Mines Management 10-Q 14 Aug 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 14, 2014
Document and Entity Information	'	'
Entity Registrant Name	'MINES MANAGEMENT INC	'
Entity Central Index Key	'0000066649	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	29,613,176
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'

CONDENSED_CONSOLIDATED_BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
CURRENT ASSETS:	'	'
Cash and cash equivalents	$3,339,409	$4,145,092
Interest receivable	2,205	6,988
Prepaid expenses and deposits	299,891	237,286
Certificates of deposit	'	1,559,361
Total current assets	3,641,505	5,948,727
PROPERTY AND EQUIPMENT:	'	'
Buildings and leasehold improvements	836,454	836,454
Equipment	6,385,752	6,419,066
Office equipment	343,897	344,939
Total property and equipment, gross	7,566,103	7,600,459
Less accumulated depreciation	6,673,449	6,294,700
Total property and equipment, net	892,654	1,305,759
OTHER ASSETS:	'	'
Available-for-sale securities	7,197	14,174
Reclamation deposits	1,184,966	1,191,182
Total other assets	1,192,163	1,205,356
Total assets	5,726,322	8,459,842
CURRENT LIABILITIES:	'	'
Accounts payable	682,516	381,305
Payroll and payroll taxes payable	29,210	23,358
Total current liabilities	711,726	404,663
LONG-TERM LIABILITIES:	'	'
Asset retirement obligation	491,142	479,488
Total liabilities	1,202,868	884,151
COMMITMENTS AND CONTINGENCIES	'	'
STOCKHOLDERS' EQUITY:	'	'
Preferred shares - no par value, 10,000,000 shares authorized; -0- shares issued and outstanding	'	'
Common shares - $0.001 par value, 100,000,000 shares authorized; 29,211,448 and 28,999,752 shares issued and outstanding, respectively	29,212	29,000
Additional paid-in capital	87,550,957	87,230,381
Accumulated deficit	-1,117,306	-1,117,306
Deficit accumulated during the exploration stage	-81,935,441	-78,569,393
Accumulated other comprehensive income	-3,968	3,009
Total stockholders' equity	4,523,454	7,575,691
Total liabilities and stockholders' equity	$5,726,322	$8,459,842

CONDENSED_CONSOLIDATED_BALANCE1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
CONDENSED CONSOLIDATED BALANCE SHEETS	'	'
Preferred stock, par value (in dollars per share)	$0	$0
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	29,211,448	28,999,752
Common stock, shares outstanding	29,211,488	28,999,752

CONDENSED_CONSOLIDATED_STATEME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended		143 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014
REVENUE:	'	'	'	'	'
Royalties	$7,627	$6,937	$14,918	$15,245	$196,394
OPERATING EXPENSES:	'	'	'	'	'
General and administrative	700,228	758,453	1,291,863	1,733,854	37,117,941
Technical services and exploration	604,421	625,090	1,086,339	1,420,914	34,510,015
Depreciation	206,091	232,745	412,792	467,648	6,770,568
Legal, accounting, and consulting	328,208	199,746	534,912	305,885	5,961,768
Fees, filing, and licenses	5,397	32,556	73,166	83,242	3,077,339
Impairment of mineral properties	'	'	'	'	504,492
Total operating expenses	1,844,345	1,848,590	3,399,072	4,011,543	87,942,123
LOSS FROM OPERATIONS	-1,836,718	-1,841,653	-3,384,154	-3,996,298	-87,745,729
OTHER INCOME:	'	'	'	'	'
Gain from warrant derivatives	'	'	'	'	476,381
Gain from sale of assets	11,900	'	11,900	'	34,900
Gain on sale of available-for-sale securities	'	'	'	'	2,005,904
Interest income, net	2,481	6,110	6,206	13,677	3,293,103
Total other income	14,381	6,110	18,106	13,677	5,810,288
NET LOSS	($1,822,337)	($1,835,543)	($3,366,048)	($3,982,621)	($81,935,441)
NET LOSS PER SHARE (basic and diluted) (in dollars per share)	($0.06)	($0.06)	($0.12)	($0.14)	'
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (basic and diluted)	29,179,030	28,999,752	29,108,403	28,999,752	'

CONDENSED_CONSOLIDATED_STATEME1

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)	3 Months Ended		6 Months Ended		143 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	'	'	'	'	'
Net loss	($1,822,337)	($1,835,543)	($3,366,048)	($3,982,621)	($81,935,441)
Reclassification to realized gain upon sale of marketable securities	'	'	'	'	-2,005,904
Adjustment to net unrealized gain (loss) on marketable securities	964	7,770	-6,977	1,785	2,001,936
COMPREHENSIVE LOSS	($1,821,373)	($1,827,773)	($3,373,025)	($3,980,836)	($81,939,409)

