Item 1.  Financial Statements

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

5

The accompanying notes are an integral part of these consolidated financial statements.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

1.

BASIS OF PRESENTATION

The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included.  Operating results for the six-monththree-month period ended June 30, 2018March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018.2019.  

For further information refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.2018.

Going Concern

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company has incurred losses since its inception and does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds.

The Company currently has no historical recurring source of revenue and in 2016 received its first cash distribution from the joint venture (Note 3). With the anticipated dissolution of the joint venture, these distributions are expected to decrease or cease after 2018.cease. The Company may profitably execute a production business plan, and thereby, its ability to continue as a going concern may improve and become less dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include the profitable exploitation of its mining properties and financing the Company’s future operations through sales of its common stock and/or debt.

Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

Certain reclassifications have been made to conform prior year’s data to the current presentation. During the three months ended March 31, 2019, management reclassified Arbitration expenses of approximately $29k from Professional services, General and administrative and other line items on previously reported Consolidated Statements of Operations captions to a separate line item because of its significance to the Company’s operations during the year. These reclassifications have no effect onimpact of the results of reported operations or stockholders’ deficit or cash flows.total net loss for the three months ended March 31, 2019 and 2018.

Earnings (Loss) Per Share

We are authorized to issue 250,000,000 shares of common stock, $0.10 par value per share. At June 30, 2018,March 31, 2019, there were 139,573,798 shares of our common stock issued and outstanding.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

For the periods ended June 30,March 31, 2019 and 2018, and 2017, the effect of the Company’s outstanding preferred shares, options and warrants, totaling 106,038,703105,868,923 and 103,386,073, respectively, would have been anti-dilutive.

6

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Accounting for Investments in Joint Ventures

For joint ventures in which the Company does not have joint control or significant influence, the cost method is used. Under the cost method, these investments are carried at the lower of cost or fair value. For those joint ventures in which there is joint control between the parties and in which the Company has significant influence, the equity method is utilized whereby the Company’s share of the venture’s earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount.

Goldrich has no significant influence over its joint venture described in Note 3Joint Venture, and therefore accounts for its investment using the cost method. The Company recognizes as income, funds received that are distributed from net accumulated earnings of the joint venture.

For joint ventures where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of a non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee. Goldrich currently has no joint venture of this nature.

The Company periodically assesses its investments in joint ventures for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue RecognitionRecognition. The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferreddefers the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. WeThe Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospectivefull retrospective transition approach.

WeThe Company performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it did not change the timing of revenue recognition or amounts of revenue recognized compared to how werevenue is recognized revenue under our previouscurrent policies. Adoption of ASU No. 2014-09 requiresrequired additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. See Note 3 for information on our sales of products.

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluatingperformed an assessment of the potential impact of implementing this updateimplementation of ASU No. 2016-02, and concluded it will not have an impact on the consolidated financial statements.

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The Company currently has two operating leases for the corporate office rent and a small storage unit in Fairbanks, Alaska; both are less than a year and do not require recognition under the standard update.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Recent Accounting Pronouncements, continued:

In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update iswas effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Adoption of the update on January 1, 2018 had no impact on the consolidated financial statementsstatements.

In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update iswas effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted.years. Adoption of the update on January 1, 2018 had no impact on the consolidated financial statementsstatements.

In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Cash and Cash Equivalents

For the purposes of the statement of cash flows, we consider all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating the recoverability of the cost of mining claims, accrued remediation costs, asset retirement obligations, stock-based compensation, and deferred tax assets and related valuation allowances. Actual results could differ from those estimates.

Property, Equipment, and Accumulated Depreciation

Property and equipment are stated at cost, which is determined by cash paid or fair value of the shares of the Company’s common stock issued. The Company’s property and equipment are located on the Company’s unpatented state mining claims located in the Chandalar mining district of Alaska, with only a minor portion located in Spokane, WA, consisting of office equipment.Alaska.

All property and equipment purchased prior to 2009 are fully depreciated. The Company’s equipment is located at the Chandalar property in Alaska, with a small amount of office equipment located at Company offices in Spokane, Washington. Assets are depreciated on a straight-line basis.

