods or services are received for the issuance of shares of the Company's common stock or options to purchase shares of common stock are accounted for based on the fair value of the goods or services received or the fair value of the equity interest issued, whichever is more reliably measurable. The Company estimates the fair value of stock-based compensation using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected life"), the estimated volatility of the Company's common stock price over the expected term ("volatility"), the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of the fair value of stock-based compensation. |
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; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses. Revenue from the sale of silver is accounted for as by-product and is deducted from production costs. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of September 30, 2018, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months. |
Revenue Recognition | Revenue Recognition Sales of gold concentrate sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of the Company's concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to the estimated settlement metals prices until final settlement by the customer. Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. See Note 16. |
Earnings (loss) Per Share | Earnings (loss) 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. Three months ended Nine months ended 2018 2017 2018 2017 Net income (loss) $ (91,772 ) $ (860,117 ) $ 22,524,399 (2,933,983 ) Deemed capital contribution on extinguishment of preferred stock - - 4,068,720 - Net income (loss) available to common shareholders - basic (91,772 ) (860,117 ) 26,593,119 (2,933,983 ) Interest expense on convertible notes payable -related parties - - 55,561 - Net income (loss) available to common shareholders - diluted $ (91,772 ) $ (860,117 ) $ 26,648,680 $ (2,073,868 ) Weighted average shares outstanding - basic 20,581,603 13,656,603 18,696,072 13,656,603 Dilutive shares – convertible notes payable – related parties - - 3,381,986 - Weighted average shares outstanding - diluted 20,581,603 13,656,603 22,078,058 13,656,603 Basic income (loss) per share $ (0.00 ) $ (0.06 ) $ 1.42 $ (0.21 ) Diluted income (loss) per share $ (0.00 ) $ (0.06 ) $ 1.21 $ (0.21 ) Excluded in diluted income (loss) per share as inclusion would have an antidilutive effect: Convertible debt – related parties 3,381,986 3,036,498 - 3,036,498 Convertible preferred stock 47,211,002 - 47,211,002 Stock options 2,400,000 - 2,400,000 - 5,781,986 50,247,500 2,400,000 50,247,500 |
Going Concern | Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit of $4,495,024 through September 30, 2018 and negative working capital of $3,485,974 which raises substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. Although production has restarted in 2019, 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. Although management has procured funding through a lender (Note 19) they intend 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 Accounting Standards Updates Adopted In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition, replacing guidance previously codified in Subtopic 605-10 Revenue Recognition-Overall. The new ASU establishes a 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 adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospective transition approach. The Company performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it does not change the timing of revenue recognition or amounts of revenue recognized compared to how it recognized revenue under previous policies. Revenues involve a very small number of types of contracts and customers. In addition, revenue contracts do not involve multiple types of performance obligations. Concentrate sales involve variable consideration as they are subject to changes in metals prices between the time of shipment and their final settlement. However, the Company is able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the month of settlement, and values are adjusted each period until final settlement. Also, it is unlikely a significant reversal of revenue for any one concentrate lot will occur. Adoption of ASU No. 2014-09 involves additional disclosures, where applicable, concerning (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. See Note 16 for information on the Company's sales of products. 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 of 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 adopted this update as of January 1, 2018 and there were no material impacts on its financial statements. 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 adopted this update as of January 1, 2018, and there were no material impacts on its financial statements. 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 Company adopted this update as of January 1, 2018. It will apply the applicable provisions of the update to any future acquisitions. Accounting Standards Updates to Become Effective in Future Periods 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. Upon implementation of the new guidance, the Company will be required to recognize a liability and right-of-use asset for its operating leases. The Company has elected the transition option to apply the new guidance at the effective date without adjusting comparative periods presented. The Company's operating leases, which will be impacted upon adoption, are not significant and management anticipates no material impact upon adoption on January 1, 2019. 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. |