CONDENSED_CONSOLIDATED_STATEME2

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		143 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'	'
Net loss	($3,366,048)	($3,982,621)	($81,935,441)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'	'
Stock-based compensation	143,038	249,600	11,473,549
Stock received for services	'	'	-11,165
Depreciation	412,792	467,648	6,770,568
Initial measurement of asset retirement obligation	'	'	344,187
Accretion of asset retirement obligation	11,654	11,103	146,955
Gain on sale of available-for-sale securities	'	'	-2,005,904
Gain from warrant derivatives	'	'	-476,381
Gain on sale of property and equipment	-11,900	'	-34,900
Impairment of mineral properties	'	'	504,492
Changes in assets and liabilities:	'	'	'
Interest receivable	4,783	1,362	-2,205
Prepaid expenses and deposits	-62,605	29,105	-360,302
Accounts payable	301,211	-114,732	682,352
Payroll and payroll taxes payable	5,852	7,460	26,030
Net cash used in operating activities	-2,561,223	-3,331,075	-64,878,165
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'	'
Purchase of property and equipment	'	'	-7,697,121
Proceeds from disposition of property and equipment	12,213	'	70,636
Proceeds (purchase) of certificates of deposit	1,565,577	-6,216	-1,124,054
Net proceeds from sale of available-for-sale securities	'	'	2,005,904
Increase in mineral properties	'	'	-144,312
Net cash provided by (used in) investing activities	1,577,790	-6,216	-6,888,947
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'	'
Net proceeds from sale of common stock	177,750	'	75,059,186
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-805,683	-3,337,291	3,292,074
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	4,145,092	10,246,073	47,335
CASH AND CASH EQUIVALENTS, END OF PERIOD	3,339,409	6,908,782	3,339,409
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:	'	'	'
Cash paid for interest	'	'	65,768
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES:	'	'	'
Unrealized gains (losses) on available-for-sale securities	($6,977)	$1,785	($3,968)

ORGANIZATION_AND_SUMMARY_OF_SI

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:	6 Months Ended
	Jun. 30, 2014
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:	'
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:	'
	NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
	Organization:
	Mines Management, Inc. (the Company) is an Idaho corporation incorporated in 1947.  The Company acquires, explores, and develops mineral properties in North and South America.
	Summary of Significant Accounting Policies:
	These unaudited interim financial statements have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information, as well as the instructions to Form 10-Q.  Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, all adjustments (consisting solely of normal recurring adjustments) considered necessary for a fair presentation of the interim financial statements have been included.
	The preparation of financial statements in accordance with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s condensed consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company’s consolidated financial position and results of operations. Operating results for the three and six month periods ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2014.
	For further information, refer to the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
	(a)                 Going concern
	The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern and do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The Company is an exploration stage company and has incurred losses since the inception of its exploration stage. As of June 30, 2014, the Company did not have sufficient cash to fund normal operations beyond 2014 without raising additional funds. The Company currently does not have a recurring source of revenue sufficient to fund normal operations and its ability to continue as a going concern is dependent on the Company’s ability to secure sufficient funding for its future exploration and working capital requirements, which may include the sale of its equity or debt securities, and the eventual profitable exploitation of its mining properties.
	On July 30, 2014, the Company sold 4,000 units consisting of one share of the Company’s Series B 6% Convertible Preferred Stock, and a warrant to purchase approximately 636 shares of the Company’s common stock, at a price of $1,000 per unit as described further in Note 6.  The offering yielded gross proceeds, before offering expenses, of $4.0 million.  However, the Company still needs additional funding to continue normal operations.  The Company’s plans for the long-term return to and continuation as a going concern include securing additional funding.  There can be no assurance that the Company will succeed in securing additional funding on terms acceptable to the Company or at all, or in generating future profitable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
	(b)                 Exploration Stage Enterprise
	Since the Company is in the exploration stage of operation, the Company’s financial statements are prepared in accordance with the provisions of Accounting Standards Codification (“ASC”) 915, Development Stage Enterprises, as it devotes substantially all of its efforts to acquiring and exploring mining interests that management believes should eventually provide sufficient net profits to sustain the Company’s existence.  Until such interests are engaged in commercial production, the Company will continue to prepare its consolidated financial statements and related disclosures in accordance with this standard.
	(c)                 Mining properties, exploration and development costs
	All exploration expenditures are expensed as incurred.  Significant property acquisition payments for active exploration properties are capitalized, including payments to acquire mineral rights.  Once a feasibility study has been completed, approved by management, and a decision is made to put the ore body into production, expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on the units of production basis over proven and probable reserves.  The Company charges to operations the allocable portion of capitalized costs attributable to properties sold.  Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area.
	(d)                 Fair value measurements
	The Company discloses the inputs used to develop the fair value measurements for the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as well as the level within the fair value hierarchy in which the fair value measurements in their entirety fall.  The three levels of the fair value hierarchy are as follows:
	Level 1:  Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
	Level 2:  Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.
	Level 3:  Unobservable inputs due to the fact that there is little or no market activity.
	(e)                 Stock compensation
	The Company measures and records the costs of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award, recognized over the period during which an employee is required to provide services in exchange for such award.  Compensation cost is recognized for awards granted and for awards modified, repurchased or cancelled.
	(f)                  Net loss per share
	Basic earnings or loss per share is computed on the basis of the weighted average number of shares outstanding during the period.  Diluted earnings or loss per share is calculated on the basis of the weighted average number of shares outstanding during the period plus the effect of potential dilutive shares during the period.  Potential dilutive shares include outstanding stock options and warrants.  For periods in which a net loss is reported, potential dilutive shares are excluded because they are antidilutive.  Therefore, basic loss per share is the same as diluted loss per share for the periods ended June 30, 2014 and 2013.
	(g)                 Recent Accounting Pronouncements
	During 2013, the Financial Accounting Standards Board issued guidance related to unrecognized tax benefits related to a net operating loss carryforward, similar tax loss or a tax credit carryforward.  The new standard requires an unrecognized tax benefit that is not available under the tax law or not intended to be used at the reporting date to be presented as a separate liability, rather than netted against a deferred tax asset in the financial statements.  The Company adopted the provisions of this guidance effective January 1, 2014. This guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows.
	(h)                 Subsequent events
	The Company evaluated events and transactions subsequent to the balance sheet date of June 30, 2014 for potential recognition or disclosure in the condensed consolidated financial statements.