8

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Property, Equipment, and Accumulated Depreciation, continued:

Improvements, which significantly increase an asset’s value or significantly extend its useful life are capitalized and depreciated over the asset’s remaining useful life.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

When a fixed asset is sold at a price either higher or lower than its carrying amount, or undepreciated cost at the date of disposal, the difference between the sale proceeds over the carrying amount is recognized as gain, while a loss is recognized when the carrying amount exceeds the sale proceeds. The gain or loss is recognized in the Consolidated Statements of Operations.

Mining Properties, Claims, and Royalty Option

The Company capitalizes costs for acquiring mineral properties, claims and royalty option and expenses, costs to maintain mineral rights and leases as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment. If a property is abandoned or sold, its capitalized costs are charged to operations.

Income Taxes

Income taxes are recognized in accordance with Accounting Standards Codification (“ASC”) 740 Income Taxes, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized. ASC 740 prescribes a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return.

Revenue Recognition

The Company does not have joint control or significant influence over the joint venture; therefore, distributions from our joint venture are recognized using the cost method. In accordance with ASU No. 2014-09, the Company has determined that our revenue does not arise from contracts with customers, does not involve satisfaction of any performance obligations on the part of the Company, or require company assets to be recognized or applied to determine costs to obtain or fulfill any contract generating revenue.

The Company’s revenue is generating through profit percentage split through At the conclusion of 2018 and 2017, Goldrich was allocated a distribution from its non-controlling ownership of the joint venture. Revenues are derived as a percentage of joint venture profits, which are not reasonably estimablepartner of $nil and cannot be determined by the joint venture until after the completion of the accounting for each annual mining season, which occurs in the fourth quarter of each year.$218,770, respectively. See note 3, Joint Venture.

Stock-Based Compensation

The Company periodically issues common shares or options to purchase shares of the Company’s common shares to its officers, directors or other parties. These issuances are recorded at fair value. The Company uses a Black Scholes valuation model for determining fair value of options to purchase shares, and compensation expense is recognized ratably over the vesting periods on a straight line basis. Compensation expense for grants that vest immediately are recognized in the period of grant.

9

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Exploration Costs

Exploration costs are expensed in the period in which they occur.

Derivatives

The Company measures derivative contracts as assets or liabilities based on their fair value. Gains or losses resulting from changes in the fair value of derivatives in each period are recorded in current operating results. None of the Company’s derivative contracts qualify for hedge accounting. The Company does not hold or issue derivative financial instruments for speculative trading purposes.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Remediation and Asset Retirement Obligation

The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. A corresponding asset is also recorded and depreciated over the life of the long-lived asset using a units of production method. After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. Determination of any amounts recognized is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.

For non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable. Such costs are based on management’s estimate of amounts expected to be incurred when the remediation work is performed.

Fair Value Measurements

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

During 20182019 and 2017,2018, the Company determined fair value on a recurring basis and non-recurring basis as follows:

The carrying amounts of financial instruments, including notes payable, approximate fair value at June 30, 2018March 31, 2019 and December 31, 2017.2018.

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Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

3.

JOINT VENTURE

On May 7, 2012, the Company entered into a joint venture with NyacAU, LLC (“NyacAU”), an Alaskan private company, to bring Goldrich’s Chandalar placer gold properties into production as defined in the joint venture agreement. In each case as used herein in reference to the JV, ‘production’ is as defined by the JV agreement. As part of the agreement, Goldrich Placer, LLC (“Goldrich Placer”GP”), a wholly-owned subsidiary of Goldrich and NyacAU (together the “Members”) formed a 50:50 joint venture company, Goldrich NyacAU Placer LLC (“GNP”), to operate the Chandalar placer mines, with NyacAU acting as managing partner. Goldrich has no significant control or influence over the JV, and therefore accounts for its investment using the cost method.