Revision of Previously Issued_2
Revision of Previously Issued Financial Statements for Immaterial Misstatements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of adjustments related to overstatement for prior periods | At September 30, 2017 As previously reported Adjustment As Revised Balance sheet Inventories, current portion $ 500,000 $ - $ 500,000 Current assets 673,182 - 673,182 Inventories, long term 3,730,190 (1,270,506 ) 1,477,968 Mineral properties and interest, net 1,114,675 1,205,387 Total assets 9,019,444 (1,270,506 ) 7,839,650 Accumulated deficit (28,955,189 ) (1,270,506 ) (30,134,983 ) Total shareholders' equity (deficit) (19,808,361 ) (1,270,506 ) (20,988,155 ) Total liabilities and shareholders' equity (deficit) 9,019,444 (1,270,506 ) 7,839,650 Three month period ended Statement of operations General project costs 74,938 (6,941 ) 67,997 Net income (loss) (867,058 ) 6,941 (860,117 ) Basic and diluted income (loss) per share (0.06 ) - (0.06 ) Nine month period ended September 30, 2017 Statement of operations General project costs 502,435 (66,551 ) 435,884 Net income (loss) (3,000,534 ) 66,551 (2,933,983 ) Basic and diluted income (loss) per share (0.22 ) 0.01 (0.21 ) Statement of cash flows Net income (loss) (3,000,534 ) (66,551 ) (2,933,983 ) Change in inventory (154,542 ) 66,551 (221,093 ) Cash flow from operating activities (939,873 ) - (939,873 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of net income (loss) available to common shareholders | Three months ended Nine months ended 2018 2017 2018 2017 Net income (loss) $ (91,772 ) $ (860,117 ) $ 22,524,399 (2,933,983 ) Deemed capital contribution on extinguishment of preferred stock - - 4,068,720 - Net income (loss) available to common shareholders - basic (91,772 ) (860,117 ) 26,593,119 (2,933,983 ) Interest expense on convertible notes payable -related parties - - 55,561 - Net income (loss) available to common shareholders - diluted $ (91,772 ) $ (860,117 ) $ 26,648,680 $ (2,073,868 ) Weighted average shares outstanding - basic 20,581,603 13,656,603 18,696,072 13,656,603 Dilutive shares – convertible notes payable – related parties - - 3,381,986 - Weighted average shares outstanding - diluted 20,581,603 13,656,603 22,078,058 13,656,603 Basic income (loss) per share $ (0.00 ) $ (0.06 ) $ 1.42 $ (0.21 ) Diluted income (loss) per share $ (0.00 ) $ (0.06 ) $ 1.21 $ (0.21 ) Excluded in diluted income (loss) per share as inclusion would have an antidilutive effect: Convertible debt – related parties 3,381,986 3,036,498 - 3,036,498 Convertible preferred stock 47,211,002 - 47,211,002 Stock options 2,400,000 - 2,400,000 - 5,781,986 50,247,500 2,400,000 50,247,500 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventories | September 30, December 31, (revised) Ore on leach pad $ 1,994,566 $ 2,058,370 Total 1,994,566 2,058,370 Less: current portion (363,708 ) (371,778 ) Non-current inventories $ 1,630,858 $ 1,686,592 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of property and equipment | September 30, December 31, 2018 2017 Equipment $ 3,252,007 $ 2,919,165 Furniture and fixtures 6,981 6,981 Electronic and computerized equipment 52,874 52,874 Vehicles 108,089 67,115 3,419,951 3,046,135 Less accumulated depreciation (1,906,584 ) (1,434,921 ) 1,513,367 1,611,214 Kiewit property facilities 2,497,435 2,497,436 Less accumulated amortization (487,214 ) (487,214 ) 2,010,221 2,010,222 Total $ 3,523,588 $ 3,621,436 |
Mineral Properties and Intere_2
Mineral Properties and Interests (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Mineral Industries Disclosures [Abstract] | |
Schedule of mineral properties and interests | September 30, December 31, Initial lease fee Kiewit and Cactus Mill $ 600,000 $ 600,000 Asset retirement obligation Kiewit Site 789,026 789,026 Kiewit Exploration 10,780 10,780 Cactus Mill 16,133 16,133 Total 815,939 815,939 Accumulated amortization (210,552 ) (210,552 ) 605,387 605,387 Total $ 1,205,387 $ 1,205,387 |
Notes Payable - Equipment (Tabl
Notes Payable - Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Notes Payable - Equipment [Abstract] | |
