Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Pershing Gold Corp. | |
Entity Central Index Key | 1,432,196 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | PGLC | |
Entity Common Stock, Shares Outstanding | 33,676,921 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,986,201 | $ 12,858,873 |
Prepaid expenses and other current assets | 607,978 | 1,006,779 |
Deposits | 41,372 | 27,884 |
Total Current Assets | 2,635,551 | 13,893,536 |
NON - CURRENT ASSETS: | ||
Property and equipment, net | 2,604,371 | 3,303,366 |
Mineral rights | 23,973,912 | 22,803,912 |
Restricted cash | 3,690,000 | 3,690,000 |
Reclamation bond deposit | 50,000 | 50,000 |
Other non-current assets | 31,209 | 9,689 |
Total Non - Current Assets | 30,349,492 | 29,856,967 |
Total Assets | 32,985,043 | 43,750,503 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 1,589,513 | 1,651,461 |
Deferred rent | 2,422 | 4,513 |
Deposit | 0 | 1,750 |
Total Current Liabilities | 1,591,935 | 1,657,724 |
LONG-TERM LIABILITIES: | ||
Deferred rent - long term portion | 5,204 | 0 |
Asset retirement obligation | 989,744 | 963,303 |
Total Liabilities | 2,586,883 | 2,621,027 |
Commitments and Contingencies | ||
STOCKHOLDERS' EQUITY : | ||
Common stock ($0.0001 Par Value; 200,000,000 Shares Authorized; 33,676,921 and 33,544,125 shares issued and outstanding as of September 30, 2018 and December 31, 2017) | 3,368 | 3,354 |
Additional paid-in capital | 212,557,882 | 211,817,072 |
Accumulated deficit | (182,163,091) | (170,690,951) |
Total Stockholders' Equity | 30,398,160 | 41,129,476 |
Total Liabilities and Stockholders' Equity | 32,985,043 | 43,750,503 |
Convertible Series A Preferred Stock | ||
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Value, Issued | 0 | 0 |
Convertible Series B Preferred Stock | ||
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Value, Issued | 0 | 0 |
Convertible Series C Preferred Stock | ||
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Value, Issued | 0 | 0 |
Convertible Series D Preferred Stock | ||
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Value, Issued | 0 | 0 |
Convertible Series E Preferred Stock | ||
STOCKHOLDERS' EQUITY : | ||
Preferred Stock, Value, Issued | $ 1 | $ 1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 33,676,921 | 33,544,125 |
Common Stock, Shares, Outstanding | 33,676,921 | 33,544,125 |
Convertible Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 2,250,000 | 2,250,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Convertible Series B Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 8,000,000 | 8,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Convertible Series C Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 3,284,396 | 3,284,396 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Convertible Series D Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 7,500,000 | 7,500,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Convertible Series E Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 15,151 | 15,151 |
Preferred Stock, Shares Issued | 8,946 | 8,946 |
Preferred Stock, Shares Outstanding | 8,946 | 8,946 |
Preferred Stock, Liquidation Preference, Value | $ 9,742,194 | $ 9,742,194 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | ||||
Compensation and related taxes | 742,606 | 826,674 | 2,390,297 | 3,139,184 |
Exploration cost | 183,710 | 189,295 | 3,046,633 | 1,017,425 |
Consulting fees | 558,579 | 501,202 | 2,236,865 | 1,723,607 |
General and administrative expenses | 1,727,487 | 1,008,016 | 3,808,484 | 3,250,493 |
Total operating expenses | 3,212,382 | 2,525,187 | 11,482,279 | 9,130,709 |
Loss from operations | (3,212,382) | (2,525,187) | (11,482,279) | (9,130,709) |
Other income (expenses): | ||||
Other income | 0 | 0 | 0 | 9,673 |
Foreign currency gain (loss) | (498) | 674 | (2,029) | (9,981) |
Interest expense and other finance costs | (1,477) | (1,181) | (7,637) | (6,159) |
Interest income | 7,165 | 3,138 | 19,805 | 7,247 |
Total other income (expenses) - net | 5,190 | 2,631 | 10,139 | 780 |
Loss before provision for income taxes | (3,207,192) | (2,522,556) | (11,472,140) | (9,129,929) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | $ (3,207,192) | $ (2,522,556) | $ (11,472,140) | $ (9,129,929) |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.10) | $ (0.09) | $ (0.34) | $ (0.32) |
Weighted average common shares outstanding - basic and diluted (in shares) | 33,645,838 | 28,402,389 | 33,618,007 | 28,396,928 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (11,472,140) | $ (9,129,929) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 737,327 | 825,136 |
Accretion | 26,441 | 28,896 |
Non-cash consulting | 75,000 | 0 |
Stock-based compensation | 442,305 | 1,044,888 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 398,801 | 184,887 |
Accounts payable and accrued expenses | 236,571 | (1,191,706) |
Deposits | (19,122) | 0 |
Other non-current assets | (17,636) | 0 |
Deferred rent | 3,113 | (4,803) |
NET CASH USED IN OPERATING ACTIVITIES | (9,589,340) | (8,242,631) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Increase in reclamation bond deposits | 0 | (25,000) |
Purchase of mineral rights | (1,170,000) | (17,000) |
Purchase of property and equipment | (113,332) | (34,639) |
NET CASH USED IN INVESTING ACTIVITIES | (1,283,332) | (76,639) |
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (10,872,672) | (8,319,270) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period | 16,548,873 | 13,972,102 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - end of period | 5,676,201 | 5,652,832 |
Cash paid for: | ||
Interest | 7,637 | 6,159 |
Income taxes | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Reduction of accrued bonuses in connection with vested restricted common stock unit grants | 73,035 | 469,423 |
Reduction of accrued bonuses in connection with vested stock options | 180,122 | 0 |
Reduction of accrued bonuses in connection with expired stock options | 22,681 | 0 |
Net book value of equipment in exchange for consulting fees | 75,000 | 0 |
Reduction of accounts payable in connection with issuance of common stock | 0 | 8,250 |
Reduction of accounts payable in connection with issuance of restricted stock unit grants | $ 0 | $ 65,000 |
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 Pershing Gold Corporation (the “Company”), formerly named Sagebrush Gold Ltd., was incorporated under the laws of the State of Nevada on August 2, 2007. The Company is a gold and precious metals exploration company pursuing exploration, development, and mining opportunities primarily in Nevada. The Company is currently focused on exploration of its Relief Canyon properties in Pershing County in northwestern Nevada. None of the Company’s properties contain proven and probable reserves, and the Company’s activities on all of its properties are exploratory in nature. On August 30, 2011, the Company, through its wholly-owned subsidiary, Gold Acquisition Corp. (“Gold Acquisition”), acquired the Relief Canyon Mine property (“Relief Canyon”) located in Pershing County, near Lovelock, Nevada. A wholly-owned subsidiary, Pershing Royalty Company, a Delaware corporation, was formed on May 17, 2012 to hold royalty interests in two gold exploration properties. On July 5, 2016, a wholly-owned subsidiary, Blackjack Gold Corporation, a Nevada corporation, was formed for potential purchases of exploration targets. Agreement and Plan of Merger On September 28, 2018, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Americas Silver Corporation (“Americas Silver”) and R Merger Sub, Inc., a wholly-owned subsidiary of Americas Silver (“Merger Sub”). Under the terms of the Merger Agreement, the Company will merge with and into Merger Sub, with the Company being the surviving corporation and becoming a wholly-owned subsidiary of Americas Silver (the “Merger”). In connection with the Merger, common stockholders of the Company will be issued 0.715 Americas Silver common shares for each share of Company common stock (the “Exchange Ratio”). Holders of the Company’s Series E Convertible Preferred Stock (“Series E Preferred Stock”) will be given the option to (a) convert their shares of Series E Preferred Stock into Company common shares immediately before the closing and exchange those common shares for Americas Silver common shares at the Exchange Ratio, or (b) exchange their Series E Preferred Stock for non-voting preferred stock of Americas Silver (“Purchaser Preferred Stock”). The Merger Agreement provides that, upon consummation of the Merger, Americas Silver will cause one nominee of the Company to be appointed to the board of directors of Americas Silver. The Merger must be approved by (i) preferred shareholders holding 75% of the Company’s preferred shares, voting as a separate class, and (ii) a majority of the voting shares held by the common shareholders and preferred shareholders, voting together as a single class on an as-converted basis. The issuance of the Americas Silver shares in connection with the Merger must also be approved by a majority of the Americas Silver shares voted at the meeting called for that purpose. The Company is required to call a meeting and solicit the approval of its stockholders (the “Special Meeting”), subject to the board of directors’ ability to accept a Superior Proposal (as defined in the Merger Agreement) in accordance with the Merger Agreement. If the Merger Agreement is terminated because the Company accepts a Superior Proposal, or the board of directors of the Company changes its recommendation to its stockholders regarding the approval of the Merger, the Company will be obligated to pay a termination fee to Americas Silver in the amount of $4,000,000 (the “Termination Fee”). Convertible Secured Debenture Concurrent with the execution of the Merger Agreement, the Company and Americas Silver entered into a Convertible Secured Debenture (“Debenture”), effective October 1, 2018, that will entitle the Company to borrow up to $4,000,000 from Americas Silver. The interest rate is 16% per year on the amount drawn, accrued and compounded monthly. The loan will mature on June 1, 2019, or September 1, 2019 if the Company has exercised an option to extend maturity. As of October 29, 2018 the Company has drawn $1,000,000 against the Debenture. The Company’s ability to draw the remainder of the principal amount is subject to the parties agreeing on terms and filing a deed of trust in the state of Nevada, among other customary conditions. If the Merger Agreement is terminated, in most circumstances, the outstanding principal amount, plus any accrued and unpaid interest, will be due and payable in cash within 90 days following the date of termination (or 10 days if the Merger Agreement is terminated by the Company in order to accept a Superior Proposal or following a change of the board of directors’ recommendation to stockholders). However, if the Merger Agreement is terminated because (i) Americas Silver fails to obtain the approval of its shareholders, (ii) a law or government order prevents consummation of the Merger, or (iii) Americas Silver breaches the Merger Agreement, the Company will have the option to repay the borrowed amount in cash or in shares of Company common stock. If repayment will be accomplished by conversion into Company common stock, the number of shares issuable will be determined by dividing the amount outstanding under the Debenture by a conversion price equal to the volume-weighted average price of the Company’s common stock for the five trading days immediately preceding the date of the election, but never less than $1.18. The issuance of common shares in exchange for amounts outstanding under the Debenture is subject to receipt of prior approval by The NASDAQ Stock Market and the Toronto Stock Exchange. The Debenture will be secured by a lien on substantially all of the Company’s assets. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation The unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and present the consolidated financial statements of the Company and its wholly-owned subsidiaries as of September 30, 2018. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the nine months ended September 30, 2018 have been included. The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these consolidated financial statements have been derived from the audited financial statements of the Company for the fiscal year ended December 31, 2017, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 28, 2018. The consolidated balance sheet as of December 31, 2017, contained herein, was derived from those financial statements. Use of estimates In preparing the unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the useful life of property and equipment, the valuation of deferred tax assets and liabilities, including valuation allowance, amounts and timing of closure obligations, the assumptions used to calculate fair value of restricted stock units, options and warrants granted, stock-based compensation, beneficial conversion on preferred stock, capitalized mineral rights, asset valuations, timing of the performance criteria of restricted stock units and the fair value of common stock issued. Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2018, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. Going concern These unaudited consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time. The Company has incurred a net loss of approximately $11.5 million for the nine months ended September 30, 2018, has used approximately $9.6 million of net cash in operations for the nine months ended September 30, 2018, has incurred a total cumulative deficit of approximately $182.2 million since its inception and requires capital for its contemplated business and exploration activities to take place. As discussed more fully in Note 1, the Company has entered into a Merger Agreement with Americas Silver. The Merger Agreement provides for, and the Company subsequently entered into, a Debenture whereby Americas Silver will fund the Company up to $4 million to cover its working capital requirements until the Merger is closed, subject to customary contingencies. If the Merger does not close the principal and interest outstanding under the Debenture would either be reimbursed with cash or the issuance of the Company’s common stock. In addition to the Debenture, obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue business. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern as determined by management. The unaudited consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. Restricted cash – non current Restricted cash consists of cash which is held as collateral under surface management surety bonds issued on the Company’s behalf. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows: September 30, 2018 December 31, 2017 (Unaudited) Cash and cash equivalents $ 1,986,201 $ 12,858,873 Restricted cash – non current 3,690,000 3,690,000 Total cash, cash equivalents and restricted cash $ 5,676,201 $ 16,548,873 Fair value of financial instruments The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their estimated fair market values based on the short-term maturity of these instruments. Prepaid expenses and other current assets Prepaid expenses and other current assets of $607,978 and $1,006,779 at September 30, 2018 and December 31, 2017, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments for consulting, public relations, and business advisory services, insurance premiums, drilling services, mining claim fees and mineral lease fees which are being amortized over the terms of their respective agreements. Mineral property acquisition and exploration costs Costs of leasing, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. Given the completion on May 24, 2018 of a final feasibility study indicating a mine is economically viable, upon a final decision to commence operating mine development activities to bring a mine into production, the property would enter into the development stage and the Company would capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed. ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. ASC 930-805-30-1 and 30-2 provide that, in fair valuing mineral assets, an acquirer should take into account both: The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. Property and equipment Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty-five years. Impairment of long-lived assets The Company accounts for the impairment or disposal of long-lived assets according to ASC 360, “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property, and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage are monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment of its long-lived assets at September 30, 2018 and December 31, 2017, respectively. Asset retirement obligations Asset retirement obligations (“ARO”), consisting primarily of estimated mine reclamation and closure costs at the Company’s Relief Canyon property, are recognized in the period incurred and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary. Income taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company adopted ASU 2016-09, “Compensation - Stock Compensation (Topic 718)” (“ASU 2016-09”), which makes several modifications to Topic 718. Upon adoption of ASU 2016-09, the Company recognizes the effect of forfeitures in compensation cost as they occur, rather than estimating forfeitures as of the award date. Any previously recognized compensation cost will be reversed in the period of forfeiture. Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. Related party transactions Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. Foreign currency transactions The Company accounts for foreign currency transactions in accordance with ASC 830, “Foreign Currency Matters” (“ASC 830”), specifically the guidance in subsection ASC 830-20, “Foreign Currency Transactions”. The U.S. dollar is the functional and reporting currency for the Company and its subsidiaries. Pursuant to ASC 830, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses upon settlement reported in foreign exchange gain (loss) in the computation of net income (loss). Recent accounting pronouncements In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” or ASU 2016-18. ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line-item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and is to be applied retrospectively. Early adoption was permitted, including adoption in an interim period. The Company early adopted ASU 2016-18 for the three-month period ended December 31, 2017 and its adoption did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates Step 2 from the goodwill impairment test. When an indication of impairment was identified after performing the first step of the goodwill impairment test, Step 2 required that an entity determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) using the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in ASU No. 2017-04, an entity would perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value. An entity would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. In addition, an entity must consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. A public business entity that is a SEC filer should adopt the amendments in ASU No. 2017-04 for its annual, or any interim, good will impairment tests in fiscal years beginning after December 15, 2019. The Company does not believe the guidance will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation”. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. An entity shall account for the effects of a modification described in ASC paragraphs 718-20-35-3 through 35-9, unless all the following are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The provisions of this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company’s adoption of this guidance on January 1, 2018 did not have a material impact on the Company’s consolidated results of operations, financial position and related disclosures. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260)”. The amendments in the update change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260, Earnings Per Share, to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features would be subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company does not believe the guidance will have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities”. ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The guidance is effective for the Company beginning after December 15, 2018, although early adoption is permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company is assessing ASU 2018-07 and does not expect it to have a material impact on its accounting and disclosures. In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s consolidated financial statements. 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 consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
MINERAL PROPERTIES
MINERAL PROPERTIES | 9 Months Ended |
Sep. 30, 2018 | |
Mineral Industries Disclosures [Abstract] | |
MINERAL PROPERTIES | NOTE 3 — MINERAL PROPERTIES The Company’s Relief Canyon property rights currently total approximately 29,000 acres and are comprised of approximately 1,137 owned unpatented mining claims, 120 owned millsite claims, 62 leased unpatented mining claims, and 6,586 acres of leased private lands, 960 acres of subleased private lands, and 320 acres of owned private minerals. Most of the property on which the Relief Canyon deposit is located is subject to a 2% net smelter return production royalty, with a portion of that property subject to net smelter return production royalties totaling 4.5%. The rest of the property is subject, under varying circumstances, to net smelter return production royalties ranging from 2% to 5%. Pershing Pass Property The Pershing Pass property consists of 765 unpatented mining claims (746 owned and 19 leased) covering approximately 12,900 acres, a mining lease of private lands covering approximately 635 acres, and a mining sublease of private lands covering approximately 960 acres. Out of the total unpatented mining claims, 238 unpatented mining claims are subject to a 2% net smelter return royalty and 19 unpatented mining claims are leased with a purchase option. The primary term of the mining lease of private lands is ten years ending in December 2022, which may be extended as long as mineral exploration, development or mining continue on the property. Production from the private lands covered by the lease is subject to a 2% net smelter return royalty on all metals produced other than gold, and to a royalty on gold indexed to the gold price, ranging from 2% at gold prices of less than $500 per ounce to 3.5% at gold prices over $1,500 per ounce. Prior to one year after commercial production begins, the Company can repurchase up to 3% of the royalty on gold production at the rate of $600,000 for each 1%. In September 2013, the Company entered into a lease agreement and purchase option for 19 unpatented mining claims (approximately 400 acres) in the Pershing Pass Property. Production from the lease is subject to a 1% net smelter return royalty on precious metals and a 0.5% net smelter royalty on all other metals produced from the leased property. Prior to production, and starting in September 2016, the Company is required to pay a $10,000 annual advance minimum royalty payment until September 2023. The annual advance minimum royalty