Document and Entity Information
Document and Entity Information - $ / shares | May 14, 2018 | Mar. 31, 2018 |
Details | ||
Registrant Name | ATHENA SILVER CORP | |
Registrant CIK | 1,304,409 | |
SEC Form | 10-Q | |
Period End date | Mar. 31, 2018 | |
Fiscal Year End | --12-31 | |
Trading Symbol | asc | |
Tax Identification Number (TIN) | 900,775,276 | |
Number of common stock shares outstanding | 36,202,320 | |
Filer Category | Smaller Reporting Company | |
Current with reporting | Yes | |
Voluntary filer | No | |
Well-known Seasoned Issuer | No | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Incorporation, State Country Name | Delaware | |
Entity Address, Address Line One | 2010A Harbison Drive #312 | |
Entity Address, City or Town | Vacaville | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95,687 | |
City Area Code | 707 | |
Local Phone Number | 884-3766 | |
Entity Listing, Par Value Per Share | $ 0.0001 |
Consolidated Balance Sheets (Ma
Consolidated Balance Sheets (March 31, 2018 unaudited) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 422 | $ 664 |
Prepaid expenses | 7,500 | 0 |
Total current assets | 7,922 | 664 |
Mineral rights and properties - unproven | 248,472 | 227,647 |
Total assets | 256,394 | 228,311 |
Current liabilities: | ||
Accounts payable | 22,153 | 4,004 |
Accrued liabilities | 70,000 | 64,500 |
Accrued interest | 9,975 | 9,082 |
Accrued interest - related parties | 373,127 | 349,508 |
Accrued interest - related parties | 31,750 | 25,000 |
Deed amendment liability - short-term portion | 10,000 | 10,000 |
Derivative liabilities | 28,620 | 58,340 |
Convertible note payable | 51,270 | 51,270 |
Current portion of Note payable - related party | 11,760 | 17,509 |
Convertible credit facility, related party | 1,959,620 | 1,890,620 |
Total current liabilities | 2,568,275 | 2,479,833 |
Deed amendment liability | 110,000 | 110,000 |
Total Liabilities | 2,678,275 | 2,589,833 |
Commitments and contingencies | 0 | 0 |
Shareholders' equity: | ||
Preferred Stock, Value, Issued | 0 | 0 |
Common Stock, Value, Issued | 3,620 | 3,620 |
Additional paid-in capital | 6,602,028 | 6,602,028 |
Accumulated deficit | (9,027,529) | (8,967,170) |
Total shareholders' equity | (2,421,881) | (2,361,522) |
Total liabilities and shareholders' equity | $ 256,394 | $ 228,311 |
Consolidated Balance Sheets (M3
Consolidated Balance Sheets (March 31, 2018 unaudited) - Parenthetical - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Details | ||
Mineral rights impairment | $ 1,885,816 | $ 1,885,816 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 36,202,320 | 36,202,320 |
Common Stock, Shares, Outstanding | 36,202,320 | 36,202,320 |
Consolidated Statements of Oper
Consolidated Statements of Operations (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating expenses: | ||
Exploration costs | $ 20,825 | $ 480 |
General and administrative expenses | 44,508 | 48,114 |
Total operating expenses | 65,333 | 48,594 |
Operating Income (Loss) | (65,333) | (48,594) |
Other income (expense): | ||
Interest expense | (24,746) | (22,980) |
Change in fair value of derivative warrant liability | 29,720 | 330 |
Total other income (expense) | 4,974 | (22,650) |
Net Income (Loss) | $ (60,359) | $ (71,244) |
Basic and diluted net income (loss) per common share | $ 0 | $ 0 |
Basic and diluted weighted-average common shares outstanding | 36,202,320 | 36,202,320 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net Income (Loss) | $ (60,359) | $ (71,244) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative warrant liability | (29,720) | (330) |
Changes in operating assets and liabilities: | ||
Change in Prepaid expenses | (7,500) | (7,500) |
Change in Accounts payable | 18,149 | 9,581 |
Change in Accrued interest - related parties | 23,619 | 21,571 |
Change in Accrued liabilities and other liabilities | 6,393 | 5,841 |
Net cash used in operating activities | (49,418) | (42,081) |
Cash flows from investing activities: | ||
Acquisition of mineral rights | (20,825) | (44,675) |
Net cash used in investing activities | (20,825) | (44,675) |
Cash flows from financing activities: | ||
Proceeds on advances payable - related parties | 6,750 | 2,100 |
Payments on advances payable - related parties | 0 | (600) |
Borrowings from notes payable - related parties | 69,000 | 90,000 |
Increase (Decrease) in Due to Affiliates | (5,749) | (5,415) |
Net cash provided by financing activities | 70,001 | 86,085 |
Net increase (decrease) in cash | (242) | (671) |
Cash and cash equivalents | 664 | 1,582 |
Cash and cash equivalents | 422 | 911 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 234 | 568 |
