Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 14, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Desert Hawk Gold Corp. | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001168081 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 12,703,033 |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | ' | ' |
Cash | $424,521 | $8,523 |
Prepaid expenses and other current assets | 234,922 | 103,068 |
Total Current Assets | 659,443 | 111,591 |
PROPERTY AND EQUIPMENT, net (Note 4) | 1,996,428 | 227,981 |
MINERAL PROPERTIES AND INTERESTS (Note 5) | 986,501 | 835,556 |
RECLAMATION BONDS (Note 5) | 1,411,657 | 155,316 |
TOTAL ASSETS | 5,054,029 | 1,330,444 |
CURRENT LIABILITIES | ' | ' |
Accounts payable and accrued expenses | 375,825 | 197,970 |
Accrued liabilities-officer wages (Note 9) | 277,500 | 332,000 |
Interest payable (Note 8). | 1,500,000 | ' |
Convertible debt (Note 6) | 600,000 | 600,000 |
Note payable - equipments | 18,879 | ' |
Total Current Liabilities | 2,772,204 | 1,129,970 |
LONG-TERM LIABILITIES | ' | ' |
Stock redeemable with gold proceeds (Note 9) | 130,000 | 130,000 |
Derivative liability-conversion option (Notes 7 and 8) | ' | 170,813 |
Asset retirement obligation | 235,756 | 69,920 |
Interest payable (Note 8) | 1,000,458 | 1,781,027 |
Note payable - equipment. | 16,105 | ' |
Note payable (Note 8) | 10,389,492 | 6,264,492 |
Total Long-Term Liabilities | 11,771,811 | 8,416,252 |
TOTAL LIABILITIES | 14,544,015 | 9,546,222 |
COMMITMENTS (Note 9 and 10) | ' | ' |
STOCKHOLDERS' (DEFICIT) (Note 3) | ' | ' |
Preferred Stock, $0.001 par value, 10,000,000 shares authorized | ' | 0 |
Series A: 958,033 shares issued and outstanding | 958 | 958 |
Series A-2: 180,000 shares issued and outstanding | 180 | 180 |
Series B: 249,603 shares issued and outstanding | 250 | ' |
Common stock, $0.001 par value, 100,000,000 shares authorized; 12,703,033 and 9,501,683 shares issued and outstanding, respectively | 12,574 | 9,373 |
Additional paid-in capital | 8,279,660 | 6,950,076 |
Accumulated deficit | -17,783,608 | -15,176,365 |
Total Stockholders' (Deficit) | -9,489,986 | -8,215,778 |
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) | $5,054,029 | $1,330,444 |
Balance_Sheets_Parentheticals
Balance Sheets Parentheticals (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Balance sheet parentheticals | ' | ' |
Preferred Stock, par value | $0.00 | $0.00 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock Series A, shares issued | 958,033 | 958,033 |
Preferred Stock Series A, shares outstanding | 958,033 | 958,033 |
Preferred Stock Series A 1, shares issued | ' | 0 |
Preferred Stock Series A 1, shares outstanding | ' | 0 |
Preferred Stock Series A-2, shares issued | 180,000 | 180,000 |
Preferred Stock Series A-2, shares outstanding | 180,000 | 180,000 |
Preferred Stock Series B, shares issued | 249,603 | 249,603 |
Preferred Stock Series B, shares outstanding | 249,603 | 249,603 |
Common Stock, par value | $0.00 | $0.00 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 12,703,033 | 9,501,683 |
Common Stock, shares outstanding | 12,703,033 | 9,501,683 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
EXPENSES | ' | ' | ' | ' |
General project costs | $360,316 | $56,574 | $423,711 | $115,633 |
Exploration expense | 15,206 | 18,829 | 31,736 | 46,381 |
Consulting | 8,100 | 5,999 | 20,927 | 9,899 |
Officers and directors fees | 144,286 | 207,000 | 178,671 | 277,000 |
Legal and professional | 35,545 | 15,464 | 77,729 | 42,143 |
General and administrative | 89,093 | 26,158 | 144,984 | 60,173 |
Depreciation | 20,373 | 16,617 | 20,772 | 33,019 |
Total Expenses | 672,919 | 346,641 | 898,530 | 584,248 |
OPERATING LOSS | -672,919 | -346,641 | -898,530 | -584,248 |
OTHER INCOME (EXPENSE) | ' | ' | ' | ' |
Interest and other income | 1,191 | ' | 1,191 | ' |
Change in fair value of derivatives | ' | ' | -6,673 | 161,747 |
Financing expense | 249,603 | ' | -998,412 | ' |
Interest expense | -350,599 | -388,247 | -718,165 | -765,677 |
Total Other Income (Expense) | -99,805 | -397,247 | -1,708,713 | -927,424 |
LOSS BEFORE INCOME TAXES | -772,724 | -743,888 | -2,607,243 | -1,511,672 |
INCOME TAXES | ' | ' | ' | 0 |
NET LOSS | ($772,724) | ($743,888) | ($2,607,243) | ($1,511,672) |
BASIC AND DILUTED NET LOSS PER SHARE | ($0.07) | ($0.08) | ($0.25) | ($0.17) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED | 11,637,047 | 8,955,610 | 10,575,441 | 8,939,985 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($2,607,243) | ($1,511,672) |
Adjustments to reconcile net loss to net cash used by operating activities: | ' | ' |
Depreciation | 20,772 | 33,019 |
Common stock issued/to be issued for services | 85,483 | 150,000 |
Common stock issued for interest expense | 45,000 | 45,000 |
Preferred stock issued for financing expense | 998,412 | ' |
Accretion of asset retirement obligation | 18,615 | 3,170 |
Change in fair value of derivatives | -6,673 | 161,747 |
Net gain on disposal of asset | -3,370 | ' |
Changes in operating assets and liabilities: | ' | ' |
(Increase) decrease in prepaid expenses and other current assets | -131,854 | 92,227 |
Increase (decrease) in accounts payable and accrued expenses | -32,715 | 72,617 |
Increase (decrease) in accrued liabilities - officer wages | -14,500 | 129,000 |
Increase (decrease) in interest payable | 719,431 | 720,677 |
Net cash (used) by operating activities | -908,642 | -104,215 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Additions to property and equipment | -1,540,953 | -7,349 |
Acquisition of reclamation bonds | -1,348,796 | ' |