On June 23, 2015, the Company raised net proceeds of $1.1 million through the sale of 12.5% of the cash flows Goldrich Placer receives in the future from its interest in GNP (“Distribution Interest”), paid in cash under items #2 and #5, to Chandalar Gold, LLC (“CGL”) and GVC Capital, LLC, (“GVC”), both of which are non-related entities. Goldrich Placer retained its ownership of its 50% interest in GNP but, after the transaction, subject to the terms of the GNP operating agreement, Goldrich Placer will effectively receive approximately 44%, CGL will effectively receive 6% (12% of Goldrich Placer’s 50% of GNP = 6%) and GVC will effectively receive 0.25% (0.5% of Goldrich Placer’s 50% of GNP = 0.25%) of any distributions produced by GNP. As of December 31, 2017 and June 30, 2018, an amount of $35,794 has been accrued for this 12.5% and is included in accrued liabilities.

Under the terms of the joint venture agreement (the “Agreement”), NyacAU provided funding to the JV. The loans are to be repaid from future production. According to the Agreement, on at least an annual basis,

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

the JV shall allocate and distribute all revenue (whether in cash or as gold) generated from the JV’s placer operation in the following order:

1.

Operating Expenses. GNP will first pay all Operating Expenses as defined in the Operating Agreement for placer mining operations at the Claims for the current mining year. Until Commercial Production is achieved, GNP will drawdown or use a line of credit from NyacAU (“LOC1”) to fund payment of the Operating Expenses and repay LOC1 to the extent of the current year's Operating Expenses.

2.

Members' Distribution - Ten Percent (10%) Portion. After payment of Operating Expenses, GNP will distribute in kind twenty percent (20%) of the remaining gold produced, equally, ten percent (10%) to NyacAU as a Member of the GNP and ten percent (10%) to Goldrich as a Member of GNP; provided, however, that, for so long as any secondary line of credit from NyacAU to GNP (“LOC2”) or loan from NyacAU to GNP to purchase the Jumbo Basin royalty (“Loan3”) are not paid in full, GNP shall retain one hundred percent (100%) of this distribution to Goldrich and shall apply such funds as payment to reduce the balance of LOC2 and Loan3 until they are paid in full.  LOC2 has never been funded or utilized. At December 31, 2107 and at June 30, 2018, $95,239 of Loan3 remains unpaid.

3.

LOC1 Payments. After payment of Operating Expenses and the Members' distribution, GNP will apply any remaining revenue to reduce the remaining balance of LOC1, if any, until it is paid in full.

4.

Reserves. After payment of Operating Expenses, the Members' distribution, and payment of LOC1, the Company may fund Reserves in an amount that is consistent with the annual budget.

5.

Member Distributions, LOC2 Payments and Loan3 Recovery. After payment of Operating Expenses, the Members', payment of LOC1, and funding of any Reserves, from any remaining gold production or revenue, the Company will distribute fifty percent (50%) to NyacAU as a Member of GNP and fifty percent (50%) to Goldrich as a Member of GNP; provided, however, that, for so long as LOC2 or Loan3 are not paid in full, GNP shall retain one hundred percent (100%) of the distribution to Goldrich and shall apply such funds as payment to reduce the balance of LOC2 and Loan3 until they are paid in full.

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Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

3.

JOINT VENTURE, CONTINUED:

LOC2 has never been funded or utilized.  

Substantially all required allocations and distributions are required to be made no later than October 31st of each year. year, with any remaining allocations or distributions being completed no later than December 31st of each year, unless otherwise agreed in writing by the Members. As of March 31, 2019, dissolution of the JV is likely, and distributions under item 2 above for the production season have been calculated using the same methodology as prior years’ distributions, although NyacAU has challenged its responsibility to declare or pay any distributions of this type due to the pending dissolution of the JV. The Company has refuted the challenge (seeArbitration).