Cash paid for income taxes | $ 0 | $ 0 |
Note 1 - Organization, Basis of
Note 1 - Organization, Basis of Presentation, Liquidity and Going Concern | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 1 - Organization, Basis of Presentation, Liquidity and Going Concern: | Note 1 – Organization, Basis of Presentation, Liquidity and Going Concern Nature of Operations Athena Silver Corporation (“we,” “our,” “us,” or “Athena”) is engaged in the acquisition and exploration of mineral resources. We were incorporated in Delaware on December 23, 2003, and began our mining operations in 2010. In December 2009, we formed and organized a new wholly-owned subsidiary, Athena Minerals, Inc. (“Athena Minerals”) which owns and operates our mining interests. Since its formation, we have acquired various properties and rights and are currently determining whether those rights and properties could sustain profitable mining operations. We have not presently determined whether our mineral properties contain mineral reserves that are economically recoverable. Our primary focus going forward will be to continue our evaluation of our properties, and the possible acquisition of additional mineral rights and additional exploration, development and permitting activities. Our mineral lease payments, permitting applications and exploration and development efforts will require additional capital. Further information regarding our mining properties and rights are discussed below in Note 2 – Mineral Rights and Properties. Basis of Presentation We prepared these interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2017. Liquidity and Going Concern Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. At March 31, 2018, we had not yet achieved profitable operations and we have accumulated losses of $9,027,529 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. Effective March 31, 2017, we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the convertible credit facility to $2,000,000. Also in 2017, the maturity date of the credit line was extended to December 31, 2018. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock. Currently, there are no arrangements in place for additional equity funding or new loans. |
Note 2 - Mineral Rights and Pro
Note 2 - Mineral Rights and Properties | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 2 - Mineral Rights and Properties: | Note 2 – Mineral Rights and Properties, net Our mineral rights and mineral properties consist of: March 31, 2018 December 31, 2017 Mineral and other properties $ 185,290 $ 185,290 Mineral rights - Langtry project 63,182 42,357 Mineral rights and properties - unproven, net $ 248,472 $ 227,647 Mineral and Other Properties On August 8, 2016, we purchased 33+/- acres of land (“Section 16 Property”) for $28,582, net of $18 of title fees, located in San Bernardino County, California. The property is located in the Calico Mining District in the SE ¼ of the SE ¼ of Section 16; T 10 North, R 1 East. The State of California patented this land to a private party in 1935 and reserved in favor of the State one-sixteenth of all coal, oil, gas and other mineral deposits contained in the land. In 2014, we purchased 160 acres of land (“Castle Rock”), located in the eastern Calico Mining District, San Bernardino County, California. The parcel is the SE quarter of Section 25, Township 10 North, Range 1 East and is mostly surrounded by public lands. It was purchased for $21,023 in a property tax auction conducted on behalf of the County. The eastern part of the Calico Mining District is best known for industrial minerals and is not known to have any precious metal deposits. In 2012, we purchased 661 acres of land (“Section 13 Property”) in fee simple for $135,685 cash, located in San Bernardino County, California, that was sold in a property tax auction conducted on behalf of the County. The parcel is all of Section 13 located in Township 7 North, Range 4 East, San Bernardino Base & Meridian. The Section 13 property is near the Lava Beds Mining District and has evidence of historic mining. It is adjacent to both the Silver Cliffs and Silver Bell historic mines. The property is located in the same regional geologic area known as the Western Mojave Block that includes our flagship Langtry Project. The property is approximately 28 miles southeast of our Langtry Project. Mineral Rights In 2010, we entered into a 20 year Mining Lease with Option to Purchase (the “Langtry Lease” or the “Lease”) granting us the exclusive right to explore, develop and conduct mining operations on a group