Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 30, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Desert Hawk Gold Corp. | ||
Entity Central Index Key | 0001168081 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 26,631,603 | ||
Entity Filer Number | 333-169701 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 3,395,203 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 2,116,432 | $ 8,716 |
Inventories (Note 5) | 4,333,682 | 1,193,341 |
Prepaid expenses and other current assets | 181,030 | 40,475 |
Total Current Assets | 6,631,144 | 1,242,532 |
PROPERTY AND EQUIPMENT, net (Note 6) | 5,287,515 | 3,415,707 |
MINERAL PROPERTIES AND INTERESTS, net (Note 7) | 3,729,637 | 879,001 |
RECLAMATION BONDS (Note 4) | 759,351 | 753,290 |
TOTAL ASSETS | 16,407,647 | 6,290,530 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 436,881 | 652,895 |
Accrued liabilities-officer and other wages (Notes 17 and 20) | 922,039 | |
Interest payable - related parties (Notes 8, 9 and 10) | 463,993 | |
Short-term notes payable - related parties (Note 8) | 249,000 | |
Convertible debt - related parties (Note 9) | 1,350,000 | |
Obligation under capital lease - related party (Note 10) | 69,562 | |
Notes payable - equipment (Note 11) | 1,302,239 | 324,111 |
Prepaid forward gold contract liability, current portion (Note 3) | 189,351 | |
Settlement of consulting contract payable (Note 14) | 200,000 | |
Total Current Liabilities | 2,128,471 | 4,031,600 |
LONG-TERM LIABILITIES | ||
Asset retirement obligation (Note 13) | 826,637 | 792,747 |
Prepaid forward gold contract liability (Note 3) | 13,410,649 | |
Total long-term liabilities | 14,237,286 | 792,747 |
TOTAL LIABILITIES | 16,365,757 | 4,824,347 |
COMMITMENTS AND CONTINGENCIES (Note 20) | ||
STOCKHOLDERS’ EQUITY (Note 15) | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized; none issued or outstanding | ||
Common stock, $0.001 par value, 100,000,000 shares authorized; 26,631,603 and 20,881,603 shares issued and outstanding | 26,633 | 20,753 |
Additional paid-in capital | 9,466,475 | 7,120,355 |
Accumulated deficit | (9,451,218) | (5,674,925) |
Total Stockholders’ Equity | 41,890 | 1,466,183 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 16,407,647 | $ 6,290,530 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 26,631,603 | 20,881,603 |
Common stock, shares outstanding | 26,631,603 | 20,881,603 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
REVENUE: | ||
Concentrate sales | $ 889,311 | $ 229,469 |
EXPENSES: | ||
General project costs | 2,161,565 | 1,989,410 |
Consulting expense | 528,817 | |
Exploration expense | 99,761 | 3,146 |
Officers and directors fees | 340,590 | 253,752 |
Legal and professional | 184,679 | 129,135 |
General and administrative | 231,308 | 685,925 |
Loss on disposal of equipment | 51,950 | |
Total Expenses | 3,598,670 | 3,061,368 |
OPERATING LOSS | (2,709,359) | (2,831,899) |
OTHER INCOME (EXPENSE) | ||
Gain on extinguishment of DMRJ debt (Note 12) | 24,916,561 | |
Interest and other income | 6,032 | 236 |
Interest expense | (46,415) | (46,760) |
Interest expense - related parties | (34,794) | (151,749) |
Interest expense - DMRJ | (421,891) | |
Loss on settlement of consulting contract (Note 14) | (900,000) | |
Loss on settlement of redeemable stock (Note 20) | (63,094) | |
Financing expense | (28,663) | (120,000) |
Total Other Income (Expense) | (1,066,934) | 24,176,397 |
INCOME (LOSS) BEFORE INCOME TAXES | (3,776,293) | 21,344,498 |
INCOME TAXES | ||
NET INCOME (LOSS) | (3,776,293) | 21,344,498 |
DEEMED CAPITAL CONTRIBUTION ON EXTINGUISHMENT OF PREFERRED STOCK (NOTE 12) | 4,068,720 | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (3,776,293) | $ 25,413,218 |
BASIC NET INCOME (LOSS) PER SHARE | $ (0.15) | $ 1.32 |
DILUTED NET INCOME (LOSS) PER SHARE | $ (0.15) | $ 1.12 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC | 25,591,877 | 19,196,808 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED | 25,591,877 | 22,654,411 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit (Revised) | Total |
Balance at Dec. 31, 2017 | $ 1,582 | $ 13,828 | $ 9,143,418 | $ (31,088,143) | $ (21,929,315) |
Balance, Shares at Dec. 31, 2017 | 1,582,563 | 13,956,603 | |||
Extinguishment of preferred stock (Note 15) | $ (1,582) | (4,067,138) | 4,068,720 | ||
Extinguishment of preferred stock (Note 15), shares | (1,582,563) | ||||
Stock options (Note 19 ) | 456,000 | 456,000 | |||
Common stock issued for cash at $.40 per share | $ 2,125 | 847,875 | 850,000 | ||
Common stock issued for cash at $.40 per share, shares | 2,125,000 | ||||
Common stock issued to convertible debtholders in connection with extinguishment of DMRJ debt (Note 12) | $ 4,500 | 620,500 | 625,000 | ||
Common stock issued to convertible debtholders in connection with extinguishment of DMRJ debt (Note 12) | 4,500,000 | ||||
Common stock issued in connection with extension of convertible debt (Note 9) | $ 300 | 119,700 | 120,000 | ||
Common stock issued in connection with extension of convertible debt (Note 9), share | 300,000 | ||||
Net income (loss) | 21,344,498 | 21,344,498 | |||
Balance at Dec. 31, 2018 | $ 20,753 | 7,120,355 | (5,674,925) | 1,466,183 | |
Balance, Shares at Dec. 31, 2018 | 20,881,603 | ||||
Common stock issued in connection with acquiring mineral properties and interests | $ 5,500 | 2,194,500 | 2,200,000 | ||
Common stock issued in connection with acquiring mineral properties and interests, shares | 5,500,000 | ||||
Common stock issued in connection with settlement of consulting contract (Note 14) | $ 250 | 99,750 | 100,000 | ||
Common stock issued in connection with settlement of consulting contract (Note 14), shares | 250,000 | ||||
Common stock released in settlement of redeemable stock | $ 130 | 51,870 | 52,000 | ||
Common stock released in settlement of redeemable stock, shares | |||||
Net income (loss) | (3,776,293) | (3,776,293) | |||
Balance at Dec. 31, 2019 | $ 26,633 | $ 9,466,475 | $ (9,451,218) | $ 41,890 | |
Balance, Shares at Dec. 31, 2019 | 26,631,603 |
Statements of Stockholders' E_2
Statements of Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Common stock issued for cash per share | $ 0.40 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ (3,776,293) | $ 21,344,498 |
Adjustments to reconcile net income (loss) to net cash used by operating activities: | ||
Depreciation and amortization | 1,196,489 | 421,228 |
Gain on extinguishment of DMRJ debt (Note 12) | (24,916,561) | |
Stock based compensation | 456,000 | |
Adjustment of inventory to net realizable value | 870,085 | 656,257 |
Accretion of asset retirement obligation | 74,692 | 80,468 |
Gain on settlement of asset retirement obligation | (17,120) | |
Loss on disposal of equipment | 51,950 | |
Common stock issued for financing expense | 120,000 | |
Common stock issued for consulting contract settlement | 100,000 | |
Common stock issued for settlement of redeemable stock | 52,000 | |
Changes in operating assets and liabilities: | ||
Inventories | (4,010,426) | 208,772 |
Prepaid expenses and other current assets | (140,555) | 61,776 |
Accounts payable and accrued expenses | (216,014) | 96,795 |
Accrued liabilities - officer wages | (922,039) | 212,462 |
Interest payable - related parties | (463,993) | 146,557 |
Interest payable - DMRJ | 451,891 | |
Settlement of consulting contract payable | 200,000 | |
Net cash used by operating activities | (7,001,224) | (659,857) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (794,361) | (73,868) |
Additions to mineral properties and interests (Note 7) | (1,150,000) | |
Additions to reclamation bonds | (48,863) | (236) |
Net cash used by investing activities | (1,993,224) | (74,104) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock | 1,475,000 | |
Proceeds from prepaid forward gold contract liability, net (Note 3) | 13,600,000 | |
Proceeds from short-term notes payable - related parties | 91,680 | 249,000 |
Payment on note payable - DMRJ | (625,000) | |
Payment of obligation under capital lease - related party | (69,562) | (14,548) |
Payment of notes payable - equipment | (829,274) | (417,987) |
Proceeds from convertible debt - related parties | 72,000 | |
Payment of short term note payable - related parties | (340,680) | |
Payment of convertible debt - related parties | (1,350,000) | |
Net cash provided by financing activities | 11,102,164 | 738,465 |
NET INCREASE IN CASH | 2,107,716 | 4,504 |
CASH, BEGINNING OF YEAR | 8,716 | 4,212 |
CASH, END OF YEAR | 2,116,432 | 8,716 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 545,202 | 46,760 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Extinguishment of preferred stock (Note 12) | 4,068,720 | |
Equipment acquired with notes payable - equipment (Note 11 ) | 1,807,402 | 141,631 |
Accounts payable settled with notes payable - equipment (Note 11) | 131,436 | |
Common stock issued for mineral properties and interests (Note 7 ) | $ 2,200,000 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Desert Hawk Gold Corp. (the "Company"), a Nevada Corporation, was incorporated on November 5, 1957. The Company commenced its current mining activities on May 1, 2009. During the year ended December 31, 2009, the Company entered into Joint Venture Agreements with the Clifton Mining Company ("Clifton"), the Woodman Mining Company and the Moeller Family Trust for the lease of certain of their property interests in the Gold Hill Mining District of Utah. In 2011, the Company entered into an agreement with DMRJ Group, (a Platinum Partners related entity), which allowed for long term funding of the Kiewit project and helped to provide cash flow for operations during the period from 2009 until 2014 while the permitting process was ongoing. The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014. Construction at the site was substantially complete at September 30, 2014. Revenue from the heap leach operation began in October 2014 with the first sales of gold concentrate. On March 8, 2018, the Company successfully finalized an agreement with the trustees of DMRJ Group ("DMRJ") which eliminated the note and interest payable balance of $25,541,561 due to DMRJ in exchange for $625,000. In addition, all outstanding shares of preferred stock held by DMRJ were retired and cancelled. See Note 12. Prior to March 2019, ongoing undercapitalization continued to hamper the Company's ability to operate. Due to lack of funding, the Company was temporarily shut down since third quarter of 2017. On March 7, 2019, the Company successfully finalized a prepaid forward gold contract agreement (the Pre-Paid Forward Gold Purchase Agreement (the "Purchase Agreement")) that provided funding and enabled production to resume later in 2019. See Note 3. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This summary of significant accounting policies of the Company is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Accounting Method The Company's financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees All transactions in which goods or services are received for the issuance of shares of the Company's common stock or options to purchase shares of common stock are accounted for based on the fair value of the goods or services received or the fair value of the equity interest issued, whichever is more reliably measurable. The Company estimates the fair value of stock-based compensation using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected life"), the estimated volatility of the Company's common stock price over the expected term ("volatility"), the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of the fair value of stock-based compensation. 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 number of gold ounces in and costing of inventories, the recoverability of the cost of mining claims, asset retirement obligation, stock-based compensation, determination of the fair value of common stock issued, deferred tax assets and related valuation allowances. Actual results could differ from those estimates. Reclassifications Certain reclassifications have been made to conform prior periods' amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders' equity, and cash flows previously reported. Cash and Cash Equivalents The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less when purchased to be cash equivalents. Reclamation bonds Reclamation bonds primarily represent bonds and are restricted primarily for reclamation funding which are carried at cost plus earned interest. Reclamation bonds are shown as a non-current asset and is included in the balance sheet. See Note 4. Inventories The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting "pregnant" solution is further processed in a plant where gold is recovered. The Company records ore on leach pad, solution in carbon columns in process and gold concentrate, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value. Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, equipment, and mineral properties; and mine administrative expenses. Costs are removed from ore on leach pads as ounces are recovered, based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of December 31, 2019, the Company had a limited operating history and actual results only over a short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests with only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12 to 18 months. At the end of each reporting period, inventory is adjusted to the lower of average cost or net realized value. See Note 5. 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 three 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 expensed as incurred. Replacements and betterments that extend the useful life of the property and equipment 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. See Note 6. Mineral Properties and Interests The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights. Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Estimates for ore reserves are a key component in determining units of production rates. Estimates of ore reserves, mineralized material, and other resources may change, possibly in the near term, resulting in changes to rates in future reporting periods. The Company does not have proven and probable reserves at this time. 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. Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing. These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. See Note 7. Mineral Exploration and Development Costs Until proven and probable reserves (as defined by SEC Guide 7) are established, all exploration expenditures are expensed as incurred. Once such reserves are established, expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operations, are capitalized and will be amortized on units of production basis over proven and probable reserves. Previously capitalized costs are expensed in the period the property is abandoned. Impairment of Long-Lived Assets The Company evaluates the carrying amounts of its long-lived assets for impairment whenever events and circumstances indicate the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Estimated undiscounted future net cash flows from each mineral property are calculated using estimated future production, three-year average metals prices, operating capital and costs, and reclamations costs. An impairment loss is recognized when the estimated discounted future cash flows expected to result from the use of an asset are less than the carrying amount of the asset. The Company's estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in estimates could occur which may affect the expected recoverability of the Company's investments in mineral properties. Provision for Taxes Income taxes are provided based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the "more likely than not" standard to allow recognition of such an asset. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. When applicable, the Company will recognize a liability for unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. See Note 16. 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. 2019 2018 Net income (loss) $ (3,776,293 ) $ 21,344,498 Deemed capital contribution on extinguishment of preferred stock - 4,068,720 Net income (loss) available to common shareholders - basic (3,776,293 ) 25,413,218 Interest expense on convertible notes payable -related parties - 74,465 Net income (loss) available to common shareholders - diluted $ (3,776,293 ) $ 25,487,683 Weighted average shares outstanding - basic 25,591,877 19,196,808 Dilutive shares – convertible notes payable – related parties - 3,457,603 Weighted average shares outstanding - diluted 25,591,877 22,654,411 Basic income (loss) per share $ (0.15 ) $ 1.32 Diluted income (loss) per share $ (0.15 ) $ 1.12 At December 31, 2019 and 2018, the common stock equivalents of 2,400,000 associated with the Company's outstanding stock options were excluded from the calculation of diluted earnings per share because in 2019 the options were antidilutive due to the net loss for the period and in 2018 the options' exercise price was not lower than the average share price during the year. Revenue Recognition The Company's product consists of gold bearing carbon which is shipped offsite to be turned into an unrefined gold concentrate, which is then further refined to become gold and silver bullion known as doré. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer, and when the transaction price can be determined or reasonably estimated. Management has determined the performance obligation is met and title is transferred when the Company delivers the doré to the customer because, at that time, (i) legal title is transferred to the customer, (ii) the customer has accepted the doré and obtained the ability to realize all of the benefits from the product, (iii) the doré content specifications are known, have been communicated to the customer, and the customer has the significant risks and rewards of ownership to it, and (iv) the Company has the right to payment for the doré. The performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer. Sales and accounts receivable for sales are recorded net of charges from the customer which represent components of the transaction price. Charges are estimated by management upon transfer of risk based on contractual terms, and actual charges typically do not vary materially from management's estimates. Revenue from the sale of dore may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. Revenue proceeds are recorded net of the impact of royalties and participation agreements. See Note 18. Reclamation and Remediation 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 asset. After the initial measurement of the asset retirement obligation, the liability is adjusted when there are changes in the estimated future cash flows due to change in estimated costs or change in time until reclamation will commence. 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. Such assumptions are based on the Company's current mining plan and the best available information for making such estimates. See Note 13. 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. Financial Instruments The Company's financial instruments include cash and cash equivalents as well as various notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity and interest rates of these financial instruments, approximates fair value at December 31, 2019 and 2018. Fair Value Measurements The Company discloses the following information for each class of assets and liabilities that are measured at fair value: 1. the fair value measurement; 2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); 3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period 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 and a description of where those unrealized gains or losses are reported in the statement of operations; and 5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. At December 31, 2019 and December 31, 2018, the Company has no assets nor liabilities that require measurement at fair value on a recurring basis. Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit of $9,451,218 through December 31, 2019 and net loss of $3,776,293 for the year ended December 31, 2019 which raises some 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. Although production has restarted in 2019, it has not yet reached optimum levels. The timing and amount of capital requirements will depend on a number of factors, including demand for products, metals market pricing, and the availability of opportunities for expansion through affiliations and other business relationships. Although management has procured funding through a forward sales agreement (Note 3) they intend to continue to seek new capital from equity securities issuances to provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. The Company's management believes that is has sufficient funds to meet its obligations and continue production over the next twelve months. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. Upon implementation of the new guidance, the Company will be required to recognize a liability and right-of-use asset for its operating leases. The Company has elected the transition option to apply the new guidance at the effective date without adjusting comparative periods presented. Adoption of the ASU on January 1, 2019 had no material impact to the Company's financial statements as the Company has no contracts that meet the criteria of this ASU. In June 2018, the FASB issued ASU No. 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The update involves simplification of several aspects of accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718 to include nonemployee awards. The update was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this update as of January 1, 2019 did not have a material impact on the Company's financial statements. In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The update removes, modifies and makes additions to certain disclosure requirements with respect to fair value measurements. The update is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of this update on fair value measurement disclosures. 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 financial statements upon adoption. |
Prepaid Forward Gold Contract L
Prepaid Forward Gold Contract Liability | 12 Months Ended |
Dec. 31, 2019 | |
Forward Gold Sales Contract Liability [Abstract] | |
PREPAID FORWARD GOLD CONTRACT LIABILITY | NOTE 3 – PREPAID FORWARD GOLD CONTRACT LIABILITY During the first quarter of 2019, the Company entered into and closed a Pre-Paid Forward Gold Purchase Agreement (the "Purchase Agreement") with PDK Utah Holdings L.P. ("PDK") for the sale and purchase by PDK of gold produced from the Company's mining property. Under the terms of the original Purchase Agreement, PDK initially agreed to purchase a total of 73,910 ounces of gold from the Company. The Company agreed to deliver ounces of gold produced from the Kiewit property to PDK. The Company would receive proceeds from PDK at the then current spot price less a discount specified in the Purchase Agreement. Prepayment was to be made in three tranches, with the initial tranche in the amount of $11,200,000 having been made upon execution of the Purchase Agreement on March 7, 2019 (the "Initial Funding"), $4,500,000 for Tranche 2 to occur at least six months following the Initial Funding date, and $5,500,000 for Tranche 3 to occur at least 10 months following the Initial Funding date, provided that all conditions precedent for funding Tranches 2 and 3 are met. From the Initial Funding, the Company paid an upfront fee of $600,000 to PDK for expenses incurred in connection with the transaction. The first gold delivery of 655 ounces is due December 2020. The Purchase Agreement contains a participation payment whereby PDK receives a portion of the proceeds from gold sold by the Company to a third party. The amount of proceeds due to PDK is based upon a percentage of proceeds over a set gold price per ounce. In addition, PDK may reduce the required number of ounces to be sold in exchange for common shares of the Company. As security for the obligations of the Company under the Purchase Agreement, the Company has granted PDK a security interest in all of the assets of the Company and has issued and recorded a Leasehold Deed of Trust, Assignment of Leases, Rents, As Extracted Collateral and Contracts, Security Agreement and Fixture Filing. The Purchase Agreement contains representations and warranties, as well as affirmative and negative covenants customary to a transaction of this nature. On October 31, 2019, the Company and PDK amended the Purchase Agreement and entered into the Amended Pre-Paid Forward Agreement (the "Amended Agreement") to adjust the second and third tranches paid to the Company, to reduce the total number of ounces of gold subject to the Purchase Agreement, and to revise other provisions therein. The second tranche was reduced from $4,500,000 to $1,600,000, and the third tranche was reduced from $5,500,000 to $1,400,000. The second tranche was received on October 31, 2019 upon execution of the Amended Agreement and the third tranche was received on December 27, 2019, with funds to be dedicated in accordance with the revised budget furnished with the Amended Agreement. The amendment also reduced the total number of ounces of gold to be delivered under the agreement from 73,910 to 47,045. The prepayment has been accounted as deferred revenue and is presented as a prepaid forward gold contract liability on the balance sheet at December 31, 2019 with a total balance of $13,600,000 which is the $14,200,000 received from PDK in Tranches 1-3, less the $600,000 upfront fee paid by the Company. Under the terms of the Amended Agreement, the Company is obligated to deliver gold in the following quantities: Months Gold Ounces per Month Total Gold Ounces December 2020 655 655 January 2021 to March 2021 896 2,688 April 2021 to March 2022 911 10,932 April 2022 to March 2023 1,396 16,752 April 2023 to December 2023 1,753 15,777 January 2024 241 241 47,045 The Amended Agreement also altered the total amount that PDK may reduce the number of ounces of gold to be delivered under the Amended Agreement in exchange for common shares of the Company. Under the Amended Agreement, PDK may reduce the required number of ounces by up to 8,000 ounces in exchange for common shares of the Company. |