CERTIFICATES_OF_DEPOSIT

CERTIFICATES OF DEPOSIT:	6 Months Ended
	Jun. 30, 2014
CERTIFICATES OF DEPOSIT:	'
CERTIFICATES OF DEPOSIT:	'
	NOTE 2 — CERTIFICATES OF DEPOSIT:
	The Company owned two certificates of deposit for a total of $1,559,361 at December 31, 2013.  These investments matured in February 2014 and were not renewed.
	The Company also has a certificate of deposit pledged as security for a Letter of Credit to the Montana Department of Environmental Quality as a reclamation guarantee for the Montanore expansion evaluation program.  This certificate matures on January 3, 2015, bears interest at the rate of 0.40% and renews automatically each year.  This certificate of deposit ($1,124,055 and $1,130,271 as of June 30, 2014 and December 31, 2013, respectively) is included with reclamation deposits on the Condensed Consolidated Balance Sheets.

AVAILABLEFORSALE_SECURITIES

AVAILABLE-FOR-SALE SECURITIES:	6 Months Ended
	Jun. 30, 2014
AVAILABLE-FOR-SALE SECURITIES:	'
AVAILABLE-FOR-SALE SECURITIES:	'
	NOTE 3 — AVAILABLE-FOR-SALE SECURITIES:
	Available-for-sale securities are comprised of common stocks which have been valued using quoted market prices in active markets.  The following table summarizes the Company’s available-for-sale securities:
		June 30,			December 31,
		2014			2013
	Cost	$	11,165		$	11,165
	Unrealized Gains (Losses)	(3,968		)	3,009
	Fair Market Value	$	7,197		$	14,174

FAIR_VALUE_MEASUREMENTS

FAIR VALUE MEASUREMENTS:	6 Months Ended
	Jun. 30, 2014
FAIR VALUE MEASUREMENTS:	'
FAIR VALUE MEASUREMENTS:	'
	NOTE 4 — FAIR VALUE MEASUREMENTS:
	The following table summarizes the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2014, and the fair value calculation input hierarchy level determined to apply to each asset and liability category. Quoted market prices were used to determine the fair value of available-for-sale securities. The Company has no financial assets or liabilities that are measured at fair value on a nonrecurring basis.
		June 30,		December 31,		Input
		2014		2013		Hierarchy
						Level
	Assets:
	Available-for-sale securities	$	7,197	$	14,174	Level 1
	Liabilities:
	Asset retirement obligation	$	491,142	$	479,488	Level 3
	The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value during the six months ended June 30, 2014 and 2013:
		Asset Retirement Obligation
		2014		2013
	Balance January 1	$	479,488	$	456,823
	Accretion expense	5,760		5,488
	Balance March 31	485,248		462,311
	Accretion expense	5,894		5,615
	Balance June 30	$	491,142	$	467,926

CONCENTRATION_OF_CREDIT_RISK

CONCENTRATION OF CREDIT RISK:	6 Months Ended
	Jun. 30, 2014
CONCENTRATION OF CREDIT RISK:	'
CONCENTRATION OF CREDIT RISK:	'
	NOTE 5 — CONCENTRATION OF CREDIT RISK:
	The Company maintains most of its cash and cash equivalents in one financial institution.  To date, the Company has not experienced a material loss or lack of access to its invested cash or cash equivalents; however, no assurance can be provided that access to the Company’s invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets. The total uninsured bank deposit balance on the Company’s bank statements was approximately $4,215,000 as of June 30, 2014.

