Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 29, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | MINES MANAGEMENT INC | ||
Entity Central Index Key | 66,649 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 13.5 | ||
Entity Common Stock, Shares Outstanding | 30,893,704 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,203,048 | $ 3,862,462 |
Interest receivable | 4,459 | 4,484 |
Prepaid expenses and deposits | 335,201 | 307,951 |
Total current assets | 1,542,708 | 4,174,897 |
PROPERTY AND EQUIPMENT: | ||
Buildings and leasehold improvements | 836,454 | 836,454 |
Equipment | 1,922,038 | 6,361,318 |
Office equipment | 344,657 | 343,897 |
Total property and equipment, gross | 3,103,149 | 7,541,669 |
Less accumulated depreciation | 2,627,864 | 6,997,153 |
Total property and equipment, net | 475,285 | 544,516 |
OTHER ASSETS: | ||
Available-for-sale securities | 975 | 2,467 |
Reclamation deposits | 1,184,966 | 1,184,966 |
Total other assets | 1,185,941 | 1,187,433 |
Total assets | 3,203,934 | 5,906,846 |
CURRENT LIABILITIES: | ||
Accounts payable | 389,973 | 326,570 |
Payroll and payroll taxes payable | 13,756 | 18,141 |
Dividends payable | 52,890 | 52,890 |
Total current liabilities | 456,619 | 397,601 |
LONG-TERM LIABILITIES: | ||
Asset retirement obligation | 528,250 | 503,279 |
Total liabilities | $ 984,869 | $ 900,880 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Preferred shares — no par value, 10,000,000 shares authorized; Series B 6% convertible preferred shares — $1,000 stated value, 3,526 shares issued and outstanding | $ 3,526,000 | $ 3,526,000 |
Common shares — $0.001 par value, 100,000,000 shares authorized; 00 shares issued and outstanding | 29,814 | 29,814 |
Additional paid-in capital | 87,949,096 | 87,685,232 |
Accumulated deficit | (89,275,655) | (86,226,382) |
Accumulated other comprehensive losses | (10,190) | (8,698) |
Total stockholders' equity | 2,219,065 | 5,005,966 |
Total liabilities and stockholders' equity | $ 3,203,934 | $ 5,906,846 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% |
Preferred stock, stated value (in dollars per share) | $ 1,000 | $ 1,000 |
Preferred stock, shares issued | 3,526 | 3,526 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 29,814,040 | 29,814,040 |
Common stock, shares outstanding | 29,814,040 | 29,814,040 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
REVENUE: | ||
Royalties | $ 19,566 | |
OPERATING EXPENSES: | ||
General and administrative | $ 1,833,201 | 2,404,660 |
Technical services | 1,524,774 | 2,027,758 |
Depreciation | 69,992 | 760,930 |
Legal, accounting, and consulting | 1,065,560 | 1,194,789 |
Fees, filing, and licenses | 188,940 | 216,113 |
Total operating expenses | 4,682,467 | 6,604,250 |
LOSS FROM OPERATIONS | (4,682,467) | (6,584,684) |
OTHER INCOME: | ||
Gain from sale of property and equipment | 1,850,000 | 122,600 |
Interest income (expense), net | (5,246) | 11,856 |
Total other income | 1,844,754 | 134,456 |
NET LOSS | (2,837,713) | (6,450,228) |
CUMULATIVE PREFERRED STOCK DIVIDENDS | (211,560) | (89,455) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (3,049,273) | $ (6,539,683) |
NET LOSS PER SHARE (basic and diluted) (in dollars per share) | $ (0.10) | $ (0.22) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (basic and diluted) | 29,814,040 | 29,398,634 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net loss | $ (2,837,713) | $ (6,450,228) |
Adjustment to net unrealized loss on marketable securities | (1,492) | (11,707) |
COMPREHENSIVE LOSS | $ (2,839,205) | $ (6,461,935) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
BALANCES at Dec. 31, 2013 | $ 29,000 | $ 87,230,381 | $ (79,686,699) | $ 3,009 | $ 7,575,691 | |
BALANCES (in shares) at Dec. 31, 2013 | 28,999,752 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Exercise of stock options | $ 212 | 177,538 | 177,750 | |||
Exercise of stock options (in shares) | 211,696 | |||||
Stock-based compensation | 309,839 | 309,839 | ||||
Preferred stock issued for cash | $ 4,000,000 | (505,924) | 3,494,076 | |||
Preferred stock issued for cash (in shares) | 4,000 | |||||
Preferred shares converted to common shares | $ (474,000) | $ 602 | 473,398 | |||
Preferred stock converted to common stock (in shares) | (474) | 602,592 | ||||
Preferred stock dividends | (89,455) | (89,455) | ||||
Adjustment to net unrealized loss on marketable securities | (11,707) | (11,707) | ||||
Net loss | (6,450,228) | (6,450,228) | ||||
BALANCES at Dec. 31, 2014 | $ 3,526,000 | $ 29,814 | 87,685,232 | (86,226,382) | (8,698) | 5,005,966 |
BALANCES (in shares) at Dec. 31, 2014 | 3,526 | 29,814,040 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 263,864 | 263,864 | ||||
Preferred stock dividends | (211,560) | (211,560) | ||||
Adjustment to net unrealized loss on marketable securities | (1,492) | (1,492) | ||||
Net loss | (2,837,713) | (2,837,713) | ||||
BALANCES at Dec. 31, 2015 | $ 3,526,000 | $ 29,814 | $ 87,949,096 | $ (89,275,655) | $ (10,190) | $ 2,219,065 |
BALANCES (in shares) at Dec. 31, 2015 | 3,526 | 29,814,040 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,837,713) | $ (6,450,228) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 263,864 | 309,839 |
Depreciation | 69,992 | 760,930 |
Accretion of asset retirement obligation | 24,971 | 23,791 |
Gain on sale of property and equipment | (1,850,000) | (122,600) |
Changes in assets and liabilities: | ||
Interest receivable | 25 | 2,504 |
Prepaid expenses and deposits | (27,250) | (70,665) |
Accounts payable | 63,403 | (54,735) |
Payroll and payroll taxes payable | (4,385) | (5,217) |
Net cash used in operating activities | (4,297,093) | (5,606,381) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (761) | |
Proceeds from disposition of property and equipment | 1,850,000 | 122,913 |
Proceeds from certificates of deposit | 1,565,577 | |
Net cash provided by (used in) investing activities | 1,849,239 | 1,688,490 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from sale of preferred stock | 3,494,076 | |