Reclamation Bonds
Reclamation Bonds | 12 Months Ended |
Dec. 31, 2019 | |
Reclamation Bonds [Abstract] | |
RECLAMATION BONDS | NOTE 4 – RECLAMATION BONDS At December 31, 2019 and 2018, the Company has a surety bond of $674,000 in an escrow account with the bonding company for reclamation of its property. This escrowed amount is held at Bank of New York, Mellon for the Company's benefit. It may not be released to the Company without the prior consent of the surety bondholder. The escrowed amount does not earn interest. In March 2019, as part of the Amended Lease (Note 7), the Company returned the Cactus Mill property and the reclamation bond of $42,802 on that property to Clifton Mining Company. Total reclamation bonds posted at December 31, 2019 and 2018 are $759,351 and $753,290, respectively, which consists of the above escrowed amount along with certificate of deposits held with the state of Utah for the remaining bonds on the property, including exploration bonds. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 5 – INVENTORIES Inventories at December 31, 2019 and 2018 consists of the following: December 31, December 31, Ore on leach pad $ 3,903,297 $ 1,193,341 Carbon column in process 235,762 - Finished goods 194,623 - Total $ 4,333,682 $ 1,193,341 Inventories at December 31, 2019 and 2018 were valued at net realizable value because production costs were greater than the amount the Company expects to receive on the sale of the estimated gold ounces contained in inventories at both period-end dates. The write-down to net realizable value was $870,085 and $656,257 at December 31, 2019 and 2018. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 - PROPERTY AND EQUIPMENT The following is a summary of property and equipment at December 31, 2019 and 2018: December 31, December 31, 2019 2018 Equipment $ 5,336,011 $ 3,093,690 Furniture and fixtures 6,981 6,981 Electronic and computer equipment 50,587 52,874 Vehicles 256,815 108,089 Land improvements 44,840 - 5,695,234 3,261,634 Less accumulated depreciation (2,254,961 ) (1,856,149 ) 3,440,273 1,405,485 Kiewit property facilities 2,497,436 2,497,436 Less accumulated amortization (650,194 ) (487,214 ) 1,847,242 2,010,222 Total $ 5,287,515 $ 3,415,707 For the Kiewit property facilities, amortization based on total units of production was $162,980 for the year ended December 31, 2019. There was no amortization in the year ended December 31, 2018 due to the lack of production. |
Mineral Properties and Interest
Mineral Properties and Interests | 12 Months Ended |
Dec. 31, 2019 | |
Mineral Industries Disclosures [Abstract] | |
MINERAL PROPERTIES AND INTERESTS | NOTE 7 – MINERAL PROPERTIES AND INTERESTS Mineral properties and interests as of December 31, 2019 and 2018 are as follows: December 31, December 31, Kiewit and surrounding claims $ 3,700,000 $ 600,000 JJS property 250,000 - Total 3,950,000 600,000 Less Accumulated amortization (475,401 ) (36,948 ) 3,474,599 563,052 Asset retirement obligation Kiewit Site 452,193 452,193 Kiewit Exploration 11,126 11,126 Cactus Mill - 26,234 Total 463,319 489,553 Less accumulated amortization (208,281 ) (173,604 ) 255,038 315,949 Total $ 3,729,637 $ 879,001 On June 13, 2019, the Company entered into an agreement whereby the Company acquired 20 claims adjacent to the Kiewit property from Ben Julian, LLC for $250,000, known as the JJS Property. In 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company ("Clifton") and the Woodman Mining Company for the lease of their property interests in the Gold Hill Mining District of Utah. In March 2019, the Company and Clifton entered into a Second Amended and Restated Lease Agreement (the "Amended Lease"). Under the terms of this Amended Lease, the Company relinquished its leasehold interest in all but 10 of the patented mining claims, for which it retained only the surface rights, and 66 of the unpatented lode mining claims previously held by the Company. The Cactus Mill property was returned to Clifton Mining Company as part of this agreement. As consideration for entering into the Amended Lease, the Company issued 5,500,000 shares of its common stock with a fair value of $2,200,000 which increased the carrying value of the mineral properties and interests. In addition, the Company and Clifton entered into a Registration Rights Agreement to register for resale the shares issued to Clifton which requires the Company to register the shares within 18 months (which is September 7, 2020) following the initial funding received under the Purchase Agreement (Note 3). In the event the Company does not register the shares within the 18-month period, the Company is obligated to pay Clifton a royalty equal to 2.5% of the net smelter returns from the minerals generated from the Company's mining claims. Under the terms of the initial 2009 Joint Venture Agreement, the Company was required to pay a 4% net smelter royalty ("NSR") on base metals in all other areas except for production from the Kiewit gold property and a NSR 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 was also required to pay Clifton a 6% NSR on any production from the Kiewit gold property. As part of the Purchase Agreement (Note 3) finalized in March 2019, these NSRs were bought out by the Company from Clifton and two other minority royalty holders at a cost of $900,000 which increased the carrying value of the mineral properties and interests. The buyer of the Purchase Agreement (Note 3), PDK, acquired a 4% NSR, previously held by Clifton, on the Kiewit property for $2,200,000. PDK remitted the funds for the NSR directly to Clifton. PDK will receive a 4% net NSR on proceeds from the sale of gold and silver from the Kiewit and JJS properties. Amortization of the mineral properties and interests based on total units of production was $475,682 for the year ended December 31, 2019. There was no amortization in the year ended December 31, 2018 due to lack of production. |
Short-Term Notes Payable - Rela
Short-Term Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Short Term Notes Payable - Related Parties [Abstract] | |
SHORT-TERM NOTES PAYABLE - RELATED PARTIES | NOTE 8 – SHORT-TERM NOTES PAYABLE – RELATED PARTIES During 2018 and the first quarter of 2019, the Company entered into several short-term notes payable with the convertible debt holders (Note 9) and with the Company's president. Total borrowed was $91,680 during the first quarter 2019 and $249,000 during the year ended December 31, 2018. The notes bore interest at 10%, had a 2% loan initiation fee, and were due in full on March 31, 2019. Accrued interest payable to related parties on these notes at December 31, 2019 and December 31, 2018 was nil and $7,243. Interest expense recognized on these loans was $3,382 and $7,243 for the years ended December 31, 2019 and 2018, respectively. These short-term notes were repaid in full, including 10% interest and a 2% loan initiation fee, in March 2019 as part of the terms of the Purchase Agreement. |
Convertible Debt - Related Part
Convertible Debt - Related Parties | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT - RELATED PARTIES | NOTE 9 – CONVERTIBLE DEBT – RELATED PARTIES 2009 Convertible Notes: On November 18, 2009, the Company issued convertible promissory notes to two of its minority shareholders, for a total of $600,000. The notes bore interest at 15% per annum. Interest-only was payable in equal monthly installments of $7,500. The notes were convertible at a rate of $0.70 per share. The Company failed to repay the notes in full on the November 30, 2012 through the 2017 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. In 2014, 2015, 2016, and 2017, the annual issuance of shares of common stock was valued at an estimated $0.04 (total $12,000) each and was accounted for as financing expense. The Company failed to repay the notes on the November 2018 maturity date. During the year ended December 31, 2018, the Company issued shares of common stock valued at $0.40 per share based on the cash price of common stock sales during 2018 which was recognized as financing expense. The due date of the note was extended to May 31, 2019. Interest had not been paid since November 2014. Per the terms of the notes, interest on these notes is not convertible to common stock. On February 28, 2018, the notes were amended changing the interest rate from 15% to 10% effective March 1, 2018 and allowing for accrued interest to be payable in full on May 31, 2019. The amendment further waived the default provision in the notes for past due interest. In addition, as part of the agreement, the convertible feature of the notes was removed. 2016 Convertible Notes: On October 14, 2016, the Company issued additional convertible promissory notes to the convertible debt holders for a total of $250,000. The notes bore interest at 10% per annum and were due in full on September 30, 2018. The notes were convertible at a rate of $0.25 per share. These notes were amended in February 2018 to extend the due date of the notes and the accrued interest to May 31, 2019. Interest on these notes is convertible to common stock. 2017 Convertible Notes: On August 7, 2017, the convertible debt holders agreed to fund up to an additional aggregate of $500,000 under terms similar to existing convertible debt agreements. At December 31, 2017, $428,000 of these funds had been advanced. The remaining $72,000 was advanced in 2018 with the final advance on February 9, 2018. On February 28, 2018, these notes were amended to postpone the maturity date and interest payment date to May 31, 2019. Accrued interest payable to related parties on the above convertible notes payable was nil and $456,750 at December 31, 2019 and 2018, respectively. Interest expense recognized on these loans was $31,412 and $139,314 for the years ended December 31, 2019 and 2018. All of these notes were paid in full, including accrued interest, on March 7, 2019 with funds received under the Purchase Agreement. |
Obligation Under Capital Lease
Obligation Under Capital Lease - Related Party | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
OBLIGATION UNDER CAPITAL LEASE - RELATED PARTY | NOTE 10 – OBLIGATION UNDER CAPITAL LEASE — RELATED PARTY A capital lease was entered into on June 20, 2016 with RMH Overhead, LLC for mining and crushing equipment valued at $185,618, some of which had been previously owned by the Company. RMH Overhead, LLC is an entity owned by the Company’s president, Rick Havenstrite. Lease payments were paid in full, including accrued interest and late fees, in March 2019 with funds received under the Purchase Agreement. The equipment is being amortized over the estimated useful life of the equipment. Accumulated amortization at December 31, 2018 was $66,292. The Company now owns the equipment which is included in property and equipment on the balance sheet. |
Notes Payable - Equipment
Notes Payable - Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable - Equipment [Abstract] | |