On June 23, 2015, the Company raised net proceeds of $1.1 million through the sale of 12.5% of the cash flows Goldrich receives in the future from its interest in GNP (“Distribution Interest”), paid in cash under items #2 and #5, to Chandalar Gold, LLC (“CGL”) and GVC Capital, LLC,(“GVC”), both of which are non-related entities. Goldrich retained its ownership of its 50% interest in GNP but, after the transaction, subject to the terms of the GNP operating agreement, Goldrich will effectively receive approximately 44%, CGL will effectively receive 6% (12% of Goldrich’s 50% of GNP = 6%) and GVC will effectively receive 0.25% (0.5% of Goldrich’s 50% of GNP = 0.25%) of any distributions produced by GNP. At December 31, 2018 and 2017, an amount of $35,794 has been accrued for the distribution which is included in accrued liabilities. No amount has been accrued for the 2018 distribution due to uncertainties relating to realization of distributions from NyacAU (seeArbitration).

At the timeconclusion of 2017, Goldrich was allocated a distribution andof $218,770, under #2 above. In accordance with terms of the proceeds are identifiable and the likelihood of collection is determined,Operating Agreement, the Company recognizeshad the distribution applied toward Loan3. In 2012, the joint venture revenue.purchased, on Goldrich’s behalf, a 2% royalty interest, payable on all production from certain Goldrich mining claims at the Chandalar, Alaska property for $250,000 from Jumbo Basin Corporation. This transaction gave rise to Loan3, is carried on GNP’s financial records at an interest rate of the greater of prime plus 2% or 10%, and is to be repaid from distributions to Goldrich as defined in the Operating Agreement, prior to any distributions in cash to Goldrich. At December 31, 2018

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

and 2017, the principal balance due on Loan3 is $95,239, with additional interest of approximately $13,500. These amounts may be adjusted by any Arbitration awards.

Arbitration

In December 2017, the Company filed an arbitration statement of claim against NyacAU and other parties. The Company and NyacAU are currently in arbitration. The Companyclaim challenged certain accounting treatment of capital leases, allocations of tax losses, charges to the JV for funding costs related to the JV manager’s financing, related-party transactions, and other items of dispute in a previous mediation that was unsuccessful in reaching an agreement. As a result, the Company has filed forparticipated in an arbitration before a panel of three independent arbitrators during 2018 to address these items.

In accordance with ASC 450,Contingencies (“ASC 450”), the Company accounts for loss or gain contingencies when it is probable that a liability or an asset is realizable and can be reasonably estimated. To date, the arbitration proceedings are in progress and no assurance can be given that the arbitration will result in a successful outcome for the Company. A successful arbitration may result in increases to the 2017 and 2016 distributions and revise the computation of these distributions in 2018. TheAn unsuccessful arbitration proceedings are in progress ascould have an indeterminate negative effect. Due to uncertainties relating to the pending outcome, the financial statements contain no adjustments for the final results of September 14, 2018; no assurance can be given that the arbitration will be successful.arbitration. The arbitration is proceeding on the basis that GNP will be dissolved.

During the three months ended March 31, 2019 and 2018, management made certain reclassifications from professional services expense, general and administrative expense and other line items on previously reported Consolidated Statements of Operations captions into Arbitration costs. The Company incurred $418,754$(46,724) and $40,000$29,176 in arbitration expenses during the six month periodthree months ended June 30,March 31, 2019 and 2018, respectively. The $(46,724) is a result of a $190,851 reimbursement for costs by the Company’s Directors and yearOfficers insurance, netted against expenses of $144,127 for the three months ended DecemberMarch 31, 2017, respectively.2019.

In addition, GNP mustwas required to meet the Minimum Production Requirements as defined by the operating agreement. The Minimum Production Requirement for each year iswas determined by the price of gold on December 1 in the preceding year. The Minimum Production Requirements for 2016, 2017, and 2018 arewere 1,100, 1,200, and 1,300 ounces of fine gold, respectively, distributable to each of Goldrich and NyacAU. The Minimum Production Requirements for 2016, 2017, and 2018 mustwere to be substantially be paid by October 31, 2018. The value of the combined 2016, 2017 and 20172018 Minimum Production Requirements has been calculated at $2,981,950$4,428,000 using the price of gold at $1,296.50$1,230 per ounce at December 31, 2017. However, no receivableSeptember 30, 2018. GNP did not meet the Minimum Production Requirements.