Refund of Reclamation bonds | 92,455 | ' |
Net cash provided (used) by investing activities | -2,797,294 | -7,349 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from note payable | 4,125,000 | 150,000 |
Payment of note payable - equipment | -3,066 | ' |
Net cash provided by financing activities | 4,121,934 | 150,000 |
NET INCREASE (DECREASE) IN CASH | 415,998 | 38,436 |
CASH, BEGINNING OF PERIOD | 8,523 | 12,300 |
CASH, END OF PERIOD | 424,521 | 50,736 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ' | ' |
Equipment acquired with note payable | 38,050 | ' |
Commom stock payable for accrued liabilities | ' | 150,000 |
Fair value of cancelled conversion option | 164,140 | ' |
Interest payable converted to note payable | ' | 37,794 |
Equipment acquired with accounts payable | $210,216 | ' |
ORGANIZATION_AND_DESCRIPTION_O
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Jun. 30, 2014 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' |
ORGANIZATION AND DESCRIPTION OF BUSINESS | ' |
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS | |
Desert Hawk Gold Corp. (the “Company”) was incorporated on November 5, 1957, in the State of Idaho as Lucky Joe Mining Company. On July 17, 2008, the Company merged with its wholly-owned subsidiary, Lucky Joe Mining Company, a Nevada corporation, for the sole purpose of effecting a change in domicile from the State of Idaho to the State of Nevada. Lucky Joe Mining Company (Nevada) was the continuing and surviving corporation and each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada). On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp. | |
The Company never successfully generated any revenue and eventually abandoned the mining business, remaining dormant until it recommenced its mining activities and entered the exploration stage on May 1, 2009. | |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
In the opinion of management, the accompanying unaudited interim consolidated balance sheets and consolidated statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of June 30, 2014, and the results of its operations and its cash flows for the three and six months ended June 30, 2014 and 2013. The operating and financial results for the Company for the six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. | |||||
These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. These unaudited interim consolidated financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2013 filed with the Securities and Exchange Commission on April 14, 2014. | |||||
In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10—Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation (“ASU 2014-10”). ASU 2014-10 removes the financial reporting distinction between development stage entities and other reporting entities. In addition, the amendment eliminate the requirements for development stage entities to (1) present inception-to-date information in the statements of income, cash flows, and shareholder equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The provisions of the amendment are effective for annual reporting periods beginning after December 15, 2014 with early adoption permitted. The Company has adopted the amendment effective June 30, 2014. Thus inception to date information is no longer presented as part of the consolidated financial statements. | |||||
Mineral Exploration and Development Costs | |||||
The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining. All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves. | |||||
Property and Equipment | |||||
Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are charged to operations as incurred. Betterments of a major nature are capitalized. Expenditures for new property, plant, equipment, and improvements that extend the useful life or functionality of the asset are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations. | |||||
Mineral Properties and Interests | |||||
The Company capitalizes costs for acquiring mineral properties 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. See Note 5. | |||||
Earnings Per Share | |||||
Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. At June 30, 2014 and June 30, 2013, common stock equivalents outstanding are as follows: | |||||
June 30, | June 30, | ||||
2014 | 2013 | ||||
Convertible debt | 857,143 | 857,143 | |||
Convertible preferred stock | 27,718,333 | 2,758,033 | |||
Total | 28,575,476 | 3,615,176 | |||
However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses. | |||||
Going Concern | |||||
As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through June 30, 2014, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. | |||||
The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014. Construction is about 85% complete at June 30, 2014. The Company will need significant funding to continue operations and increase development through the next fiscal year. The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships. | |||||
If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. | |||||
Reclassifications | |||||
Certain reclassifications have been made to conform data from prior periods to the current presentation. These reclassifications have no effect on the results of operations or stockholders’ deficit. |
CAPITAL_STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2014 | |
CAPITAL STOCK | ' |
CAPITAL STOCK | ' |
NOTE 3 - CAPITAL STOCK | |
Common Stock | |
The Company is authorized to issue 100,000,000 shares of common stock. All shares have equal voting rights and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. | |