STOCKHOLDERS_EQUITY

STOCKHOLDERS' EQUITY:	6 Months Ended
	Jun. 30, 2014
STOCKHOLDERS' EQUITY:	'
STOCKHOLDERS' EQUITY:	'
	NOTE 6 — STOCKHOLDERS’ EQUITY:
	Common Shares:
	For a description of the public offerings and sales of common stock that occurred prior to 2014, refer to the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
	Preferred Shares:
	The Company has authorized 10,000,000 preferred shares, no par value.  Through June 30, 2014, the Company had not issued any preferred shares.
	On July 30, 2014, the Company sold to one investor 4,000 units consisting of one share of the Company’s Series B 6% convertible preferred stock, no par value, and a warrant to purchase approximately 636 shares of the company’s common stock, par value $0.001 per share, at a price to the investor of $1,000 per unit.  Each share of Series B convertible preferred stock is immediately convertible into shares of common stock at a conversion rate of approximately 1,271 shares of common stock for each share of Series B convertible preferred stock (equivalent to a conversion price of $0.7866 per share of common stock).  The warrants are immediately exercisable at an exercise price of $1.0816 per share and will expire November 30, 2018.  The offering yielded gross proceeds, before offering expenses, of $4.0 million (net proceeds of $3.6 million after deducting placement agent and investor fees and expenses but before deducting other offering expenses).  As of August 14, 2014, 316 shares of the Series B 6% convertible preferred stock had been converted into 401,728 shares of common stock.

STOCK_OPTIONS

STOCK OPTIONS:	6 Months Ended
	Jun. 30, 2014
STOCK OPTIONS:	'
STOCK OPTIONS:	'
	NOTE 7 — STOCK OPTIONS:
	The Company had four equity incentive plans as of December 31, 2013.  Two of these plans, the 2003 Stock Option Plan and the 2003 Consultant Stock Compensation Plan, expired in February 2014.  There has been no change to the Company’s 2007 and 2012 Equity Incentive Plans during 2014, other than the items summarized below.  For a description of these Equity Incentive Plans, refer to the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
	A summary of the option activity under the Company’s Equity Incentive Plans as of June 30, 2014, and changes during the period then ended, is presented below:
		Number of		Weighted-			Weighted-		Aggregate
		Options		Average			Average		Intrinsic Value
				Exercise			Remaining
				Price			Contractual
							Term
	Outstanding at January 1, 2014	4,663,000		$	1.53
	Exercised	(187,000	)	$	0.87
	Forfeited or expired	(535,000	)	$	1.96
	Outstanding at March 31, 2014	3,941,000		$	1.5
	Granted	530,000		$	0.91
	Exercised	(50,000	)	$	0.99
	Forfeited or expired	(200,000	)	$	0.99
	Outstanding at June 30, 2014	4,221,000		$	1.46		2.92		$	518,650
	Exercisable at June 30, 2014	3,821,000		$	1.52		2.7		$	518,650
	The fair value for each option award is estimated at the date of grant using the Black-Scholes option-pricing model using the assumptions noted in the following table. Volatility for the periods presented is based on the historical volatility of the Company’s common shares over the expected life of the option. The risk-free rate for periods within the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The Company does not foresee the payment of dividends in the near term.
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2014			2013(1)			2014			2013
	Weighted average risk-free interest rate	0.91		%	—			0.91		%	0.44		%
	Weighted average volatility	73.08		%	—			73.08		%	68.88		%
	Expected dividend yield	—			—			—			—
	Weighted average expected life (in years)	3.0			—			3.0			3.0
	Weighted average grant-date fair value	$	0.44		$	—		$	0.44		$	0.48
	(1)     No options were granted during the three months ended June 30, 2013.
	During the three months ended June 30, 2014 there were 50,000 stock options exercised with a weighted average exercise price of $0.99 and a total intrinsic value of $3,000.  During the six months ended June 30, 2014, there were 237,000 stock options exercised with a weighted average exercise price of $0.90 and a total intrinsic value of $88,724.  During the six months ended June 30, 2013, there were no stock options exercised.
	A summary of the status of the Company’s nonvested options as of June 30, 2014 and changes during the period then ended is presented below:
		Number of		Weighted-
		Options		Average
				Grant-Date
				Fair Value
	Nonvested at January 1, 2014	588,000		$	0.27
	Vested	(18,000	)	$	0.27
	Nonvested at March 31, 2014	570,000		$	0.27
	Granted	400,000		$	0.44
	Vested	(570,000	)	$	0.27
	Nonvested at June 30, 2014	400,000		$	0.44
	As of June 30, 2014, there was $160,850 of unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plans.  The cost is expected to be recognized over a weighted-average period of less than one year.
	Total compensation costs recognized for stock-based employee compensation awards was $96,556 and $0 for the three months ended June 30, 2014 and 2013, respectively.  Total compensation costs recognized for stock-based employee compensation awards was $133,842 and $249,600 for the six months ended June 30, 2014 and 2013, respectively.  These costs were included in general and administrative expenses and technical services and exploration expenses on the Condensed Consolidated Statements of Operations.  Total costs recognized for stock-based compensation awards for services performed by outside parties were $3,677 and $0 for the three months ended June 30, 2014 and 2013, respectively. Total costs recognized for stock-based compensation awards for services performed by outside parties were $9,196 and $0 for the six months ended June 30, 2014 and 2013, respectively.  Cash received from options exercised under all share-based payment arrangements during the six months ended June 30, 2014 and 2013 was $177,750 and $0, respectively.