Due to the JV’s failure to meet the Minimum Production Requirements defined in the Operating Agreement, the JV is being dissolved. No financial statement adjustment has been recorded for this amount due to the likely failure of the JV to meet the Minimum Production Requirements by October 2018, which would force the dissolution of the JV and may make the collection of this amount uncertain. NyacAU, the managing partner of GNP, anticipates that GNP will not meet the minimum production requirements by the close of the 2018 season, and the company has announced its intended dissolution of the GNP Joint Venture. Subsequent to any dissolution, NyacAU is entitled to a secured interest in all placer gold production from certain claims owned by Goldrich as collateral for repayment of fifty percent (50%) of LOC1. Arbitration proceedings may significantly affect the balance of LOC1, the magnitude of which cannot be estimated at September 13, 2018.Requirements.

4.

RELATED PARTY TRANSACTIONS

Beginning in January 2016 and through June 30, 2018,March 31, 2019, the salary of the Company’s Chief Executive Officer (“CEO”) has not been paid in full. Fees due to the Company’s Chief Financial Officer (“CFO”) have been accrued and remain unpaid:

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Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

4.

RELATED PARTY TRANSACTIONS, CONTINUED:

During the six monthsyear ended June 30,December 31, 2018, the Company also awarded 1,850,000 shares of common stock to officers and a director as compensation. The value of the shares awarded was $64,566$64,565 based upon the quoted value of the stock at the time of the grant.

5.

NOTES PAYABLE & NOTES PAYABLE – RELATED PARTY

On February 13, 2018, the Company announced a senior secured notes financing for a possible total net proceeds of $2,200,000. During the yearthree months ended DecemberMarch 31, 2017,2019, the Company received the firstthird tranche of the notes payable for gross proceeds of $1,794,737,$89,474, discounted at 5%, or $4,474, resulting in net proceeds of $1,705,000,$85,000, of which $1,000,000 was from a major shareholder and director. The note agreement has been amended to accommodate total net proceeds of up to $2,750,000. During the six months ended June 30, 2018, the Company received the second tranche of the notes and recorded a liability of $505,263, discounted at 5%, or $25,263, with $25,520 finance costs, resulting in net proceeds of $454,480, of which $265,113$71,000 was from a related party.

At June 30,March 31, 2019, the Company had outstanding Notes payable of $967,371, with all discounts being amortized. At December 31, 2018, the Company had outstanding Notes payable of $952,634, with all discounts being amortized. At March 31, 2019, the Company had outstanding Notes payable – related party of $2,453,684, with all discounts being amortized. At December 31, 2018, the Company had outstanding Notes payable – related party of $1,347,368 less remaining unamortized$2,378,947, with all discounts of $99,304 for a net liability of $1,248,064. At December 31, 2017, the Company had outstandingbeing amortized.

These Notes payable and Notes payable – related party are high risk debt instruments, and therefore include terms that are not typical to debt instruments of $1,052,632 less remaining unamortized discounts of $164,749 forlower risk. The terms include an interest rate that may be higher than a net liability of $887,883.rate on a low risk note, a discount on the cash received by the Company, warrants based on the debt’s principal and a market-based finder’s fee with a portion payable in cash and another portion payable in warrants.

The senior secured senior notes were scheduled to mature on October 31, 2018, have an interest rate of 15% per annum, calculated on a 360-day year and payable monthly, and were issued net of a 5% original issue discount. A total of 12,074,98917,960,512 five-year Class T warrants werehave been issued to the lenders.lenders, including 12,881,835 to a related party in connection with the current and prior-period note issuances. The warrants have an exercise price of $0.03 and expire on various dates from November 30, 2022 through June 18, 2023.January 31, 2024. During the sixthree months ended June 30, 2018March 31, 2019, the companyCompany issued 2,652,6301,906,577 warrants in connection with the notes payable. The warrants were valued at $68,747$8,997 and had an allocated relative fair value of $57,421.$7,753.

A total of 1,436,841 five-year Class T warrants have been issued for finders fees related to this debt financing including 1,030,547 to a related party. The warrants issued for finders fees were fair valued at $25,863 for the three months ended March 31, 2019, using a Black Scholes valuation model (see table below), and are included in interest expense and finance costs.