2014 Activity | |
The Company issued a total of 64,284 shares of stock to the note holders of the convertible debt for interest expense during the six months ended June 30, 2014. See Note 6. | |
On May 1, 2014, the Company issued 3,137,066 shares to its president, Rick Havenstrite, as a management incentive. As a part of this agreement, Mr. Havenstrite agreed to forgive $40,000 of accrued but unpaid wages. An independent valuation company, was engaged to provide the Company with an estimate of the fair value of the common stock on a per share basis as of May 1, 2014. Their valuation report was completed on July 24, 2014 and they estimated the fair value of the common stock of the Company, on a non-controlling, non-marketable basis as of the valuation date (May 1, 2014) to be $0.04 per share. Based on this rate, the fair value of the shares issued to Mr. Havenstrite was determined to be $125,483; $85,483 of which was recognized as officers and directors fees in the quarter ended June 30, 2014. | |
2013 Activity | |
On July 5, 2013, a Seventh Amendment to the DMRJ Group funding was agreed upon. This Amendment became effective on June 27, 2013 and, as a result of the terms of the amendment, 150,000 shares of common stock valued at $1.00 per share were issued to Robert Jorgensen, a former director and officer, on July 11, 2013. The stock was payable to Mr. Jorgensen at June 30, 2013. | |
The Company issued a total of 128,488 shares of stock to the note holders of the convertible debt for interest expense during the year ended December 31, 2013. The shares were valued at $0.70 per share. | |
300,000 shares of common stock, valued at $1.00 per share, were issued to the two holders of the convertible debt, with 150,000 shares issued to each of the two debt holders as part of the extension of the due date of the notes. The due date of the convertible debt was then extended to November 30, 2014. | |
Preferred Stock | |
In connection with the Fourth Amendment to the DMRJ Group funding, on May 3, 2011, the Company created and designated 2,500,000 shares of its authorized preferred stock as Series A-1 Preferred Stock and 1,000,000 shares as Series A-2 Preferred Stock. | |
Each share of Series A-1 Preferred Stock and Series A-2 Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to (i) for the Series A-1 Preferred Stock, ten times the Series A-1 issue price ($0.70) divided by the conversion price for Series A-1 Preferred and (ii) for the Series A-2 Preferred Stock, ten times the Series A-2 issue price ($1.00) divided by the conversion price for such Series A-2 Preferred Stock. The initial conversion price of the Series A-1 Preferred Stock is $0.70 per share and the initial conversion price of the Series A-2 Preferred Stock is $1.00. If the Company issues or sells shares of its common stock, or grants options or other convertible securities which are exercisable or convertible into common shares, at prices less than the conversion price of Series A-1 or A-2 shares, except in certain exempted situations, then the conversion price of the Series A-1 and A-2 shares will be reduced to this lower of the sale or conversion price. See Note 8 for further information. | |
On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. The Tenth Amendment provides for funding of construction of the heap leach pad and process facility, mining development, and operations through a series of monthly term loan advances totaling a maximum of $5,700,000 over five months. As a part of this amendment, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock. The conversion rate of the Series B Preferred Stock is 100 shares of common stock for each share of Series B Preferred Stock. During the quarter ended March 31, 2014, financing expense in the amount of $1,248,015 was recorded in association with this share issuance, using an estimated fair value of the equivalent common shares of $0.05. During the quarter ended June 30, 2014, the Company revised the estimated fair value of the equivalent common shares to be $998,412 based upon that rate of $0.04 as determined by an independent valuation company (see above). Thus a reduction to financing expense of $249,603 was recorded. | |
As a result of this issuance, DMRJ beneficially owns 67% of the Company (on a fully-diluted basis) with shares convertible to 27,718,333 shares of common stock. | |
In connection with this amendment, the Company amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude from the definition of convertible securities the shares of all preferred stock previously issued to DMRJ Group and any future issuances of any shares of Series A, Series, B, and Series A-1 and A-2 to DMRJ Group or any of its affiliates. | |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
PROPERTY AND EQUIPMENT | ' | ||||||
PROPERTY AND EQUIPMENT | ' | ||||||
NOTE 4 - PROPERTY AND EQUIPMENT | |||||||
Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves. Construction and development of the project began with the establishment of the reclamation bond on February 20, 2014. Expenditures for construction of the infrastructure (investment in Kiewit property development) and capitalized for future amortization over units produced, totaled $1,445,678 during the six months ended June 30, 2014. | |||||||
The following is a summary of property, equipment, and accumulated depreciation at June 30, 2014 and December 31, 2013: | |||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Equipment | $ | 727,994 | $ | 418,298 | |||