Schedule of the equipment notes payable | September 30, December 31, 2017 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ 30,893 $ 47,154 Note payable to CAT Financial, collateralized by used crushing equipment, due in 9 monthly installments of $39,009. See below. 195,067 - Note payable to CAT Financial, collateralized by used mining equipment due in 36 monthly installments of varying amounts including interest at 4.68%. 117,002 266,675 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,674 including interest at 2.99%. 64,633 149,687 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%. - 5,515 407,595 469,031 Current portion (407,595 ) (452,214 ) Long term portion $ - $ 16,817 |
Note Payable - DMRJ (Tables)
Note Payable - DMRJ (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Note Payable - Related Party [Abstract] | |
Schedule of due to DMRJ | September 30, December 31, 2018 2017 Principal $ - $ 15,554,552 Interest payable - 9,535,118 $ - $ 25,089,670 |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of asset retirement obligations | September 30, September 30, 2018 2017 Asset retirement obligation, beginning of period $ 1,046,621 $ 974,109 Changes to estimated costs and timing to reclaim - - Accretion expense 54,384 54,384 Asset retirement obligation, end of period $ 1,101,005 $ 1,028,493 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of sales of products by metal | Three months ended Nine months ended 2018 2017 2018 2017 Gold $ 211,812 $ 80,485 $ 211,812 162,763 Silver (by-product) 2,715 2,559 2,715 4,860 Less: Smelter and refining charges (18,953 ) (1,726 ) (18,953 ) (5,039 ) Total $ 195,574 $ 81,318 $ 195,574 $ 162,584 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of fair value of option award assumptions used | Weighted Annual dividend yield - Expected life (years) 5.0 Risk-free interest rate 2.54 % Expected volatility based on comparable peers 51.2 % Common stock price based on most recent sale of common stock for cash $ 0.40 |
Schedule of stock based compensation cost | Stock Options Weighted Weighted Outstanding, December 31, 2017 - - - Issued 2,400,000 $ 0.40 5.0 Exercised -0- - - Expired -0- - Outstanding and exercisable, September 30, 2018 2,400,000 $ 0.40 4.4 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Mar. 08, 2018 | Dec. 31, 2017 | |
Organization and Description of Business (Textual) | |||
Revenues from sales of gold concentrate, description | Production commenced and revenues of approximately $7,200,000 from sales of gold and other metals concentrate have been received through December 31, 2018. | ||
Note and interest payable | $ 25,541,561 | $ 625,000 | |
Due to DMRJ | $ 625,000 |
Revision of Previously Issued_3
Revision of Previously Issued Financial Statements for Immaterial Misstatements (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Inventories, current portion | $ 363,708 | $ 371,778 | $ 500,000 |
Current assets | 417,678 | 478,241 | 673,182 |
Inventories, long term | 1,630,858 | 1,686,592 | 1,477,968 |
Mineral properties and interest, net | 1,205,387 | 1,205,387 | 1,205,387 |
Total assets | 7,530,741 | 7,744,710 | 7,839,650 |
Accumulated deficit | (4,495,024) | (31,088,143) | (30,134,983) |
Total shareholders' equity (deficit) | 2,526,084 | (21,929,315) | (20,988,155) |
Total liabilities and shareholders’ equity (deficit) | $ 7,530,741 | $ 7,744,710 | 7,839,650 |
As previously reported [Member] | |||
Inventories, current portion | 500,000 | ||
Current assets | 673,182 | ||
Inventories, long term | 3,730,190 | ||
Mineral properties and interest, net | 1,114,675 | ||
Total assets | 9,019,444 | ||
Accumulated deficit | (28,955,189) | ||
Total shareholders' equity (deficit) | (19,808,361) | ||
Total liabilities and shareholders’ equity (deficit) | 9,019,444 | ||
Adjustment [Member] | |||
Inventories, current portion | |||
Current assets | |||
Inventories, long term | (1,270,506) | ||
Mineral properties and interest, net | |||
Total assets | (1,270,506) | ||
Accumulated deficit | (1,270,506) | ||
Total shareholders' equity (deficit) | (1,270,506) | ||
Total liabilities and shareholders’ equity (deficit) | $ (1,270,506) |
Revision of Previously Issued_4
Revision of Previously Issued Financial Statements for Immaterial Misstatements (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
General project costs | $ 6,810 | $ 67,997 | $ 763,194 | $ 435,884 |
Net income (loss) | $ (91,772) | $ (860,117) | $ 22,524,399 | $ (2,933,983) |
Basic and diluted income (loss) per share | $ (0.06) | $ (0.21) | ||
As Previously Reported [Member] | ||||
General project costs | $ 74,938 | $ 502,435 | ||
Net income (loss) | $ (867,058) | $ (3,000,534) | ||
Basic and diluted income (loss) per share | $ (0.06) | $ (0.22) | ||
Adjustment [Member] | ||||
General project costs | $ (6,941) | $ (66,551) | ||
Net income (loss) | $ 6,941 | $ 66,551 | ||
Basic and diluted income (loss) per share | $ 0.01 |
Revision of Previously Issued_5
Revision of Previously Issued Financial Statements for Immaterial Misstatements (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income (loss) | $ (91,772) | $ (860,117) | $ 22,524,399 | $ (2,933,983) |
Change in inventory | (63,804) | (221,093) | ||
Cash flow from operating activities | $ (629,918) | (939,873) | ||