of 20 patented mining claims consisting of approximately 413 acres that comprise our Langtry Property. Effective November 28, 2012, December 19, 2013 and January 21, 2015, we executed Amendments No. 1, 2 and 3, respectively, to the Langtry Lease modifying certain terms. Effective March 10, 2016, we executed and delivered a new Lease/Purchase Option (“Lease/Option”) covering our flagship Langtry Property located in the Calico Mining District, San Bernardino County, California. The Lease/Option also includes two unpatented mining claims in the Calico Mining District known as the Lilly #10 and Quad Deuce XIII (the “Langtry Unpatented Claims”), which we have previously owned and agreed to transfer to the Lessor subject to the Lease/Option. The new Lease/Option supersedes all prior agreements. The following is a summary of the highlights of the new Lease/Option, which is qualified in its entirety by the provisions of the Lease/Option dated March 10, 2016: · The Lease/Option has a term of 20 years, and grants an exclusive right to explore, develop and purchase the Langtry property. Lease payments under the new agreement are a nominal $1 per year, payable in advance. This amount was paid in March 2016. The lease requires us to also maintain the option to purchase in good standing as described below. · Option payments: in order to maintain the option to purchase, we are required to pay option payments (“Option Payments”) as follows: $40,000 year 1; the greater of $40,000 or the spot price of 2,500 ounces of silver in years 2 through 5; the greater of $50,000 or the spot price of 2,500 ounces of silver in years 6 through 10; the greater of $75,000 or the spot price of 3,750 ounces of silver in years 11 through 15; and the greater of $100,000 or the spot price of 5,000 ounces of silver in years 16 through 20. 50% of all Option Payments are credited against the purchase price should the Company exercise the purchase option. · In March 2017 we made the required year 2 payment totaling $44,675. In March 2018, we made the required year 3 payment totaling $41,650. 50% of the payment, or $20,825 was capitalized as mining rights as the amount is applicable to the option purchase price. The remaining $20,825 was expensed as lease option costs and included in exploration costs. In all subsequent years, the option payment shall be due March 15. · Option Purchase Price: We have the option to purchase fee title to the Langtry Property for the full 20-year term of the Lease/Option. The purchase price is: conveyance, the Company agreed to pay $10,000, payable in equal monthly installments of $1,000 beginning on September 1, 2015 which has been paid in full. All commitments and obligations under our prior 2010 Lease and the 2016 Lease/Option to Purchase have been fulfilled to date. Future option payments and/or exploration and development of this property may require new equity and/or debt capital. In addition, as of March 31, 2018 all regulatory obligations due or accrued regarding our mineral rights had been paid, and all our claims remain in good standing. Impairment of Mineral Rights The Company has evaluated its mineral rights and properties. As a result of the evaluation, the Company recognized an impairment loss of $1,885,816 associated with the Langtry project. The current impairment analysis and conclusion was a result of the continuing low silver prices. While the Company believes the current range of silver prices between $15 and $20 per ounce is low compared to recent historical value, it believes the Langtry property would be economically viable when the price of silver is consistently above at least $20 per ounce. As such, the Company impaired at 100% all capitalized lease and maintenance payments made prior to the Lease Option agreement of March 10, 2016, as well as the deed amendment fee of $150,000 that provides for a royalty cap upon any future production activities. The unimpaired portion of the mineral rights totaling $63,182 represents payments on the agreement representing amounts applicable to the lease purchase option totaling $63,162, and the lease payment of $20 representing the amount paid for the 20 year lease at $1 per year. |
Note 3 - Fair Value of Financia
Note 3 - Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 3 - Fair Value of Financial Instruments: | Carrying Value at Fair Value Measurement at March 31, 2018 March 31, 2018 Level 1 Level 2 Level 3 Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (29,720) Balance, March 31, 2018 $ 28,620 The carrying values of cash and cash equivalents, accounts payable, accrued liabilities and other short-term debt, approximate their fair value because of the short-term nature of these financial instruments. |