Furniture and fixtures, temporary housing | 10,781 | 4,268 | |||||
Electronic and computerized equipment | 19,011 | - | |||||
Vehicles | 55,830 | 23,516 | |||||
813,616 | 446,082 | ||||||
Less accumulated depreciation | -262,866 | -218,101 | |||||
550,750 | 227,981 | ||||||
Investment in Kiewit property development | 1,445,678 | - | |||||
Less accumulated amortization | - | - | |||||
Total | $ | 1,996,428 | $ | 227,981 | |||
Construction of the heap leach pad and process facility began with the establishment of the reclamation bond on February 20, 2014 and expenditures incurred by the Company and capitalized totaled $1,445,678 for the six month period ended June 30, 2014 Depreciation and amortization as of June 30, 2014 and June 30, 2013 was $44,765 and $33,019, respectively. Of the June 30, 2014 depreciation, $1,581 of this was expensed in general and administrative expenses, $19,191 was expensed in general project costs and $23,993 was capitalized as Investment in Kiewit property development to be amortized with other capitalized costs. |
MINERAL_PROPERTIES_AND_LEASES
MINERAL PROPERTIES AND LEASES | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
MINERAL PROPERTIES AND LEASES | ' | ||||||
MINERAL PROPERTIES AND LEASES | ' | ||||||
NOTE 5 – MINERAL PROPERTIES AND LEASES | |||||||
Mineral properties and leases as of June 30, 2014 and December 31, 2013 are as follows: | |||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Initial lease fee | |||||||
Yellow Hammer site | $ | 175,000 | $ | 175,000 | |||
Kiewit, Cactus Mill and all other sites | 600,000 | 600,000 | |||||
Total | 775,000 | 775,000 | |||||
Asset retirement obligation | |||||||
Yellowhammer Site | - | 30,908 | |||||
Kiewit Site | 184,588 | - | |||||
Kiewit Exploration | 10,780 | 10,780 | |||||
Cactus Mill | 16,133 | 16,133 | |||||
Total | 211,501 | 57,821 | |||||
Blue Fin Claims | - | 2,735 | |||||
Total | $ | 986,501 | $ | 835,556 | |||
The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting of 247 unpatented claims, including the unpatented mill site claim, and two Utah state mineral leases located on state trust lands. Annual claims fees are currently $140 per claim plus administrative fees. | |||||||
On January 6, 2014, we obtained the final permit necessary to commence construction of the heap leach pad and process facility. On February 20, 2014, the Kiewit reclamation bond in the amount of $1,348,000 was posted with the State of Utah, Division of Oil, Gas and Mining. This newly calculated bond amount includes bonding for the Yellowhammer Small Mine and the Yellowhammer Exploration sites along with the Herat Exploration site. As such, the asset retirement obligation for these sites was removed. Funds of $92,705 were received in April 2014 by the Company for these refunded reclamation bonds. Total reclamation bonds posted at June 30, 2014 and December 31, 2013 are $1,411,657 and $155,316, respectively. | |||||||
On March 20, 2013, the Confederated Tribes of the Goshute Reservation (“Tribes”) sent a letter to the Bureau of Land Management (“BLM”) outlining their review of the Kiewit Mine Project Draft Environmental Assessment. The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources. On February 6, 2014 the Tribes filed an appeal of the permit with the BLM. On April 10, 2014, the BLM was granted an extension of time to May 7, 2014 to answer the appeal and on May 8, 2014 an additional extension of time was granted to the BLM to June 6, 2014 to answer the appeal. On June 6, 2014 the BLM submitted their response to the appeal. As of this date, the Company has no further information as to the status of the appeal. | |||||||
CONVERTIBLE_DEBT
CONVERTIBLE DEBT | 6 Months Ended |
Jun. 30, 2014 | |
CONVERTIBLE DEBT | ' |
CONVERTIBLE DEBT | ' |
NOTE 6 – CONVERTIBLE DEBT | |
On November 18, 2009, the Company issued convertible promissory notes to two of its minority shareholders for a total of $600,000. The notes bear interest at 15% per annum. Interest is payable in equal monthly installments of $7,500. The notes are convertible into potentially 857,143 shares of common stock. The note holders were issued 64,284 shares of stock each in 2013 to settle accrued interest for 2013 and have been issued 32,142 shares of common stock each to settle accrued interest for the first six months of 2014. | |
DERIVATIVE_LIABILITIES
DERIVATIVE LIABILITIES | 6 Months Ended |
Jun. 30, 2014 | |
DERIVATIVE LIABILITIES | ' |
DERIVATIVE LIABILITIES | ' |
NOTE 7 – DERIVATIVE LIABILITIES | |
On February 19, 2014, in connection with the Tenth Amendment to the Investment Agreement with DMRJ Group (Note 8), the ability to convert the DMRJ Group debt into shares of common stock was cancelled. The fair value of the conversion option on the date of cancellation was calculated to be $164,146 and was recorded as additional paid in capital. The Company recognized a change in fair value of $6,673 and $152,747 for the six months ended June 30, 2014 and June 30, 2013, respectively. | |
DMRJ_GROUP_FUNDING
DMRJ GROUP FUNDING | 6 Months Ended |
Jun. 30, 2014 | |
DMRJ GROUP FUNDING: | ' |
DMRJ GROUP FUNDING | ' |
NOTE 8 – DMRJ GROUP FUNDING | |
2014 Activity | |
In January 2014, pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount of $25,000. The January 31, 2014 loan payment was not made. | |