NOTES PAYABLE - EQUIPMENT | NOTE 11 – NOTES PAYABLE – EQUIPMENT The following is a summary of the equipment notes payable: December 31, December 31, 2018 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ - $ 27,192 Note payable to CAT Financial, collateralized by used mining equipment due in 36 monthly installments of varying amounts including interest at 4.68%. - 117,002 Note payable to Wheeler Machinery, collateralized by used crushing equipment, due in 9 monthly installments of $39,009. - 145,066 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,674 including interest at 2.99%. - 34,851 Note payable to Epiroc, collateralized by a used Epiroc drill, due in 6 monthly installments of $22,235, beginning October 2019, plus a balloon payment or refinancing prior to April 2020, of $488,317, including interest at 8%. 563,368 - Note payable to Wheeler Machinery, collateralized by a used CAT 740 Haul truck, due in 11 monthly installments of $14,475, beginning May 2019, including interest at 8%, with a balloon payment due in April 2020 of $168,873. 206,682 - Note payable to Wheeler Machinery, collateralized by a used D8T dozer, due in 11 monthly payments of $19,125, beginning August 2019, including interest at 10%, with a balloon payment due in July 2020 of $350,281. 441,989 - Note payable to Komatsu Equipment, collateralized by a used PC490 Excavator, due in 11 monthly payments of $10,320, beginning July 2019, including interest at 9%, with a balloon payment due in March 2020 of $71,372. 90,200 - 1,302,239 324,111 Current portion (1,302,239 ) (324,111 ) Long term portion $ - $ - All principal payments at December 31, 2019 are due in 2020. All of the above notes with balances due at December 31, 2018 were paid in full in March 2019 with funds received under the Purchase Agreement. |
Note Payable - Dmrj
Note Payable - Dmrj | 12 Months Ended |
Dec. 31, 2019 | |
Note Payable - Related Party [Abstract] | |
NOTE PAYABLE - DMRJ | NOTE 12 – NOTE PAYABLE — DMRJ In July 2010, the Company entered into an Investment Agreement with DMRJ. The Agreement had been modified numerous times and operated under the Fourteenth Amendment to the Investment Agreement dated December 22, 2016. The Amendments provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement. At December 31, 2017, DMRJ beneficially owned approximately 77% of the Company (on a fully diluted basis) with Series A, A-2 and B preferred stock shares convertible to 47,211,002 shares of common stock (See Note 15). In the third quarter of 2016, control of the management of DMRJ was given to court appointed trustees of the two major funds of Platinum Partners. On March 8, 2018, the Company finalized an agreement with the trustees to discharge all of the amounts owed by the Company to DMRJ and to extinguish all of DMRJ's shares of the Company's preferred stock in exchange for $625,000. On the date of the agreement, the principal balance of the note was $15,554,552 and accrued interest payable was $9,987,009 for a total balance due of $25,541,561. As a result of the transaction, in the quarter ended March 31, 2018, the Company recognized a gain on extinguishment of debt of $24,916,561. All of the preferred stock of the Company that had been issued to DMRJ in prior years was extinguished. The preferred stock was originally recorded for a total value $4,068,720. As a result of the extinguishment, the Company adjusted accumulated deficit for the value of the preferred stock. This amount is considered a capital contribution and has been added to net income attributable to common stockholders in the calculation of earnings per share for the year ended December 31, 2018. After the above transactions, DMRJ is no longer a shareholder (beneficially or otherwise) of the Company as of March 8, 2018. During the quarter ended March 31, 2018, the existing convertible debt holders funded the $625,000 and modifications to their existing convertible note terms were made in exchange for 4,500,000 shares of the Company's common stock. See Notes 9 and 15. |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ASSET RETIREMENT OBLIGATION | NOTE 13 –ASSET RETIREMENT OBLIGATION Changes in the asset retirement obligation for the years ended December 31, 2019 and 2018 are as follows: December 31, 2019 December 31, 2018 Asset retirement obligation, beginning of period $ 792,747 $ 1,046,621 Reduction in liability due to transfer of Cactus Mill property (40,802 ) - Changes to estimated costs and timing to reclaim - (334,342 ) Accretion expense 74,692 80,468 Asset retirement obligation, end of period $ 826,637 $ 792,747 During the year ended December 31, 2019, the Cactus Mill property was returned to Clifton as part of the terms of the Amended Lease (Note 7). The net asset retirement cost of $17,120 and obligation of $40,802 relating to the Cactus Mill property were eliminated resulting in a gain on settlement of asset retirement obligation of $20,451 recognized in general and administrative expense in the statement of operations. In the fourth quarter of 2018, the Company updated the asset retirement obligation to reflect a plan for reclamation and closure of the mine at the end of its life having estimated undiscounted costs of approximately $1,369,115, an increase of $30,586 from the $1,338,529 in the previous plan. However, the asset retirement asset and obligation decreased by $334,342 as a result of a change in the estimated timing of costs and the impact of discounting the costs to present value. The estimated reclamation costs were discounted using credit adjusted, risk-free interest rate of 10% from the time we incurred the obligation to the time we expect to pay the retirement obligation. |
Settlement of Consulting Contra
Settlement of Consulting Contract | 12 Months Ended |
Dec. 31, 2019 | |
Investments, All Other Investments [Abstract] | |
SETTLEMENT OF CONSULTING CONTRACT | NOTE 14 – SETTLEMENT OF CONSULTING CONTRACT On March 29, 2018, the Company entered into a five-year Agency Agreement (the "Agency Agreement") with H&H Metals Corp., a New York corporation ("H&H"). Under the terms of the Agency Agreement, H&H agreed to provide certain advisory services in regard to natural resources activities and to assist in securing purchasers for minerals produced from its mining properties. On January 16, 2019, as a condition for entering into the Purchase Agreement (Note 3), the Company negotiated a termination of the Agency Agreement (the "Termination Agreement") with H&H. Under the terms of the Termination Agreement, the Company paid H&H $600,000 in cash and agreed to pay an additional $200,000 within 18 months. The Company also issued 250,000 shares of its common stock with a fair value of $100,000 to H&H. In addition, Phillip H. Holme, a principal of H&H, became a director of the Company. The Company recognized a loss on settlement of consulting contract of $900,000 during the year ended December 31, 2019. The balance of $200,000 is due in July 2020, under the settlement agreement. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
CAPITAL STOCK | NOTE 15 - 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. 2019 Activity During the year ended December 31, 2019, the Company had the following transactions relating to common stock. All shares issued were valued at $0.40 per share based on the most recent sale of common stock for cash: ● Issued 5,500,000 shares of common stock to Clifton in connection with the Amended Lease (Note 7). The fair value of these shares was $2,200,000. ● Issued 250,000 shares of common stock to H&H in connection with settlement of a consulting contract (Note 14). The fair value of these shares was $100,000. ● In connection with the settlement of stock redeemable with gold proceeds issued in 2012, the Company allowed investors to retain 130,000 shares of common stock that had been issued in connection with a financing in 2012. The fair value of these shares was $52,000. 2018 Activity During the year ended December 31, 2018, the Company had the following transactions relating to common stock: ● Sold 4,500,000 shares of common stock to the convertible debt holders for $625,000 in cash and several concessions as to the convertibility, due dates and default provisions on their outstanding debt. See Note 9. ● Sold 2,125,000 shares of its common stock at $0.40 per share for cash proceeds of $850,000. ● Issued 300,000 shares of common stock to the convertible debt holders under the terms of the debt agreements, which required this stock issuance when the Company failed to repay the convertible debt in full on the November 31, 2018 maturity date. Preferred Stock The Company’s Articles of Incorporation authorized 10,000,000 shares of $0.001 par value Preferred Stock available for issuance with such rights and preferences, including liquidation, dividend, conversion, and voting rights, as the Board of Directors may determine. On March 8, 2018, the Company finalized an agreement with the trustees of DMRJ, who owned all of the Series A, A-2 and Series B outstanding preferred stock. This agreement discharged all of the debt owed by the Company to DMRJ and its related affiliates and returned all of the shares of preferred stock to the Company in exchange for $625,000. The Company then cancelled all of the preferred shares of stock. As a result, DMRJ relinquished all ownership in the Company. See Note 12. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 16 – INCOME TAXES The Company did not recognize a tax benefit for the year ended December 31, 2019 due to ongoing net losses. The Company did not recognize a tax provision for the year ended December 31, 2018 due to the availability of net operating loss carry forwards. The components of the Company's net deferred tax assets are as follows: 2019 2018 Deferred tax asset: Net operating loss carryforward $ 1,784,000 $ 952,000 Property and equipment 37,000 37,000 Exploration costs 58,000 85,000 Stock based compensation 96,000 96,000 Financing costs - 23,000 Asset retirement obligation 54,000 42,000 Total deferred tax assets 2,029,000 1,235,000 Valuation allowance (2,029,000 ) (1,235,000 ) Net deferred tax assets $ - $ - Deferred income taxes arise from timing differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. A deferred tax asset valuation allowance is recorded when it is more likely than not that deferred tax assets will not be realized. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax assets, a valuation allowance equal to 100% of the deferred tax assets has been recorded at December 31, 2019 and 2018. A reconciliation between the statutory federal income tax rate and the Company's tax provision (benefit) is as follow: December 31, 2019 December 31, 2018 Amount computed using the statutory rate $ (793,000 ) (21 %) $ 4,482,000 (21 %) Other (1,000 ) - (8,000 ) - Change in valuation allowance 794,000 21 % (4,474,000 ) 21 % Total income tax provision (benefit) $ - - % $ - - % At December 31, 2019 the Company had federal net operating loss carry forwards of approximately $8.5 million, $4.6 million of which expire between 2028 through 2037. The remaining balance of $3.9 million will never expire but its utilization is limited to 80% of taxable income in any future year. During the years ended December 31, 2019 and 2018, there were no material uncertain tax positions taken by the Company. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2019 and 2018. The Company's federal income tax returns for fiscal years 2014 through 2019 remain open and subject to examination. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 – RELATED PARTY TRANSACTIONS In addition to transactions disclosed in Notes 8, 9, 10 and 19, the Company had the following related party transaction. The Company has a month to month lease agreement for its office space with RMH Overhead, LLC, a company owned by Rick Havenstrite, the Company's President and a director. The Company recognized rent expense of $12,000 for the years ended December 31, 2019 and 2018, respectively, under this lease. At December 31, 2019 and 2018, amounts due to RMH Overhead, LLC of nil and $18,750, respectively, are included in in accounts payable and accrued expenses on the balance sheet. The Company compensates directors for their contributions to the management of the Company, with one director receiving $6,000 per month and the other two directors receiving $5,000 per quarter. At December 31, 2019 and December 31, 2018, nil and $94,000, respectively, was due to directors. The amounts due at December 31, 2018 were paid in full in March 2019 with funds received under the Purchase Agreement. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
