Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | MINES MANAGEMENT INC | |
Entity Central Index Key | 66,649 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
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 | 31,643,704 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 393,244 | $ 1,203,048 |
Interest receivable | 406 | 4,459 |
Prepaid expenses and deposits | 289,550 | 335,201 |
Total current assets | 683,200 | 1,542,708 |
PROPERTY AND EQUIPMENT: | ||
Buildings and leasehold improvements | 836,454 | 836,454 |
Equipment | 1,922,038 | 1,922,038 |
Office equipment | 344,657 | 344,657 |
Total property and equipment, gross | 3,103,149 | 3,103,149 |
Less accumulated depreciation | 2,661,168 | 2,627,864 |
Total property and equipment, net | 441,981 | 475,285 |
OTHER ASSETS: | ||
Available-for-sale securities | 2,144 | 975 |
Reclamation deposits | 1,184,966 | 1,184,966 |
Total other assets | 1,187,110 | 1,185,941 |
Total assets | 2,312,291 | 3,203,934 |
CURRENT LIABILITIES: | ||
Accounts payable | 434,630 | 389,973 |
Payroll and payroll taxes payable | 33,551 | 13,756 |
Dividends payable | 46,401 | 52,890 |
Total current liabilities | 514,582 | 456,619 |
LONG-TERM LIABILITIES: | ||
Asset retirement obligation | 534,666 | 528,250 |
Total liabilities | $ 1,049,248 | $ 984,869 |
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, 3,093 and 3,526 shares issued and outstanding, respectively | $ 3,093,370 | $ 3,526,000 |
Common shares — $0.001 par value, 100,000,000 shares authorized; 30,893,704 and 29,814,040 shares issued and outstanding, respectively | 30,894 | 29,814 |
Additional paid-in capital | 88,486,591 | 87,949,096 |
Accumulated deficit | (90,338,791) | (89,275,655) |
Accumulated other comprehensive losses | (9,021) | (10,190) |
Total stockholders' equity | 1,263,043 | 2,219,065 |
Total liabilities and stockholders' equity | $ 2,312,291 | $ 3,203,934 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
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, 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 | 3,093 | 3,526 |
Preferred stock, shares outstanding | 3,093 | 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 | 30,893,704 | 29,814,040 |
Common stock, shares outstanding | 30,893,704 | 29,814,040 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
OPERATING EXPENSES: | ||
General and administrative | $ 450,257 | $ 551,902 |
Technical services | 302,410 | 422,958 |
Depreciation | 33,304 | 27,837 |
Legal, accounting, and consulting | 213,740 | 465,624 |
Fees, filing, and licenses | 13,868 | 47,800 |
Total operating expenses | 1,013,579 | 1,516,121 |
LOSS FROM OPERATIONS | (1,013,579) | (1,516,121) |
OTHER INCOME: | ||
Interest income | 574 | 2,108 |
NET LOSS | (1,013,005) | (1,514,013) |
CUMULATIVE PREFERRED STOCK DIVIDENDS | (50,131) | (52,890) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (1,063,136) | $ (1,566,903) |
NET LOSS PER SHARE (basic and diluted) (in dollars per share) | $ (0.03) | $ (0.05) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (basic and diluted) | 30,504,213 | 29,814,040 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||
Net loss | $ (1,013,005) | $ (1,514,013) |
Adjustment to net unrealized loss on marketable securities | 1,169 | 980 |
COMPREHENSIVE LOSS | $ (1,011,836) | $ (1,513,033) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,013,005) | $ (1,514,013) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 75,945 | 127,800 |
Depreciation | 33,304 | 27,837 |
Accretion of asset retirement obligation | 6,416 | 6,046 |
Changes in assets and liabilities: | ||
Interest receivable | 4,053 | 3,406 |
Prepaid expenses and deposits | 45,651 | 46,385 |
Accounts payable | 44,657 | 131,220 |
Payroll and payroll taxes payable | 19,795 | 15,440 |
Net cash used in operating activities | (783,184) | (1,155,879) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from sales of common stock | 30,000 | |
Cumulative preferred stock dividends | (56,620) | (52,890) |
Net cash used in financing activities | (26,620) | (52,890) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (809,804) | (1,208,769) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 1,203,048 | 3,862,462 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 393,244 | 2,653,693 |
SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITIES: | ||
Accrual of cumulative preferred stock dividends | 46,401 | $ 52,890 |