COMMITMENTS

COMMITMENTS:	6 Months Ended
	Jun. 30, 2014
COMMITMENTS:	'
COMMITMENTS:	'
	NOTE 8 — COMMITMENTS:
	The Company entered into an Exploration Earn-In Agreement with Estrella Gold Corp. on April 5, 2012, pursuant to which the Company could acquire 75% of the Estrella gold and silver exploration property located in central Peru by expending $5,000,000 on exploration activities.  Under the terms of the agreement, the Company was required to make annual cash payments to Estrella of $100,000 prior to the end of the first agreement year ending on February 28, 2013, and $200,000 prior to the end of each subsequent agreement year until the earn-in had been completed.  The Company was also required to expend a minimum of $500,000 in exploration and development expenditures in each of the first and second agreement years.  The Company was able to terminate this agreement at any time during the earn-in period; however, a minimum of $350,000 in exploration and development expenses was required during the first year of the agreement regardless of whether or not the agreement was terminated.  The Company met the first year’s exploration and development expenditure requirements during 2012.  During February 2013, the Company made the required $100,000 cash payment prior to the end of the first agreement year and continued the Exploration Earn-In Agreement into the second year.  During January 2014, the Company terminated the Exploration Earn-In Agreement.

ORGANIZATION_AND_SUMMARY_OF_SI1

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Policies)	6 Months Ended
	Jun. 30, 2014
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:	'
Going concern	'
	(a)                 Going concern
	The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern and do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. The Company is an exploration stage company and has incurred losses since the inception of its exploration stage. As of June 30, 2014, the Company did not have sufficient cash to fund normal operations beyond 2014 without raising additional funds. The Company currently does not have a recurring source of revenue sufficient to fund normal operations and its ability to continue as a going concern is dependent on the Company’s ability to secure sufficient funding for its future exploration and working capital requirements, which may include the sale of its equity or debt securities, and the eventual profitable exploitation of its mining properties.
	On July 30, 2014, the Company sold 4,000 units consisting of one share of the Company’s Series B 6% Convertible Preferred Stock, and a warrant to purchase approximately 636 shares of the Company’s common stock, at a price of $1,000 per unit as described further in Note 6.  The offering yielded gross proceeds, before offering expenses, of $4.0 million.  However, the Company still needs additional funding to continue normal operations.  The Company’s plans for the long-term return to and continuation as a going concern include securing additional funding.  There can be no assurance that the Company will succeed in securing additional funding on terms acceptable to the Company or at all, or in generating future profitable operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Exploration Stage Enterprise	'
	(b)                 Exploration Stage Enterprise
	Since the Company is in the exploration stage of operation, the Company’s financial statements are prepared in accordance with the provisions of Accounting Standards Codification (“ASC”) 915, Development Stage Enterprises, as it devotes substantially all of its efforts to acquiring and exploring mining interests that management believes should eventually provide sufficient net profits to sustain the Company’s existence.  Until such interests are engaged in commercial production, the Company will continue to prepare its consolidated financial statements and related disclosures in accordance with this standard.
Mining properties, exploration and development costs	'
	(c)                 Mining properties, exploration and development costs
	All exploration expenditures are expensed as incurred.  Significant property acquisition payments for active exploration properties are capitalized, including payments to acquire mineral rights.  Once a feasibility study has been completed, approved by management, and a decision is made to put the ore body into production, expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on the units of production basis over proven and probable reserves.  The Company charges to operations the allocable portion of capitalized costs attributable to properties sold.  Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area.
Fair value measurements	'
	(d)                 Fair value measurements
	The Company discloses the inputs used to develop the fair value measurements for the Company’s financial assets and liabilities that are measured at fair value on a recurring basis as well as the level within the fair value hierarchy in which the fair value measurements in their entirety fall.  The three levels of the fair value hierarchy are as follows:
	Level 1:  Unadjusted quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
	Level 2:  Quoted prices in inactive markets for identical assets or liabilities, quoted prices for similar assets or liabilities in active markets, or other observable inputs either directly related to the asset or liability or derived principally from corroborated observable market data.
	Level 3:  Unobservable inputs due to the fact that there is little or no market activity.
Stock compensation	'
	(e)                 Stock compensation
	The Company measures and records the costs of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award, recognized over the period during which an employee is required to provide services in exchange for such award.  Compensation cost is recognized for awards granted and for awards modified, repurchased or cancelled.
Net loss per share	'
	(f)                  Net loss per share
	Basic earnings or loss per share is computed on the basis of the weighted average number of shares outstanding during the period.  Diluted earnings or loss per share is calculated on the basis of the weighted average number of shares outstanding during the period plus the effect of potential dilutive shares during the period.  Potential dilutive shares include outstanding stock options and warrants.  For periods in which a net loss is reported, potential dilutive shares are excluded because they are antidilutive.  Therefore, basic loss per share is the same as diluted loss per share for the periods ended June 30, 2014 and 2013.
Recent Accounting Pronouncements	'
	(g)                 Recent Accounting Pronouncements
	During 2013, the Financial Accounting Standards Board issued guidance related to unrecognized tax benefits related to a net operating loss carryforward, similar tax loss or a tax credit carryforward.  The new standard requires an unrecognized tax benefit that is not available under the tax law or not intended to be used at the reporting date to be presented as a separate liability, rather than netted against a deferred tax asset in the financial statements.  The Company adopted the provisions of this guidance effective January 1, 2014. This guidance did not have a significant impact on the Company’s consolidated financial position, results of operations or cash flows.
Subsequent events	'
	(h)                 Subsequent events
	The Company evaluated events and transactions subsequent to the balance sheet date of June 30, 2014 for potential recognition or disclosure in the condensed consolidated financial statements.