REVENUE RECOGNITION | NOTE 18 – REVENUE RECOGNITION Product sales for the years ended December 31, 2019 and 2018 are shown below. At December 31, 2019 and December 31, 2018, the Company did not have a gold sales receivable balance. Year ended 2019 2018 Gold $ 1,010,080 $ 248,344 Silver 11,928 3,060 Less: Royalties and participation payments (125,591 ) (13,159 ) Other charges (7,106 ) (8,776 ) Total $ 889,311 $ 229,469 For the year ended December 31, 2019, all revenue was from sales to Asahi Refining. For the year ended December 31, 2018, all revenue was from sales to H&H Metals Corp. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 19—STOCK OPTIONS The Company has reserved 2,400,000 shares under its 2018 Stock Incentive Plan (the "Plan"). The Plan was adopted by the board of directors on March 28, 2018, retroactive to February 23, 2018, as a vehicle for the recruitment and retention of qualified employees, officers, directors, consultants, and other service providers. The Plan is administered by the Board of Directors. The Company may issue, to eligible persons, restricted common stock, incentive and non-statutory options, stock appreciation rights and restricted stock units. The terms and conditions of awards under the Plan will be determined by the Board of Directors. On February 23, 2018, the Board approved the grant of an aggregate of 2,400,000 non-statutory options under the 2018 Plan exercisable at $0.40 per share which expire February 23, 2023 in the amounts and to the following: ● Rick Havenstrite, President and CEO – 1,000,000 options ● Howard Crosby, Director – 1,000,000 options ● John Ryan, Director – 200,000 options ● Linde Havenstrite, Project Engineer – 200,000 options The options were fully vested on the date of grant. Assumptions used in calculating the fair value during the year ended December 31, 2018 were as follows: Annual dividend yield - Expected life (years) 5.0 Risk-free interest rate 2.54 % Expected volatility based on comparable peers 51.2 % Common stock price based on most recent sale of common stock for cash $ 0.40 The fair value of the options of $456,000 was recognized as stock based compensation cost for the year ended December 31, 2018, which was included in general and administrative expenses. Outstanding options at December 31, 2019 were 2,400,000, have a remaining life of 3.15 years, and had no intrinsic value. No options were granted, expired, or were exercised during the year ended December 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 – COMMITMENTS AND CONTINGENCIES In addition to commitments disclosed in Notes 3 and 7, the Company had the following commitments and contingencies. Personal property tax and other accrued liabilities Personal property tax for Tooele County, Utah, is billed and becomes due on November 30 of each year. At December 31, 2019, the amount due to Tooele County is nil. At December 31, 2018, the balance due for these taxes was $134,687 which included delinquent taxes from prior years. The balance was paid in full in March 2019 with funds received under the Purchase Agreement. Employment Agreements The Company has an employment agreement with Mr. Havenstrite as President of the Company, which is ongoing. The agreement, as amended, requires Mr. Havenstrite to meet certain time requirements and limits the number of other board member obligations in which he can participate. The agreement allows for a base annual salary of $144,000 plus certain performance compensation upon fulfillment of established goals. The agreement allows the board of directors to terminate Mr. Havenstrite’s employment at any time, providing for a severance payment upon termination without cause. At December 31, 2019 and December 31, 2018, accrued compensation of nil and $828,039, were due to officers of the Company. Of the amounts accrued at December 31, 2019 and December 31, 2018, accrued compensation of nil and $593,232 is due to Rick Havenstrite and nil and $234,807 is due to Marianne Havenstrite, Treasurer and Principal Financial Officer. Finder’s Agreement On May 11, 2018, the Company entered into an agreement with Mount Royal Consultants (Mount Royal) to assist in finding prospective investors. Mount Royal would receive a finder’s fee of 7% for a connection with a company that resulted in a qualified investment consisting of equity securities or a fee of 3% for a connection with a company that resulted in a purchase of debt securities. On March 7, 2019, the Company closed a Purchase Agreement (Note 3) to a buyer for the purchase of gold produced from the Company’s mining property. This agreement was deemed to be subject to the finder’s fee and resulted in a payment to Mount Royal of $318,000, 3% of the $10,600,000 beneficially received by the Company in accordance with the terms of the Purchase Agreement. On November 1, 2019, an additional payment of 3% of the Tranche 2 payment received by the Company resulted in a payment of $48,000 to Mount Royal and a third payment of $42,000 was issued after receipt of the Tranche 3 payment on December 27, 2019. Future amounts to be received from investors could also be subject to this agreement. During the years ended December 31, 2019 and 2018, the Company recognized $408,000 and nil, respectively, as consulting expense relating to this agreement. Stock Redeemable with Gold Proceeds In 2012, the Company sold 130,000 shares of its common stock. Under the terms of this offering, the shares could be redeemed for cash generated from the sale of gold. Each investor received 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, the shares were initially recorded as a liability and not as equity. All investors opted to convert their shares for cash from 5% of the gold sales. At December 31, 2018, included in accounts payable was $151,405 to investors for their portion of gold sales occurring October 2014 to June 2015. This balance was paid to the investors in March 2019 fully satisfying the terms of the original offering. Upon full satisfaction of the redemption provisions, the shares of common stock should have been returned to the Company. However, the Company allowed the investors to keep the shares. The Company recognized an expense of $63,094, which includes $52,000 for the fair value of the shares of common stock, as loss on settlement of redeemable stock during the year ended December 31, 2019. Mining Leases Annual claims fees are currently $155 per claim plus administrative and school trust land fees. Total paid for claims fees in 2019 was $14,794. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Method | Accounting Method The Company's financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. |
Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees | Accounting for Stock Options and Stock Awards Granted to Employees and Nonemployees All transactions in which goods or services are received for the issuance of shares of the Company's common stock or options to purchase shares of common stock are accounted for based on the fair value of the goods or services received or the fair value of the equity interest issued, whichever is more reliably measurable. The Company estimates the fair value of stock-based compensation using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected life"), the estimated volatility of the Company's common stock price over the expected term ("volatility"), the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of the fair value of stock-based compensation. |
Use of Estimates | 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 number of gold ounces in and costing of inventories, the recoverability of the cost of mining claims, asset retirement obligation, stock-based compensation, determination of the fair value of common stock issued, deferred tax assets and related valuation allowances. Actual results could differ from those estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to conform prior periods' amounts to the current presentation. These reclassifications have no effect on the results of operations, stockholders' equity, and cash flows previously reported. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less when purchased to be cash equivalents. |
Reclamation bonds | Reclamation bonds Reclamation bonds primarily represent bonds and are restricted primarily for reclamation funding which are carried at cost plus earned interest. Reclamation bonds are shown as a non-current asset and is included in the balance sheet. See Note 4. |
Inventories | Inventories The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting "pregnant" solution is further processed in a plant where gold is recovered. The Company records ore on leach pad, solution in carbon columns in process and gold concentrate, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value. Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; amortization of property, equipment, and mineral properties; and mine administrative expenses. Costs are removed from ore on leach pads as ounces are recovered, based on the average cost per recoverable ounce of gold on the leach pad. Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type). The nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time. As of December 31, 2019, the Company had a limited operating history and actual results only over a short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests with only limited refinements. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12 to 18 months. At the end of each reporting period, inventory is adjusted to the lower of average cost or net realized value. See Note 5. |
Property and Equipment | 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 three 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 expensed as incurred. Replacements and betterments that extend the useful life of the property and equipment 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. See Note 6. |
Mineral Properties and Interests | Mineral Properties and Interests The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights. Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ore reserves. Estimates for ore reserves are a key component in determining units of production rates. Estimates of ore reserves, mineralized material, and other resources may change, possibly in the near term, resulting in changes to rates in future reporting periods. The Company does not have proven and probable reserves at this time. 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. Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing. These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility. Additionally, interest is capitalized to mine development until such assets are ready for their intended use. See Note 7. |
Mineral Exploration and Development Costs | Mineral Exploration and Development Costs Until proven and probable reserves (as defined by SEC Guide 7) are established, all exploration expenditures are expensed as incurred. Once such reserves are established, expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operations, are capitalized and will be amortized on units of production basis over proven and probable reserves. Previously capitalized costs are expensed in the period the property is abandoned. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates the carrying amounts of its long-lived assets for impairment whenever events and circumstances indicate the carrying value may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. Estimated undiscounted future net cash flows from each mineral property are calculated using estimated future production, three-year average metals prices, operating capital and costs, and reclamations costs. An impairment loss is recognized when the estimated discounted future cash flows expected to result from the use of an asset are less than the carrying amount of the asset. The Company's estimates of future cash flows are subject to risks and uncertainties. It is reasonably possible that changes in estimates could occur which may affect the expected recoverability of the Company's investments in mineral properties. |
Provision for Taxes | Provision for Taxes Income taxes are provided based upon the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the "more likely than not" standard to allow recognition of such an asset. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for income tax purposes. When applicable, the Company will recognize a liability for unrecognized tax benefits. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. See Note 16. |
Earnings Per Share | 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. 2019 2018 Net income (loss) $ (3,776,293 ) $ 21,344,498 Deemed capital contribution on extinguishment of preferred stock - 4,068,720 Net income (loss) available to common shareholders - basic (3,776,293 ) 25,413,218 Interest expense on convertible notes payable -related parties - 74,465 Net income (loss) available to common shareholders - diluted $ (3,776,293 ) $ 25,487,683 Weighted average shares outstanding - basic 25,591,877 19,196,808 Dilutive shares – convertible notes payable – related parties - 3,457,603 Weighted average shares outstanding - diluted 25,591,877 22,654,411 Basic income (loss) per share $ (0.15 ) $ 1.32 Diluted income (loss) per share $ (0.15 ) $ 1.12 At December 31, 2019 and 2018, the common stock equivalents of 2,400,000 associated with the Company's outstanding stock options were excluded from the calculation of diluted earnings per share because in 2019 the options were antidilutive due to the net loss for the period and in 2018 the options' exercise price was not lower than the average share price during the year. |