On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. The Tenth Amendment provides for funding of mining operations through a series of advances (the “Monthly Term Loan Advances”) totaling a maximum of $5,700,000 over five months. As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016. The interest rate on the loan balance was reduced from 24% to 15% and minimum payment amounts were established beginning in February 2015. On the last business day of each month, commencing October 31, 2014, we will pay to DMRJ Group an amount equal to 100% of all cash flows from operations for the immediately preceding month, if any, less mutually agreed upon capital expenditures (and if an agreement on capital expenditures is not reached, then 100% of cash flows from operations) subject to a minimum cash balance of $200,000 until such time as the unpaid principal amount of all Term Loan Advances outstanding and all accrued interest has been paid in full. All payments will be applied first to accrued but unpaid interest and second to outstanding principal. The first Monthly Term Loan, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit. A total of $4,100,000 was drawn during the six months ended June 30, 2014 in connection with the Tenth Amendment Monthly Term Loan Advances. In addition, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock (Note 3). Onsite construction of the project is 85% complete at June 30, 2014. If the Company is unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate the Company’s mining leases and other assets. | |
2013 Activity | |
On January 29, 2013, the Company entered into a Sixth Amendment to the Investment Agreement with DMRJ Group. The Sixth Amendment provided for the Company to receive additional funds in one advance (the “January Term Loan Advance”) of $50,000. This advance was received in February 2013 and replaced the second October Term Loan Advance, as authorized in the Fifth Amendment to the Investment Agreement, which had never been drawn. In addition, the maturity date of the entire loan balance due to DMRJ Group was moved from December 15, 2012 to March 5, 2013. The March 5, 2013 payment was not made. | |
On April 30, 2013, the Company agreed to the terms of a Seventh Amendment to the Investment Agreement with DMRJ Group. This amendment became effective on June 26, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from March 5, 2013 to June 30, 2013. The Seventh Amendment provided for the Company to receive additional funds in two advances of $50,000. The first advance (the “April Term Loan Advance”) was received on May 2, 2013 and the second advance (the “May Term Loan Advance”) was received on June 26, 2013. The June 30, 2013 loan payment was not made. | |
On July 24, 2013, the Company agreed to the terms of an Eighth Amendment to the Investment Agreement with DMRJ Group. This amendment became effective on July 24, 2013 and as a result of the terms of the amendment, the maturity date of the entire loan balance due to DMRJ Group was moved from June 30, 2013 to September 30, 2013. The Eighth Amendment provided for the Company to receive additional funds in two advances. The first advance (the “July Term Loan Advance”) in the amount of $100,000, was received on July 24, 2013 and the second advance (the “Additional July Term Loan Advance”) was received on August 23, 2013 in the amount of $50,000. The September 30, 2013 loan payment was not made. | |
On October 24, 2013, the Company agreed to the terms of a Ninth Amendment to the Investment Agreement with DMRJ Group. As a provision of this amendment the maturity date of the entire loan balance due to DMRJ Group was moved from September 30, 2013 to January 31, 2014. The Ninth Amendment provided for the Company to receive additional funds in four advances of $25,000 each. The advances (the “October 2013 Term Loan Advances”) were to be used for ordinary course general corporate purposes. The advances could be drawn for four successive calendar months commencing in October 2013 in the aggregate principal amount of $25,000 each for an aggregate of up to $100,000. The interest rate on these advances remains at 2% per month. Two of these advances were drawn in 2013. |
REMEDIATION_LIABILITY_AND_ASSE
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION | 3 Months Ended | ||||||
Jun. 30, 2014 | |||||||
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION | ' | ||||||
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION | ' | ||||||
NOTE 9 - REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION | |||||||
Changes in the reclamation liability for the six months ended June 30, 2014 and the year ended December 31, 2013 are as follows: | |||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Reclamation and remediation liability, beginning of period | $ | 69,920 | $ | 63,584 | |||
Additional obligation incurred | 147,221 | 0 | |||||
Accretion expense | 18,615 | 6,336 | |||||
Reclamation and remediation liability, end of period | $ | 235,756 | $ | 69,920 | |||
For the six months ended June 30, 2014, the Company recorded an additional obligation relating to the construction of the heap leach pad and process facility at the Kiewit site. In calculating the present value of the new obligation, the Company used a credit adjusted risk free interest rate of 8% and projected life of six years. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions. |
COMMITMENTS
COMMITMENTS | 6 Months Ended |
Jun. 30, 2014 | |
COMMITMENTS | ' |
COMMITMENTS | ' |
NOTE 10 – COMMITMENTS | |
Mining Properties | |