payment increases to $12,500 in September 2023, to $15,000 in September 2028 and to $20,000 in September 2033. The Company has the right to buy the leased claims at any time for $250,000. In March 2017, the Company entered into a Mining Sublease with Newmont granting the Company the exclusive right to prospect, explore for, develop, and mine minerals on certain lands within the Pershing Pass area south of the Relief Canyon Mine. The subleased lands are subject to an underlying 2 % NSR royalty payable to the Owners and a 2% NSR royalty payable to Newmont under the Sublease. The Mining Sublease has an initial term of ten years and may be extended by the Company until December 3, 2034 and so long thereafter as any mining, development, or processing operations are being conducted continuously. The Mining Sublease calls for the Company to make minimum work expenditures for the first four years of the Mining Sublease, followed by annual advanced minimum royalty payments to Newmont to maintain the Mining Sublease in good standing. The Sublease may be terminated any time after providing 90-days written notice of termination. The $500,000 expenditure required to be made by the second anniversary (3/29/2019) is a firm commitment and must be satisfied irrespective of termination. If a required minimum work commitment, including the $500,000 firm commitment, is not timely satisfied as scheduled, the Company must pay Newmont the difference between the scheduled amount of required minimum work commitment and costs already incurred by the Company towards the required minimum work commitment. As of June 30, 2018, the most recent cost reporting date under the Mining Sublease, the Company can credit approximately $270,000 in exploration expenditures already incurred against the $1.5 million work commitment. Coal Canyon Property In December 2017, the Company entered into two mining leases at Coal Canyon, which is west of the Relief Canyon Mine. One such mining lease with Good Springs Exploration, LLC and Clancy Wendt (collectively “Lessor”) covers 43 unpatented mining claims adding 800 acres to the Company’s property holdings. The lease contains customary terms and conditions, with a primary term of ten years, which may be extended, annual advance royalty payments to Lessor starting at $20,000 per year, capping at $50,000, which payments are recoupable against a 3% net smelter return production royalty, which royalty can be bought down by one percent point of net smelter return for a payment of $1,000,000, and also includes a conditional purchase option for $350,000. A second mining lease with New Nevada Resources, LLC and New Nevada Lands, LLC (collectively “New Nevada”) covers 1,899 acres of fee land. The lease contains customary terms and conditions, with a primary term of twenty years, which may be extended, with annual advance royalty payments to New Nevada starting at $10 per acre capping at $25 per acre, which payments are recoupable against a 3% net smelter return production royalty. This royalty can be reduced by one percent of net smelter return in exchange for a payment of $1 million, and also includes a conditional purchase option at a price of $500 per acre. Newmont Properties On April 5, 2012, the Company purchased from Victoria Gold Corp. and Victoria Resources (US) Inc. (collectively, “Victoria”) their interest in approximately 13,300 acres of mining claims and private lands adjacent to the Company’s original landholdings at the Relief Canyon Mine in Pershing County, Nevada. Approximately 8,900 acres of the lands that the Company acquired from Victoria were a leasehold interest comprised of unpatented mining claims and private lands subject to a 2006 Mineral Lease and Sublease with Newmont USA Ltd. (“Newmont”), which the Company refers to as the Newmont Leased property. At that time, the Newmont Leased property consisted of 155 unpatented lode mining claims owned by Newmont comprising approximately 2,800 acres, approximately 4,900 acres of privately-owned fee minerals leased by Newmont from the owners, and 62 unpatented mining claims that were owned by Victoria within the Newmont Leased property and area of interest. On January 14, 2015, the Company entered into an Asset Purchase Agreement with Newmont (the “Asset Purchase Agreement”) pursuant to which the Company acquired for $6.0 million, 74 unpatented mining claims totaling approximately 1,300 acres that the Company had previously leased from Newmont, and entered into a new mining lease directly with New Nevada Resources, LLC and New Nevada Lands, LLC for approximately 1,600 acres of fee, or private, land that the Company had previously subleased from Newmont. As part of the January 2015 transactions completed pursuant to the Asset Purchase Agreement, a subsidiary of the Company entered into a Mining Lease (the “2015 Mining Lease”) with New Nevada Resources, LLC and New Nevada Lands, LLC (the “Owners”), covering certain fee lands (the “Leased Properties”) included in the Company’s Relief Canyon properties. The 2015 Mining Lease has a term of twenty years and for as long thereafter as any mining, development or processing operations are being conducted on a continuous basis. The 2015 Mining Lease contains customary terms and conditions, including an advance royalty and a 2.5% net smelter returns production royalty on the Leased Properties payable to the Owners. Newmont Leased Property As part of the Asset Purchase Agreement transactions, Newmont and the Company entered into an amendment of the 2006 Minerals Lease and Sublease (the “Third Amendment”), pursuant to which the Company agreed to a $2.6 million work commitment on the properties remaining subject to the 2006 Minerals Lease and Sublease to be expended by the seventh anniversary of the effective date of the Third Amendment. Upon the eighth anniversary of the effective date of the Third Amendment, the Company shall pay an annual rental payment of $10.00 per acre if the Company does not incur $500,000 in qualified expenditures during the preceding year. Expenditures incurred in excess of the annual work commitment or rental payment obligation may be carried forward as credits against future annual work commitment obligations or rental payment obligations. As of December 15, 2017, the most recent cost reporting date under the Third Amendment, the Company can credit approximately $2.9 million in exploration expenditures already incurred against the remaining $2.3 million work commitment and future rental payment obligations. Also as part of the transactions completed pursuant to the Asset Purchase Agreement, Newmont and the Owners entered into a new Mining Lease (the “2015 Newmont Lease”) covering about 2,770 acres of private lands included in the Company’s Relief Canyon properties (the “Subleased Properties”) and subleased by the Company from Newmont pursuant to the 2006 Minerals Lease and Sublease. The 2015 Newmont Lease has a term of twenty years and for as long thereafter as any mining, development or processing operations are being conducted on a continuous basis. The 2015 Newmont Lease contains customary terms and conditions, including an advance royalty and a 2.5% net smelter returns production royalty on the Subleased Properties payable to the Owners. The Company continues to hold rights to the Subleased Properties pursuant to its 2006 Minerals Lease and Sublease with Newmont. As discussed above, on March 29, 2017, the Company entered into a Mining Sublease with Newmont granting the Company the exclusive right to prospect, explore for, develop, and mine minerals on certain lands within the Pershing Pass area south of the Relief Canyon Mine. The Mining Sublease has an initial term of ten years and may be extended by the Company until December 3, 2034 and so long thereafter as any mining, development, or processing operations are being conducted continuously. The Mining Sublease calls for the Company to make minimum work expenditures for the first four years of the Mining Sublease, followed by annual advanced minimum royalty payments to Newmont to maintain the Mining Sublease in good standing. The Sublease may be terminated any time after providing 90-days written notice of termination. If the required minimum work commitment of $500,000 has not been satisfied prior to termination the Company must pay Newmont the difference between the $500,000 required minimum work commitment and costs already incurred by the Company towards the required minimum work commitment. As of September 30, 2018, the most recent cost reporting date under the Mining Sublease, the Company can credit approximately $270,000 in exploration expenditures already incurred against the $1.5 million work commitment. On August 27, 2018, the Company exercised its right to purchase certain royalty interests owned by Newmont for $1,100,000. By exercise of its right of first offer the Company acquired all of the assets then held under the Third Amendment terminating the lease in its entirety, without further force or effect. By termination of the 2006 Lease Agreement, the agreement Area of Interest also terminated. Assets acquired under the right of first offer include (i) 81 unpatented lode claims, (ii) 320 acres of private minerals (subject to an underlying 2.125% NSR royalty payable to New Nevada Resources, LLC); (iii) assignment of a Mining Lease dated, effective December 31, 2014, between New Nevada Resources, LLC and New Nevada Lands, LLC (collectively “Owner”), covering approximately 2,458.88 acres of private lands subject to a 2.5% NSR royalty payable to Owner, and other customary terms and conditions under the Mineral Lease agreement; and (iv) termination of the 2006 Minerals Lease and Sublease in its entirety, without any further force or effect. General In February 2018, the Company increased its statewide surface management surety bonds by $200,000 with the United States Department of the Interior Bureau of Land Management (“BLM”) as required by the State of Nevada. No additional collateral was required. As of September 30, 2018, the Company had posted statewide surface management surety bonds in the total amount of approximately $12.5 million, which was approximately $80,000 in excess of the coverage requirement as of September 30, 2018, to reclaim land disturbed in its exploration and mining operations. The surface management surety bonds are provided through third-party insurance underwriters. The Company was required to deposit a total of $3,690,000, or approximately 30% of the total surety bonds, in collateral accounts. The funds deposited in the collateral accounts are classified as restricted cash – noncurrent on the Company’s balance sheet. As of September 30, 2018, based on management’s review of the carrying value of mineral rights, management determined that there is no evidence that the cost of these acquired mineral rights will not be fully recovered and accordingly, the Company determined that no adjustment to the carrying value of mineral rights was required. As of the date of these consolidated financial statements, the Company has not established any proven or probable reserves on its mineral properties and has incurred only acquisition and exploration costs. Mineral properties consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Relief Canyon Mine — Gold Acquisition $ 8,571,071 $ 8,501,071 Relief Canyon Mine — Newmont Properties 14,809,441 13,709,441 Pershing Pass Property 593,400 593,400 $ 23,973,912 $ 22,803,912 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 — PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Estimated Life September 30, 2018 December 31, 2017 (Unaudited) Furniture and fixtures 5 years $ 56,995 $ 56,995 Office and computer equipment 1 - 5 years 447,470 434,563 Land — 358,886 358,886 