Revenue Recognition | Revenue Recognition The Company's product consists of gold bearing carbon which is shipped offsite to be turned into an unrefined gold concentrate, which is then further refined to become gold and silver bullion known as doré. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer, and when the transaction price can be determined or reasonably estimated. Management has determined the performance obligation is met and title is transferred when the Company delivers the doré to the customer because, at that time, (i) legal title is transferred to the customer, (ii) the customer has accepted the doré and obtained the ability to realize all of the benefits from the product, (iii) the doré content specifications are known, have been communicated to the customer, and the customer has the significant risks and rewards of ownership to it, and (iv) the Company has the right to payment for the doré. The performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer. Sales and accounts receivable for sales are recorded net of charges from the customer which represent components of the transaction price. Charges are estimated by management upon transfer of risk based on contractual terms, and actual charges typically do not vary materially from management's estimates. Revenue from the sale of dore may be subject to adjustment upon final settlement of estimated metal prices, weights and assays, and are recorded as adjustments to revenue in the period of final settlement of prices, weights and assays; such adjustments are typically not material in relation to the initial invoice amounts. Revenue proceeds are recorded net of the impact of royalties and participation agreements. See Note 18. |
Reclamation and Remediation | Reclamation and Remediation 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 asset. After the initial measurement of the asset retirement obligation, the liability is adjusted when there are changes in the estimated future cash flows due to change in estimated costs or change in time until reclamation will commence. 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. Such assumptions are based on the Company's current mining plan and the best available information for making such estimates. See Note 13. 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. |
Financial Instruments | Financial Instruments The Company's financial instruments include cash and cash equivalents as well as various notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity and interest rates of these financial instruments, approximates fair value at December 31, 2019 and 2018. |
Fair Value Measurements | Fair Value Measurements The Company discloses the following information for each class of assets and liabilities that are measured at fair value: 1. the fair value measurement; 2. the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3); 3. for fair value measurements using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: a. total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earnings are reported in the statement of operations; b. the amount of these gains or losses attributable to the change in unrealized gains or losses relating to those assets or liabilities still held at the reporting period date and a description of where those unrealized gains or losses are reported; c. purchases, sales, issuances, and settlements (net); and d. transfers into and/or out of Level 3. 4. the amount of the total gains or losses for the period 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 and a description of where those unrealized gains or losses are reported in the statement of operations; and 5. in annual periods only, the valuation technique(s) used to measure fair value and a discussion of changes in valuation techniques, if any, during the period. At December 31, 2019 and December 31, 2018, the Company has no assets nor liabilities that require measurement at fair value on a recurring basis. |
Going Concern | Going Concern As shown in the accompanying financial statements, the Company had an accumulated deficit of $9,451,218 through December 31, 2019 and net loss of $3,776,293 for the year ended December 31, 2019 which raises some 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. Although production has restarted in 2019, it has not yet reached optimum levels. The timing and amount of capital requirements will depend on a number of factors, including demand for products, metals market pricing, and the availability of opportunities for expansion through affiliations and other business relationships. Although management has procured funding through a forward sales agreement (Note 3) they intend to continue to seek new capital from equity securities issuances to provide funds needed to increase liquidity, fund internal growth, and fully implement its business plan. The Company's management believes that is has sufficient funds to meet its obligations and continue production over the next twelve months. |
New Accounting Pronouncements | New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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. Upon implementation of the new guidance, the Company will be required to recognize a liability and right-of-use asset for its operating leases. The Company has elected the transition option to apply the new guidance at the effective date without adjusting comparative periods presented. Adoption of the ASU on January 1, 2019 had no material impact to the Company's financial statements as the Company has no contracts that meet the criteria of this ASU. In June 2018, the FASB issued ASU No. 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The update involves simplification of several aspects of accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718 to include nonemployee awards. The update was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this update as of January 1, 2019 did not have a material impact on the Company's financial statements. In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The update removes, modifies and makes additions to certain disclosure requirements with respect to fair value measurements. The update is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of this update on fair value measurement disclosures. 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 financial statements upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of net income (loss) available to common shareholders | 2019 2018 Net income (loss) $ (3,776,293 ) $ 21,344,498 Deemed capital contribution on extinguishment of preferred stock - 4,068,720 Net income (loss) available to common shareholders - basic (3,776,293 ) 25,413,218 Interest expense on convertible notes payable -related parties - 74,465 Net income (loss) available to common shareholders - diluted $ (3,776,293 ) $ 25,487,683 Weighted average shares outstanding - basic 25,591,877 19,196,808 Dilutive shares – convertible notes payable – related parties - 3,457,603 Weighted average shares outstanding - diluted 25,591,877 22,654,411 Basic income (loss) per share $ (0.15 ) $ 1.32 Diluted income (loss) per share $ (0.15 ) $ 1.12 |
Prepaid Forward Gold Contract_2
Prepaid Forward Gold Contract Liability (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Forward Gold Sales Contract Liability [Abstract] | |
Schedule of company is obligated to deliver gold | Months Gold Ounces per Month Total Gold Ounces December 2020 655 655 January 2021 to March 2021 896 2,688 April 2021 to March 2022 911 10,932 April 2022 to March 2023 1,396 16,752 April 2023 to December 2023 1,753 15,777 January 2024 241 241 47,045 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of components of inventories | December 31, December 31, Ore on leach pad $ 3,903,297 $ 1,193,341 Carbon column in process 235,762 - Finished goods 194,623 - Total $ 4,333,682 $ 1,193,341 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, equipment, and accumulated depreciation | December 31, December 31, 2019 2018 Equipment $ 5,336,011 $ 3,093,690 Furniture and fixtures 6,981 6,981 Electronic and computer equipment 50,587 52,874 Vehicles 256,815 108,089 Land improvements 44,840 - 5,695,234 3,261,634 Less accumulated depreciation (2,254,961 ) (1,856,149 ) 3,440,273 1,405,485 Kiewit property facilities 2,497,436 2,497,436 Less accumulated amortization (650,194 ) (487,214 ) 1,847,242 2,010,222 Total $ 5,287,515 $ 3,415,707 |
Mineral Properties and Intere_2
Mineral Properties and Interests (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Mineral Industries Disclosures [Abstract] | |
Schedule of mineral properties and interests | December 31, December 31, Kiewit and surrounding claims $ 3,700,000 $ 600,000 JJS property 250,000 - Total 3,950,000 600,000 Less Accumulated amortization (475,401 ) (36,948 ) 3,474,599 563,052 Asset retirement obligation Kiewit Site 452,193 452,193 Kiewit Exploration 11,126 11,126 Cactus Mill - 26,234 Total 463,319 489,553 Less accumulated amortization (208,281 ) (173,604 ) 255,038 315,949 Total $ 3,729,637 $ 879,001 |
Notes Payable - Equipment (Tabl
Notes Payable - Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Notes Payable - Equipment [Abstract] | |
Schedule of the equipment notes payable | December 31, December 31, 2018 Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,441 including interest at 4.99%. $ - $ 27,192 Note payable to CAT Financial, collateralized by used mining equipment due in 36 monthly installments of varying amounts including interest at 4.68%. - 117,002 Note payable to Wheeler Machinery, collateralized by used crushing equipment, due in 9 monthly installments of $39,009. - 145,066 Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,674 including interest at 2.99%. - 34,851 Note payable to Epiroc, collateralized by a used Epiroc drill, due in 6 monthly installments of $22,235, beginning October 2019, plus a balloon payment or refinancing prior to April 2020, of $488,317, including interest at 8%. 563,368 - Note payable to Wheeler Machinery, collateralized by a used CAT 740 Haul truck, due in 11 monthly installments of $14,475, beginning May 2019, including interest at 8%, with a balloon payment due in April 2020 of $168,873. 206,682 - Note payable to Wheeler Machinery, collateralized by a used D8T dozer, due in 11 monthly payments of $19,125, beginning August 2019, including interest at 10%, with a balloon payment due in July 2020 of $350,281. 441,989 - Note payable to Komatsu Equipment, collateralized by a used PC490 Excavator, due in 11 monthly payments of $10,320, beginning July 2019, including interest at 9%, with a balloon payment due in March 2020 of $71,372. 90,200 - 1,302,239 324,111 Current portion (1,302,239 ) (324,111 ) Long term portion $ - $ - |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of asset retirement obligations | December 31, 2019 December 31, 2018 Asset retirement obligation, beginning of period $ 792,747 $ 1,046,621 Reduction in liability due to transfer of Cactus Mill property (40,802 ) - Changes to estimated costs and timing to reclaim - (334,342 ) Accretion expense 74,692 80,468 Asset retirement obligation, end of period $ 826,637 $ 792,747 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | 2019 2018 Deferred tax asset: Net operating loss carryforward $ 1,784,000 $ 952,000 Property and equipment 37,000 37,000 Exploration costs 58,000 85,000 Stock based compensation 96,000 96,000 Financing costs - 23,000 Asset retirement obligation 54,000 42,000 Total deferred tax assets 2,029,000 1,235,000 Valuation allowance (2,029,000 ) (1,235,000 ) Net deferred tax assets $ - $ - |
Schedule of reconciliation between statutory federal income tax rate and tax provision (benefit) | December 31, 2019 December 31, 2018 Amount computed using the statutory rate $ (793,000 ) (21 %) $ 4,482,000 (21 %) Other (1,000 ) - (8,000 ) - Change in valuation allowance 794,000 21 % (4,474,000 ) 21 % Total income tax provision (benefit) $ - - % $ - - % |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of sales of products by metal | Year ended December 31, 2019 2018 Gold $ 1,010,080 $ 248,344 Silver 11,928 3,060 Less: Royalties and participation payments (125,591 ) (13,159 ) Other charges (7,106 ) (8,776 ) Total $ 889,311 $ 229,469 |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of options were fully vested on the date of grant | Annual dividend yield - Expected life (years) 5.0 Risk-free interest rate 2.54 % Expected volatility based on comparable peers 51.2 % Common stock price based on most recent sale of common stock for cash $ 0.40 |