Preferred shares converted to common shares | $ 432,630 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2016 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Nature of Operations: Mines Management, Inc. (the Company) is an Idaho corporation incorporated in 1947. The Company acquires, explores, and develops mineral properties in North America. The Company’s principal mineral property interest, the Montanore Project, is held by its wholly owned subsidiaries, Newhi Inc. and Montanore Minerals Corp. The Company’s properties, including the Montanore property, are currently in the exploration stage; none of its properties are currently in production. The Company continues acquiring various permits for the Montanore Project and is determining its feasibility for development. The Company’s business, operations and financial condition are subject to significant risks and uncertainties, including failing to secure additional funding to continue our business and execute our planned advanced evaluation and delineation drilling program at the Montanore Project. 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 month period ended March 31, 2016 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2016. 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, 2015. (a) Going concern The accompanying condensed 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 through the end of the second quarter of 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, borrowing, or the sale of all or part of the Montanore project. 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) 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 and 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. (c) 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. (d) 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. (e) 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 March 31, 2016 and 2015. (f) Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standars Update No. 2014-15, Disclosure of Uncertainties about an Entitiy’s Ability to Continue as a Going Concern, 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 expected to affect only the presentation and disclosures of the Company’s consolidated financial statements. I n 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. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows, and forfeitures. This guidance is effective for years ending after December 31, 2016. The Company is currently assessing the impact, if any, on its consolidated financial statements. (g) Subsequent events The Company evaluated events and transactions subsequent to the balance sheet date of March 31, 2016 for potential recognition or disclosure in the condensed consolidated financial statements. |
CERTIFICATE OF DEPOSIT
CERTIFICATE OF DEPOSIT | 3 Months Ended |
Mar. 31, 2016 | |
CERTIFICATE OF DEPOSIT | |
CERTIFICATE OF DEPOSIT | NOTE 2 — CERTIFICATE OF DEPOSIT: The Company has a certificate of deposit in the amount of $1,124,055 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, 2017, bears interest at the rate of 0.15% and renews automatically each year. This certificate of deposit is included with reclamation deposits on the Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015. |
AVAILABLE-FOR-SALE SECURITIES
AVAILABLE-FOR-SALE SECURITIES | 3 Months Ended |
Mar. 31, 2016 | |
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: March 31, December 31, 2016 2015 Cost $ $ Unrealized Losses Fair Market Value $ $ |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016, 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. Input March 31, December 31, Hierarchy 2016 2015 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 three months ended March 31, 2016 and 2015: Asset Retirement Obligation 2016 2015 Balance January 1 $ $ Accretion expense Balance March 31 $ $ |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 3 Months Ended |
Mar. 31, 2016 | |
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 $1,279,000 as of March 31, 2016. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2016 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 6 — 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 March 31, 2016, 906.63 shares of the Series B 6% convertible preferred stock had been converted into 1,152,592 shares of common stock. Upon the occurrence of certain events 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 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 following table sets forth the exercise price and expiration date of the outstanding common stock purchase warrants as of March 31, 2016. 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 | 3 Months Ended |
Mar. 31, 2016 | |
STOCK OPTIONS | |