During the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Moeller Family Trust for the lease of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah. Pursuant to the agreement, if the Company does not place the Yellow Hammer property into commercial production within a three-year period it will be required to make annual payments to the Trust of $50,000. The Yellow Hammer operated for several months in 2011. Under the terms of the Joint Venture Agreement, the Company is required to pay a 6% net smelter royalty on the production of base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold and silver, as applicable. There were no sales and no royalty expense to date in 2014 or in 2013. | |
Also, during the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company and the Woodman Mining Company for the lease of their property interests in the Gold Hill Mining District of Utah. Under the terms of the Joint Venture Agreement, the Company is required to pay a 4% net smelter royalty on base metals in all other areas except for production from the Kiewit gold property and a net smelter royalty on gold and silver, except for production from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable. The Company is also required to pay a 6% net smelter return on any production from the Kiewit gold property. Additionally, if the Company does not place the Kiewit property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three year period, it will be required to make annual payments to Clifton Mining in the amount of $50,000 per location. The Company has not begun commercial production and the annual payments due on July 24, 2014 were made and accepted by Clifton Mining for the Clifton Shears and Kiewit properties. The Cane Springs property payment was not made in 2013 and this claim was released back to Clifton Mining at that time. | |
Employment Agreements | |
In September 2010, the Company entered into employment agreements with its Chief Executive Officer (“CEO”) and its President and entered into a consulting agreement with one of its directors. Each agreement was for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year. Termination agreements have been reached with the CEO and one director, providing for payment of accrued compensation and consulting payable over several months commencing with the funding of the Kiewit project. These payments began in February 2014. As of June 30, 2014 and December 31, 2013, accrued compensation of $277,500 and $332,000, and consulting fees payable of $40,000 and $70,000, respectively, were due to directors and officers. Of these amounts, accrued compensation of $165,000 is due to Rick Havenstrite, $28,500 to Marianne Havenstrite and $124,000 remains to be paid pursuant to the termination agreements. In addition, as part of a management incentive award on May 1, 2014, Rick Havenstrite was awarded 3,137,066 shares of common stock. As part of this award, Mr. Havenstrite agreed to forgive $40,000 in accrued compensation. See Note 3. | |
Stock Redeemable with Gold Proceeds | |
An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of common stock. This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of the Company’s common stock. Under the terms of this offering, for a period of 12 months after commencement of operations at the Kiewit project, the shares can be redeemed for cash generated from the sale of gold. Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option. Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce. Due to the redemption feature of these shares, management has concluded that the proceeds from these stock sales should be recorded as a liability and not as equity. | |
ACCOUNTING_POLICIES_Policies
ACCOUNTING POLICIES (Policies) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
ACCOUNTING POLICIES | ' | ||||
Mineral Exploration and Development Costs | ' | ||||
Mineral Exploration and Development Costs | |||||
The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining. All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned. Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves. | |||||
Property and Equipment, Policy | ' | ||||
Property and Equipment | |||||
Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are charged to operations as incurred. Betterments of a major nature are capitalized. Expenditures for new property, plant, equipment, and improvements that extend the useful life or functionality of the asset are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations. | |||||
Mineral Properties and Leases,Policy | ' | ||||
Mineral Properties and Interests | |||||
The Company capitalizes costs for acquiring mineral properties 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. See Note 5. | |||||
Earnings Per Share, Policy | ' | ||||
Earnings Per Share | |||||
Basic earnings per share includes no dilution and is computed by dividing net income (loss) available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. At June 30, 2014 and June 30, 2013, common stock equivalents outstanding are as follows: | |||||
June 30, | June 30, | ||||
2014 | 2013 | ||||
Convertible debt | 857,143 | 857,143 | |||
Convertible preferred stock | 27,718,333 | 2,758,033 | |||
Total | 28,575,476 | 3,615,176 | |||
However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses. | |||||
Going Concern Policy | ' | ||||
Going Concern | |||||
As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through June 30, 2014, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence. | |||||
The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014. Construction is about 85% complete at June 30, 2014. The Company will need significant funding to continue operations and increase development through the next fiscal year. The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships. | |||||