As Previously Reported [Member] | ||||
Net income (loss) | (867,058) | (3,000,534) | ||
Change in inventory | (154,542) | |||
Cash flow from operating activities | (939,873) | |||
Adjustment [Member] | ||||
Net income (loss) | $ 6,941 | 66,551 | ||
Change in inventory | 66,551 | |||
Cash flow from operating activities |
Revision of Previously Issued_6
Revision of Previously Issued Financial Statements for Immaterial Misstatements (Details Textual) | Dec. 31, 2017USD ($) |
Revision of Previously Issued Financial Statements for Immaterial Misstatements (Textual) | |
Accumulated overstatement of inventory | $ 1,263,566 |
Mineral properties | $ 90,712 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Net income (loss) | $ (91,772) | $ (860,117) | $ 22,524,399 | $ (2,933,983) |
Deemed capital contribution on extinguishment of preferred stock | 4,068,720 | |||
Net income (loss) available to common shareholders - basic | (91,772) | (860,117) | 26,593,119 | (2,933,983) |
Interest expense on convertible notes payable -related parties | 55,561 | |||
Net income (loss) available to common shareholders - diluted | $ (91,772) | $ (860,117) | $ 26,593,119 | $ (2,933,983) |
Weighted average shares outstanding - basic | 20,581,603 | 13,656,603 | 18,696,072 | 13,656,603 |
Dilutive shares - convertible notes payable - related parties | 3,381,986 | |||
Weighted average shares outstanding - diluted | 20,581,603 | 13,656,603 | 22,078,058 | 13,656,603 |
Basic income (loss) per share | $ 0 | $ (0.06) | $ 1.42 | $ (0.21) |
Diluted income (loss) per share | $ 0 | $ (0.06) | $ 1.21 | $ (0.21) |
Excluded in diluted income (loss) per share as inclusion would have an antidilutive effect: | ||||
Convertible debt – related parties | 3,381,986 | 3,036,498 | 3,036,498 | |
Convertible preferred stock | 47,211,002 | 47,211,002 | ||
Stock options | 2,400,000 | 2,400,000 | ||
Total | 5,781,986 | 50,247,500 | 2,400,000 | 50,247,500 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Summary of Significant Accounting Policies (Textual) | |||
Accumulated deficit | $ (4,495,024) | $ (31,088,143) | $ (30,134,983) |
Negative working capital | $ 3,485,974 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Mar. 08, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Capital stock (Textual) | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Voting rights, description | 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. | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Beneficial ownership, percentage | 77.00% | ||
Agreement for debt owed related, description | This agreement discharged all of the debt owed by the Company to DMRJ and its related affiliates and returned all of the shares of preferred stock to the Company in exchange for $625,000. The Company then cancelled all of the preferred shares of stock. As a result, DMRJ relinquished all ownership in the Company. See Note 13. | ||
2018 Activity [Member] | |||
Capital stock (Textual) | |||
Shares of common stock sold | 4,500,000 | 2,125,000 | |
Cash proceeds | $ 625,000 | $ 850,000 | |
Common stock per share | $ 0.4 |
Reclamation Bonds (Details)
Reclamation Bonds (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Reclamation Bonds (Textual) | ||
Surety bond in escrow account | $ 674,000 | $ 674,000 |
Reclamation bonds | $ 753,230 | $ 753,054 |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Inventory Disclosure [Abstract] | |||
Ore on leach pad | $ 1,994,566 | $ 2,058,370 | |
Total | 1,994,566 | 2,058,370 | |
Less: current portion | (363,708) | (371,778) | |
Non-current inventories | $ 1,630,858 | $ 1,686,592 | $ 1,477,968 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | $ 3,523,588 | $ 3,621,436 |
Property and equipment, Total | 3,523,588 | 3,621,436 |
Property and Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,419,951 | 3,046,135 |
Less accumulated depreciation | (1,906,584) | (1,434,921) |
Property and equipment, Total | 1,513,367 | 1,611,214 |
Property and Equipment [Member] | Furniture and fixtures [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 6,981 | 6,981 |
Property and Equipment [Member] | Electronic and computerized equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 52,874 | 52,874 |
Property and Equipment [Member] | Vehicles [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 108,089 | 67,115 |
Property and Equipment [Member] | Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 3,252,007 | 2,919,165 |
Finite-Lived Intangible Assets [Member] | Kiewit Property Improvements [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 2,497,435 | 2,497,436 |
Less accumulated depreciation | (487,214) | (487,214) |
Property and equipment, Total | $ 2,010,221 | $ 2,010,222 |
Mineral Properties and Intere_3
Mineral Properties and Interests (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Initial lease fee | ||
Kiewit and Cactus Mill | $ 600,000 | $ 600,000 |
Asset retirement obligation | ||
Kiewit Site | 789,026 | 789,026 |
Kiewit Exploration | 10,780 | 10,780 |
Cactus Mill | 16,133 | 16,133 |