Net proceeds from sales of common stock | 177,750 | |
Cumulative preferred stock dividends | (211,560) | (36,565) |
Net cash provided by (used in) financing activities | (211,560) | 3,635,261 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (2,659,414) | (282,630) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 3,862,462 | 4,145,092 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,203,048 | 3,862,462 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 11,535 | |
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES: | ||
Accrual of cumulative preferred stock dividends | $ 52,890 | 52,890 |
Preferred Stock | ||
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES: | ||
Preferred shares converted to common shares | $ 474,000 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2015 | |
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 a publicly held Idaho corporation incorporated in 1947. The Company acquires, explores, and develops mineral properties in North and South America. Summary of Significant Accounting Policies: 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. The Company does not have sufficient cash to fund normal operations beyond April 2016 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. 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. Principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Mines Management, Inc., and its wholly ‑owned subsidiaries, Newhi, Inc., Montanore Minerals Corp., Montmin Resources Corp., and Minera Montanore Peru, SAC. Intercompany balances and transactions have been eliminated. c. Exploration stage enterprise The Company is in the exploration stage of operation and 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 seek additional funding to support the completion of its exploration and development activities. The Company’s activities are subject to significant risks and uncertainties, including its ability to secure sufficient funding to continue operations, to obtain proven and probable reserves, to comply with industry regulations and obtain permits necessary for development of the Montanore project, as well as environmental risks and market conditions. d. Cash and cash equivalents Cash and cash equivalents include cash on hand, cash in banks, investments in certificates of deposit with original maturities of 90 days or less, and money market funds. e. Available for sale securities Available ‑for ‑sale securities are recorded at fair value, with unrealized gains or losses recorded as a component of equity, unless a decline in value of the security is considered other than temporary. Realized gains and losses and other than temporary impairments are recorded in the statement of operations. f. Property and equipment Property and equipment are stated at cost less accumulated depreciation. Buildings and leasehold improvements are depreciated on the straight ‑line basis over an estimated useful life of 39 years. Plant and equipment and office equipment are generally depreciated on a straight ‑line basis over estimated useful lives ranging from 5 to 10 years. When assets are retired or sold, the costs and related allowances for depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the statement of operations. g. Mining properties, exploration and development costs All exploration expenditures, including costs to acquire stationary equipment for use in exploration activities that have no significant alternative future use, 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. h. Asset impairment The Company evaluates its long ‑lived assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset grouping, asset impairment is considered to exist. The related impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. Changes in significant assumptions underlying future cash flow estimates may have a material effect on the Company’s financial position and results of operations. i. 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. j. Asset retirement obligations A liability is recognized for the present value of estimated environmental remediation (asset retirement obligation), in the period in which the liability is incurred if a reasonable estimate of fair value can be made. The offsetting balance is charged to expense as an exploration cost if the liability is incurred during the exploration stage of the related mining project or as an asset if the related mining project is in production. Adjustments are made to the liability for changes resulting from passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation. The Company has an asset retirement obligation associated with its underground evaluation program at the Montanore Project, described more fully in note 6. k. Deferred income taxes Deferred income tax is provided for differences between the basis of assets and liabilities for financial and income tax reporting. A deferred tax asset, subject to a valuation allowance, is recognized for estimated future tax benefits of tax ‑basis operating losses being carried forward. Uncertain tax positions are evaluated in a two ‑step process, whereby (1) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more ‑likely ‑than ‑not recognition threshold, the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority would be recognized. If income tax related interest and penalties were to be assessed, the Company would charge interest to interest expense, and penalties to general and administrative expense. l. Stock based 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. m. 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 and convertible preferred stock. 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 years ended December 31, 2015 and 2014. n. Assumptions and use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Significant areas requiring the use of management assumptions and estimates relate to asset impairments, including long ‑lived assets and investments, asset retirement obligations, and valuation of stock based compensation and warrant derivatives. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s 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. o. Recent accounting pronouncements In August 2014, the FASB issued a new going concern standard which defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Adoption of this update is not anticipated to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued a new standard, Leases (ASC 842) . Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than twelve months and to disclose key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018. The Company is not able to reasonably estimate the impact on the Company’s consolidated financial statements at this time. p. Subsequent events The Company evaluated events and transactions subsequent to the balance sheet date of December 31, 2015, for potential recognition or disclosure in the consolidated financial statements. |
MINING PROPERTIES
MINING PROPERTIES | 12 Months Ended |
Dec. 31, 2015 | |
MINING PROPERTIES | |
MINING PROPERTIES | NOTE 2—MINING PROPERTIES Montanore: The Montanore property is located in northwestern Montana and includes 10 patented mining claims and 861 unpatented mining claims. In August 2002, the Company acquired a controlling interest in the Montanore silver and copper deposit in Sanders and Lincoln Counties, Montana. The Company received a quitclaim deed from Noranda Mineral Corp. (“Noranda”) when Noranda elected to withdraw from the project. In December 2002, the Company received a quitclaim deed to all intellectual property connected with studies that Noranda carried out on the project. Advance and Iroquois: The Advance and Iroquois properties are located in northern Washington State. The Advance property consists of 720 acres of patented mineral rights. Although the Company does not own the overlying surface rights to its patented mineral rights, it does have right of access to explore and mine. The Iroquois property consists of 62 acres of patented mineral and surface rights. |
CERTIFICATES OF DEPOSIT
CERTIFICATES OF DEPOSIT | 12 Months Ended |
Dec. 31, 2015 | |
CERTIFICATES OF DEPOSIT | |
CERTIFICATES OF DEPOSIT | NOTE 3—CERTIFICATES OF DEPOSIT The Company 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 of deposit was in the amount of $1,124,055 as of December 31, 2015 and 2014, respectively. It bore interest at the rate of 0.40% as of December 31, 2015 and had a maturity date of January 3, 2016. This certificate of deposit renews automatically each year and is included with reclamation deposits on the Consolidated Balance Sheets for the years ended December 31, 2015 and 2014. The certificate was renewed on January 3, 2016 in the amount of $1,124,055 bearing interest at the rate of 0.15% and expires on January 3, 2017. |
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES | 12 Months Ended |
Dec. 31, 2015 | |
AVAILABLE-FOR-SALE SECURITIES. | |
AVAILABLE-FOR-SALE SECURITIES | NOTE 4—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: December 31, December 31, 2015 2014 Cost $ $ Unrealized Losses Fair Market Value $ $ |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 5—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 December 31, 2015 and 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. Balance at Balance at Input December 31, December 31, Hierarchy 2015 2014 Level Assets: Available-for-sale securities $ $ Level 1 Liabilities: Asset retirement obligation $ $ Level 3 The following table presents the fair value reconciliation of Level 3 liabilities measured at fair value during the year ended December 31, 2015: Asset Retirement Obligation Balance January 1, 2015 $ Accretion expense Balance December 31, 2015 $ |
ASSET RETIREMENT OBLIGATIONS
ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2015 | |
ASSET RETIREMENT OBLIGATIONS | |
ASSET RETIREMENT OBLIGATIONS | NOTE 6—ASSET RETIREMENT OBLIGATIONS The Company has an asset retirement obligation (“ARO”) associated with its underground evaluation program at the Montanore Project. The ARO resulted from the reclamation and remediation requirements of the Montana Department of Environmental Quality as outlined in the Company’s permit to carry out the evaluation program. Estimated reclamation costs were discounted using a credit adjusted risk ‑free interest rate of 4.78% from the time the Company expects to pay the retirement obligation to the time it incurred the obligation, which is estimated at 25 years. The following table summarizes activity in the Company’s ARO. Year Ended Year Ended December 31, December 31, 2015 2014 Balance January 1, $ $ Accretion expense Balance December 31, $ $ The Company has a certificate of deposit which is 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 which is discussed further in note 3. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2015 | |
CONCENTRATION OF CREDIT RISK. | |
CONCENTRATION OF CREDIT RISK | NOTE 7—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 Company’s total uninsured bank deposit balance totaled approximately $2,200,000 as of December 31, 2015. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 8—STOCKHOLDERS’ EQUITY Preferred Shares: During July 2014, the Company sold to one investor 4,000 units consisting of one share of the Company’s Series B convertible preferred stock, no par value, and a warrant to purchase the Company’s common stock, par value $0.001 per share, at a stated value 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 conversion rate is subject to downward adjustment upon the Company issuing or selling shares of the Company’s common stock for a per share price less than the applicable conversion rate. The offering yielded gross proceeds, before offering expenses, of $4.0 million (net proceeds of $3.5 million after deducting placement agent and investor fees and expenses and other offering expenses). The preferred stock has no voting rights but will entitle the holders to receive cumulative dividends at the rate of 6% per annum per share, payable quarterly. The dividends are payable in either cash or common stock at the Company’s discretion. As of December 31, 2015, 474 shares of the Series B convertible preferred stock had been converted into 602,592 shares of common stock. Upon the occurrence of certain events that the Company believes are within its control, the holders of the preferred shares may have the option to redeem or convert them into common shares or increase the dividend rate to 18% per annum. Warrants: Each warrant is immediately exercisable at an exercise price of $1.0816 per share and allows the holder to purchase approximately 636 shares of the Company’s common stock. The warrants are not listed on a national securities exchange and do not have the rights or privileges of a holder of common stock, including any voting rights, until the holder exercises the warrant. Upon the occurrence of a Fundamental Transaction, as defined in the warrant, the Company or its successor may be required to purchase the unexercised portion of the warrant from the warrant holder. The Company does not currently anticipate that this will occur. The following table summarizes exercise prices and expiration dates of outstanding common stock purchase warrants as of December 31, 2015. Number of Warrants Exercise Price Per Share Expiration Date 4,000 $ 1.0816 November 30, 2018 Liquidation: Upon any dissolution, liquidation or winding up, whether voluntary or involuntary, holders of the preferred stock are entitled to receive distributions out of the Company’s assets, whether capital or surplus, before any distributions may be made on any other outstanding classes of stock. The amount received by holders of the preferred stock will be equal to the stated value of $1,000 per share of preferred stock plus any accrued and unpaid dividends thereon, and any other fees or liquidated damages then due and owing. Common Shares: During 2007, the Company sold 2,500,000 common shares in a private placement to one investor. In connection with the stock sale, the Company entered into a Right of First Refusal agreement (the “ROFR”) which grants a twenty -year right of first proposal and a right to match third-party proposals, to purchase all or any portion of silver mined, produced or recovered by the Company in the State of Montana. The ROFR does not apply to trade sales and spot sales in the ordinary course of business or to forward sales, in each case, for which no upfront payment is received by the Company. |
STOCK OPTIONS
STOCK OPTIONS | 12 Months Ended |
Dec. 31, 2015 | |
STOCK OPTIONS | |
STOCK OPTIONS | NOTE 9—STOCK OPTIONS The Company had four equity incentive plans: the 2003 Stock Option Plan, the 2003 Consultant Stock Compensation Plan, the 2007 Equity Incentive Plan, and the 2012 Equity Incentive Plan (collectively, the “Plans”). Under all of the equity incentive plans, the option exercise price may not be less than 100% of the fair market value per share on the date of grant, the stock options are exercisable within ten years from the date of the grant of the option, and the vesting schedule of the options is at the discretion of the Board of Directors. Under the 2003 Stock Option Plan and Consultant Stock Compensation Plan, both of which expired in February 2014, the Company could grant options to purchase up to 3,000,000 shares and 700,000 shares of authorized and unissued common stock, respectively. The 2003 Stock Option Plan included both incentive stock options and nonqualified stock options. Under the 2007 Equity Incentive Plan (the “2007 Plan”), which provides for the issuance of both incentive stock options and nonqualified stock options and restricted shares to directors, employees and consultants of the Company, the Company may issue up to 3,000,000 shares of the Company’s authorized but unissued common stock. No participant is eligible to be granted more than 500,000 common shares during any calendar year. Under the 2012 Equity Incentive Plan (“2012 Plan”), the Company may grant options to purchase up to 3,000,000 shares of the Company’s authorized but unissued common stock, at the discretion of the Board. The 2012 Plan provides for the issuance of incentive stock options to employees and nonqualified stock options to directors, employees and consultants of the Company. No participant is eligible to be granted more than 200,000 common shares during any calendar year. A summary of the option activity under the Plans as of December 31, 2015, and changes during the year then ended, is presented below: Weighted- Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value Outstanding at January 1, 2015 $ Granted $ Forfeited or expired $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ 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 years presented is based on the historical volatility of the Company’s common stock 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 on common stock in the near term. Years Ended December 31, 2015 2014 Weighted average risk-free interest rate % % Weighted average volatility % % Expected dividend yield — — Weighted average expected life (in years) Weighted average grant-date fair value $ $ During the year ended December 31, 2015, there were no options exercised. During the year ended December 31, 2014, there were 237,000 options exercised with a weighted average exercise price of $0.90 . The total intrinsic value of the options exercised during the year ended December 31, 2014 was $88,724 . A summary of the status of the Company’s nonvested options as of December 31, 2015 and changes during the year then ended is presented below: Weighted-Average Number of Grant-Date Options Fair Value Nonvested at January 1, 2015 $ Issued $ Vested $ Nonvested at December 31, 2015 $ As of December 31, 2015, there was $46,545 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 $263,864 and $300,643 for the years ended December 31, 2015 and 2014, respectively. These costs were included in general and administrative and technical services expenses on the Consolidated Statements of Operations. Total costs recognized for stock ‑based compensation awards for services performed by outside parties were $0 and $9,196 for the years ended December 31, 2015 and 2014, respectively. Cash received from options exercised under all share ‑based payment arrangements for the years ended December 31, 2015 and 2014 was $0 and $177,750 , respectively. |