Building and improvements 5 - 25 years 823,131 823,131 Site costs 10 years 1,518,129 1,417,704 Crushing system 20 years 2,390,995 2,514,021 Process plant and equipment 10 years 3,530,460 3,530,460 Vehicles and mining equipment 5 - 10 years 605,824 605,824 9,731,890 9,741,584 Less: accumulated depreciation (7,127,519 ) (6,438,218 ) $ 2,604,371 $ 3,303,366 For the nine months ended September 30, 2018 and 2017, depreciation expense amounted to $737,327 and $825,136, respectively. During May 2018, the Company exchanged a reclaim tunnel and other equipment with a net book value of $75,000 (cost of $123,026 and associated accumulated depreciation of $48,026) for engineering design services also valued at $75,000. As a result, the assets and related accumulated depreciation were written-off as of September 30, 2018. No gain or loss was recognized on the exchange. |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATIONS | NOTE 5 — ASSET RETIREMENT OBLIGATIONS In conjunction with the permit approval permitting the Company to resume mining in the existing open pits at the Relief Canyon Mine during the third quarter of 2014, the Company has recorded an asset retirement obligation based upon the reclamation plan submitted in connection with the permit. The following table summarizes activity in the Company’s ARO: September 30, 2018 June 30, 2017 (Unaudited) (Unaudited) Balance, beginning of period $ 963,303 $ 895,085 Accretion expense 26,441 9,632 Reclamation obligations settled - - Additions and changes in estimates - - Balance, end of period $ 989,744 $ 904,717 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 — STOCKHOLDERS’ EQUITY On June 17, 2015, the Board of Directors of the Company approved a reverse stock split of the Company’s Common Stock at a ratio of 1-for-18 (the “Reverse Stock Split”) which became effective on June 18, 2015. In connection with the Reverse Stock Split, the Company filed a Certificate of Amendment to its Amended and Restated Articles of Incorporation, as amended, with the Nevada Secretary of State to reduce the number of shares of Common Stock the Company is authorized to issue from 800,000,000 to 200,000,000. All share and per share values of the Company’s Common Stock for all periods presented in the accompanying consolidated financial statements are retroactively restated for the effect of the Reverse Stock Split in accordance with SAB Topic 4C. Preferred Stock The Company is authorized within the limitations and restrictions stated in the Amended and Restated Articles of Incorporation to provide by resolution or resolutions for the issuance of 50,000,000 shares of Preferred Stock, par value $0.0001 per share in such series and with such designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions as the Company’s Board of Directors establishes. Series A Convertible Preferred Stock As of September 30, 2018, 2,250,000 shares of Series A Preferred Stock, $0.0001 par value were authorized with none outstanding. Series B Convertible Preferred Stock As of September 30, 2018, 8,000,000 shares of Series B Preferred Stock, $0.0001 par value were authorized with none outstanding. Series C Convertible Preferred Stock As of September 30, 2018, 3,284,396 shares of Series C Preferred Stock, $0.0001 par value, were authorized with none outstanding. 9% Series D Cumulative Preferred Stock As of September 30, 2018, 7,500,000 shares of Series D Preferred Stock, $0.0001 par value, were authorized with none outstanding. Series E Convertible Preferred Stock As of September 30, 2018, 15,151 shares of Series E Preferred Stock, $0.0001 par value, were authorized with 8,946 Series E Preferred shares outstanding. On September 28, 2018, the Company amended the Certificate of Designation for its Series E Preferred Stock (the “Amended Series E Certificate of Designation”), effective immediately. The amendments (a) exempt the Merger from automatic conversion and cash payment provisions that would otherwise be applicable upon the consummation of the Merger, and (b) exempt the execution of the Debenture (but not any subsequent conversion of the Debenture into shares of the Company’s common stock) from provisions that would otherwise trigger an adjustment in the conversion price of the Series E Preferred Stock. Common Stock Restricted Stock Units In January 2018, the Company granted 25,000 restricted stock units to the directors of the Company in connection with bonus compensation for fiscal year 2017. The fair market value on the date of grant was approximately $59,000. The restricted stock units granted to the directors of the Company vested upon grant. For each vested restricted stock unit, the holder will be entitled to receive one restricted share of the Company's Common Stock upon the holder's termination of service on the Company's Board of Directors or upon a change in control. In February 2018, the Company accelerated the vesting of 18,518 restricted stock units granted to one of its board members who resigned effective February 23, 2018. After the acceleration, the Company converted 85,135 vested restricted stock units into 85,135 shares of the Company’s Common Stock due to the resignation of one of the members of the board of directors. In April 2018, the Company granted 12,377 restricted stock units to a director of the Company for initial board retainer fees. The fair market value on the date of grant was approximately $25,000. The restricted stock units granted to the director vest one-third on April 29, 2019, 2020 and 2021. For each vested restricted stock unit, the holder will be entitled to receive one restricted share of the Company's Common Stock upon the holder's separation of employment under certain circumstances or upon a change in control. Between April 2018 and June 2018, the Company granted a total of 17,497 restricted stock units to two members of the Company’s Board of Directors as payment in lieu of cash for retainer and meeting fees earned totaling $34,000 for the nine months ended September 30, 2018. All of these restricted stock units vested on the date of grant. For each vested restricted stock unit, the holder will be entitled to receive one restricted share of the Company's Common Stock upon such director’s termination of service on the Board of Directors, in connection with a change in control, or under certain other circumstances. In August 2018, the Company converted 47,661 vested restricted stock units granted to one of its board members who resigned effective August 29, 2018 into 47,661 shares of the Company’s Common Stock due to such board member s resignation. As of December 31, 2017 and 2016, the Company recognized a liability for employee and director bonus compensation related to restricted stock unit grants with a fair value of approximately $59,000 and $530,000, respectively, which was included in accounts payable and accrued expenses. Consequently, the Company recognized stock based compensation of approximately $59,000 and $530,000 during the year ended December 31, 2017 and 2016, respectively, in connection with these transactions. As of September 30, 2018, the Company recorded approximately $73,035 in additional paid-in capital and a contemporaneous reduction of accounts payable and accrued expenses in connection with the issuance of vested restricted stock units related to fiscal year 2016 and 2017 bonus compensations. As of September 30, 2018, there is no remaining unvested restricted stock units related to fiscal year 2016 and 2017 bonus compensation. During the nine months ended September 30, 2018 and 2017, the Company recorded total stock-based compensation expense in connection with restricted stock and restricted stock unit awards of $430,986 and $908,323, respectively. At September 30, 2018, there was a total of $1,455,538 unrecognized compensation expense in connection with restricted stock and restricted stock unit awards. A summary of the status of the restricted stock units as of September 30, 2018, and of changes in restricted stock units outstanding during the nine months ended September 30, 2018, is as follows: Nine months ended September 30, 2018 (Unaudited) Restricted Stock Unit Weighted Average Grant-Date Fair Value Per Share Outstanding at December 31, 2017 1,061,471 $ 5.68 Granted 54,874 2.16 Vested and converted (132,796 ) 2.23 Forfeited - - Outstanding at September 30, 2018 983,549 $ 5.39 Common Stock Options In January 2018, the Company issued 436,000 stock options in bonus compensation for certain employees. The options are exercisable at a price of $2.80 for 10 years. A summary of the Company’s outstanding stock options as of September 30, 2018 (unaudited) and changes during the nine months ended are presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at December 31, 2017 1,794,453 $ 7.21 4.20 Granted 436,000 2.80 10.00 Exercised — — — Forfeited/Expired (102,336 ) 5.53 — Cancelled — — — Balance at September 30, 2018 2,128,117 $ 6.36 4.81 Options exercisable at end of period 1,711,117 $ 7.23 Options expected to vest 417,000 $ 2.80 Weighted average fair value of options granted during the period $ 1.19 As of December 31, 2017, the Company recognized a liability for employee bonus compensation related to stock options granted in January 2018 with a grant-date fair value of approximately $520,000, which was included in accounts payable and accrued expenses. The stock options granted to employees vest one-third on January 29, 2018, 2019 and 2020. The 436,000 options were valued on the grant date at approximately $1.19 per option or a total of approximately $520,000 using a Black-Scholes option pricing model with the following assumptions: stock price of $2.36 per share (based on the sale of its common stock in a private placement at $2.80), volatility of 41%, expected term of 10 years, and a risk free interest rate of 2.70%. Consequently, the Company recognized stock based compensation of approximately $520,000 during the year ended December 31, 2017, in connection with these transactions. As of September 30, 2018, the Company recorded approximately $180,122 in additional paid in capital and a contemporaneous reduction of accounts payable and accrued expenses in connection with the issuance of vested restricted stock units related to fiscal year 2017 bonus compensations. Additionally, the Company reduced stock based compensation of $22,681 in connection with the expiration of stock options due to an employee termination and a contemporaneous reduction of accounts payable and accrued expenses. As of September 30, 2018, the remaining balance of unvested stock options related to fiscal year 2017 bonus compensations amounted to approximately $295,000. Common Stock Warrants A summary of the Company’s outstanding stock warrants as of September 30, 2018 (unaudited) and changes during the nine months ended are presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at December 31, 2017 4,434,267 $ 4.12 1.29 Granted — — — Cancelled — — — Forfeited (2,247,019 ) 4.77 — Exercised — — — Balance at September 30, 2018 2,187,248 $ 3.46 1.20 Warrants exercisable at September 30, 2018 2,187,248 $ 3.46 1.20 Weighted average fair value of warrants granted during the period $ — |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS PER COMMON SHARE | NOTE 7 — NET LOSS PER COMMON SHARE Net loss per common share is calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic loss per share is computed by dividing net loss available to common stockholder, adjusted for preferred dividends, by the weighted average number of shares of Common Stock outstanding during the period. The computation of diluted net loss per share does not include anti-dilutive Common Stock equivalents in the weighted average shares outstanding. The following table sets forth the computation of basic and diluted loss per share: For the Nine Months ended September 30, 2018 For the Nine Months ended September 30, 2017 (Unaudited) (Unaudited) Numerator: Net loss available to common stockholders $ (11,472,140 ) $ (9,129,929 ) Denominator: Denominator for basic and diluted loss per share (weighted-average shares) 33,618,007 28,396,928 Net loss per common share, basic and diluted $ (0.34 ) $ (0.32 ) The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss. In periods where the Company has a net loss, all dilutive securities are excluded. September 30, 2018 September 30, 2017 (Unaudited) (Unaudited) Common stock equivalents: Stock options 2,128,117 1,794,453 Stock warrants 2,187,248 2,497,763 Restricted stock units 983,549 1,047,224 Convertible preferred stock 3,163,051 2,725,092 Total 8,461,965 8,064,532 As more fully discussed in Note 1 the Company entered into a Debenture with Americas Silver to provide a loan of up to $4 million to fund the Company’s working capital needs up to the closing of the Merger, subject to certain customary conditions. In certain circumstances the repayment of the Debenture will be made via the issuance of shares of Company common stock. If shares are issued to Americas Silver to pay-off the Debenture additional shares would be issued which could potentially impact net loss per common share. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 — COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases its corporate facility and certain office equipment under operating leases with expiration dates through 2021. In April 2015, the Company executed a new operating lease agreement for its corporate facility in Lakewood, Colorado. The lease is for a period of 39 months commencing in May 2015 and expiring in July 2018. During the second quarter of 2018, the Company executed an amendment to the office lease agreement extending the lease period an additional 39 months through October 2021. The Company recognized total deferred rent of $7,626 in connection with this lease agreement as of September 30, 2018. Rent expense was $35,265 and $38,557 for the nine months ended September 30, 2018 and 2017, respectively. Future minimum rental payments required under operating leases are as follows: 2018 $ 9,893 2019 56,099 2020 57,194 2021 42,888 $ 166,074 Mining Leases The Company leases certain mineral properties and water rights included in its Relief Canyon Properties. The future minimum lease payments under these mining leases are as follows: 2018 $ 68,994 2019 98,491 2020 137,485 2021 137,485 2022 142,485 Thereafter 937,290 $ 1,522,230 Should the Merger close as contemplated, certain key employees of the Company will receive aggregate payments totaling approximately $2.8 million, through employment or severance compensation agreements. Mr. Alfers, Chief Executive Officer, will receive $1.7 million and Mr. Alexander, Vice President Finance and Controller, will receive approximately $450,000. Non-executive key employees will receive the remaining portion of the aggregate $2.8 million. Additionally, should the Merger close as contemplated, Canaccord, the Company’s financial advisor, will receive a minimum success fee of $750,000. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 — SUBSEQUENT EVENTS Convertible Secured Debenture Concurrent with the execution of the Merger Agreement, the Company and Americas Silver entered into a Convertible Secured Debenture (“Debenture”), effective October 1, 2018, that will entitle the Company to borrow up to $4,000,000 from Americas Silver, subject to certain customary conditions. The interest rate is 16% per year on the amount drawn, accrued and compounded monthly. The loan will mature on June 1, 2019, or September 1, 2019 if the Company has exercised an option to extend maturity. If the Merger Agreement is terminated, in most circumstances, the outstanding principal amount, plus any accrued and unpaid interest, will be due and payable in cash within 90 days following the date of termination (or 10 days if the Merger Agreement is terminated by the Company in order to accept a Superior Proposal or following a change of the board of directors’ recommendation to stockholders). However, if the Merger Agreement is terminated because (i) Americas Silver fails to obtain the approval of its shareholders, (ii) a law or government order prevents consummation of the Merger, or (iii) Americas Silver breaches the Merger Agreement, the Company will have the option to repay the borrowed amount in cash or in shares of Company common stock. If repayment will be accomplished by conversion into Company common stock, the number of shares issuable will be determined by dividing the amount outstanding under the Debenture by a conversion price equal to the volume-weighted average price of the Company’s common stock for the five trading days immediately preceding the date of the election, but never less than $1.18. The issuance of common shares in exchange for amounts outstanding under the Debenture is subject to receipt of prior approval by The NASDAQ Stock Market and the Toronto Stock Exchange. The Debenture will be secured by a lien on substantially all of the Company’s assets. As of October 29, 2018 the Company has drawn $1,000,000 against the Debenture. The Company intends to use the proceeds from the Debenture to fund its near-term working capital requirements, including permit advancements, ongoing property maintenance and corporate requirements. The Company’s ability to draw the remainder of the principal amount is subject to the parties agreeing on terms and filing a deed of trust in the state of Nevada, among other customary conditions. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and present the consolidated financial statements of the Company and its wholly-owned subsidiaries as of September 30, 2018. All intercompany transactions and balances have been eliminated. All adjustments (consisting of normal recurring items) necessary to present fairly the Company’s financial position as of September 30, 2018, and the results of operations and cash flows for the nine months ended September 30, 2018 have been included. The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the full year. The accounting policies and procedures employed in the preparation of these consolidated financial statements have been derived from the audited financial statements of the Company for the fiscal year ended December 31, 2017, which are contained in the Company’s Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on March 28, 2018. The consolidated balance sheet as of December 31, 2017, contained herein, was derived from those financial statements. |
Use of estimates | Use of estimates In preparing the unaudited consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated balance sheet, and revenues and expenses for the period then ended. Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the useful life of property and equipment, the valuation of deferred tax assets and liabilities, including valuation allowance, amounts and timing of closure obligations, the assumptions used to calculate fair value of restricted stock units, options and warrants granted, stock-based compensation, beneficial conversion on preferred stock, capitalized mineral rights, asset valuations, timing of the performance criteria of restricted stock units and the fair value of common stock issued. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments with an original maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2018, the Company had bank balances exceeding the FDIC insurance limit on interest bearing accounts. To reduce its risk associated with the failure of such financial institutions, the Company evaluates at least annually the rating of the financial institutions in which it holds deposits. |
Going concern | Going concern These unaudited consolidated financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period of time. The Company has incurred a net loss of approximately $11.5 million for the nine months ended September 30, 2018, has used approximately $9.6 million of net cash in operations for the nine months ended September 30, 2018, has incurred a total cumulative deficit of approximately $182.2 million since its inception and requires capital for its contemplated business and exploration activities to take place. As discussed more fully in Note 1, the Company has entered into a Merger Agreement with Americas Silver. The Merger Agreement provides for, and the Company subsequently entered into, a Debenture whereby Americas Silver will fund the Company up to $4 million to cover its working capital requirements until the Merger is closed, subject to customary contingencies. If the Merger does not close the principal and interest outstanding under the Debenture would either be reimbursed with cash or the issuance of the Company’s common stock. In addition to the Debenture, obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue business. The ability to successfully resolve these factors raises substantial doubt about the Company’s ability to continue as a going concern as determined by management. The unaudited consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties. |
Restricted cash - non current | Restricted cash – non current Restricted cash consists of cash which is held as collateral under surface management surety bonds issued on the Company’s behalf. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows: September 30, 2018 December 31, 2017 (Unaudited) Cash and cash equivalents $ 1,986,201 $ 12,858,873 Restricted cash – non current 3,690,000 3,690,000 Total cash, cash equivalents and restricted cash $ 5,676,201 $ 16,548,873 |
Fair value of financial instruments | Fair value of financial instruments The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that requires the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (“FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable and accrued expenses approximate their estimated fair market values based on the short-term maturity of these instruments. |
Prepaid expenses and other current assets | Prepaid expenses and other current assets Prepaid expenses and other current assets of $607,978 and $1,006,779 at September 30, 2018 and December 31, 2017, respectively, consist primarily of costs paid for future services which will occur within a year. Prepaid expenses principally include prepayments for consulting, public relations, and business advisory services, insurance premiums, drilling services, mining claim fees and mineral lease fees which are being amortized over the terms of their respective agreements. |
Mineral property acquisition and exploration costs | Mineral property acquisition and exploration costs Costs of leasing, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. Given the completion on May 24, 2018 of a final feasibility study indicating a mine is economically viable, upon a final decision to commence operating mine development activities to bring a mine into production, the property would enter into the development stage and the Company would capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future the Company has capitalized mineral properties, these properties will be periodically assessed for impairment. To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed. ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims. ASC 930-805-30-1 and 30-2 provide that, in fair valuing mineral assets, an acquirer should take into account both: The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. |
Property and equipment | Property and equipment Property and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets, generally one to twenty-five years. |