AVAILABLEFORSALE_SECURITIES_Ta

AVAILABLE-FOR-SALE SECURITIES: (Tables)	6 Months Ended
	Jun. 30, 2014
AVAILABLE-FOR-SALE SECURITIES:	'
Schedule of the Company's available-for-sale securities	'
		June 30,			December 31,
		2014			2013
	Cost	$	11,165		$	11,165
	Unrealized Gains (Losses)	(3,968		)	3,009
	Fair Market Value	$	7,197		$	14,174

FAIR_VALUE_MEASUREMENTS_Tables

FAIR VALUE MEASUREMENTS: (Tables)	6 Months Ended
	Jun. 30, 2014
FAIR VALUE MEASUREMENTS:	'
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis	'
		June 30,		December 31,		Input
		2014		2013		Hierarchy
						Level
	Assets:
	Available-for-sale securities	$	7,197	$	14,174	Level 1
	Liabilities:
	Asset retirement obligation	$	491,142	$	479,488	Level 3
Schedule of fair value reconciliation of level 3 liabilities measured at fair value	'
		Asset Retirement Obligation
		2014		2013
	Balance January 1	$	479,488	$	456,823
	Accretion expense	5,760		5,488
	Balance March 31	485,248		462,311
	Accretion expense	5,894		5,615
	Balance June 30	$	491,142	$	467,926

STOCK_OPTIONS_Tables

STOCK OPTIONS: (Tables)	6 Months Ended
	Jun. 30, 2014
STOCK OPTIONS:	'
Summary of stock option activity	'
		Number of		Weighted-			Weighted-		Aggregate
		Options		Average			Average		Intrinsic Value
				Exercise			Remaining
				Price			Contractual
							Term
	Outstanding at January 1, 2014	4,663,000		$	1.53
	Exercised	(187,000	)	$	0.87
	Forfeited or expired	(535,000	)	$	1.96
	Outstanding at March 31, 2014	3,941,000		$	1.5
	Granted	530,000		$	0.91
	Exercised	(50,000	)	$	0.99
	Forfeited or expired	(200,000	)	$	0.99
	Outstanding at June 30, 2014	4,221,000		$	1.46		2.92		$	518,650
	Exercisable at June 30, 2014	3,821,000		$	1.52		2.7		$	518,650
Schedule of assumptions used to estimate the fair value of stock options	'
		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2014			2013(1)			2014			2013
	Weighted average risk-free interest rate	0.91		%	—			0.91		%	0.44		%
	Weighted average volatility	73.08		%	—			73.08		%	68.88		%
	Expected dividend yield	—			—			—			—
	Weighted average expected life (in years)	3.0			—			3.0			3.0
	Weighted average grant-date fair value	$	0.44		$	—		$	0.44		$	0.48
Summary of nonvested options	'
		Number of		Weighted-
		Options		Average
				Grant-Date
				Fair Value
	Nonvested at January 1, 2014	588,000		$	0.27
	Vested	(18,000	)	$	0.27
	Nonvested at March 31, 2014	570,000		$	0.27
	Granted	400,000		$	0.44
	Vested	(570,000	)	$	0.27
	Nonvested at June 30, 2014	400,000		$	0.44

ORGANIZATION_AND_SUMMARY_OF_SI2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIE: (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jul. 30, 2014	Jul. 30, 2014	Jul. 30, 2014
In Millions, except Share data, unless otherwise specified			Warrant [Member]	Convertible Preferred Stock [Member]	Convertible Preferred Stock [Member]
Preferred Stock and Common Shares	'	'	'	'	'
Number of units sold	0	0	'	'	4,000
Number of shares of common stock that can be purchased on exercise of warrants	'	'	636	'	'
Unit price (in dollars per share)	'	'	'	'	$1,000
Gross proceeds before offering expenses	'	'	'	$4	'