If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. | |||||
Reclassification, Policy | ' | ||||
Reclassifications | |||||
Certain reclassifications have been made to conform data from prior periods to the current presentation. These reclassifications have no effect on the results of operations or stockholders’ deficit. | |||||
Common_Stock_Equivalents_Outst
Common Stock Equivalents Outstanding (TABLE) | 6 Months Ended | ||||
Jun. 30, 2014 | |||||
Common Stock Equivalents Outstanding (TABLE) | ' | ||||
Common Stock Equivalents Outstanding (TABLE) | ' | ||||
At June 30, 2014 and June 30, 2013, common stock equivalents outstanding are as follows: | |||||
June 30, | June 30, | ||||
2014 | 2013 | ||||
Convertible debt | 857,143 | 857,143 | |||
Convertible preferred stock | 27,718,333 | 2,758,033 | |||
Total | 28,575,476 | 3,615,176 | |||
Summary_of_property_equipment_
Summary of property, equipment, and accumulated depreciation (TABLES) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Summary of property, equipment, and accumulated depreciation (TABLE) | ' | ||||||
Summary of property, equipment, and accumulated depreciation (TABLE) | ' | ||||||
The following is a summary of property, equipment, and accumulated depreciation at June 30, 2014 and December 31, 2013: | |||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Equipment | $ | 727,994 | $ | 418,298 | |||
Furniture and fixtures, temporary housing | 10,781 | 4,268 | |||||
Electronic and computerized equipment | 19,011 | - | |||||
Vehicles | 55,830 | 23,516 | |||||
813,616 | 446,082 | ||||||
Less accumulated depreciation | -262,866 | -218,101 | |||||
550,750 | 227,981 | ||||||
Investment in Kiewit property development | 1,445,678 | - | |||||
Less accumulated amortization | - | - | |||||
Total | $ | 1,996,428 | $ | 227,981 |
MINERAL_PROPERTIES_AND_LEASES_
MINERAL PROPERTIES AND LEASES (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
MINERAL PROPERTIES AND LEASES (Tables) | ' | ||||||
Mineral Properties and Leases | ' | ||||||
Mineral properties and leases as of June 30, 2014 and December 31, 2013 are as follows: | |||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Initial lease fee | |||||||
Yellow Hammer site | $ | 175,000 | $ | 175,000 | |||
Kiewit, Cactus Mill and all other sites | 600,000 | 600,000 | |||||
Total | 775,000 | 775,000 | |||||
Asset retirement obligation | |||||||
Yellowhammer Site | - | 30,908 | |||||
Kiewit Site | 184,588 | - | |||||
Kiewit Exploration | 10,780 | 10,780 | |||||
Cactus Mill | 16,133 | 16,133 | |||||
Total | 211,501 | 57,821 | |||||
Blue Fin Claims | - | 2,735 | |||||
Total | $ | 986,501 | $ | 835,556 | |||
Changes_in_the_reclamation_lia
Changes in the reclamation liability (TABLES) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Changes in the reclamation liability (TABLE): | ' | ||||||
Changes in the reclamation liability (TABLE) | ' | ||||||
Changes in the reclamation liability for the six months ended June 30, 2014 and the year ended December 31, 2013 are as follows: | |||||||
June 30, | December 31, | ||||||
2014 | 2013 | ||||||
Reclamation and remediation liability, beginning of period | $ | 69,920 | $ | 63,584 | |||
Additional obligation incurred | 147,221 | 0 | |||||
Accretion expense | 18,615 | 6,336 | |||||
Reclamation and remediation liability, end of period | $ | 235,756 | $ | 69,920 | |||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share (Details) | Jun. 30, 2014 | Dec. 31, 2013 |
Per share details | ' | ' |
Common stock convertible Debt , | 857,143 | 857,143 |
Common stock convertible into debt and preferred stock | 27,718,333 | 2,758,033 |
Total Common stock Equivalent outstanding | 28,575,476 | 3,615,176 |
Capital_Stock_Details
Capital Stock (Details) (USD $) | Jun. 30, 2014 | 1-May-14 | Dec. 31, 2013 | Jul. 05, 2013 |
Common stock | ' | ' | ' | ' |
Company authorised to issue shares of common stock | 100,000,000 | ' | ' | ' |
Company issued a total of shares of stock to note holders | 64,284 | ' | 128,488 | ' |
The fair value of note holders shares | $45,000 | ' | ' | ' |
Company issued shares to is president | ' | 3,137,066 | ' | ' |
Mr. Havenstrite agreed to forgive accured but unpaid wages | ' | $40,000 | ' | ' |
Non -controlling , non -marketable basis fair value of the common stock per share value | ' | $0.04 | ' | ' |
As DMRJ Group Amendment no of shares valued | ' | ' | ' | 150,000 |
As per amendment 150,000 shares valued per share | ' | ' | ' | $1 |
note holders per share value | ' | ' | $0.70 | ' |
Shares of common stock issued to Two holders of common debt | ' | ' | 300,000 | ' |
300,000 shares of common stock, valued per share | ' | ' | $1 | ' |
Capital_Stock_Preferred_Stock_
Capital Stock Preferred Stock (Details) (USD $) | 11-May-11 |
Capital Stock Preferred Stock | ' |
Designated preferred stock shares series A | 0 |
Preferred stock shares series A issued to DMRJ Group | 0 |
Designated preferred stock shares series A 1 | 2,500,000 |
Designated preferred stock shares series A 2 | 1,000,000 |
Convertible by the holder into common stock | 0 |
Outstanding preferred stock shares series A 2 | 0 |
The initial conversion price of the Series A-1 preferred stock per share | $0.70 |
The initial conversion price of the Series A-2 preferred stock per share | $1 |
Tenth_Amendment_to_the_Investm
Tenth Amendment to the Investment Agreement with DMRJ (Details) (USD $) | Feb. 19, 2014 |
Investment Agreement with DMRJ | ' |
Monthly term loan advances totaling | $5,700,000 |
Company issued shares to DMRJ Group B series Preferred stock | 249,603 |