Impairment of long-lived assets | Impairment of long-lived assets The Company accounts for the impairment or disposal of long-lived assets according to ASC 360, “Property, Plant and Equipment”. The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of long-lived assets, including mineral rights, may not be recoverable. Long-lived assets in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the area, exploration reports, assays, technical reports, drill results and the Company’s continued plans to fund exploration programs on the property, and whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried forward as an asset will not be fully recovered. The tests for long-lived assets in the exploration stage are monitored for impairment based on factors such as current market value of the long-lived assets and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset. When necessary, impaired assets are written down to estimated fair value based on the best information available. Estimated fair value is generally based on either appraised value or measured by discounting estimated future cash flows. Considerable management judgment is necessary to estimate discounted future cash flows. Accordingly, actual results could vary significantly from such estimates. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The Company did not record any impairment of its long-lived assets at September 30, 2018 and December 31, 2017, respectively. |
Asset retirement obligations | Asset retirement obligations Asset retirement obligations (“ARO”), consisting primarily of estimated mine reclamation and closure costs at the Company’s Relief Canyon property, are recognized in the period incurred and when a reasonable estimate can be made, and recorded as liabilities at fair value. Such obligations, which are initially estimated based on discounted cash flow estimates, are accreted to full value over time through charges to accretion expense. Corresponding asset retirement costs are capitalized as part of the carrying amount of the related long-lived asset and depreciated over the asset’s remaining useful life. Asset retirement obligations are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimated timing or amount of reclamation and closure costs. The Company reviews and evaluates its asset retirement obligations annually or more frequently at interim periods if deemed necessary. |
Income taxes | Income taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized. The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefit associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company has adopted ASC 740-10-25, “Definition of Settlement”, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion and examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. The federal and state income tax returns of the Company are subject to examination by the IRS and state taxing authorities, generally for three years after they are filed. |
Stock-based compensation | Stock-based compensation Stock-based compensation is accounted for based on the requirements of the Share-Based Payment Topic of ASC 718, “Compensation — Stock Compensation” (“ASC 718”), which requires recognition in the consolidated financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. The Company adopted ASU 2016-09, “Compensation - Stock Compensation (Topic 718)” (“ASU 2016-09”), which makes several modifications to Topic 718. Upon adoption of ASU 2016-09, the Company recognizes the effect of forfeitures in compensation cost as they occur, rather than estimating forfeitures as of the award date. Any previously recognized compensation cost will be reversed in the period of forfeiture. Pursuant to ASC Topic 505-50, “Equity Based Payments to Non-employees”, for share-based payments to consultants and other third-parties, compensation expense is determined at the measurement date. The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company initially records compensation expense based on the fair value of the award at the reporting date. |
Related party transactions | Related party transactions Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. |
Foreign currency transactions | Foreign currency transactions The Company accounts for foreign currency transactions in accordance with ASC 830, “Foreign Currency Matters” (“ASC 830”), specifically the guidance in subsection ASC 830-20, “Foreign Currency Transactions”. The U.S. dollar is the functional and reporting currency for the Company and its subsidiaries. Pursuant to ASC 830, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting gains or losses upon settlement reported in foreign exchange gain (loss) in the computation of net income (loss). |
Recent accounting pronouncements | Recent accounting pronouncements In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” or ASU 2016-18. ASU 2016-18 is intended to clarify how entities present restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash and cash equivalents and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash in the statement of cash flows. When cash and cash equivalents and restricted cash are presented in more than one line-item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017 and is to be applied retrospectively. Early adoption was permitted, including adoption in an interim period. The Company early adopted ASU 2016-18 for the three-month period ended December 31, 2017 and its adoption did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates Step 2 from the goodwill impairment test. When an indication of impairment was identified after performing the first step of the goodwill impairment test, Step 2 required that an entity determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) using the same procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Under the amendments in ASU No. 2017-04, an entity would perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying value. An entity would recognize an impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value. In addition, an entity must consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. A public business entity that is a SEC filer should adopt the amendments in ASU No. 2017-04 for its annual, or any interim, good will impairment tests in fiscal years beginning after December 15, 2019. The Company does not believe the guidance will have a material impact on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, “Compensation - Stock Compensation”. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in ASC Topic 718. An entity shall account for the effects of a modification described in ASC paragraphs 718-20-35-3 through 35-9, unless all the following are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The provisions of this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company’s adoption of this guidance on January 1, 2018 did not have a material impact on the Company’s consolidated results of operations, financial position and related disclosures. In July 2017, the FASB issued ASU 2017-11 “Earnings Per Share (Topic 260)”. The amendments in the update change the classification of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. For freestanding equity-classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260, Earnings Per Share, to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features would be subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company does not believe the guidance will have a material impact on its consolidated financial statements. In August 2017, the FASB issued ASU 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities”. ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The guidance is effective for the Company beginning after December 15, 2018, although early adoption is permitted. The Company does not believe the guidance will have a material impact on its consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07 “Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” These amendments expand the scope of Topic 718, Compensation - Stock Compensation (which currently only includes share-based payments to employees) to include share-based payments issued to nonemployees for goods or services. Consequently, the accounting for share-based payments to nonemployees and employees will be substantially aligned. The ASU supersedes Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees. The guidance is effective for public companies for fiscal years, and interim fiscal periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted, but no earlier than a company’s adoption date of Topic 606, Revenue from Contracts with Customers. The Company is assessing ASU 2018-07 and does not expect it to have a material impact on its accounting and disclosures. In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. The standard removes, modifies, and adds certain disclosure requirements, and is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company will be evaluating the impact this standard will have on the Company’s consolidated financial statements. 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 consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows: September 30, 2018 December 31, 2017 (Unaudited) Cash and cash equivalents $ 1,986,201 $ 12,858,873 Restricted cash – non current 3,690,000 3,690,000 Total cash, cash equivalents and restricted cash $ 5,676,201 $ 16,548,873 |
MINERAL PROPERTIES (Tables)
MINERAL PROPERTIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Mineral Industries Disclosures [Abstract] | |
Mineral Property | Mineral properties consisted of the following: September 30, 2018 December 31, 2017 (Unaudited) Relief Canyon Mine — Gold Acquisition $ 8,571,071 $ 8,501,071 Relief Canyon Mine — Newmont Properties 14,809,441 13,709,441 Pershing Pass Property 593,400 593,400 $ 23,973,912 $ 22,803,912 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment consisted of the following: Estimated Life September 30, 2018 December 31, 2017 (Unaudited) Furniture and fixtures 5 years $ 56,995 $ 56,995 Office and computer equipment 1 - 5 years 447,470 434,563 Land — 358,886 358,886 Building and improvements 5 - 25 years 823,131 823,131 Site costs 10 years 1,518,129 1,417,704 Crushing system 20 years 2,390,995 2,514,021 Process plant and equipment 10 years 3,530,460 3,530,460 Vehicles and mining equipment 5 - 10 years 605,824 605,824 9,731,890 9,741,584 Less: accumulated depreciation (7,127,519 ) (6,438,218 ) $ 2,604,371 $ 3,303,366 |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Asset Retirement Obligations | The following table summarizes activity in the Company’s ARO: September 30, 2018 June 30, 2017 (Unaudited) (Unaudited) Balance, beginning of period $ 963,303 $ 895,085 Accretion expense 26,441 9,632 Reclamation obligations settled - - Additions and changes in estimates - - Balance, end of period $ 989,744 $ 904,717 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Summary of the outstanding restricted stock | A summary of the status of the restricted stock units as of September 30, 2018, and of changes in restricted stock units outstanding during the nine months ended September 30, 2018, is as follows: Nine months ended September 30, 2018 (Unaudited) Restricted Stock Unit Weighted Average Grant-Date Fair Value Per Share Outstanding at December 31, 2017 1,061,471 $ 5.68 Granted 54,874 2.16 Vested and converted (132,796 ) 2.23 Forfeited - - Outstanding at September 30, 2018 983,549 $ 5.39 |
Summary of the outstanding stock options | A summary of the Company’s outstanding stock options as of September 30, 2018 (unaudited) and changes during the nine months ended are presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at December 31, 2017 1,794,453 $ 7.21 4.20 Granted 436,000 2.80 10.00 Exercised — — — Forfeited/Expired (102,336 ) 5.53 — Cancelled — — — Balance at September 30, 2018 2,128,117 $ 6.36 4.81 Options exercisable at end of period 1,711,117 $ 7.23 Options expected to vest 417,000 $ 2.80 Weighted average fair value of options granted during the period $ 1.19 |