STOCK OPTIONS | NOTE 7 — STOCK OPTIONS: For a description of the Company’s 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, 2015. A summary of the option activity under the Company’s Equity Incentive Plans as of March 31, 2016, and changes during the period then ended, is presented below: Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Aggregate Options Price Term Intrinsic Value Outstanding at January 1, 2016 $ Exercised $ Forfeited or expired $ Outstanding and exercisable at March 31, 2016 $ $ The fair value for each option award is estimated at the date of grant using the Black-Scholes option-pricing model. 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. There were no options granted during the three month periods ended March 31, 2016 and 2015. During the three months ended March 31, 2016, there were 784,000 stock options exercised with a weighted average exercise price of $0.21 and a total intrinsic value of $99,018 . During the three months ended March 31, 2015 there were no stock options exercised. A summary of the status of the Company’s nonvested options as of March 31, 2016 and changes during the period then ended is presented below: Weighted-Average Number of Grant-Date Options Fair Value Nonvested at January 1, 2016 Vested Nonvested at March 31, 2016 — — As of March 31, 2016, there was no unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Company’s Equity Incentive Plans. Total compensation costs recognized for stock-based employee compensation awards was $75,945 and $127,800 for the 1threemonthsended March 31, 2016 and 2015, 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 $29,400 and $0 during the three months ended March 31, 2016 and 2015, respectively. Cash received from options exercised under all share-based payment arrangements during the three months ended March 31, 2016 and 2015 was $30,000 and $0 , respectively. |
ORGANIZATION AND SUMMARY OF S14
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Going concern | (a) Going concern The accompanying condensed 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 through the end of the second quarter of 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, borrowing, or the sale of all or part of the Montanore project. 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. |
Mining properties, exploration and development costs | (b) 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 and 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 | (c) 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 | (d) 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 | (e) 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 March 31, 2016 and 2015. |
Recent Accounting Pronouncements | (f) Recent Accounting Pronouncements In August 2014, the FASB issued Accounting Standars Update No. 2014-15, Disclosure of Uncertainties about an Entitiy’s Ability to Continue as a Going Concern, 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 expected to affect only the presentation and disclosures of the Company’s consolidated financial statements. I n 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. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows, and forfeitures. This guidance is effective for years ending after December 31, 2016. The Company is currently assessing the impact, if any, on its consolidated financial statements. |
Subsequent events | (g) Subsequent events The Company evaluated events and transactions subsequent to the balance sheet date of March 31, 2016 for potential recognition or disclosure in the condensed consolidated financial statements. |
AVAILABLE-FOR-SALE SECURITIES (
AVAILABLE-FOR-SALE SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
AVAILABLE-FOR-SALE SECURITIES. | |
Schedule of the Company's available-for-sale securities | March 31, December 31, 2016 2015 Cost $ $ Unrealized Losses Fair Market Value $ $ |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
Schedule of financial assets and liabilities accounted for at fair value on a recurring basis | Input March 31, December 31, Hierarchy 2016 2015 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 2016 2015 Balance January 1 $ $ Accretion expense Balance March 31 $ $ |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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) | 3 Months Ended |
Mar. 31, 2016 | |
STOCK OPTIONS | |
Summary of stock option activity | Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Aggregate Options Price Term Intrinsic Value Outstanding at January 1, 2016 $ Exercised $ Forfeited or expired $ Outstanding and exercisable at March 31, 2016 $ $ |
Summary of nonvested stock options | Weighted-Average Number of Grant-Date Options Fair Value Nonvested at January 1, 2016 Vested Nonvested at March 31, 2016 — — |
CERTIFICATE OF DEPOSIT (Details
CERTIFICATE OF DEPOSIT (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
CERTIFICATES OF DEPOSIT: | ||
Reclamation deposits | $ 1,184,966 | $ 1,184,966 |
Certificates of deposit maturing on January 3, 2016 | ||
CERTIFICATES OF DEPOSIT: | ||
Reclamation deposits | $ 1,124,055 | |
Interest rate (as a percent) | 0.15% |
AVAILABLE-FOR-SALE SECURITIES20
AVAILABLE-FOR-SALE SECURITIES (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
AVAILABLE-FOR-SALE SECURITIES. | ||
Cost | $ 11,165 | $ 11,165 |
Unrealized Losses | (9,021) | (10,190) |
Fair Market Value | $ 2,144 | $ 975 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value on a Recurring Basis (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