During the three months ended March 31, 2019 and 2018, the Company paid finderaccrued cash finders fees related to this debt financing totaling $30,000$40,350 and $21,000, respectively, to related party entities and incurred $46,520 of otherare included in interest expense and finance and placement costs. Interest and financing costs, including finders fees, of $73,759$127,048 and $138,753 was$62,404 were expensed during the three months ended March 31, 2019 and six month periods ended June 30,March 31, 2018, respectively. Total interest of which $68,651$309,478 is accrued at June 30, 2018March 31, 2019 and is included in accountsInterest payable and accrued liabilities.Interest payable – related parties. Interest due at June 30,March 31, 2019 was not timely paid. To date, the senior secured notes have not been paid, and the note holders have not demanded payment and have indicated willingness to work with the Company to extend the due date.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

The table below summarizes the total senior secured notes due, the amount received with discount, warrants issued for finders fees and cash expensed for finders fees for all periods related to the senior secured notes payable and senior secured notes payable – related party.

The total fair value of the Class T warrants was estimated on the issue dates at $34,860 and $nil for the three months ended March 31, 2019 and March 31, 2018, was timely paid.respectively, using the following weighted average assumptions: 

The senior secured notes are secured by distributions from the GNP joint venture. The notes rank junior to:

(i)

Any GNP Distributions that are only deemed to be made by GNP to Goldrich Placer pursuant to the Operating Agreement but are then withheld pursuant to Section 10.1 of the GNP Operating Agreement; and

(ii)

Any GNP Distributions that are made by the GNP to Goldrich Placer pursuant to the GNP Operating Agreement but are then withheld to pay Loan 3 and 2012 reclamation expenses; and   

(iii)

Any GNP Distributions that are made by the GNP to Goldrich Placer pursuant to the Operating Agreement but are then used to pay legal fees relating to mediation/arbitration concerning distributions due to Goldrich Placer from GNP; and

(iv)

Any GNP Distributions that are part of the Chandalar Sale, described below; and   

(v)

Any GNP Distributions that are part of the GVC Sale, described below; and

(vi)

Any GNP Distributions which are secured by the Company’s outstanding Senior Gold Forward Sales Contracts.

13

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

5.

NOTES PAYABLE & NOTES PAYABLE – RELATED PARTY, CONTINUED:

The Chandalar Sale relates to a purchase agreement, dated as of June 19, 2015, whereby the Company, through its subsidiary Goldrich Placer, sold and assigned to CGL 12% of any and all GNP Distributions to Goldrich Placer, subject to the limitations set forth in the purchase agreement and the related assignment.See Note 3 Joint Venture. The GVC Sale relates to a purchase agreement, dated as of May 22, 2015, whereby the Company, through its subsidiary Goldrich Placer, sold and assigned to GVC 0.50% of any and all GNP Distributions to Goldrich Placer, subject to the limitations set forth in the purchase agreement and the related assignment.See Note 3 Joint Venture.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Repayment of all amounts owed under the notes isare guaranteed by Goldrich Placer, which in turn owns a 50% interest in Goldrich NyacAU Placer LLC.See Note 3 Joint Venture. The notes contain standard default provisions, including failure to pay interest and principal when due. Under the terms of the notes, any additional loans will be issued at a 5% discount and, for each loan, the Company will issue 5.25 Class T warrants, not to exceed warrants representing the Company’s maximum authorized shares available, for each dollar loaned under this agreement.

At June 30, 2018, the Company had outstanding notes payable of $952,633 less remaining unamortized discounts of $67,041 for a net liability of $885,592. At December 31, 2017, the Company had outstanding total notes payable of $742,105 less remaining unamortized discounts of $115,998 for a net liability of $626,107.

6.

NOTES PAYABLE IN GOLD

During 2013, the Company issued notes payable in gold totaling $820,000, less a discount of $205,000, for net proceeds of $615,000. Under the terms of the notes, the Company agreed to deliver gold to the holders at the lesser of $1,350 per ounce of fine gold or a 25% discount to market price as calculated on the contract date and specify delivery of gold in November 2014.