Note 4 - Derivative Liabilities
Note 4 - Derivative Liabilities and Note Payable | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 4 - Derivative Liabilities and Note Payable | Note 4 – Derivative Liabilities and Note Payable Convertible Note Payable: Effective April 1, 2015, the Company executed a convertible promissory note (the “Note”) in the principal amount of $51,270 in favor of Clifford Neuman, the Company’s legal counsel, representing accrued and unpaid fees for past legal services. The Note accrues interest at the rate of 6% per annum, compounded quarterly, and is due on demand. The principal and accrued interest due under the Note may be converted, at the option of the holder, into shares of the Company’s common stock at a conversion price of $0.0735 per share, which represented the market price of the Company’s common stock on the date the Note was made. The conversion price is subject to adjustment in the event the Company sells shares of common stock or common stock equivalent at a price below the conversion price. The Note contains certain anti-dilution provisions that would reduce the conversion price should the Company issue common stock equivalents at a price less than the Note conversion price. Accordingly, the conversion features of the Note are considered a discount to the Note. However, since the Note is payable upon demand by the note holder, the value of the discount is considered interest expense at the time of its inception. The Note is evaluated quarterly, and upon any quarterly valuations in which the value of the conversion option changes we recognize a gain or loss due to a decrease or increase in the fair value of the derivative liability, respectively. The change in fair value of our derivative liability – convertible note payable is as follows: Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (29,720) Balance, March 31, 2018 $ 28,620 We estimate the fair value of this derivative at inception and at each balance sheet date until such time the Note is paid or converted using the Black-Scholes option pricing model, which includes assumptions for expected dividends, expected share price volatility, risk-free interest rate, and expected life of the Note. Our expected volatility assumption is based on our historical weekly closing price of our stock over a period equivalent to the expected remaining life of the Note. The following table summarizes the assumptions used to value the derivative liability at March 31, 2018: Fair value assumptions – derivative: March 31, 2018 Risk free interest rate 2.09% Expected term (years) 1.0 Expected volatility 189% Expected dividends 0% The following table summarizes the assumptions used to value the derivative liability at December 31, 2017: Fair value assumptions – derivative: December 31, 2017 Risk free interest rate 1.76% Expected term (years) 1.0 Expected volatility 183% Expected dividends 0% Accrued interest totaled $9,975 and $9,082 at March 31, 2018 and December 31, 2017, respectively, and is included in Accrued interest on the accompanying consolidated balance sheets. |
Note 5 - Credit Agreement and N
Note 5 - Credit Agreement and Notes Payable - Related Parties | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 5 - Credit Agreement and Notes Payable - Related Parties: | Total principal amounts owed under the credit facility notes payable were $1,959,620 and $1,890,620 at March 31, 2018 and December 31, 2017, respectively. Borrowings under our convertible note payable to Mr. Gibbs were $69,000 and $90,000 for the three months ended March 31, 2018 and 2017, respectively, and were generally used to pay certain mining lease obligations as well as other operating expenses. No principal or interest payments have made to Mr. Gibbs since the inception of the convertible credit facility. As of March 31, 2018 there remained $40,380 of credit available for future borrowings. Total accrued interest on the notes payable to Mr. Gibbs was $373,090 and $349,454 at March 31, 2018 and December 31, 2017, respectively, and are included in Accrued interest - related parties on the accompanying consolidated balance sheets. Note Payable – Related Party On September 12, 2016 we executed an unsecured Note Payable (“Note”) with Mr. John Power, the Company’s President and Chief Executive Officer in the amount of $45,000. The Note accrues interest at 6% per year, and matures on September 12, 2018. The Note requires monthly principal and interest payments of $1,994 beginning on October 12, 2016. As of March 31, 2018 all required principal and interest payments have been made. At March 31, 2018 and December 31, 2017 the Note balance was $11,760 and $17,509, respectively. A total of $37 of interest had accrued since the last payment and is included in Accrued interest – related parties on the accompanying consolidated balance sheets. Interest Expense – Related Parties Total related party interest expense was $23,853 and $22,139 for the three months ended March 31, 2018 and 2017, respectively. |