FAIR VALUE MEASUREMENTS: | |||
Financial assets that are measured at fair value on a nonrecurring basis | $ 0 | $ 0 | |
Financial liabilities that are measured at fair value on a nonrecurring basis | 0 | 0 | |
Assets: | |||
Available-for-sale securities | 2,144 | 975 | |
Liabilities: | |||
Asset retirement obligation | 534,666 | $ 528,250 | |
Recurring basis | Level 1 | |||
Assets: | |||
Available-for-sale securities | 2,144 | $ 975 | |
Recurring basis | Level 3 | |||
Liabilities: | |||
Asset retirement obligation | $ 534,666 | $ 528,250 |
FAIR VALUE MEASUREMENTS - Fai22
FAIR VALUE MEASUREMENTS - Fair Value Reconciliation of Level 3 Liabilities (Details) - Asset Retirement Obligation - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair value reconciliation of level 3 liabilities measured at fair value | ||
Balance at the beginning of the period | $ 528,250 | $ 503,279 |
Accretion expense | 6,416 | 6,046 |
Balance at the end of the period | $ 534,666 | $ 509,325 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details) - Cash and cash equivalents - Concentration of credit risk | 3 Months Ended |
Mar. 31, 2016USD ($)item | |
CONCENTRATION OF CREDIT RISK: | |
Number of financial institutions | item | 1 |
Uninsured bank deposit balance | $ | $ 1,279,000 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) $ / shares in Units, $ in Millions | Jul. 30, 2014USD ($)item$ / sharesshares | Nov. 02, 2007itemshares | Mar. 31, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares |
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 | shares | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | $ 0 | ||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | ||
Number of units sold or outstanding | shares | 3,093 | 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 | |||
Preferred Shares: | ||||
Number of investor | item | 1 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0 | |||
Number of units sold or outstanding | shares | 4,000 | |||
Issue price (in dollars per share) | $ / shares | $ 1,000 | |||
Gross proceeds before offering expenses | $ | $ 4 | |||
Net proceeds after deducting other offering expenses | $ | $ 3.5 | |||
Number of preferred shares converted | shares | 906.63 | |||
Warrants | ||||
Warrants: | ||||
Number of shares of common stock that can be purchased on exercise of each warrant | shares | 636 | 636 | 636 | |
Number of shares associated with a specific exercise price per share and expiration date | shares | 4,000 | 4,000 | 4,000 | |
Exercise Price (in dollars per share) | $ / shares | $ 1.0816 | $ 1.0816 | $ 1.0816 | |
Common Stock | ||||
Preferred Stock and Common Shares: | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Number of common shares received for each share of preferred stock on any given date | shares | shares | 1,271 | |||
Conversion price per share of common stock (in dollars per share) | $ / shares | $ 0.7866 | $ 0.7866 | $ 0.7866 | |
Preferred Shares: | ||||
Conversion of Stock, Shares Issued | shares | 1,152,592 | |||
Private placement 2007 transaction | Common Stock | ||||
Preferred Stock and Common Shares: | ||||
Number of shares issued or sold | shares | 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 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Number of Options | ||
Outstanding at the beginning of the period (in shares) | 5,107,000 | |
Exercised (in shares) | 784,000 | 0 |
Forfeited or expired (in shares) | (50,000) | |
Exercisable at the end of the period (in shares) | 4,273,000 | |
Weighted-Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 0.57 | |
Forfeited or expired (in dollars per share) | 0.20 | |
Exercisable at the end of the period (in dollars per share) | 0.63 | |
Weighted average exercised (in dollars per share) | $ 0.21 | |
Weighted-Average Remaining Contractual Term | ||
Exercisable at the end of the period | 2 years 10 months 10 days | |
Aggregate Intrinsic Value | ||
Exercisable at the end of the period | $ 414,000 | |
Assumptions used to estimate the fair value of stock options | ||
Exercised (in shares) | 784,000 | 0 |
Weighted average exercised (in dollars per share) | $ 0.21 | |
Total intrinsic value | $ 99,018 | |
Number of Options | ||
Nonvested at the beginning of the period (in shares) | 990,000 | |
Vested (in shares) | (990,000) | |
Weighted-Average Grant-Date Fair Value | ||
Nonvested at the beginning of the period (in dollars per share) | $ 0.16 | |
Vested (in dollars per share) | $ 0.16 | |
Disclosures for share-based compensation cost | ||
Total compensation costs recognized for stock-based employee compensation awards | $ 75,945 | $ 127,800 |
Costs recognized for stock-based compensation awards for services performed by outside parties | 29,400 | 0 |
Cash received from options exercised | $ 30,000 | $ 0 |