Summary of the outstanding stock warrants | A summary of the Company’s outstanding stock warrants as of September 30, 2018 (unaudited) and changes during the nine months ended are presented below: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Balance at December 31, 2017 4,434,267 $ 4.12 1.29 Granted — — — Cancelled — — — Forfeited (2,247,019 ) 4.77 — Exercised — — — Balance at September 30, 2018 2,187,248 $ 3.46 1.20 Warrants exercisable at September 30, 2018 2,187,248 $ 3.46 1.20 Weighted average fair value of warrants granted during the period $ — |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Earnings Per Share | The following table sets forth the computation of basic and diluted loss per share: For the Nine Months ended September 30, 2018 For the Nine Months ended September 30, 2017 (Unaudited) (Unaudited) Numerator: Net loss available to common stockholders $ (11,472,140 ) $ (9,129,929 ) Denominator: Denominator for basic and diluted loss per share (weighted-average shares) 33,618,007 28,396,928 Net loss per common share, basic and diluted $ (0.34 ) $ (0.32 ) |
Schedule of antidilutive securities excluded from computation diluted shares outstanding | The following were excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact on the Company’s net loss. In periods where the Company has a net loss, all dilutive securities are excluded. September 30, 2018 September 30, 2017 (Unaudited) (Unaudited) Common stock equivalents: Stock options 2,128,117 1,794,453 Stock warrants 2,187,248 2,497,763 Restricted stock units 983,549 1,047,224 Convertible preferred stock 3,163,051 2,725,092 Total 8,461,965 8,064,532 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments required under the lease | Future minimum rental payments required under operating leases are as follows: 2018 $ 9,893 2019 56,099 2020 57,194 2021 42,888 $ 166,074 |
Schedule of future minimum lease payments under mining leases | The Company leases certain mineral properties and water rights included in its Relief Canyon Properties. The future minimum lease payments under these mining leases are as follows: 2018 $ 68,994 2019 98,491 2020 137,485 2021 137,485 2022 142,485 Thereafter 937,290 $ 1,522,230 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Textual) | 1 Months Ended | 9 Months Ended | ||
Oct. 29, 2018USD ($) | Sep. 30, 2018 | Oct. 01, 2018USD ($) | Sep. 28, 2018USD ($) | |
Exchange Ratio | 0.715 | |||
Percentage of Holding Preferred Shareholders | 75.00% | |||
Termination Fee Payable | $ 4,000,000 | |||
Debt Instrument, Maturity Date, Description | The loan will mature on June 1, 2019, or September 1, 2019 if the Company has exercised an option to extend maturity. | |||
Subsequent Event [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 16.00% | |||
Proceeds from Issuance of Secured Debt | $ 1,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and cash equivalents | $ 1,986,201 | $ 12,858,873 | ||
Restricted cash – non current | 3,690,000 | 3,690,000 | ||
Total cash, cash equivalents and restricted cash | $ 5,676,201 | $ 16,548,873 | $ 5,652,832 | $ 13,972,102 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | Dec. 31, 2017 | |
Prepaid expenses | $ 607,978 | $ 607,978 | $ 1,006,779 | |||
Federal Deposit Insurance Corporation Premium Expense | 250,000 | |||||
Net Income (Loss) Attributable to Parent | (3,207,192) | $ (2,522,556) | (11,472,140) | $ (9,129,929) | ||
Net Cash Provided by (Used in) Operating Activities | (9,589,340) | $ (8,242,631) | ||||
Retained Earnings (Accumulated Deficit) | $ (182,163,091) | $ (182,163,091) | $ (170,690,951) | |||
Common Stock, Terms of Conversion | If repayment will be accomplished by conversion into Company common stock, the number of shares issuable will be determined by dividing the amount outstanding under the Debenture by a conversion price equal to the volume-weighted average price of the Company’s common stock for the five trading days immediately preceding the date of the election, but never less than $1.18. | |||||
Subsequent Event [Member] | ||||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 |
MINERAL PROPERTIES (Details)
MINERAL PROPERTIES (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Mineral properties | ||
Total Mineral Properties | $ 23,973,912 | $ 22,803,912 |
Relief Canyon Mine — Gold Acquisition | ||
Mineral properties | ||
Total Mineral Properties | 8,571,071 | 8,501,071 |
Relief Canyon Mine — Newmont Properties | ||
Mineral properties | ||
Total Mineral Properties | 14,809,441 | 13,709,441 |
Pershing Pass Property | ||
Mineral properties | ||
Total Mineral Properties | $ 593,400 | $ 593,400 |
MINERAL PROPERTIES (Details Tex
MINERAL PROPERTIES (Details Textual) | Dec. 15, 2017USD ($) | Jan. 14, 2015USD ($)amine | Aug. 27, 2018USD ($)amine | Mar. 29, 2017USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2018USD ($)aminelb | Dec. 31, 2017USD ($)a | Feb. 28, 2018USD ($) | Mar. 31, 2017 | Sep. 30, 2013mine | Sep. 30, 2013 | Sep. 30, 2013a | Apr. 05, 2012amine |
Mineral properties | |||||||||||||
Unpatented lode mining claims owned | mine | 81 | ||||||||||||
Unpatented mining claims owned | mine | 155 | ||||||||||||
Royalty percentage on precious metals | 1.00% | ||||||||||||
Amount required to be spent in exploration expenses | $ 270,000 | $ 270,000 | |||||||||||
Rental payment per acre per year | a | 10 | ||||||||||||
Statewide bond | $ 200,000 | ||||||||||||
Payments to Acquire Businesses, Gross | $ 6,000,000 | ||||||||||||
Minerals Lease and Sublease work commitment Amount | $ 500,000 | $ 1,500,000 | $ 1,500,000 | ||||||||||
Unpatented Lode Mining Claims Owned | mine | 81 | ||||||||||||
Royalty Payable Percentage | 2.50% | 2.00% | |||||||||||
Area Of Land For Owned Private Minerals | a | 320 | 320 | |||||||||||
Owner [Member] | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 2,458.88 | 1,899 | |||||||||||
Advance royalty required to pay per year | $ 10 | ||||||||||||
Royalty Return Percentage | 3.00% | ||||||||||||
Royalty Capping Amount | $ 25 | ||||||||||||
Purchase Options, Land | 500 | ||||||||||||
Net Smelter Return Payment | $ 1,000,000 | ||||||||||||
Victoria [Member] | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 8,900 | ||||||||||||
Lessor [Member] | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 800 | ||||||||||||
Advance royalty required to pay per year | $ 20,000 | ||||||||||||
Royalty Return Percentage | 3.00% | ||||||||||||
Royalty Capping Amount | $ 50,000 | ||||||||||||
Purchase Options, Land | $ 350,000 | ||||||||||||
Net Smelter Return Payment | $ 1,000,000 | ||||||||||||
Relief Canyon | |||||||||||||
Mineral properties | |||||||||||||
Unpatented mill sites owned | mine | 74 | ||||||||||||
New Nevada Resoucres LLC [Member] | |||||||||||||
Mineral properties | |||||||||||||
Royalty Payable Percentage | 2.125% | ||||||||||||
Newmont USA Ltd | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 1,300 | ||||||||||||
Payments to Acquire Royalty Interests in Mining Properties | $ 1,100,000 | ||||||||||||
BLM | |||||||||||||
Mineral properties | |||||||||||||
Statewide bond | 12,500,000 | ||||||||||||
Excess amount of the current coverage requirement to reclaim land disturbed in exploration and mining operations | 80,000 | ||||||||||||
Debt Instrument, Collateral Amount | $ 3,690,000 | ||||||||||||
New Nevada Lands, LLC | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 1,600 | ||||||||||||
Relief Canyon acre mine [Member] | |||||||||||||
Mineral properties | |||||||||||||
Unpatented mining claims owned | 1,137 | ||||||||||||
Acres of Property | a | 29,000 | ||||||||||||
Mine site Claim Owned | 120 | ||||||||||||
Unpatented Mining Claims Leased | 62 | ||||||||||||
Area of Land for Leased | a | 6,586 | ||||||||||||
Area of Land for Subleased | a | 960 | ||||||||||||
Royalty Return Percentage Total | 4.50% | ||||||||||||
Net smelter return royalty percentage | 2.00% | ||||||||||||
Maximum | Relief Canyon | |||||||||||||
Mineral properties | |||||||||||||
Royalty Return Percentage Total | 5.00% | ||||||||||||
Minimum | Relief Canyon | |||||||||||||
Mineral properties | |||||||||||||
Royalty Return Percentage | 2.00% | ||||||||||||
Relief Canyon Mine - Newmont Properties | |||||||||||||
Mineral properties | |||||||||||||
Unpatented lode mining claims owned | mine | 62 | ||||||||||||
Unpatented Lode Mining Claims Owned | mine | 62 | ||||||||||||
Relief Canyon Mine - Newmont Properties | 2006 Mineral Lease and Sublease | |||||||||||||
Mineral properties | |||||||||||||
Minerals Lease and Sublease work commitment Amount | $ 500,000 | ||||||||||||
Relief Canyon Mine - Newmont Properties | Victoria Gold | Relief Canyon | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 13,300 | ||||||||||||
Relief Canyon Mine - Newmont Properties | Newmont USA Ltd | |||||||||||||
Mineral properties | |||||||||||||
Acres of privately-owned fee minerals leased (in acres) | a | 4,900 | ||||||||||||
Relief Canyon Mine - Newmont Properties | Newmont USA Ltd | Relief Canyon | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 2,800 | ||||||||||||
Pershing Pass Property | |||||||||||||
Mineral properties | |||||||||||||
Unpatented mill sites owned | mine | 238 | ||||||||||||
Unpatented mining claims owned | 765 | 746 | 19 | ||||||||||
Acres of Property | a | 12,900 | 400 | |||||||||||
Royalty percentage on gold if gold prices are less than $500 per ounce | 2.00% | ||||||||||||
Gold price (per ounce) | lb | 500 | ||||||||||||
Royalty percentage on gold if gold prices are over $1,500 per ounce | 3.50% | ||||||||||||
Gold price (per ounce) | lb | 1,500 | ||||||||||||
Rate at which the entity can repurchase royalty percentage of gold | $ 600,000 | ||||||||||||
Unpatented Mining Claims Leased | 19 | ||||||||||||
Royalty Return Percentage | 2.00% | ||||||||||||
Net smelter return royalty percentage | 2.00% | ||||||||||||
Area Of Properties Held Under Leases | a | 635 | ||||||||||||
Area Of Properties Held Under Subleases | a | 960 | ||||||||||||
Pershing Pass Property | Other Metal | |||||||||||||
Mineral properties | |||||||||||||
Royalty percentage on precious metals | 0.50% | ||||||||||||
Pershing Pass Property | Wolf Pack Gold (Nevada) Corp | |||||||||||||
Mineral properties | |||||||||||||
Unpatented mining claims owned | 19 | ||||||||||||
Purchase price for acquisition of unpatented mining claims | $ 250,000 | ||||||||||||
Pershing Pass Property | Minimum | Wolf Pack Gold (Nevada) Corp | Starting September 2016 till September 2023 | |||||||||||||
Mineral properties | |||||||||||||
Advance royalty required to pay per year | 10,000 | ||||||||||||
Pershing Pass Property | Minimum | Wolf Pack Gold (Nevada) Corp | Starting September 2023 till September 2028 | |||||||||||||
Mineral properties | |||||||||||||
Advance royalty required to pay per year | 12,500 | ||||||||||||
Pershing Pass Property | Minimum | Wolf Pack Gold (Nevada) Corp | Starting September 2028 till September 2033 | |||||||||||||
Mineral properties | |||||||||||||
Advance royalty required to pay per year | 15,000 | ||||||||||||
Pershing Pass Property | Minimum | Wolf Pack Gold (Nevada) Corp | September 2033 | |||||||||||||
Mineral properties | |||||||||||||
Advance royalty required to pay per year | $ 20,000 | ||||||||||||
2015 Newmont Lease | |||||||||||||
Mineral properties | |||||||||||||
Acres of Property | a | 2,770 | ||||||||||||
Amount required to be spent in exploration expenses | $ 2,300,000 | ||||||||||||
Percentage of Royalty To Smelter Returns | 2.50% | ||||||||||||
Minerals Lease and Sublease work commitment Amount | $ 2,600,000 | ||||||||||||