Organization and Description _2
Organization and Description of Business (Details) | Mar. 08, 2018USD ($) |
Organization and Description of Business (Textual) | |
Note and interest payable | $ 25,541,561 |
Due to DMRJ | $ 625,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Net income (loss) | $ (3,776,293) | $ 21,344,498 |
Deemed capital contribution on extinguishment of preferred stock | 4,068,720 | |
Net income (loss) available to common shareholders - basic | (3,776,293) | 25,413,218 |
Interest expense on convertible notes payable -related parties | 74,465 | |
Net income (loss) available to common shareholders - diluted | $ (3,776,293) | $ 25,413,218 |
Weighted average shares outstanding - basic | 25,591,877 | 19,196,808 |
Dilutive shares – convertible notes payable – related parties | 3,457,603 | |
Weighted average shares outstanding - diluted | 25,591,877 | 22,654,411 |
Basic income (loss) per share | $ (0.15) | $ 1.32 |
Diluted income (loss) per share | $ (0.15) | $ 1.12 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | ||
Accumulated deficit | $ (9,451,218) | $ (5,674,925) |
Net loss | $ (3,776,293) | $ 21,344,498 |
Outstanding stock options were excluded | 2,400,000 | 2,400,000 |
Prepaid Forward Gold Contract_3
Prepaid Forward Gold Contract Liability (Details) | Dec. 31, 2019oz |
Total Gold Ounces | 47,045 |
December 2020 [Member] | |
Gold Ounces per Month | 655 |
Total Gold Ounces | 655 |
January 2021 to March 2021 [Member] | |
Gold Ounces per Month | 896 |
Total Gold Ounces | 2,688 |
April 2021 to March 2022 [Member] | |
Gold Ounces per Month | 911 |
Total Gold Ounces | 10,932 |
April 2022 to March 2023 [Member] | |
Gold Ounces per Month | 1,396 |
Total Gold Ounces | 16,752 |
April 2023 to December 2023 [Member] | |
Gold Ounces per Month | 1,753 |
Total Gold Ounces | 15,777 |
January 2024 [Member] | |
Gold Ounces per Month | 241 |
Total Gold Ounces | 241 |
Prepaid Forward Gold Contract_4
Prepaid Forward Gold Contract Liability (Details Textual) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
PDK [Member] | |
Forward Gold Sales Contract Liability (Textual) | |
Purchase Agreement, description | The Company entered into and closed a Pre-Paid Forward Gold Purchase Agreement (the “Purchase Agreement”) with PDK Utah Holdings L.P. (“PDK”) for the sale and purchase by PDK of gold produced from the Company’s mining property. Under the terms of the original Purchase Agreement, PDK initially agreed to purchase a total of 73,910 ounces of gold from the Company. The Company agreed to deliver ounces of gold produced from the Kiewit property to PDK. The Company would receive proceeds from PDK at the then current spot price less a discount specified in the Purchase Agreement. Prepayment was to be made in three tranches, with the initial tranche in the amount of $11,200,000 having been made upon execution of the Purchase Agreement on March 7, 2019 (the “Initial Funding”), $4,500,000 for Tranche 2 to occur at least six months following the Initial Funding date, and $5,500,000 for Tranche 3 to occur at least 10 months following the Initial Funding date, provided that all conditions precedent for funding Tranches 2 and 3 are met. From the Initial Funding, the Company paid an upfront fee of $600,000 to PDK for expenses incurred in connection with the transaction. The first gold delivery of 655 ounces is due December 2020. |
Total balance of contract liability | $ 13,600,000 |
Amended Agreement, description | The Amended Agreement also altered the total amount that PDK may reduce the number of ounces of gold to be delivered under the Amended Agreement in exchange for common shares of the Company. Under the Amended Agreement, PDK may reduce the required number of ounces by up to 8,000 ounces in exchange for common shares of the Company. |
Tranches [Member] | |
Forward Gold Sales Contract Liability (Textual) | |
Purchase Agreement, description | The Company and PDK amended the Purchase Agreement and entered into the Amended Pre-Paid Forward Agreement (the “Amended Agreement”) to adjust the second and third tranches paid to the Company, to reduce the total number of ounces of gold subject to the Purchase Agreement, and to revise other provisions therein. The second tranche was reduced from $4,500,000 to $1,600,000, and the third tranche was reduced from $5,500,000 to $1,400,000. The second tranche was received on October 31, 2019 upon execution of the Amended Agreement and the third tranche was received on December 27, 2019, with funds to be dedicated in accordance with the revised budget furnished with the Amended Agreement. The amendment also reduced the total number of ounces of gold to be delivered under the agreement from 73,910 to 47,045. |
Amount received from PDK | $ 14,200,000 |
Upfront fee paid | $ 600,000 |
Reclamation Bonds (Details)
Reclamation Bonds (Details) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Reclamation Bonds (Textual) | |||
Surety bond in escrow account | $ 674,000 | $ 674,000 | |
Reclamation bonds | $ 759,351 | $ 753,290 | |
Return property and the reclamation bond | $ 42,802 |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Ore on leach pad | $ 3,903,297 | $ 1,193,341 |
Carbon column in process | 235,762 | |
Finished goods | 194,623 | |
Total | $ 4,333,682 | $ 1,193,341 |
Inventories (Details Textual)
Inventories (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Inventories (Textual) | ||
Write-down to net realizable value | $ 870,085 | $ 656,257 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Total | $ 5,287,515 | $ 3,415,707 |
Property, Plant and Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 5,695,234 | 3,261,634 |
Less accumulated depreciation | (2,254,961) | (1,856,149) |
Property and equipment, Total | 3,440,273 | 1,405,485 |
Property, Plant and Equipment [Member] | Equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 5,336,011 | 3,093,690 |
Property, Plant and Equipment [Member] | Furniture and fixtures [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 6,981 | 6,981 |
Property, Plant and Equipment [Member] | Electronic and computer equipment [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 50,587 | 52,874 |
Property, Plant and Equipment [Member] | Vehicles [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 256,815 | 108,089 |
Property, Plant and Equipment [Member] | Land Improvements [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 44,840 | |
Finite-Lived Intangible Assets [Member] | Kiewit property facilities [Member] | ||
Summary of property, equipment, and accumulated depreciation | ||
Property and equipment, Gross | 2,497,436 | 2,497,436 |
Less accumulated depreciation | (650,194) | (487,214) |
Property and equipment, Total | $ 1,847,242 | $ 2,010,222 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment (Details Textual) | ||
Amortization adjustment | $ 162,980 |
Mineral Properties and Intere_3
Mineral Properties and Interests (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Initial lease fee | ||
Kiewit and surrounding claims | $ 3,700,000 | $ 600,000 |
JJS property | 250,000 | |
Total | 3,950,000 | 600,000 |
Less Accumulated amortization | (475,401) | (36,948) |
Total | 3,474,599 | 563,052 |
Asset retirement obligation | ||
Kiewit Site | 452,193 | 452,193 |
Kiewit Exploration | 11,126 | 11,126 |
Cactus Mill | 26,234 | |
Total | 463,319 | 489,553 |
Less accumulated amortization | (208,281) | (173,604) |
Mineral properties after accumulated depletion | 255,038 | 315,949 |
Total | $ 3,729,637 | $ 879,001 |
Mineral Properties and Intere_4
Mineral Properties and Interests (Details Textual) - USD ($) | Jun. 13, 2019 | Dec. 31, 2019 |
Mineral Properties and Interests; Reclamation Bonds (Textual) | ||
Common stock issued | 5,500,000 | |
Fair value of common stock | $ 2,200,000 | |
Percentage of royalty | 2.50% | |
Mineral properties and amortization | $ 475,682 | |
Agreement, description | In addition, the Company and Clifton entered into a Registration Rights Agreement to register for resale the shares issued to Clifton which requires the Company to register the shares within 18 months (which is September 7, 2020) following the initial funding received under the Purchase Agreement (Note 3). In the event the Company does not register the shares within the 18-month period. | |
Corporate Joint Venture [Member] | ||
Mineral Properties and Interests; Reclamation Bonds (Textual) | ||
Joint venture agreement, description | Under the terms of the initial 2009 Joint Venture Agreement, the Company was required to pay a 4% net smelter royalty (“NSR”) on base metals in all other areas except for production from the Kiewit gold property and a NSR 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 was also required to pay Clifton a 6% NSR on any production from the Kiewit gold property. | |
NSR [Member] | ||
Mineral Properties and Interests; Reclamation Bonds (Textual) | ||
Royalty expense | $ 900,000 | |
Purchase agreement, description | The buyer of the Purchase Agreement (Note 3), PDK, acquired a 4% NSR, previously held by Clifton, on the Kiewit property for $2,200,000. PDK remitted the funds for the NSR directly to Clifton. PDK will receive a 4% net NSR on proceeds from the sale of gold and silver from the Kiewit and JJS properties. | |
Ben Julian, LLC [Member] | ||
Mineral Properties and Interests; Reclamation Bonds (Textual) | ||
Agreement, description | The Company entered into an agreement whereby the Company acquired 20 claims adjacent to the Kiewit property from Ben Julian, LLC for $250,000, known as the JJS Property. |
Short-Term Notes Payable - Re_2
Short-Term Notes Payable - Related Parties (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Short-Term Notes Payable - Related Parties (Textual) | |||
Total borrowings | $ 249,000 | $ 91,680 | |
Short-term debt, percentage bearing interest rate | 10.00% | ||
Loan initiation fee, percentage | 2.00% | ||
Interest expense | $ 3,382 | 7,243 | |
Accrued interest payable | $ 7,243 | ||
Purchase agreement, description | These short-term notes were repaid in full, including 10% interest and a 2% loan initiation fee, in March 2019 as part of the terms of the Purchase Agreement. |
Convertible debt - Related Pa_2
Convertible debt - Related Parties (Details) - USD ($) | Oct. 14, 2016 | Nov. 18, 2009 | Feb. 28, 2018 | Aug. 07, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Convertible Notes - Related Parties (Textual) | |||||||
Convertible debt | $ 600,000 | $ 1,350,000 | |||||
Interest payable | 15.00% | ||||||
Periodic payment of interest | $ 7,500 | ||||||
Conversion price | $ 0.70 | ||||||
Share price per share | $ 0.40 | ||||||
Loan maturity date | May 31, 2019 | ||||||
Interest expense | 46,415 | $ 46,760 | |||||
Minimum [Member] | |||||||
Convertible Notes - Related Parties (Textual) | |||||||
Interest payable | 10.00% | ||||||
Maximum [Member] | |||||||
Convertible Notes - Related Parties (Textual) | |||||||
Interest payable | 15.00% | ||||||
Convertible Debt [Member] | |||||||
Convertible Notes - Related Parties (Textual) | |||||||
Convertible debt | $ 250,000 | $ 500,000 | $ 428,000 | ||||
Interest payable | 10.00% | ||||||
Conversion price | $ 0.25 | ||||||
Accrued interest payable | 456,750 | ||||||
Common stock and principal and interest were initially due date | Sep. 30, 2018 | ||||||
Loan maturity date | May 31, 2019 | ||||||
Convertible debt, description | The remaining $72,000 was advanced in 2018 with the final advance on February 9, 2018. | The Company failed to repay the notes in full on the November 30, 2012 through the 2017 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. In 2014, 2015, 2016, and 2017, the annual issuance of shares of common stock was valued at an estimated $0.04 (total $12,000) each and was accounted for as financing expense. | |||||
Interest expense | $ 31,412 | $ 139,314 |
Obligation under Capital Leas_2
Obligation under Capital Lease - Related Party (Details) - RMH Overhead LLC [Member] - USD ($) | 1 Months Ended | 12 Months Ended |
Jun. 20, 2016 | Dec. 31, 2018 | |
Obligation Under Capital Lease - Related Party (Textual) | ||
Equipment includes assets under capital lease amount | $ 185,618 | |
Accumulated amortization | $ 66,292 |
Notes Payable - Equipment (Deta
Notes Payable - Equipment (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Note payable | $ 1,302,239 | $ 324,111 |
Current portion | $ (1,302,239) | $ (324,111) |
Long term portion | ||
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | $ 27,192 | |
Notes Payable One [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 117,002 | |
Notes Payable Two [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 145,066 | |