Series B Preferred Stock is euqalent to shares of common stock | 100 |
Director_fee_and_other_details
Director fee and other details (Details) (USD $) | 3 Months Ended | ||
Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2013 | |
Fee Details | ' | ' | ' |
Officers and Directors Fees | $125,483 | ' | $85,483 |
Financing expense | ' | 1,248,015 | ' |
Estimated fair value of the equivalent common shares | ' | $0.05 | ' |
Revised estimated fair value of the equivalent common shares to be | 998,412 | ' | ' |
Revised estimated fair value of the equivalent common shares to be per share | $0.04 | ' | ' |
Reduction to financing expense | $249,603 | ' | ' |
As a result of this issuance, DMRJ beneficially owns 67% of the Company with shares convertible to shares of common stock. | 27,718,333 | ' | ' |
The_following_is_a_summary_of_
The following is a summary of property, equipment, and accumulated depreciation (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
The following is a summary of property, equipment, and accumulated depreciation | ' | ' |
Equipment | $727,994 | $418,298 |
Furniture and fixtures, temporary housing | 10,781 | 4,268 |
Electronic and computerized equipment | 19,011 | 0 |
Vehicles | 55,830 | 23,516 |
Total equipment | 813,616 | 446,082 |
Less accumulated depreciation | -262,866 | -218,101 |
Total net equipment | 550,750 | 227,981 |
Investment in Kiewit property development | 1,445,678 | 0 |
Less accumulated amortization | 0 | 0 |
Total property and Equipment Expenditures-net | $1,996,428 | $227,981 |
Depreciation_and_amortization_
Depreciation and amortization expense (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Depreciation and amortization expense | ' | ' |
Expenditure incurred by the company and capitalized totaled | $1,445,678 | $0 |
Depreciation and amortization expense for Six months ended | 44,765 | 33,019 |
General and administrative expense of the company | 1,581 | 0 |
Capitalized expenses were | 19,191 | 23,993 |
capitalized costs. | $23,993 | ' |
Recovered_Sheet1
Mineral properties and leases are as follows (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Mineral Properties And Leases Exploration Expenditures | ' | ' |
Yellow Hammer site | $175,000 | $600,000 |
Kiewit, Cactus Mill and all other sites | 600,000 | 775,000 |
Total lease fee | 775,000 | 281,361 |
Yellowhammer Site | 0 | 30,908 |
Kiewit Site | 184,588 | 0 |
Kiewit Exploration | 10,780 | 10,780 |
Cactus Mill | 16,133 | 16,133 |
Total obligations | 211,501 | 57,821 |
Blue Fin Claims | 0 | 2,735 |
Total Mineral Properties and Leases | $986,501 | $835,556 |
Reclamation_Details
Reclamation (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Reclamation and bond details | ' | ' |
Kiewit reclamation bond in the amount | $1,348,000 | $0 |
Asset retirement obligation will be removed and funds received | 92,705 | 0 |
Total reclamation bonds posted amounted | 1,503,316 | 155,316 |
Annual claims fees | $140 | $0 |
CONVERTIBLE_DEBT_Details
CONVERTIBLE DEBT (Details) (USD $) | Jun. 30, 2014 | Nov. 18, 2009 |
Convertible debt details | ' | ' |
Company issued convertible promissory notes to two of its minority shareholders | ' | $600,000 |
The notes bear interest per annum | ' | 15.00% |
Interest is payable in equal monthly installments | ' | $7,500 |
The notes are convertible into potentially shares of common stock | ' | 857,143 |
The note holders were issued shares | 64,284 | ' |
TTo settle accrued interest for 2013 and have been issued shares of common stock | 32,142 | ' |
Derivative_Liability_Fair_Valu
Derivative Liability Fair Value (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Derivative Liability Fair Value | ' | ' |
Recorded additional capital | $164,146 | $0 |
Change_in_Fair_value_Details
Change in Fair value (Details) (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Change in fair value details | ' | ' |
Change in Fair value amount | $6,673 | $152,747 |
DMRJ_2014_Activity_Details
DMRJ 2014 Activity (Details) (USD $) | Jan. 31, 2014 |
2014 Activity Details | ' |
Term Loan Advance was taken in the amount | $25,000 |
Tenth Amendment provides for funding of mining operations through a series of advances totaling a maximum | 5,700,000 |
The interest rate on the loan balance was reduced from maximum | 24.00% |
The interest rate on the loan balance was reduced from minimum | 15.00% |
DMRJ Group an amount equal to | 100.00% |
Minimum cash balance amount | 200,000 |
The first Monthly Term Loan amount | $2,000,000 |
Changes_in_the_reclamation_lia1
Changes in the reclamation liability for the years as follows (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Changes in the reclamation liability for the years as follows | ' | ' |
Reclamation and remediation liability, beginning of the period | $69,920 | $63,584 |
Additional Obligation incurred | 55,222 | 0 |
Accretion expense | 11,344 | 6,336 |
Reclamation and remediation liability, end of year | $136,486 | $69,920 |
Present value of the asset retirement obligation calculated using the credit adjusted risk free interest rate | 8.00% | 8.00% |
Projected mine lives | 6 | 6 |
COMMITMENTS_Employment_Agreeme
COMMITMENTS Employment Agreements (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2012 |
Commitments Employment Agreements | ' | ' | ' |
Base salary or fees to CEO and President | ' | ' | $120,000 |
Amount owed by the company to the CEO as accrued compensation | 277,500 | 332,000 | ' |
Amount owed by the company to the CEO as accrued consulting payable | $40,000 | $70,000 | ' |