DEFERRED INCOME TAX
DEFERRED INCOME TAX | 12 Months Ended |
Dec. 31, 2015 | |
DEFERRED INCOME TAX | |
DEFERRED INCOME TAX | NOTE 10—DEFERRED INCOME TAX As of December 31, 201 5 and 201 4 , the Company had net deferred tax assets that were fully reserved by valuation allowances. Following are the components of such assets and allowances: Years Ended December 31, 2015 2014 Deferred tax assets: Net operating loss carryforwards $ $ Stock-based compensation Property and equipment Asset retirement obligation Total deferred tax assets Deferred tax liabilities: Property and equipment Net deferred tax asset before valuation allowance Less valuation allowance Net deferred tax assets $ — $ — For the periods presented, the effective income tax rate differed from the expected rate because of the effects of changes in the deferred tax asset valuation allowance. Changes in the deferred tax asset valuation allowance for the years ended December 31, 2015 and 2014 relate only to corresponding changes in deferred tax assets for those periods. As of December 31, 2015, the Company had federal tax ‑basis net operating loss carryforwards totaling approximately $74,200,000 which will expire in various amounts from 2020 through 2035. The Company is subject to examination of its income tax filings in the United States and various state jurisdictions for the 2012 through 2015 tax years. Within each of these jurisdictions the Company has examined its material tax positions and determined that they would more likely than not be sustained. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS | |
COMMITMENTS | NOTE 11—COMMITMENTS Operating Leases: The Company leases office space and equipment under operating leases. As a result, the Company recognized rental expense of $53,104 and $52,186 for the years ending December 31, 2015 and 2014, respectively. The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2015. Years ending December 31: 2016 $ 2017 2018 Total minimum payments required $ Employment Agreements: The Company has employment agreements with certain executives. The agreements include a provision for severance pay equal to a multiple of each executive’s salary. To receive severance, termination must be without cause and cannot be a result of death or disability. Additionally, severance must be paid if the executive resigns for good reason within one year following a change in control of the Company. As of December 31, 2015, the potential aggregate liability for severance pay under the agreements is $2,075,000 . Royalties on Patented Mining Claims: Two of the Company’s patented mining claims, which cover the Montanore deposit, are burdened by a production payment obligation of $0.20 per ton of ore extracted and milled therefrom. The calculation and timing of the production payment are specifically defined by a Purchase and Sale Agreement. |
ORGANIZATION AND SUMMARY OF S19
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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. The Company does not have sufficient cash to fund normal operations beyond April 2016 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. 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. |
Principles of consolidation | b. Principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of Mines Management, Inc., and its wholly ‑owned subsidiaries, Newhi, Inc., Montanore Minerals Corp., Montmin Resources Corp., and Minera Montanore Peru, SAC. Intercompany balances and transactions have been eliminated. |
Exploration stage enterprise | c. Exploration stage enterprise The Company is in the exploration stage of operation and 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 seek additional funding to support the completion of its exploration and development activities. The Company’s activities are subject to significant risks and uncertainties, including its ability to secure sufficient funding to continue operations, to obtain proven and probable reserves, to comply with industry regulations and obtain permits necessary for development of the Montanore project, as well as environmental risks and market conditions. |
Cash and cash equivalents | d. Cash and cash equivalents Cash and cash equivalents include cash on hand, cash in banks, investments in certificates of deposit with original maturities of 90 days or less, and money market funds. |
Available for sale securities | e. Available for sale securities Available ‑for ‑sale securities are recorded at fair value, with unrealized gains or losses recorded as a component of equity, unless a decline in value of the security is considered other than temporary. Realized gains and losses and other than temporary impairments are recorded in the statement of operations. |
Property and equipment | f. Property and equipment Property and equipment are stated at cost less accumulated depreciation. Buildings and leasehold improvements are depreciated on the straight ‑line basis over an estimated useful life of 39 years. Plant and equipment and office equipment are generally depreciated on a straight ‑line basis over estimated useful lives ranging from 5 to 10 years. When assets are retired or sold, the costs and related allowances for depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the statement of operations. |
Mining properties, exploration and development costs | g. Mining properties, exploration and development costs All exploration expenditures, including costs to acquire stationary equipment for use in exploration activities that have no significant alternative future use, 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. |