Total | 815,939 | 815,939 |
Accumulated amortization | (210,552) | (210,552) |
Total | 605,387 | 605,387 |
Total | $ 1,205,387 | $ 1,205,387 |
Mineral Properties and Intere_4
Mineral Properties and Interests (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | |
Dec. 31, 2009 | Sep. 30, 2018 | Sep. 30, 2017 | |
Mineral Properties and Interests; Reclamation Bonds (Textual) | |||
Claims fees (per claim) | $ 155 | ||
Joint venture agreement, description | The Company is also required to pay a 6% net smelter return on any production from the Kiewit gold property. | ||
Royalty expense | 11,360 | $ 9,785 | |
Amortization expense | |||
Joint Venture Agreement [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 Part
Convertible Debt - Related Parties (Details) - USD ($) | Oct. 14, 2016 | Nov. 18, 2009 | Feb. 28, 2018 | Aug. 07, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2017 | Sep. 30, 2017 | Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2012 |
Short-term Debt [Line Items] | ||||||||||||||||
Convertible debt | $ 600,000 | $ 1,350,000 | $ 1,278,000 | |||||||||||||
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 | ||||||||||
Share price per share | $ 0.40 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | |||||||||||
Loan maturity date | May 31, 2019 | |||||||||||||||
Financing expense | $ 12,000 | $ 12,000 | $ 12,000 | $ 12,000 | ||||||||||||
Minimum [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Interest payable | 10.00% | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Interest payable | 15.00% | |||||||||||||||
Convertible Debt [Member] | ||||||||||||||||
Short-term Debt [Line Items] | ||||||||||||||||
Convertible debt | $ 250,000 | $ 500,000 | 428,000 | |||||||||||||
Interest payable | 10.00% | |||||||||||||||
Conversion price | $ 0.25 | |||||||||||||||
Accrued interest payable | $ 422,722 | $ 317,436 | ||||||||||||||
Common stock and principal and interest were initially due date | Sep. 30, 2018 | |||||||||||||||
Loan maturity date | May 31, 2019 | Nov. 30, 2018 | ||||||||||||||
Convertible debt, description | The remaining $72,000 was advanced in 2018 with the final advance on February 9, 2018. | |||||||||||||||
Long term | $ 71,260 | $ 57,398 |
Obligation under Capital Leas_2
Obligation under Capital Lease - Related Party (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Obligation Under Capital Lease - Related Party (Textual) | |||
Estimated future minimum lease payments | $ 72,000 | ||
Implied interest | 3,820 | ||
RMH Overhead, LLC [Member] | |||
Obligation Under Capital Lease - Related Party (Textual) | |||
Equipment includes assets under capital lease amount | 185,618 | $ 185,618 | |
Accumulated amortization | $ 59,663 | $ 39,775 | |
Initial lease term, description | The initial lease term was for 24 months, which expired June 20, 2018. | ||
Future minimum lease payments, description | The eight future minimum lease payments of $9,000 each plus financing costs were overdue at September 30, 2018. These lease payments were paid in full, including accrued interest and late fees, in March 2019. See Note 19. |
Short-Term Notes Payable _ Re_2
Short-Term Notes Payable – Related Parties (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Nov. 18, 2009 | |
Short-Term Notes Payable – Related Parties (Textual) | ||||
Short-term note payable | $ 100,000 | |||
Bears interest | 15.00% | |||
Maturity due date | Mar. 31, 2019 | |||
Short-term note payable, description | This short-term note was repaid in full to the lender, including 10% interest and a 2% loan initiation fee, in March 2019. | |||
Short-Term Notes Payable [Member] | ||||
Short-Term Notes Payable – Related Parties (Textual) | ||||
Bears interest | 10.00% | |||
Percentage of loan initiation fee | 2.00% | |||
Accrued interest payable | $ 2,438 | |||
Interest expense | $ 2,438 |
Notes Payable - Equipment (Deta
Notes Payable - Equipment (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Note payable | $ 407,595 | $ 469,031 |
Current portion | (407,595) | (452,214) |
Long term portion | 16,817 | |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 30,893 | 47,154 |
Notes Payable One [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 195,067 | |
Notes Payable Two [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 117,002 | 266,675 |
Notes Payable Three [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 64,633 | 149,687 |
Notes Payable Four [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | $ 5,515 |
Notes Payable - Equipment (De_2
Notes Payable - Equipment (Details Textual) - USD ($) | Nov. 18, 2009 | Jul. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2016 | Nov. 30, 2016 |
Notes Payable - Equipment (Textual) | |||||