Minerals Lease and Sublease exploration expenditures | $ 2,900,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 9,731,890 | $ 9,741,584 |
Less: accumulated depreciation | (7,127,519) | (6,438,218) |
Total property and equipment, net | 2,604,371 | 3,303,366 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 56,995 | 56,995 |
Estimated Life | 5 years | |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 447,470 | 434,563 |
Office and computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 years | |
Office and computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 1 year | |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 358,886 | 358,886 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 823,131 | 823,131 |
Building and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 25 years | |
Building and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 years | |
Site costs | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 1,518,129 | 1,417,704 |
Estimated Life | 10 years | |
Crushing system | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 2,390,995 | 2,514,021 |
Estimated Life | 20 years | |
Process plant and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 3,530,460 | 3,530,460 |
Estimated Life | 10 years | |
Vehicles and mining equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 605,824 | $ 605,824 |
Vehicles and mining equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 10 years | |
Vehicles and mining equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 years |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | ||
May 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 737,327 | $ 825,136 | ||
Property, Plant and Equipment, Gross | 9,731,890 | $ 9,741,584 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 7,127,519 | $ 6,438,218 | ||
Reclaim Tunnel and Other Equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property Plant and Equipment Exchanged | $ 75,000 | |||
Property, Plant and Equipment, Gross | 123,026 | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 48,026 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Balance, beginning of period | $ 963,303 | $ 895,085 |
Accretion expense | 26,441 | 9,632 |
Reclamation obligations settled | 0 | 0 |
Additions and changes in estimates | 0 | 0 |
Balance, end of period | $ 989,744 | $ 904,717 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - $ / shares | 1 Months Ended | 9 Months Ended |
Feb. 28, 2018 | Sep. 30, 2018 | |
Restricted Stock Unit | ||
Granted | 18,518 | |
Restricted Stock Units (RSUs) [Member] | ||
Restricted Stock Unit | ||
Beginning Balance | 1,061,471 | |
Granted | 54,874 | |
Vested and converted | (132,796) | |
Forfeited | 0 | |
Ending Balance | 983,549 | |
Weighted Average Grant-Date Fair Value Per Share | ||
Beginning Balance | $ 5.68 | |
Granted | 2.16 | |
Vested and converted | 2.23 | |
Forfeited | 0 | |
Ending Balance | $ 5.39 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Options | ||
Beginning Balance | 1,794,453 | |
Granted | 436,000 | |
Exercised | 0 | |
Forfeited/Expired | (102,336) | |
Cancelled | 0 | |
Ending Balance | 2,128,117 | |
Options exercisable at end of period | 1,711,117 | |
Options expected to vest | 417,000 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 7.21 | |
Granted | $ 2.80 | |
Exercised | 0 | |
Forfeited/Expired | 5.53 | |
Cancelled | 0 | |
Ending Balance | 6.36 | |
Options exercisable at end of period | 7.23 | |
Options expected to vest | 2.80 | |
Weighted average fair value of options granted during the period | $ 1.19 | |
Weighted Average Remaining Contractual Life (Years) | ||
Balance | 4 years 9 months 22 days | 4 years 2 months 12 days |
Granted | 10 years | |
Exercised | 0 years | |
Forfeited/Expired | 0 years | |
Cancelled | 0 years |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Number of Warrants | ||
Beginning Balance | 4,434,267 | |
Granted | 0 | |
Cancelled | 0 | |
Forfeited | (2,247,019) | |
Exercised | 0 | |
Ending Balance | 2,187,248 | |
Warrants exercisable | 2,187,248 | |
Weighted Average Exercise Price | ||
Beginning Balance | $ 4.12 | |
Granted | $ 0 | |
Cancelled | 0 | |
Forfeited | 4.77 | |
Exercised | 0 | |
Ending Balance | 3.46 | |
Warrants exercisable | 3.46 | |
Weighted average fair value of warrants granted during the period | $ 0 | |
Weighted Average Remaining Contractual Life (Years) | ||
Balance | 1 year 2 months 12 days | 1 year 3 months 14 days |
Granted | 0 years | |
Cancelled | 0 years | |
Forfeited | 0 years | |
Exercised | 0 years | |
Warrants exercisable | 1 year 2 months 12 days |
STOCKHOLDERS' EQUITY (Details T
STOCKHOLDERS' EQUITY (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Aug. 31, 2018 | Apr. 30, 2018 | Feb. 28, 2018 | Jan. 31, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 17, 2015 | Jun. 16, 2015 | |
Class of Stock [Line Items] | |||||||||||
Stock authorized, shares | 50,000,000 | 50,000,000 | |||||||||
Par value of preferred stock authorized (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Stock-based compensation expense | $ 520,000 | ||||||||||
Share Price | $ 2.36 | ||||||||||
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | |||||||||
Shares Issued, Price Per Share | $ 1.19 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 18,518 | ||||||||||
Deferred Compensation Liability, Current and Noncurrent | $ 295,000 | $ 520,000 | |||||||||
Accrued Bonus Reduction Related To Vesting Of Restricted Stock | $ 73,035 | $ 469,423 | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 436,000 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 2.80 | $ 6.36 | $ 7.21 | ||||||||
Sale of Stock, Price Per Share | $ 2.80 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 41.00% | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.70% | ||||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures | 12,377 | 17,497 | |||||||||
Initial Board Retainer Fees | $ 25,000 | ||||||||||
Retainer And Meeting Fees | $ 34,000 | ||||||||||
Reduction of accrued bonuses in connection with vested stock options | 180,122 | 0 | |||||||||
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 47,661 | ||||||||||
Accrued Bonus Reduction Related To Expired Stock Option | 22,681 | 0 | |||||||||
Accounts Payable and Accrued Liabilities [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock-based compensation expense | 59,000 | $ 530,000 | |||||||||
Deferred Compensation Liability, Current | $ 59,000 | $ 530,000 | |||||||||
Amendment [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Common Stock, Shares Authorized | 200,000,000 | 800,000,000 | |||||||||
Restricted Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock-based compensation expense | 430,986 | $ 908,323 | |||||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 1,455,538 | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 25,000 | ||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 85,135 | ||||||||||
Convertible Series A Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock authorized, shares | 2,250,000 | 2,250,000 | |||||||||
Par value of preferred stock authorized (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, Outstanding (in shares) | 0 | 0 | |||||||||
Convertible Series B Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock authorized, shares | 8,000,000 | 8,000,000 | |||||||||
Par value of preferred stock authorized (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, Outstanding (in shares) | 0 | 0 | |||||||||
Convertible Series C Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock authorized, shares | 3,284,396 | 3,284,396 | |||||||||
Par value of preferred stock authorized (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, Outstanding (in shares) | 0 | 0 | |||||||||
Convertible Series E Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock authorized, shares | 15,151 | 15,151 | |||||||||
Par value of preferred stock authorized (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||||
Preferred stock, Outstanding (in shares) | 8,946 | 8,946 | |||||||||
9% Series D Cumulative Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock authorized, shares | 7,500,000 | ||||||||||
Par value of preferred stock authorized (in dollars per share) | $ 0.0001 | ||||||||||
Preferred stock, Outstanding (in shares) | 0 |
NET LOSS PER COMMON SHARE (Deta
NET LOSS PER COMMON SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net loss available to common stockholders | $ (11,472,140) | $ (9,129,929) | ||
Denominator: | ||||
Denominator for basic and diluted loss per share (weighted-average shares) | 33,645,838 | 28,402,389 | 33,618,007 | 28,396,928 |
Net loss per common share, basic and diluted | $ (0.10) | $ (0.09) | $ (0.34) | $ (0.32) |
NET LOSS PER COMMON SHARE (De_2
NET LOSS PER COMMON SHARE (Details 1) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock equivalents | 8,461,965 | 8,064,532 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock equivalents | 2,128,117 | 1,794,453 |
Stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock equivalents | 2,187,248 | 2,497,763 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock equivalents | 983,549 | 1,047,224 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock equivalents | 3,163,051 | 2,725,092 |
NET LOSS PER COMMON SHARE (De_3
NET LOSS PER COMMON SHARE (Details Textual) | Oct. 01, 2018USD ($) |
Subsequent Event [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2018USD ($) |
Other Commitments [Line Items] | |
2,018 | $ 9,893 |
2,019 | 56,099 |
2,020 | 57,194 |
2,021 | 42,888 |
Total | $ 166,074 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details 1) | Sep. 30, 2018USD ($) |
COMMITMENTS AND CONTINGENCIES [Line Items] | |
2,018 | $ 68,994 |
2,019 | 98,491 |
2,020 | 137,485 |
2,021 | 137,485 |
2,022 | 142,485 |
Thereafter | 937,290 |
Total | $ 1,522,230 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Other Commitments [Line Items] | ||
Operating Leases, Rent Expense, Net | $ 35,265 | $ 38,557 |
Lease Expiring Period | 39 months | |
Deferred Rent Credit | $ 7,626 | |
Lessee, Operating Lease, Renewal Term | 39 months | |
Merger Consideration Employment or Severance Compensation Payable | $ 2,800,000 | |
Merger Consideration Success Fee payable | 750,000 | |
Chief Executive Officer [Member] | ||
Other Commitments [Line Items] | ||
Merger Consideration Employment or Severance Compensation Payable | 1,700,000 | |
Vice President [Member] | ||
Other Commitments [Line Items] | ||
Merger Consideration Employment or Severance Compensation Payable | $ 450,000 |
SUBSEQUENT EVENTS (Details Text
SUBSEQUENT EVENTS (Details Textual) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Oct. 29, 2018 | Sep. 30, 2018 | Oct. 01, 2018 | |
Debt Instrument, Maturity Date, Description | The loan will mature on June 1, 2019, or September 1, 2019 if the Company has exercised an option to extend maturity. | |||
Common Stock, Terms of Conversion | If repayment will be accomplished by conversion into Company common stock, the number of shares issuable will be determined by dividing the amount outstanding under the Debenture by a conversion price equal to the volume-weighted average price of the Company’s common stock for the five trading days immediately preceding the date of the election, but never less than $1.18. | |||
Subsequent Event [Member] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 4,000,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 16.00% | |||
Proceeds from Issuance of Secured Debt | $ 1,000,000 | |||
Subsequent Event [Member] | Secured Debt [Member] | ||||
Debt Instrument, Maturity Date, Description | The loan will mature on June 1, 2019, or September 1, 2019 if the Company has exercised an option to extend maturity. | |||
Proceeds from Issuance of Secured Debt | $ 1,000,000 |