Note 6 - Commitments and Contin
Note 6 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 6 - Commitments and Contingencies: | Note 6 - Commitments and Contingencies |
Note 7 - Share-based Compensati
Note 7 - Share-based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 7 - Share-based Compensation | Note 7 - Share-based Compensation 2004 Equity Incentive Plan A summary of our stock option activity for options issued under the 2004 Equity Incentive Plan as well as options outstanding that were issued outside the Plan is as follows: Shares Weighted Average Exercise Price Outstanding at December 31, 2017 600,000 $0.26 Options granted or expired - Outstanding at March 31, 2018 600,000 $0.26 All outstanding options at both March 31, 2018 and December 31, 2017 represent options issued outside the 2004 Equity Incentive Plan. All options expired in April 2018, and the weighted average contractual life of all outstanding options at March 31, 2018 was 0.02 years. No share based compensation expense was recorded for either the three months ended March 31, 2018 or 2017. |
Note 8 - Related Party Transact
Note 8 - Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 8 - Related Party Transactions | Note 8 – Related Party Transactions Conflicts of Interests Magellan Gold Corporation (“Magellan”) is a company under common control. Mr. Power is a significant shareholder and director of both Athena and Magellan. Mr. Gibbs is a significant shareholder and creditor (see Note 5 – Credit Agreement and Notes Payable – Related Parties), in both Athena and Magellan. Athena and Magellan are both involved in the business of acquisition and exploration of mineral resources. Silver Saddle Resources, LLC (“Silver Saddle”) is also a company under common control. Mr. Power and Mr. Gibbs are the owners and managing members of Silver Saddle. Athena and Silver Saddle are both involved in the business of acquisition and exploration of mineral resources. There exists no arrangement or understanding with respect to the resolution of future conflicts of interest. The existence of common ownership and common management could result in significantly different operating results or financial position from those that could have resulted had Athena, Magellan and Silver Saddle been autonomous. Management and Director Fees – Related Parties The Company is subject to a month-to-month management agreement with Mr. Power requiring a monthly payment of $2,500 as consideration for the day-to-day management of Athena. For each of the three months ended March 31, 2017 and 2016, a total of $7,500, respectively, was recorded as management fees and are included in general and administrative expenses in the accompanying consolidated statements of operations. As of March 31, 2018 and December 31, 2017, $55,000 and $52,500, respectively, of management fees due to Mr. Power had not been paid and are included in accrued liabilities – related parties on the accompanying consolidated balance sheets. The Company is subject to an agreement with a Director to pay a retainer fee of $1,000 per month for his services. For each of the three months ended March 31, 2018 and 2017, a total of $3,000, was charged as director fees and is included in general and administrative expenses on the accompanying consolidated statements of operations. At March 31, 2018 and December 31, 2017, a total of $15,000 and $12,000, respectively, had not been paid and is included in accrued liabilities – related parties on the accompanying consolidated balance sheets. Accrued Interest - Related Parties At March 31, 2018 and December 31, 2017, Accrued interest - related parties includes accrued interest payable to Mr. Gibbs in the amounts of $373,090 and $349,454, respectively, representing unpaid interest on the convertible credit facility. In addition, at March 31, 2018 and December 31, 2017, Accrued interest - related parties includes $37 and $54, respectively, of interest accrued on the installment Note payable due to Mr. Power. Advances Payable - Related Parties Mr. Power has on occasion advanced the