CERTIFICATES_OF_DEPOSIT_Detail

CERTIFICATES OF DEPOSIT: (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
CERTIFICATES OF DEPOSIT:	'	'
Number of certificates of deposit owned	'	2
Certificate of deposit value	'	$1,559,361
Reclamation deposits	1,184,966	1,191,182
Certificates of Deposit Maturing in February 2014 [Member]	'	'
CERTIFICATES OF DEPOSIT:	'	'
Certificate of deposit value	'	1,559,361
Certificates of Deposit Renewed Maturing on January 03 2015 [Member]	'	'
CERTIFICATES OF DEPOSIT:	'	'
Reclamation deposits	$1,124,055	$1,130,271
Interest rate (as a percent)	0.40%	'

AVAILABLEFORSALE_SECURITIES_De

AVAILABLE-FOR-SALE SECURITIES: (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
AVAILABLE-FOR-SALE SECURITIES:	'	'
Cost	$11,165	$11,165
Unrealized Gains (Losses)	-3,968	3,009
Fair Market Value	$7,197	$14,174

FAIR_VALUE_MEASUREMENTS_Detail

FAIR VALUE MEASUREMENTS: (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
FAIR VALUE MEASUREMENTS:	'	'
Financial assets that are measured at fair value on a nonrecurring basis	$0	'
Financial liabilities that are measured at fair value on a nonrecurring basis	0	'
Assets:	'	'
Available-for-sale securities	7,197	14,174
Liabilities:	'	'
Asset retirement obligation	491,142	479,488
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]	'	'
Assets:	'	'
Available-for-sale securities	7,197	14,174
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]	'	'
Liabilities:	'	'
Asset retirement obligation	$491,142	$479,488

FAIR_VALUE_MEASUREMENTS_Detail1

FAIR VALUE MEASUREMENTS: (Details 2) (Asset Retirement Obligations [Member], USD $)	3 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2013	Mar. 31, 2013
Asset Retirement Obligations [Member]	'	'	'	'
Fair value reconciliation of level 3 liabilities measured at fair value	'	'	'	'
Balance at the beginning of the period	$485,248	$479,488	$462,311	$456,823
Accretion expense	5,894	5,760	5,615	5,488
Balance at the end of the period	$491,142	$485,248	$467,926	$462,311

CONCENTRATION_OF_CREDIT_RISK_D

CONCENTRATION OF CREDIT RISK: (Details) (Cash and Cash Equivalents [Member], Credit Concentration Risk [Member], USD $)	6 Months Ended
	Jun. 30, 2014
	item
Cash and Cash Equivalents [Member] | Credit Concentration Risk [Member]	'
CONCENTRATION OF CREDIT RISK:	'
Number of financial institutions	1
Uninsured bank deposit balance	$4,215,000

STOCKHOLDERS_EQUITY_Details

STOCKHOLDERS' EQUITY: (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jul. 30, 2014	Aug. 14, 2014	Jul. 30, 2014	Jul. 30, 2014	Aug. 14, 2014	Jul. 30, 2014
In Millions, except Share data, unless otherwise specified			Convertible Preferred Stock [Member]	Convertible Preferred Stock [Member]	Convertible Preferred Stock [Member]	Warrant [Member]	Common Stock [Member]	Common Stock [Member]
			item
Preferred Stock and Common Shares	'	'	'	'	'	'	'	'
Common Stock, Par or Stated Value Per Share	$0.00	$0.00	'	'	'	'	'	$0.00
Common stock issued at conversion of preferred stock, shares	'	'	'	316	'	'	401,728	1,271
Conversion price per share of common stock (in dollars per share)	'	'	'	'	'	'	'	$0.79
Warrants	'	'	'	'	'	'	'	'
Number of shares of common stock that can be purchased on exercise of warrants	'	'	'	'	'	636	'	'
Exercise Price (in dollars per share)	'	'	'	'	'	1.0816	'	'
Preferred Shares:	'	'	'	'	'	'	'	'
Number of investor	'	'	1	'	'	'	'	'
Authorized preferred shares	10,000,000	10,000,000	'	'	'	'	'	'
Preferred stock, par value (in dollars per share)	$0	$0	'	'	'	'	'	'
Number of units sold	0	0	'	'	4,000	'	'	'
Preferred stock, par value (in dollars per share)	$0	$0	'	'	$0	'	'	'
Unit price (in dollars per share)	'	'	'	'	$1,000	'	'	'
Gross proceeds before offering expenses	'	'	$4	'	'	'	'	'
Net proceeds before deducting other offering expenses	'	'	$3.60	'	'	'	'	'