On November 30, 2017, the Company renegotiated terms with the holders. A default condition arising from the non-delivery of the gold in 2017 was alleviated by agreements with the three note holders to extend the delivery date of gold to November 30, 2018, with the following terms:

·

Fifteen percent (15%), or 76 ounces, of the required quantity of gold under the contract, prior to amendment one in 2014, amendment two in 2015, and amendment three in 2016, which was originally due on the Delivery Date of November 30, 2014, was delivered on November 30, 2017. In lieu of gold, the Company could elect to satisfy the delivery of the deliverable required quantity by paying, an amount equal to the deliverable required quantity times the greater of the original purchase price or the index price for the day preceding the date of payment. The Company paid a total of $97,295 in cash to satisfy this renegotiated term.

·

The Company agreed to pay interest on the value of the delayed delivery required quantity of $341,543, at an annual non-compounding percentage rate of 10% payable quarterly with any remaining interest due and payable on the delivery date.

·

If the delivery date index price on November 30, 2018 is less than the original purchase price, an additional adjusted required amount shall be delivered by December 31, 2018.

On November 30, 2018, the Company renegotiated terms with the holders. A default condition arising from the non-delivery of the gold in 2018 was alleviated by agreements with the three note holders to extend the delivery date of gold to February 28, 2019, with the following terms:

In relation to the remaining 55% of the original Required Quantity of Gold under the Contract, prior to Amendment One, Amendment Two, Amendment Three, and Amendment Four (the “Fourth Delayed Delivery Required Quantity”), such Fourth Delayed Delivery Required Quantity shall be delivered to the Purchaser at the Delivery Point on February 28, 2019. In relation to the Fourth Delayed Delivery Required Quantity, “Delivery Date” as set forth on the Confirmation Letter, is hereby amended to be no later than February 28, 2019. 

Subsequent to November 30, 2018, the Company hereby agrees to pay interest on the value of the Fourth Delayed Delivery Required Quantity (calculated as described in section 4 below) at an annual percentage rate of 10% (the “Interest Rate”) payable quarterly on December 31, 2018 with any remaining interest due and payable on the Delivery Date for the Fourth Delayed Delivery Required Quantity. Interest shall be non-compounding, provided however, that any interest no paid in full by any required Interest Payment Date, shall be added to the principal amount of the value of the Fourth Delayed Delivery Required Quantity and shall be subject to interest at the Interest Rate until such late interest payment is made in full.  

All interest due and payable shall be paid in cash to the Purchaser at the bank account designated by the Purchaser.  

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

Subsequent to November 30, 2018, the value of the Fourth Delayed Delivery Required Quantity shall be reset on December 1, 2018 and shall be equal to the number of ounces of Gold in the Fourth Delayed Delivery Required Quantity multiplied by the greater of either: (a) the Delivery Date Index Price (as defined in the Contract) on November 30, 2017: (b) the Delivery Date Index Price (as defined in the Contract) on November 30, 2018; or (c) the Original Purchase Price used to calculate the amount of gold due in the Confirmation Letter. The Original Purchase Price was the lesser of either (i) $1,350 per ounce of fine gold or (ii) a 25% discount to the Initial Index Price (as defined in the Contract). 

If the Delivery Date Index Price on February 28, 2019, or on the actual date delivery is made if delivery is before February 28, 2019, is less than the Original Purchase Price, an Additional Adjusted Required Amount, equal to the Fourth Delayed Delivery Required Quantity multiplied by a ratio, consisting of the Original Purchase Price as the numerator and the Delivery Date Index Price on February 28, 2019, or on the actual date delivery is made if delivery is before February 28, 2019, as the denominator, less the Fourth Delayed Delivery Required Quantity, shall be delivered to the Purchaser at the Delivery Point by March 31, 2019. 

For the sixthree months ended June 30, 2018,March 31, 2019, using a forward gold pricethe value of $1,213,the Fourth Delayed Delivery Price of $1,319, the Company recognized a change in fair value of $32,255$9,777. For the three months ended March 31, 2018, using a forward gold price of $1,341, the Company recognized a change in fair value of $1,828 in accounting for these notes as derivatives.