Company funds generally utilized for day-to-day operating requirements. These advances are non-interest bearing and are generally repaid as cash becomes available. During the three months ended March 31, 2018, Mr. Power made short-term advances to the Company totaling $6,750. At March 31, 2018, advances totaling $31,750 had not been repaid. During the three months ended March 31, 2017, Mr. Power made short-term advances to the Company of $2,100, of which $600 was repaid during the quarter. At December 31, 2017, $25,000 of advances were outstanding. The Company also utilizes credit cards owned by Mr. Power to pay various obligations when an online payment is required, the availability of cash is limited, or the timing of the payments is considered critical. |
Note 9 - Subsequent Events
Note 9 - Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Notes | |
Note 9 - Subsequent Events | Note 9 - Subsequent Events Subsequent to March 31, 2018 John Gibbs has advanced $15,000 under the credit facility. |
Note 1 - Organization, Basis 15
Note 1 - Organization, Basis of Presentation, Liquidity and Going Concern: Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Policies | |
Basis of Presentation | Basis of Presentation We prepared these interim consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The accompanying unaudited interim consolidated financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 are not necessarily indicative of the results for the full year. While we believe that the disclosures presented herein are adequate and not misleading, these interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2017. |
Note 1 - Organization, Basis 16
Note 1 - Organization, Basis of Presentation, Liquidity and Going Concern: Liquidity and Going Concern (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Policies | |
Liquidity and Going Concern | Liquidity and Going Concern Our consolidated financial statements have been prepared on a going concern basis, which assumes that we will be able to meet our obligations and continue our operations during the next fiscal year. Asset realization values may be significantly different from carrying values as shown in our consolidated financial statements and do not give effect to adjustments that would be necessary to the carrying values of assets and liabilities should we be unable to continue as a going concern. At March 31, 2018, we had not yet achieved profitable operations and we have accumulated losses of $9,027,529 since our inception. We expect to incur further losses in the development of our business, all of which raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern depends on our ability to generate future profits and/or to obtain the necessary financing to meet our obligations arising from normal business operations when they come due. Effective March 31, 2017, we amended our credit agreement with Mr. John Gibbs, a related party, to increase the borrowing limit under the convertible credit facility to $2,000,000. Also in 2017, the maturity date of the credit line was extended to December 31, 2018. We anticipate that additional funding will be in the form of additional loans from officers, directors or significant shareholders, or equity financing from the sale of our common stock. Currently, there are no arrangements in place for additional equity funding or new loans. |
Note 2 - Mineral Rights and P17
Note 2 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Tables/Schedules | |
Schedule of Mineral Rights and Properties | March 31, 2018 December 31, 2017 Mineral and other properties $ 185,290 $ 185,290 Mineral rights - Langtry project 63,182 42,357 Mineral rights and properties - unproven, net $ 248,472 $ 227,647 |
Note 3 - Fair Value of Financ18
Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Tables/Schedules | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Carrying Value at Fair Value Measurement at March 31, 2018 March 31, 2018 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 28,620 $ - $ - $ 28,620 Carrying Value at Fair Value Measurement at December 31, 2017 December 31, 2017 Level 1 Level 2 Level 3 Derivative liability – Convertible note payable $ 58,340 $ - $ - $ 58,340 |
Note 3 - Fair Value of Financ19
Note 3 - Fair Value of Financial Instruments: Summary of changes in the derivative liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Tables/Schedules | |
Summary of changes in the derivative liabilities | Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (29,720) Balance, March 31, 2018 $ 28,620 |
Note 4 - Derivative Liabiliti20