Notes Payable Three [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 34,851 | |
Notes Payable Four [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 563,368 | |
Notes Payable Five [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 206,682 | |
Notes Payable Six [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | 441,989 | |
Notes Payable Seven [Member] | ||
Debt Instrument [Line Items] | ||
Note payable | $ 90,200 |
Notes Payable - Equipment (De_2
Notes Payable - Equipment (Details Textual) | 12 Months Ended |
Dec. 31, 2019USD ($)Installments | |
Notes Payable [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 48 |
Installments amount | $ 2,441 |
Interest rate percentage | 4.99% |
Notes Payable One [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 36 |
Interest rate percentage | 4.68% |
Notes Payable Two [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 9 |
Installments amount | $ 39,009 |
Notes Payable Three [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 47 |
Installments amount | $ 11,674 |
Interest rate percentage | 2.99% |
Notes Payable Three [Member] | Komatsu D275 dozer [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 1 |
Installments amount | $ 21,000 |
Notes Payable Four [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 6 |
Installments amount | $ 22,235 |
Interest rate percentage | 8.00% |
Maturity date | Apr. 30, 2020 |
Balloon payment | $ 488,317 |
Notes Payable Five [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 11 |
Installments amount | $ 14,475 |
Interest rate percentage | 8.00% |
Maturity date | Apr. 30, 2020 |
Balloon payment | $ 168,873 |
Notes Payable Six [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 11 |
Installments amount | $ 19,125 |
Interest rate percentage | 10.00% |
Maturity date | Jul. 31, 2020 |
Balloon payment | $ 350,281 |
Notes Payable Seven [Member] | |
Notes Payable - Equipment (Textual) | |
Number of installments | Installments | 11 |
Installments amount | $ 10,320 |
Interest rate percentage | 9.00% |
Maturity date | Mar. 31, 2020 |
Balloon payment | $ 71,372 |
Note Payable - DMRJ (Details)
Note Payable - DMRJ (Details) - USD ($) | Mar. 08, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Note Payable Dmrj (Textual) | |||||
Convertible debt holders | $ 463,993 | ||||
Preferred stock issued | 4,068,720 | ||||
Preferred stock issued | $ 4,068,720 | ||||
Dmrj [Member] | |||||
Note Payable Dmrj (Textual) | |||||
Ownership percentage of stock on a fully-diluted basis | 77.00% | ||||
Convertible shares of common stock | 4,500,000 | 47,211,002 | |||
Convertible debt holders | $ 625,000 | ||||
Preferred stock issued | $ 625,000 | ||||
Debt instrument, description | On the date of the agreement, the principal balance of the note was $15,554,552 and accrued interest payable was $9,987,009 for a total balance due of $25,541,561. As a result of the transaction, in the quarter ended March 31, 2018, the Company recognized a gain on extinguishment of debt of $24,916,561. | ||||
Preferred stock issued | $ 4,068,720 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
Asset retirement obligation, beginning of period | $ 792,747 | $ 1,046,621 |
Reduction in liability due to transfer of Cactus Mill property | (40,802) | |
Changes to estimated costs and timing to reclaim | (334,342) | |
Accretion expense | 74,692 | 80,468 |
Asset retirement obligation, end of period | $ 826,637 | $ 792,747 |
Asset Retirement Obligation (_2
Asset Retirement Obligation (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Dec. 31, 2019 | |
Asset Retirement Obligation (Textual) | ||
Retirement asset and obligation decreased | $ 334,342 | |
Asset Retirement Obligations, Description | The Company updated the asset retirement obligation to reflect a plan for reclamation and closure of the mine at the end of its life having estimated undiscounted costs of approximately $1,369,115, an increase of $30,586 from the $1,338,529 in the previous plan. | The Cactus Mill property was returned to Clifton as part of the terms of the Amended Lease (Note 7). The net asset retirement cost of $17,120 and obligation of $40,802 relating to the Cactus Mill property were eliminated resulting in a gain on settlement of asset retirement obligation of $20,451 recognized in general and administrative expense in the statement of operations. |
Risk-free interest rate | 10.00% |
Settlement of Consulting Cont_2
Settlement of Consulting Contract (Details) - USD ($) | 1 Months Ended | 12 Months Ended |
Jan. 16, 2019 | Dec. 31, 2019 | |
Settlement of Consulting Contract (Textual) | ||
Termination Agreement, description | The Company negotiated a termination of the Agency Agreement (the "Termination Agreement") with H&H. Under the terms of the Termination Agreement, the Company paid H&H $600,000 in cash and agreed to pay an additional $200,000 within 18 months. The Company also issued 250,000 shares of its common stock with a fair value of $100,000 to H&H. In addition, Phillip H. Holme, a principal of H&H, became a director of the Company. | |
Settlement of consulting contract | $ 900,000 | |
Settlement agreement | $ 200,000 | |
Consulting Contract Due date | Jul. 31, 2020 |
Capital Stock (Details)
Capital Stock (Details) - USD ($) | Mar. 08, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2012 |
Capital Stock (Textual) | ||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||
Voting rights, description | 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. | |||
Common stock per share | $ 0.40 | |||
Common stock issue | 5,500,000 | |||
Fair value of common stock | $ 2,200,000 | |||
2019 Activity [Member] | ||||
Capital Stock (Textual) | ||||
Common stock issue | 250,000 | 130,000 | ||
Fair value of common stock | $ 100,000 | $ 52,000 | ||
2018 Activity [Member] | ||||
Capital Stock (Textual) | ||||
Shares of common stock sold | 2,125,000 | |||
Cash proceeds | $ 850,000 | |||
Common stock per share | $ 0.40 | |||
Agreement for debt owed related, description | This agreement discharged all of the debt owed by the Company to DMRJ and its related affiliates and returned all of the shares of preferred stock to the Company in exchange for $625,000. | |||
2018 Activity [Member] | Convertible debt holders [Member] | ||||
Capital Stock (Textual) | ||||
Shares of common stock sold | 300,000 | 4,500,000 | ||
Cash proceeds | $ 625,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax asset: | ||
Net operating loss carryforward | $ 1,784,000 | $ 952,000 |
Property and equipment | 37,000 | 37,000 |
Exploration costs | 58,000 | 85,000 |
Stock based compensation | 96,000 | 96,000 |
Financing costs | 23,000 | |
Asset retirement obligation | 54,000 | 42,000 |
Total deferred tax assets | 2,029,000 | 1,235,000 |
Valuation allowance | (2,029,000) | (1,235,000) |
Net deferred tax assets |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Amount computed using the statutory rate, amount | $ (793,000) | $ 4,482,000 |
Amount computed using the statutory rate, percent | (21.00%) | (21.00%) |
Other, amount | $ (1,000) | $ (8,000) |
Other, percent | ||
Change in valuation allowance, amount | $ 794,000 | $ (4,474,000) |
Change in valuation allowance, percent | 21.00% | 21.00% |
Total income tax provision (benefit), amount | ||
Total income tax provision (benefit), percent |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Income Taxes (Textua) | |
Net deferred tax assets, description | The Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax assets, a valuation allowance equal to 100% of the deferred tax assets. |
Federal net operating loss carry forwards | $ 8,500,000 |
Federal net operating loss carry forwards, description | $4.6 million of which expire between 2028 through 2037. The remaining balance of $3.9 million will never expire but its utilization is limited to 80% of taxable income in any future year. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions (Textual) | ||
Rent expense | $ 12,000 | $ 12,000 |
Accounts payable and accrued expenses | 436,881 | 652,895 |
Director One [Member] | ||
Related Party Transactions (Textual) | ||
Accrued compensation | 6,000 | |
Director Two [Member] | ||
Related Party Transactions (Textual) | ||
Accrued compensation | 5,000 | |
Director [Member] | ||
Related Party Transactions (Textual) | ||
Due to directors | 94,000 | |
RMH Overhead, LLC [Member] | ||
Related Party Transactions (Textual) | ||
Accounts payable and accrued expenses | $ 18,750 | $ 18,750 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Gold | $ 1,010,080 | $ 248,344 |
Silver | 11,928 | 3,060 |
Less: Royalties and participation payments | (125,591) | (13,159) |
Other charges | (7,106) | (8,776) |
Total | $ 889,311 | $ 229,469 |
Stock Options (Details)
Stock Options (Details) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Share-based Payment Arrangement [Abstract] | |
Annual dividend yield | |
Expected life (years) | 5 years |
Risk-free interest rate | 2.54% |
Expected volatility based on comparable peers | 51.20% |
Common stock price based on most recent sale of common stock for cash | $ 0.40 |
Stock Options (Details Textual)
Stock Options (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 23, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stock options (Textual) | |||
Reserved shares under stock incentive plan | 2,400,000 | ||
Number of Options, Granted | 2,400,000 | ||
Weighted-Average Exercise Price, Granted | $ 0.40 | ||
Stock based compensation cost | $ 456,000 | ||
Share based compensation expiration date | Feb. 23, 2023 | ||
Outstanding options | $ 2,400,000 | ||
Remaining life of Options | 3 years 1 month 24 days | ||
Rick Havenstrite [Member] | |||
Stock options (Textual) | |||
Number of Options, Granted | 1,000,000 | ||
Howard Crosby [Member] | |||
Stock options (Textual) | |||
Number of Options, Granted | 1,000,000 | ||
John Ryan [Member] | |||
Stock options (Textual) | |||
Number of Options, Granted | 200,000 | ||
Linde Havenstrite [Member] | |||
Stock options (Textual) | |||
Number of Options, Granted | 200,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | May 11, 2018 | Dec. 31, 2012 | Dec. 31, 2019 | Dec. 31, 2018 |
Commitments and Contingencies (Textual) | ||||
Base annual salary | $ 144,000 | |||
Accrued compensation | $ 828,039 | |||
Personal property tax due | $ 134,687 | |||
Proceeds from the sale of stock | $ 130,000 | |||
Finder’s agreement, description | The Company entered into an agreement with Mount Royal Consultants (Mount Royal) to assist in finding prospective investors. Mount Royal would receive a finder’s fee of 7% for a connection with a company that resulted in a qualified investment consisting of equity securities or a fee of 3% for a connection with a company that resulted in a purchase of debt securities. On March 7, 2019, the Company closed a Purchase Agreement (Note 3) to a buyer for the purchase of gold produced from the Company’s mining property. This agreement was deemed to be subject to the finder’s fee and resulted in a payment to Mount Royal of $318,000, 3% of the $10,600,000 beneficially received by the Company in accordance with the terms of the Purchase Agreement. On November 1, 2019, an additional payment of 3% of the Tranche 2 payment received by the Company resulted in a payment of $48,000 to Mount Royal and a third payment of $42,000 was issued after receipt of the Tranche 3 payment on December 27, 2019. Future amounts to be received from investors could also be subject to this agreement. During the years ended December 31, 2019 and 2018, the Company recognized $408,000 and nil, respectively, as consulting expense relating to this agreement. | All investors opted to convert their shares for cash from 5% of the gold sales. At December 31, 2018, included in accounts payable was $151,405 to investors for their portion of gold sales occurring October 2014 to June 2015. This balance was paid to the investors in March 2019 fully satisfying the terms of the original offering. Upon full satisfaction of the redemption provisions, the shares of common stock should have been returned to the Company. However, the Company allowed the investors to keep the shares. The Company recognized an expense of $63,094, which includes $52,000 for the fair value of the shares of common stock, as loss on settlement of redeemable stock during the year ended December 31, 2019. | ||
Investment, determining price | $ 1,000 | |||
Annual claims fees | $ 155 | |||
Rick Havenstrite [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Accrued compensation | 593,232 | |||
Director [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Accrued compensation | 94,000 | |||
Marianne Havenstrite [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Accrued compensation | $ 234,807 |