Asset impairment | h. Asset impairment The Company evaluates its long ‑lived assets for impairment when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the sum of estimated future net cash flows on an undiscounted basis is less than the carrying amount of the related asset grouping, asset impairment is considered to exist. The related impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. Changes in significant assumptions underlying future cash flow estimates may have a material effect on the Company’s financial position and results of operations. |
Fair value measurements | i. 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. |
Asset retirement obligations | j. Asset retirement obligations A liability is recognized for the present value of estimated environmental remediation (asset retirement obligation), in the period in which the liability is incurred if a reasonable estimate of fair value can be made. The offsetting balance is charged to expense as an exploration cost if the liability is incurred during the exploration stage of the related mining project or as an asset if the related mining project is in production. Adjustments are made to the liability for changes resulting from passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation. The Company has an asset retirement obligation associated with its underground evaluation program at the Montanore Project, described more fully in note 6. |
Deferred income taxes | k. Deferred income taxes Deferred income tax is provided for differences between the basis of assets and liabilities for financial and income tax reporting. A deferred tax asset, subject to a valuation allowance, is recognized for estimated future tax benefits of tax ‑basis operating losses being carried forward. Uncertain tax positions are evaluated in a two ‑step process, whereby (1) it is determined whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more ‑likely ‑than ‑not recognition threshold, the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority would be recognized. If income tax related interest and penalties were to be assessed, the Company would charge interest to interest expense, and penalties to general and administrative expense. |
Stock based compensation | l. Stock based 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 | m. 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 and convertible preferred stock. 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 years ended December 31, 2015 and 2014. |
Assumptions and use of estimates | n. Assumptions and use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Significant areas requiring the use of management assumptions and estimates relate to asset impairments, including long ‑lived assets and investments, asset retirement obligations, and valuation of stock based compensation and warrant derivatives. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company’s 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. |
Recent accounting pronouncements | o. Recent accounting pronouncements In August 2014, the FASB issued a new going concern standard which defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. This guidance is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Adoption of this update is not anticipated to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued a new standard, Leases (ASC 842) . Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than twelve months and to disclose key information about leasing arrangements. This guidance is effective for fiscal years beginning after December 15, 2018. The Company is not able to reasonably estimate the impact on the Company’s consolidated financial statements at this time. |
Subsequent events | p. Subsequent events The Company evaluated events and transactions subsequent to the balance sheet date of December 31, 2015, for potential recognition or disclosure in the consolidated financial statements. |
AVAILABLE-FOR-SALE SECURITIES (
AVAILABLE-FOR-SALE SECURITIES (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
AVAILABLE-FOR-SALE SECURITIES. | |
Schedule of the Company's available-for-sale securities | December 31, December 31, 2015 2014 Cost $ $ Unrealized Losses Fair Market Value $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis | Balance at Balance at Input December 31, December 31, Hierarchy 2015 2014 Level Assets: Available-for-sale securities $ $ Level 1 Liabilities: Asset retirement obligation $ $ Level 3 |
Schedule of fair value reconciliation of level 3 liabilities measured at fair value | Asset Retirement Obligation Balance January 1, 2015 $ Accretion expense Balance December 31, 2015 $ |
ASSET RETIREMENT OBLIGATIONS (T
ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
ASSET RETIREMENT OBLIGATIONS | |
Summary of activity in the Company's ARO | Year Ended Year Ended December 31, December 31, 2015 2014 Balance January 1, $ $ Accretion expense Balance December 31, $ $ |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
STOCKHOLDERS' EQUITY | |
Schedule of exercise prices and expiration dates of the Company's outstanding common share purchase warrants | Number of Warrants Exercise Price Per Share Expiration Date 4,000 $ 1.0816 November 30, 2018 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
STOCK OPTIONS | |
Summary of stock option activity | Weighted- Weighted- Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value Outstanding at January 1, 2015 $ Granted $ Forfeited or expired $ Outstanding at December 31, 2015 $ $ Exercisable at December 31, 2015 $ $ |
Schedule of assumptions used to estimate the fair value of stock options | Years Ended December 31, 2015 2014 Weighted average risk-free interest rate % % Weighted average volatility % % Expected dividend yield — — Weighted average expected life (in years) Weighted average grant-date fair value $ $ |