STOCK_OPTIONS_Details

STOCK OPTIONS: (Details) (USD $)	1 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	Feb. 28, 2014	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
	item						item
Stock options	'	'	'	'	'	'	'
Number of equity incentive plans	'	'	'	'	'	'	4
Number of equity incentive plans expired	2	'	'	'	'	'	'
Number of Options	'	'	'	'	'	'	'
Outstanding at the beginning of the period (in shares)	'	3,941,000	4,663,000	'	4,663,000	'	'
Granted (in shares)	'	530,000	'	0	'	'	'
Exercised (in shares)	'	-50,000	-187,000	'	-237,000	0	'
Forfeited or expired (in shares)	'	-200,000	-535,000	'	'	'	'
Outstanding at the end of the period (in shares)	'	4,221,000	3,941,000	'	4,221,000	'	4,663,000
Exercisable at the end of the period (in shares)	'	3,821,000	'	'	3,821,000	'	'
Weighted-Average Exercise Price	'	'	'	'	'	'	'
Outstanding at the beginning of the period (in dollars per share)	'	$1.50	$1.53	'	$1.53	'	'
Granted (in dollars per share)	'	$0.91	'	'	'	'	'
Exercised (in dollars per share)	'	$0.99	$0.87	'	$0.90	'	'
Forfeited or expired (in dollars per share)	'	$0.99	$1.96	'	'	'	'
Outstanding at the end of the period (in dollars per share)	'	$1.46	$1.50	'	$1.46	'	$1.53
Exercisable at the end of the period (in dollars per share)	'	$1.52	'	'	$1.52	'	'
Weighted-Average Remaining Contractual Term	'	'	'	'	'	'	'
Outstanding at the end of the period	'	'2 years 11 months 1 day	'	'	'	'	'
Exercisable at the end of the period	'	'2 years 8 months 12 days	'	'	'	'	'
Aggregate Intrinsic Value	'	'	'	'	'	'	'
Outstanding at the end of the period	'	$518,650	'	'	$518,650	'	'
Exercisable at the end of the period	'	518,650	'	'	518,650	'	'
Assumptions used to estimate the fair value of stock options	'	'	'	'	'	'	'
Weighted average risk-free interest rate (as a percent)	'	0.91%	'	'	0.91%	0.44%	'
Weighted average volatility (as a percent)	'	73.08%	'	'	73.08%	68.88%	'
Weighted average expected life	'	'3 years	'	'	'3 years	'3 years	'
Weighted-average grant-date fair value (in dollars per share)	'	$0.44	'	'	$0.44	$0.48	'
Granted (in shares)	'	530,000	'	0	'	'	'
Exercised (in shares)	'	50,000	187,000	'	237,000	0	'
Exercised (in dollars per share)	'	$0.99	$0.87	'	$0.90	'	'
Intrinsic value of awards exercised	'	3,000	'	'	88,724	'	'
Number of Options	'	'	'	'	'	'	'
Nonvested at the beginning of the period (in shares)	'	570,000	588,000	'	588,000	'	'
Vested (in shares)	'	-570,000	-18,000	'	'	'	'
Nonvested at the end of the period (in shares)	'	400,000	570,000	'	400,000	'	588,000
Granted (in shares)	'	400,000	'	'	'	'	'
Weighted-Average Grant-Date Fair Value	'	'	'	'	'	'	'
Nonvested at the beginning of the period (in dollars per share)	'	$0.27	$0.27	'	$0.27	'	'
Vested (in dollars per share)	'	$0.27	$0.27	'	'	'	'
Nonvested at the end of the period (in dollars per share)	'	$0.44	$0.27	'	$0.44	'	$0.27
Granted (in dollars per share)	'	$0.44	'	'	'	'	'
Disclosures for share-based compensation cost	'	'	'	'	'	'	'
Unrecognized compensation expense related to nonvested share-based compensation arrangements	'	160,850	'	'	160,850	'	'
Expected weighted-average period of recognition of unrecognized compensation cost related to nonvested share-based compensation arrangements	'	'	'	'	'1 year	'	'
Total compensation costs recognized for stock-based employee compensation awards	'	96,556	'	0	133,842	249,600	'
Costs recognized for stock-based compensation awards for services performed by outside parties	'	3,677	'	0	9,196	0	'
Cash received from options exercised	'	$177,750	'	$0	'	'	'

COMMITMENTS_Details

COMMITMENTS: (Details) (Estrella Gold Corp. [Member], USD $)	1 Months Ended	6 Months Ended					0 Months Ended
	Feb. 28, 2013	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Apr. 05, 2012
	First Agreement Year [Member]	First Agreement Year [Member]	First Agreement Year [Member]	First Agreement Year [Member]	Second Agreement Year [Member]	Subsequent Agreement Year [Member]	Exploration Activities [Member]
			Minimum [Member]	Exploration Activities [Member]	Minimum [Member]
				Minimum [Member]
COMMITMENTS:	'	'	'	'	'	'	'
Percentage of Estrella exploration property located in central Peru that could be acquired by the company	'	'	'	'	'	'	75.00%
Exploration activities commitment	'	'	'	'	'	'	$5,000,000
Annual cash payments required to be made to Estrella	'	100,000	'	'	'	200,000	'
Annual cash payments made to Estrella	100,000	'	'	'	'	'	'
Exploration and development expenditures	'	'	$500,000	$350,000	$500,000	'	'