Mining equipment financed, description | A new agreement was made with Wheeler Machinery and CAT Financial for the return of four pieces of this equipment to the Company. The equipment temporarily remained in the possession of Wheeler Machinery and a new payment schedule was established. In May 2018, a note for the remaining payments due for $273,067 was formalized. Of this amount, $141,631 represented the value of the equipment and the remaining amount of $131,436 was to settle accounts payable for past due rent. The equipment was refurbished and returned to the site in 2019. | ||||
Debt instrument, periodic payment, interest | $ 7,500 | ||||
Debt instrument, interest rate, percentage | 15.00% | ||||
Note Payable CAT Equipment [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Note payable due to CAT | $ 960,585 | ||||
Loss on impairment of equipment | $ 147,214 | ||||
Komatsu Telehandler Lift [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Debt instrument, payment terms | 48 monthly installments | ||||
Debt instrument, periodic payment, interest | $ 2,441 | ||||
Debt instrument, interest rate, percentage | 4.99% | ||||
Crushing Equipment [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Debt instrument, payment terms | 9 monthly installments | ||||
Debt instrument, periodic payment, interest | $ 39,009 | ||||
Mining Equipment [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Debt instrument, payment terms | 36 monthly installments | ||||
Debt instrument, interest rate, percentage | 4.68% | ||||
Komatsu D275 Dozer [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Debt instrument, payment terms | one monthly installment | ||||
Debt instrument, periodic payment, interest | $ 21,000 | ||||
Komatsu D275 Dozer One [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Debt instrument, payment terms | 47 monthly installments | ||||
Debt instrument, periodic payment, interest | $ 11,674 | ||||
Debt instrument, interest rate, percentage | 2.99% | ||||
2009 Multiquip Generator [Member] | |||||
Notes Payable - Equipment (Textual) | |||||
Debt instrument, payment terms | 24 monthly installments | ||||
Debt instrument, periodic payment, interest | $ 1,412 | ||||
Debt instrument, interest rate, percentage | 11.40% |
Note Payable - DMRJ (Details)
Note Payable - DMRJ (Details) - USD ($) | Sep. 30, 2018 | Mar. 08, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||
Principal | $ 25,541,561 | $ 625,000 | |
DMRJ [Member] | |||
Related Party Transaction [Line Items] | |||
Principal | 15,554,552 | ||
Interest payable | 9,535,118 | ||
Total | $ 25,089,670 |
Note Payable - DMRJ (Details Te
Note Payable - DMRJ (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Mar. 08, 2018 | |
Note Payable Dmrj (Textual) | ||||||
Convertible debt holders | $ 422,722 | $ 422,722 | $ 317,436 | |||
Preferred stock issued | $ 4,068,720 | |||||
DMRJ [Member] | ||||||
Note Payable Dmrj (Textual) | ||||||
Ownership percentage of stock on a fully-diluted basis | 77.00% | |||||
Convertible shares of common stock | 4,500,000 | 47,211,002 | ||||
Settled for payment | $ 625,000 | |||||
Convertible debt holders | $ 625,000 | $ 625,000 | ||||
Preferred stock issued | $ 4,068,720 | |||||
Debt instrument, description | On the date of the agreement, the principal balance of the note was $15,554,552 and accrued interest payable was $9,987,009 for a total balance due of $25,541,561. As a result of the transaction, the Company recognized a gain on extinguishment of debt of $24,916,561. |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Asset retirement obligation, beginning of period | $ 1,046,621 | $ 974,109 |
Changes to estimated costs and timing to reclaim | ||
Accretion expense | 54,384 | 54,384 |
Asset retirement obligation, end of period | $ 1,101,005 | $ 1,028,493 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Related Party Transactions (Textual) | |||
Accrued compensation | $ 859,039 | $ 709,577 | |
President [Member] | |||
Related Party Transactions (Textual) | |||
Accrued compensation | 563,231 | 491,693 | |
Other Directors [Member] | |||
Related Party Transactions (Textual) | |||
Accrued compensation | 79,000 | 44,000 | |
Limited Liability Company [Member] | |||
Related Party Transactions (Textual) | |||
Rent expense for rental of office space | 9,000 | $ 9,000 | |
Accounts payable | 15,750 | $ 16,750 | |
Limited Liability Company [Member] | President [Member] | |||
Related Party Transactions (Textual) | |||
Expenses paid in current rents | 9,000 | $ 9,000 | |
Addition rent received | $ 1,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||||
Gold | $ 211,812 | $ 80,485 | $ 211,812 | $ 162,763 |
Silver (by-product) | 2,715 | 2,559 | 2,715 | 4,860 |
Less: Smelter and refining charges | (18,953) | (1,726) | (18,953) | (5,039) |
Total | $ 195,574 | $ 81,318 | $ 195,574 | $ 162,584 |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Recognition (Textual) | |||
sales of gold concentrate | $ 211,812 | $ 211,812 | $ 162,763 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Annual dividend yield | |
Expected life (years) | 5 years |
Risk-free interest rate | 2.54% |
Expected volatility based on comparable peers | 51.20% |