The fair value was calculated using the market approach with Level 2 inputs.inputs of gold future delivery contracts. At June 30, 2018March 31, 2019 and December 31, 2017,2018, the Company had outstanding total notes payable in gold of $323,695$351,934 and $355,950,$342,157, respectively, representing 266.788 ounces of fine gold deliverable at November 30, 2018.March 31, 2019. Interest of $8,011 was expensed during the three months ended March 31, 2019, of which $2,990 is accrued at March 31, 2019 and is included in Interest payable.

14

Goldrich Mining Company

NotesDue to the Consolidated Financial Statements (unaudited)Joint Venture’s failure to meet Minimum Production Requirements or make a sufficient distribution to the Joint Venture partners, the Company was unable to make payment to the holders of the notes payable in gold. To date, the gold notes have not been paid, the note holders have not demanded payment and have indicated willingness to work with the Company to extend the due date.

7.

COMMITMENTS AND CONTINGENCIES

The Company has 426.5 acres of patented claims and 22,432 acres of non-patented claims. We are subject to annual claims rental fees in order to maintain our non-patented claims. In addition to the annual claims rental fees due November 30 of each year, we are also required to meet annual labor requirements due November 30 of each year. The Company is able to carry forward costs for annual labor that exceed the required yearly totals for four years. Following are the annual claims and labor requirements for 2018.2019.

The Company has a carryover to 20182019 of approximately $22.3$28.6 million to satisfy its annual labor requirements. This carryover expires in the years 20182019 through 20232024 if unneeded to satisfy requirements in those years.

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

8.SUBSEQUENT EVENTS

Subsequent to the three months ended March 31, 2019, the Company entered into additional notes payable totaling $120,000, net of discounts, of which $70,000 was from a related party.

The Company and NyacAU areis currently in arbitration. The Company challenged certain accounting treatment of capital leases, allocations of tax losses, charges to the JV for funding costs related to the JV manager’s financing, related-party transactions, and other items of dispute in a mediation that was unsuccessful in reaching an agreement. As a result, the Company has filed for arbitration before a panel of three independent arbitrators to address these items.

A successful arbitration may result in increases to the 2017 and 2016 distributions and revise the computation of these distributions in 2018. The arbitration proceedings are in progress as of September 14, 2018; no assurance can be given that the arbitration will be successful.

In addition, GNP must meet the Minimum Production Requirements as defined by the operating agreement. The Minimum Production Requirement for each year is determined by the price of gold on December 1 in the preceding year. The Minimum Production Requirements for 2016, 2017 and 2018 are 1,100, 1,200 and 1,300 ounces of fine gold, respectively, distributable to each of Goldrich and NyacAU. The Minimum Production Requirements for 2016, 2017 and 2018 must substantially be paid by October 31, 2018. The valuenegotiations with holders of the combined 2016 and 2017 Minimum Production Requirements has been calculated at $2,981,950 usingsenior secured notes as well as the price of gold at $1,296.50 per ounce at December 31, 2017. However, no receivable has been recorded for this amount due to the likely failureholders of the JVnotes payable in gold to meetamend the Minimum Production Requirements by October 2018, which would force the dissolutionterms of the JV and may make the collection of this amount uncertain. NyacAU, the managing partner of GNP, anticipates that GNP will not meet the minimum production requirements by the close of the 2018 season. The arbitration is proceeding on the basis that GNP will be dissolved. Subsequent to any dissolution, NyacAU is entitled to a secured interest in all placer gold production from certain claims owned by Goldrich as collateral for repayment of fifty percent (50%) of LOC1. Arbitration proceedings may significantly affect the balance of LOC1, the magnitude of which cannot be estimated at September 13, 2018.notes.

8.

SUBSEQUENT EVENTS

On August 20, 2018, the Company closed on additional borrowings totaling $500,000 under the Senior Secured Notes previously announced on February 13, 2018, bringing the net proceeds of the Notes to $2,685,000. The Note has been increased to accommodate total net proceeds of up to $2,750,000. Of the additional net proceeds, a total of $1,780,000 was received from a major shareholder and director of the Company.