Note 4 - Derivative Liabilities and Note Payable: Schedule of Change in Fair Value of Derivative Liability - Convertible Note Payable (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Tables/Schedules | |
Schedule of Change in Fair Value of Derivative Liability - Convertible Note Payable | Balance, December 31, 2017 $ 58,340 Total gains, (unrealized, realized) included in net loss (29,720) Balance, March 31, 2018 $ 28,620 |
Note 4 - Derivative Liabiliti21
Note 4 - Derivative Liabilities and Note Payable: Schedule of assumptions used to value Derivative Note discount (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Tables/Schedules | |
Schedule of assumptions used to value Derivative Note discount | Fair value assumptions – derivative: March 31, 2018 Risk free interest rate 2.09% Expected term (years) 1.0 Expected volatility 189% Expected dividends 0% The following table summarizes the assumptions used to value the derivative liability at December 31, 2017: Fair value assumptions – derivative: December 31, 2017 Risk free interest rate 1.76% Expected term (years) 1.0 Expected volatility 183% Expected dividends 0% |
Note 7 - Share-based Compensa22
Note 7 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Tables/Schedules | |
Schedule of Share-based Compensation, Stock Options, Activity | Shares Weighted Average Exercise Price Outstanding at December 31, 2017 600,000 $0.26 Options granted or expired - Outstanding at March 31, 2018 600,000 $0.26 |
Note 1 - Organization, Basis 23
Note 1 - Organization, Basis of Presentation, Liquidity and Going Concern (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Details | |
Entity Incorporation, State Country Name | Delaware |
Entity Incorporation, Date of Incorporation | Dec. 23, 2003 |
Note 1 - Organization, Basis 24
Note 1 - Organization, Basis of Presentation, Liquidity and Going Concern: Liquidity and Going Concern (Details) | 99 Months Ended |
Mar. 31, 2018USD ($) | |
Details | |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (9,027,529) |
Note 2 - Mineral Rights and P25
Note 2 - Mineral Rights and Properties: Schedule of Mineral Rights and Properties (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Mineral properties | ||
Property, Plant and Equipment, Gross | $ 185,290 | $ 185,290 |
Mineral rights - Langtry Project | ||
Property, Plant and Equipment, Gross | 63,182 | 42,357 |
Mineral rights and properties | ||
Property, Plant and Equipment, Gross | $ 248,472 | $ 227,647 |
Note 2 - Mineral Rights and P26
Note 2 - Mineral Rights and Properties: Mineral and Other Properties (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Mineral properties - Section 16 Property | |
Noncash or Part Noncash Acquisition, Description | On August 8, 2016, we purchased 33+/- acres of land (“Section 16 Property”) for |
Payments for (Proceeds from) Acquisition | $ 28,582 |
Mineral properties - Castle Rock | |
Noncash or Part Noncash Acquisition, Description | In 2014, we purchased 160 acres of land (“Castle Rock”), located in the eastern Calico Mining District, San Bernardino County, California. The parcel is the SE quarter of Section 25, Township 10 North, Range 1 East and is mostly surrounded by public lands. |
Payments for (Proceeds from) Acquisition | $ 21,023 |
Mineral properties - Section 13 Property | |
Noncash or Part Noncash Acquisition, Description | In 2012, we purchased 661 acres of land (“Section 13 Property”) in fee simple for |
Payments for (Proceeds from) Acquisition | $ 135,685 |
Note 2 - Mineral Rights and P27
Note 2 - Mineral Rights and Properties (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Mineral rights - Langtry Project | |
Noncash or Part Noncash Acquisition, Description | In 2010, we entered into a 20 year Mining Lease with Option to Purchase (the “Langtry Lease” or the “Lease”) granting us the exclusive right to explore, develop and conduct mining operations on a group of 20 patented mining claims |
Note 3 - Fair Value of Financ28
Note 3 - Fair Value of Financial Instruments: Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative liability - Convertible note payable | $ 28,620 | $ 58,340 |
Fair Value, Inputs, Level 1 | ||
Derivative liability - Convertible note payable | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Derivative liability - Convertible note payable | 0 | 0 |
Fair Value, Inputs, Level 3 | ||
Derivative liability - Convertible note payable | $ 28,620 | $ 58,340 |
Note 3 - Fair Value of Financ29
Note 3 - Fair Value of Financial Instruments: Summary of changes in the derivative liabilities (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Details | |