Common stock price based on most recent sale of common stock for cash | $ 0.40 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details 1) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options, Outstanding, Beginning balance | shares | |
Number of Options, Granted | shares | 2,400,000 |
Number of Options, Exercised | shares | 0 |
Number of Options, Expired | shares | 0 |
Number of Options, Outstanding, Ending balance | shares | 2,400,000 |
Number of Options, Exercisable | shares | 2,400,000 |
Weighted-Average Exercise Price, Outstanding, Beginning balance | $ / shares | |
Weighted-Average Exercise Price, Granted | $ / shares | 0.40 |
Weighted-Average Exercise Price, Exercised | $ / shares | |
Weighted-Average Exercise Price, Expired | $ / shares | |
Weighted-Average Exercise Price, Outstanding, Ending balance | $ / shares | 0.40 |
Weighted-Average Exercise Price, Exercisable | $ / shares | $ 0.40 |
Weighted-Average Remaining Contractual Term, Issued | 5 years |
Weighted-Average Remaining Contractual Term, Outstanding | 4 years 4 months 24 days |
Weighted-Average Remaining Contractual Term, Exercisable | 4 years 4 months 24 days |
Stock-Based Compensation (Det_3
Stock-Based Compensation (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended |
Feb. 23, 2018 | Sep. 30, 2018 | |
Stock-Based Compensation (Textual) | ||
Reserved shares under stock incentive plan | 2,400,000 | |
Number of Options, Granted | 2,400,000 | |
Weighted-Average Exercise Price, Granted | $ 0.40 | |
Stock based compensation cost | $ 456,000 | |
Share based compensation expiration date | Feb. 23, 2023 | |
Rick Havenstrite [Member] | ||
Stock-Based Compensation (Textual) | ||
Number of Options, Granted | 1,000,000 | |
Howard Crosby [Member] | ||
Stock-Based Compensation (Textual) | ||
Number of Options, Granted | 1,000,000 | |
John Ryan [Member] | ||
Stock-Based Compensation (Textual) | ||
Number of Options, Granted | 200,000 | |
Linde Havenstrite [Member] | ||
Stock-Based Compensation (Textual) | ||
Number of Options, Granted | 200,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Mar. 07, 2019 | May 11, 2018 | Nov. 01, 2019 | Dec. 31, 2014 | Dec. 31, 2012 | Sep. 30, 2010 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2017 |
Commitments and Contingencies (Textual) | |||||||||||
Base annual salary | $ 120,000 | ||||||||||
Accrued compensation | $ 780,039 | $ 665,577 | |||||||||
Personal property tax due | $ 26,125 | $ 79,917 | $ 90,013 | ||||||||
Proceeds from the sale of stock | $ 130,000 | ||||||||||
Conversion amounts due to shareholders | $ 151,406 | ||||||||||
Employment agreements, description | The agreement allows the Board to terminate Mr. Havenstrite's employment at any time, providing for a severance payment upon termination without cause. This agreement was amended in 2019 to allow for a rate increase for Mr. Havenstrite to an annual rate of $144,000. The Board also agreed in 2019 to compensate its directors for their contributions to the management of the Company, with one director receiving $6,000 per month and the other two directors receiving $5,000 per quarter. | ||||||||||
Rick Havenstrite [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Accrued compensation | 563,231 | 491,693 | |||||||||
Marianne Havenstrite [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Accrued compensation | 216,808 | 173,884 | |||||||||
Director [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Accrued compensation | 64,000 | $ 44,000 | |||||||||
Tooele County [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Interest and penalties | $ 196,055 | ||||||||||
Mount Royal Consultants [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Percentage of royalty payments | 3.00% | ||||||||||
Percentage of finder’s fee | 7.00% | ||||||||||
Mount Royal Consultants [Member] | PDK Utah Holdings, LLC [Member] | |||||||||||
Commitments and Contingencies (Textual) | |||||||||||
Annual payments to trust amount | $ 318,000 | ||||||||||
Percentage of royalty payments | 3.00% | 3.00% | |||||||||
Penalty payments for royalties | $ 10,600,000 | $ 48,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Mar. 29, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | Mar. 26, 2019 | Nov. 18, 2009 | |
Subsequent Events (Textual) | |||||
Short-term notes payable | $ 249,000 | ||||
Bears interest | 15.00% | ||||
Maturity due date | Mar. 31, 2019 | ||||
Short-term note payable, description | These short-term notes were repaid in full to the lenders, including 10% interest and a 2% loan initiation fee, in March 2019. | ||||
Repayment of Notes [Member] | |||||
Subsequent Events (Textual) | |||||
Short-term notes payable | $ 2,103,289 | ||||
Short-term Notes Payable [Member] | |||||
Subsequent Events (Textual) | |||||
Remaining balance | $ 48,000 | ||||
Short-term notes payable | $ 201,000 | ||||
Bears interest | 10.00% | ||||
Percentage of loan initiation fee | 2.00% | ||||
H&H Metals Agreement [Member] | |||||
Subsequent Events (Textual) | |||||