Summary of nonvested stock options | Weighted-Average Number of Grant-Date Options Fair Value Nonvested at January 1, 2015 $ Issued $ Vested $ Nonvested at December 31, 2015 $ |
DEFERRED INCOME TAX (Tables)
DEFERRED INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
DEFERRED INCOME TAX | |
Schedule of components of net deferred tax assets fully reserved by valuation allowances | Years Ended December 31, 2015 2014 Deferred tax assets: Net operating loss carryforwards $ $ Stock-based compensation Property and equipment Asset retirement obligation Total deferred tax assets Deferred tax liabilities: Property and equipment Net deferred tax asset before valuation allowance Less valuation allowance Net deferred tax assets $ — $ — |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
COMMITMENTS | |
Schedule by years of future minimum rental payments required under operating leases | Years ending December 31: 2016 $ 2017 2018 Total minimum payments required $ |
ORGANIZATION AND SUMMARY OF S27
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Building and leasehold improvements | |
Property and equipment | |
Estimated useful lives | 39 years |
Plant and equipment and office equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 5 years |
Plant and equipment and office equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 10 years |
MINING PROPERTIES (Details)
MINING PROPERTIES (Details) | 12 Months Ended |
Dec. 31, 2015aitem | |
Montanore | |
MINING PROPERTIES | |
Number of patented mining properties | item | 10 |
Number of unpatented mining properties | item | 861 |
Advance | |
MINING PROPERTIES | |
Area of property (in acres) | a | 720 |
Iroquois | |
MINING PROPERTIES | |
Patented area of property (in acres) | a | 62 |
CERTIFICATES OF DEPOSIT (Detail
CERTIFICATES OF DEPOSIT (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CERTIFICATES OF DEPOSIT: | ||
Reclamation deposits | $ 1,184,966 | $ 1,184,966 |
Certificates of deposit renewed and maturing on January 3, 2014 | ||
CERTIFICATES OF DEPOSIT: | ||
Reclamation deposits | 1,124,055 | |
Certificates of deposit renewed and maturing on January 3, 2017 | ||
CERTIFICATES OF DEPOSIT: | ||
Certificate of deposit value | $ 1,124,055 | |
Interest rate (as a percent) | 0.15% | |
Certificates of deposit maturing on January 3, 2016 | ||
CERTIFICATES OF DEPOSIT: | ||
Certificate of deposit value | $ 1,124,055 | $ 1,124,055 |
Interest rate (as a percent) | 0.40% |
AVAILABLE-FOR-SALE SECURITIES30
AVAILABLE-FOR-SALE SECURITIES (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
AVAILABLE-FOR-SALE SECURITIES. | ||
Cost | $ 11,165 | $ 11,165 |
Unrealized Losses | (10,190) | (8,698) |
Fair Market Value | $ 975 | $ 2,467 |
FAIR VALUE MEASUREMENTS - fair
FAIR VALUE MEASUREMENTS - fair value on a recurring basis (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 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 | 975 | $ 2,467 | |
Liabilities: | |||
Asset retirement obligation | 528,250 | 503,279 | $ 479,488 |
Recurring basis | Level 1 | |||
Assets: | |||
Available-for-sale securities | 975 | 2,467 | |
Recurring basis | Level 3 | |||
Liabilities: | |||
Asset retirement obligation | $ 528,250 | $ 503,279 |
FAIR VALUE MEASUREMENTS - fai32
FAIR VALUE MEASUREMENTS - fair value reconciliation of Level 3 liabilities (Details) - Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair value reconciliation of level 3 liabilities measured at fair value | |
Balance at the beginning of the period | $ 503,279 |
Accretion expense | 24,971 |
Balance at the end of the period | $ 528,250 |
ASSET RETIREMENT OBLIGATIONS (D
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
ASSET RETIREMENT OBLIGATIONS | ||
Credit adjusted risk-free interest rate used to discount estimated reclamation costs (as a percent) | 4.78% | |
Estimated retirement obligation term | 25 years | |
Summary of activity in the ARO | ||
Balance at the beginning of the period | $ 503,279 | $ 479,488 |
Accretion expense | 24,971 | 23,791 |
Balance at the end of the period | $ 528,250 | $ 503,279 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details) - Cash and cash equivalents - Concentration of credit risk | 12 Months Ended |
Dec. 31, 2015USD ($)item | |
CONCENTRATION OF CREDIT RISK: | |
Number of financial institutions | item | 1 |
Uninsured bank deposit balance | $ | $ 2,200,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | Nov. 02, 2007USD ($)itemshares | Jul. 31, 2014USD ($)item$ / sharesshares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2014$ / sharesshares | Dec. 31, 2013$ / shares | Dec. 31, 2012$ / shares |
Preferred Stock and Common Shares: | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Preferred Shares: | ||||||
Preferred stock, dividend rate (as a percent) | 6.00% | 6.00% | ||||
Authorized preferred shares | 10,000,000 | 10,000,000 | ||||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||||
Number of units sold or outstanding | 3,526 | 3,526 | ||||
Maximum | ||||||
Preferred Shares: | ||||||
Preferred stock, dividend rate (as a percent) | 18.00% | |||||
Convertible Preferred Stock | ||||||
Preferred Stock and Common Shares: | ||||||
Issue price (in dollars per share) | $ / shares | $ 1,000 | |||||
Common stock issued at conversion of preferred stock, shares | 474 | |||||
Preferred Shares: | ||||||
Number of investor | item | 1 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 | ||||
Number of units sold or outstanding | 4,000 | |||||
Issue price (in dollars per share) | $ / shares | $ 1,000 | |||||
Gross proceeds before offering expenses | $ | $ 4,000,000 | |||||
Net proceeds after deducting other offering expenses | $ | $ 3,500,000 | |||||
Warrants | ||||||
Warrants: | ||||||
Number of shares of common stock that can be purchased on exercise of each warrant | 636 | |||||
Number of shares associated with a specific exercise price per share and expiration date | 4,000 | |||||
Exercise Price (in dollars per share) | $ / shares | $ 1.0816 | |||||
Common Stock | ||||||
Preferred Stock and Common Shares: | ||||||