Derivative Liabilities, Starting Balance | $ 58,340 |
Derivative, Gain (Loss) on Derivative, Net | (29,720) |
Derivative Liabilities, Endling Balance | $ 28,620 |
Note 4 - Derivative Liabiliti30
Note 4 - Derivative Liabilities and Note Payable: Convertible Note Payable (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 |
Fair Value of Derivative Liability, Convertible Note Payable, Balance at Start of Period | $ 58,340 | ||
Derivative Liability, Convertible Note Payable, Total losses (realized/unrealized) included in net loss | (29,720) | ||
Fair Value of Derivative Liability, Convertible Note Payable, Balance at End of Period | $ 28,620 | $ 58,340 | 28,620 |
Derivative Note discount | |||
Fair Value Assumptions, Risk Free Interest Rate | 2.09% | 1.76% | |
Fair Value Assumptions, Expected Term | 1 year | 1 year | |
Fair Value Assumptions, Expected Volatility Rate | 189.00% | 183.00% | |
Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | |
Derivative Note, Accrued Interest | $ 9,975 | $ 9,082 | $ 9,975 |
Note 5 - Credit Agreement and31
Note 5 - Credit Agreement and Notes Payable - Related Parties (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Convertible Notes Payable Related Parties - Mr. Gibbs | |||
Borrowings under convertible note payble | $ 69,000 | $ 90,000 | |
John D. Gibbs, a significant shareholder | |||
Line of Credit Facility, Initiation Date | Jul. 18, 2012 | ||
Line of Credit Facility, Affiliated Borrower | Mr. Gibbs, a significant shareholder | ||
Line of Credit Facility, Interest Rate Description | 5% | ||
Line of Credit Facility, Expiration Date | Dec. 31, 2017 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,000,000 | ||
Line of Credit Facility, Covenant Compliance | The credit facility also contains customary representations and warranties (including those relating to organization and authorization, compliance with laws, payment of taxes and other obligations, absence of defaults, material agreements and litigation) and customary events of default (including those relating to monetary defaults, covenant defaults, cross defaults and bankruptcy events). | ||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 1,959,620 | $ 1,890,620 | |
Accrued interest on notes payble | $ 373,090 | 349,454 | |
John Power, President & CEO | |||
Debt Instrument, Issuance Date | Sep. 12, 2016 | ||
Debt Instrument, Issuer | Mr. John Power, the Company’s President and Chief Executive Officer | ||
Debt Instrument, Face Amount | $ 45,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||
Debt Instrument, Maturity Date | Sep. 12, 2018 | ||
Debt Instrument, Frequency of Periodic Payment | monthly | ||
Debt Instrument, Periodic Payment, Principal | $ 1,994 | ||
Debt Instrument, Date of First Required Payment | Oct. 12, 2016 | ||
Long-term Debt, Gross | $ 11,760 | $ 17,509 | |
Debt Instrument, Increase, Accrued Interest | 37 | ||
Related Parties | |||
Interest Expense | $ 23,853 | $ 22,139 |
Note 7 - Share-based Compensa32
Note 7 - Share-based Compensation: Schedule of Share-based Compensation, Stock Options, Activity (Details) | Dec. 31, 2017$ / sharesshares |
Details | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance | shares | 600,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.26 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Ending Balance | shares | 600,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 0.26 |
Note 7 - Share-based Compensa33
Note 7 - Share-based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Details | ||
Weighted average contractual life of all outstanding options | $ 0.02 | |
Share-based Compensation | $ 0 | $ 0 |
Note 8 - Related Party Transa34
Note 8 - Related Party Transactions: Management Fees - Related Parties (Details) - Mr. Power - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Management Fee Expense | $ 7,500 | $ 7,500 | |
Management Fee Payable | $ 55,000 | $ 52,500 |
Note 8 - Related Party Transa35
Note 8 - Related Party Transactions: Accrued Interest - Related Parties (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Mr. Gibbs | ||
Interest Payable to Related Party Current | $ 373,090 | $ 349,454 |
Note 8 - Related Party Transa36
Note 8 - Related Party Transactions: Advances Payable - Related Parties (Details) - Mr. Power - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Advances from Related Parties | $ 6,750 | $ 2,100 | |
Advances Payable Current | $ 25,000 |
Note 9 - Subsequent Events (Det
Note 9 - Subsequent Events (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Event 1 | |
Subsequent Event, Description | John Gibbs has advanced $15,000 under the credit facility |