Termination Agreement, description | Under the terms of the Termination Agreement, we paid H&H $600,000, agreed to pay an additional $200,000 within 18 months, and $36,000 as a payment against the final shipment of ore by the Company. In addition, we appointed Phillip H. Holme, a principal of H&H, as a director of the Company upon the Initial Funding. | ||||
Purchase Agreement [Member] | |||||
Subsequent Events (Textual) | |||||
Purchase agreement, description | Under the terms of the Purchase Agreement, the buyer has agreed to purchase a total of 73,910 ounces of gold from the Company in three tranches, with prepayment of the initial tranche in the amount of $11,200,000 having been made upon execution of the Purchase Agreement on March 7, 2019 (the "Initial Funding"), $4,500,000 for Tranche 2 to occur at least six months following the Initial Funding date, and $5,500,000 for Tranche 3 to occur at least 10 months following the Initial Funding date, provided that all conditions precedent for funding Tranches 2 and 3 are met. From the Initial Funding, the Company paid an upfront fee of $600,000 to buyer for expenses incurred in connection with the transaction. Under the terms of the Purchase Agreement the Company also agreed to deliver gold in certain quantities during agreed periods following prepayment of each tranche. As security for the obligations of the Company under the Purchase Agreement, the Company has granted the buyer a security interest in all of the assets of the Company and has issued and recorded a Leasehold Deed of Trust, Assignment of Leases, Rents, As Extracted Collateral and Contracts, Security Agreement and Fixture Filing. Concurrent with the Initial Funding, the Company granted a perpetual royalty to the buyer equal to 4% of the net smelter returns payable on all minerals mined, produced, or otherwise recovered from the Company's mining properties, for which the buyer paid $2,200,000 to the Company. On October 31, 2019, the Company and the buyer amended the Purchase Agreement and entered into the Amended Pre-Paid Forward Agreement (the "Amended Agreement") to adjust the second and third tranches paid to the Company, to reduce the total number of ounces of gold subject to the Purchase Agreement, and to revise other provisions therein. The second tranche was reduced from $4,500,000 to $1,600,000, and the third tranche was reduced from $5,500,000 to $1,400,000. The second tranche was received on November 1, 2019 upon execution of the Amended Agreement and the funds are to be dedicated to general capital expenditures in accordance with the revised budget furnished with the Amended Agreement. The amendment also reduced the total number of ounces of gold prepaid under the agreement. Under the terms of the Amended Agreement, the Company is obligated to deliver gold in the following quantities following prepayment of each tranche: ● Beginning the 21st calendar month following the Initial Funding, 655 ounces of gold per month for each of the four calendar months thereafter, 670 ounces for each the 12 calendar months thereafter, 1,155 ounces for each of the 12 calendar months thereafter, and 1,512 ounces of gold for each of the 9 calendar months thereafter. ● Beginning the 14th Calendar month following the Tranche 2 funding, 129 ounces of gold per month for each of the 37 calendar months thereafter. ● Beginning the 13th Calendar month following the Tranche 3 funding, 112 ounces of gold per month for each of the 37 calendar months thereafter. The Amended Agreement also alters the total amount that the buyer may reduce the number of ounces of gold to be delivered under the Amended Agreement in exchange for common shares of the Company. Under the Amended Agreement, the buyer may reduce the required number of ounces by up to 8,000 ounces in exchange for common shares of the Company. | ||||
Consultant Settlement Agreement [Member] | |||||
Subsequent Events (Textual) | |||||
Consultant settlement agreement, description | The Company terminated a consulting agreement and paid $600,000 to the consultant, with an agreement to pay an additional $200,000 within 18 months, and further agreed to pay $36,000 as a payment against the final shipment of ore by the Company. In addition, the Company issued 250,000 shares of its common stock to the consultant. A principal of the consulting company was also appointed a director of the Company. | ||||
Ben Julian, LLC [Member] | |||||
Subsequent Events (Textual) | |||||
Property purchase price | $ 500,000 | ||||
Clifton Mining Company [Member] | |||||
Subsequent Events (Textual) | |||||
Payments to Clifton Mining | $ 3,000,000 | ||||
Shares of stock issued | 5,500,000 | ||||
Amended lease, description | Under the terms of the Amended Lease the Company acquired and cancelled Clifton's 5% royalty interest from production on the Kiewit project. The Company also acquired from third parties and cancelled the remaining 1% outstanding royalty interest thereon, for which the Company paid each party $50,000. | ||||
Acquisition costs | $ 250,000 | ||||
Amended lease term | 20 years | ||||
Percentage of royalty | 2.50% |