Common stock issued at conversion of preferred stock, shares | 1,271 | 602,592 | ||||
Conversion price per share of common stock (in dollars per share) | $ / shares | $ 0.7866 | |||||
Private placement 2007 transaction | Common Stock | ||||||
Preferred Stock and Common Shares: | ||||||
Number of shares issued or sold | 2,500,000 | |||||
Number of investors | item | 1 | |||||
Period time of right of first proposal and a right to match third-party proposals | 20 years | |||||
Upfront payments received for ROFR not applying to trade sales and spot sales | $ | $ 0 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) | 12 Months Ended | |
Dec. 31, 2015USD ($)item$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | |
Stock options | ||
Number of equity incentive plans | item | 4 | |
Number of Options | ||
Outstanding at the beginning of the period (in shares) | 4,876,000 | |
Granted (in shares) | 770,000 | |
Forfeited or expired (in shares) | (539,000) | |
Outstanding at the end of the period (in shares) | 5,107,000 | 4,876,000 |
Exercisable at the end of the period (in shares) | 4,117,000 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 1.31 | |
Granted (in dollars per share) | $ / shares | 0.28 | |
Forfeited or expired (in dollars per share) | $ / shares | 2.48 | |
Outstanding at the end of the period (in dollars per share) | $ / shares | 0.57 | $ 1.31 |
Expired (in dollars per share) | $ / shares | $ 0.90 | |
Outstanding and exercisable at the end of the period (in dollars per share) | $ / shares | $ 0.61 | |
Weighted-Average Remaining Contractual Term | ||
Outstanding at the end of the period | 2 years 9 months 4 days | |
Exercisable at the end of the period | 2 years 2 months 23 days | |
Aggregate Intrinsic Value | ||
Outstanding at the end of the period | $ | $ 701,320 | |
Exercisable at the end of the period | $ | $ 325,120 | |
Assumptions used to estimate the fair value of stock options | ||
Weighted average risk-free interest rate (as a percent) | 0.65% | 0.95% |
Weighted average volatility (as a percent) | 80.88% | 69.00% |
Weighted average expected life (in years) | 2 years | 3 years |
Weighted-average grant-date fair value (in dollars per share) | $ / shares | $ 0.12 | $ 0.32 |
Granted (in shares) | 770,000 | |
Exercised (in shares) | 0 | 237,000 |
Total intrinsic value | $ | $ 88,724 | |
Number of Options | ||
Nonvested at the beginning of the period (in shares) | 900,000 | |
Issued (in shares) | 640,000 | |
Vested (in shares) | (550,000) | |
Nonvested at the end of the period (in shares) | 990,000 | 900,000 |
Weighted-Average Grant-Date Fair Value | ||
Nonvested at the beginning of the period (in dollars per share) | $ / shares | $ 0.28 | |
Vested (in dollars per share) | $ / shares | 0.31 | |
Issued (in dollars per share) | $ / shares | 0.12 | |
Nonvested at the end of the period (in dollars per share) | $ / shares | $ 0.16 | $ 0.28 |
Disclosures for share-based compensation cost | ||
Unrecognized compensation expense related to nonvested share-based compensation arrangements | $ | $ 46,545 | |
Total compensation costs recognized for stock-based employee compensation awards | $ | 263,864 | $ 300,643 |
Costs recognized for stock-based compensation awards for services performed by outside parties | $ | 0 | 9,196 |
Cash received from options exercised | $ | $ 0 | $ 177,750 |
Maximum | ||
Stock options | ||
Contractual term | 10 years | |
Disclosures for share-based compensation cost | ||
Expected weighted-average period of recognition of unrecognized compensation cost related to nonvested share-based compensation arrangements | 1 year | |
Minimum | ||
Stock options | ||
Option exercise price as percentage of fair market value per share on the date of grant | 100.00% | |
2012 Plan | ||
Stock options | ||
Shares authorized for grant under the plans | 3,000,000 | |
Number of participants eligible to be granted more than 200,000 common shares during any calendar year | item | 0 | |
Maximum number of shares to grant a participant in a calendar year | 200,000 | |
2003 Stock Option Plan | ||
Stock options | ||
Shares authorized for grant under the plans | 3,000,000 | |
Unissued shares of common stock | 700,000 | |
2007 Plan | ||
Stock options | ||
Shares authorized for grant under the plans | 3,000,000 | |
Maximum number of shares to grant a participant in a calendar year | 500,000 |
DEFERRED INCOME TAX - component
DEFERRED INCOME TAX - components of deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 25,220,000 | $ 24,270,000 |
Stock-based compensation | 390,000 | 480,000 |
Property and equipment | 1,250,000 | 1,250,000 |
Asset retirement obligation | 180,000 | 170,000 |
Total deferred tax assets | 27,040,000 | 26,170,000 |
Deferred tax liabilities: | ||
Property, plant and equipment | 240,000 | 210,000 |
Net deferred tax asset before valuation allowance | 26,800,000 | 25,960,000 |
Less valuation allowance | $ (26,800,000) | $ (25,960,000) |
DEFERRED INCOME TAX - net opera
DEFERRED INCOME TAX - net operating loss carryforwards (Details) | Dec. 31, 2015USD ($) |
Federal | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 74,200,000 |
COMMITMENTS (Details)
COMMITMENTS (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)item$ / item | |
Operating Leases | |
2,016 | $ 11,500 |
2,017 | 3,100 |
2,018 | 1,600 |
Total minimum payments required | 16,200 |
Employment Agreements | Executive officers | |
Loss Contingencies [Line Items] | |
Potential aggregate liability for severance pay | $ 2,075,000 |
Employment Agreements | Executive officers | Maximum | |
Loss Contingencies [Line Items] | |
Resignation period following a change in control of the company resulting in additional severance payment | 1 year |
Royalties on patented mining claims | Montanore | |
Loss Contingencies [Line Items] | |
Number of patented mining claims burdened by a production payment obligation | item | 2 |
Production payment obligation per ton of ore extracted and milled therefrom (in dollars per ton) | $ / item | 0.20 |