Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2019 | Feb. 14, 2020 | |
Details | ||
Registrant CIK | 0001288750 | |
Fiscal Year End | --09-30 | |
Registrant Name | Timberline Resources Corp | |
SEC Form | 10-Q | |
Period End date | Dec. 31, 2019 | |
Trading Symbol | TLRS | |
Trading Exchange | NONE | |
Tax Identification Number (TIN) | 82-0291227 | |
Number of common stock shares outstanding | 74,895,260 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | false | |
Entity File Number | 001-34055 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 101 EAST LAKESIDE AVENUE | |
Entity Address, City or Town | COEUR D’ALENE | |
Entity Address, State or Province | ID | |
Entity Address, Postal Zip Code | 83814 | |
City Area Code | 208 | |
Local Phone Number | 664-4859 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Timberline Resources Corp and S
Timberline Resources Corp and Subsidiaries Consolidated Balance Sheets (Interim period unaudited) - USD ($) | Dec. 31, 2019 | Sep. 30, 2019 |
CURRENT ASSETS: | ||
Cash | $ 196,714 | $ 30,757 |
Prepaid expenses and other current assets | 59,870 | 21,132 |
Account receivable | 19,963 | 118,525 |
TOTAL CURRENT ASSETS | 276,547 | 170,414 |
PROPERTY, MINERAL RIGHTS, AND EQUIPMENT, net (NOTE 3) | 14,991,738 | 15,023,843 |
OTHER ASSETS: | ||
Reclamation bonds | 292,684 | 305,184 |
Deposits and other assets | 5,700 | 5,700 |
TOTAL OTHER ASSETS | 298,384 | 310,884 |
TOTAL ASSETS | 15,566,669 | 15,505,141 |
CURRENT LIABILITIES: | ||
Accounts payable | 41,397 | 103,485 |
Accrued expenses | 32,506 | 102,236 |
Accrued interest | 25 | 10,956 |
Accrued interest - related party | 112,267 | 83,107 |
Accrued payroll, benefits and taxes | 17,308 | 24,038 |
Payment obligation | 150,239 | 178,533 |
Senior unsecured note payable - related party, current portions, net of discount | 193,383 | 0 |
TOTAL CURRENT LIABILITIES | 547,125 | 502,355 |
LONG-TERM LIABILITIES: | ||
Asset retirement obligation | 170,651 | 168,619 |
Senior unsecured note payable - related party, net of discount (NOTE 6) | 300,000 | 452,255 |
TOTAL LONG-TERM LIABILITIES | 470,651 | 620,874 |
TOTAL LIABILITIES | 1,017,776 | 1,123,229 |
COMMITMENTS AND CONTINGENCIES (NOTES 3, 5 and 9) | 0 | 0 |
STOCKHOLDERS' EQUITY: (NOTE 8) | ||
Preferred stock, $0.01 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 200,000,000 shares authorized, 74,895,260 and 67,395,260 shares issued and outstanding, respectively | 74,895 | 67,395 |
Additional paid-in capital | 75,492,358 | 74,568,258 |
Accumulated deficit | (61,018,360) | (60,253,741) |
TOTAL STOCKHOLDERS' EQUITY | 14,548,893 | 14,381,912 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 15,566,669 | $ 15,505,141 |
Timberline Resources Corp and_2
Timberline Resources Corp and Subsidiaries Consolidated Balance Sheets (Interim period unaudited) - Parenthetical - $ / shares | Dec. 31, 2019 | Sep. 30, 2019 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 74,895,260 | 67,395,260 |
Common Stock, Shares, Outstanding | 74,895,260 | 67,395,260 |
Timberline Resources Corp and_3
Timberline Resources Corp and Subsidiaries Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING EXPENSES: | ||
Mineral exploration | $ 146,482 | $ 271,525 |
Salaries and benefits | 125,290 | 43,318 |
Professional fees | 68,851 | 92,792 |
Insurance | 18,742 | 22,636 |
Other general and administrative | 152,172 | 81,259 |
TOTAL OPERATING EXPENSES | 511,537 | 511,530 |
LOSS FROM OPERATIONS | (511,537) | (511,530) |
OTHER INCOME (EXPENSE): | ||
Foreign exchange gain and other | 18 | 956 |
Loss on extinguishment of debt - related party | (195,611) | 0 |
Interest expense | (17,363) | (24,849) |
Interest expense - related party | (40,126) | (14,250) |
TOTAL OTHER INCOME (EXPENSE) | (253,082) | (38,123) |
LOSS BEFORE INCOME TAXES | (764,619) | (549,653) |
INCOME TAX PROVISION (BENEFIT) | 0 | 0 |
NET LOSS | $ (764,619) | $ (549,653) |
NET LOSS PER SHARE, BASIC AND DILUTED | $ (0.01) | $ (0.01) |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 73,020,260 | 60,791,369 |
Timberline Resources Corp and_4
Timberline Resources Corp and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Retained Earnings | Total |
Equity Balance at Sep. 30, 2018 | $ 67,395 | $ 74,568,258 | $ (60,253,741) | $ 14,381,912 |
Equity balance, shares at Sep. 30, 2018 | 67,395,260 | |||
Common stock and warrants issued for cash | $ 7,500 | 592,500 | 0 | 600,000 |
Common stock and warrants issued for cash | 7,500,000 | |||
Stock-based compensation | $ 0 | 161,100 | 0 | 161,100 |
Warrants issued for extinguishment of debt, related party | 0 | 170,500 | 0 | 170,500 |
Net loss | $ 0 | 0 | (764,619) | (764,619) |
Equity balance, shares at Dec. 31, 2018 | 74,895,260 | |||
Equity Balance at Dec. 31, 2018 | $ 74,895 | 75,492,358 | (61,018,360) | 14,548,893 |
Equity Balance at Sep. 30, 2019 | $ 53,528 | 73,197,430 | (58,596,458) | 14,654,500 |
Equity balance, shares at Sep. 30, 2019 | 53,527,819 | |||
Common stock and warrants issued for cash | $ 7,500 | 592,500 | 0 | 600,000 |
Common stock and warrants issued for cash | 7,500,000 | |||
Stock-based compensation | $ 0 | 5,000 | 0 | 5,000 |
Warrants issued for joint venture to AGEI | 0 | 176,000 | 0 | 176,000 |
Net loss | $ 0 | 0 | (549,653) | (549,653) |
Equity balance, shares at Dec. 31, 2019 | 61,027,819 | |||
Equity Balance at Dec. 31, 2019 | $ 61,028 | $ 73,970,930 | $ (59,146,111) | $ 14,885,847 |
Timberline Resources Corp and_5
Timberline Resources Corp and Subsidiaries Consoldiated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (764,619) | $ (549,653) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Stock based compensation | 161,100 | 5,000 |
Accretion of asset retirement obligation | 2,032 | 1,935 |
Amortization of discount on senior unsecured notes payable - related party | 16,017 | 20,071 |
Loss on extinguishment of debt - related party | 195,611 | 0 |
Changes in assets and liabilities: | ||
Prepaid expenses and other current assets | (38,738) | (48,251) |
Account receivable | 98,562 | 0 |
Accounts payable | (62,088) | (11,322) |
Accrued expenses | (69,730) | 34,887 |
Accrued interest | (10,931) | 18,890 |
Accrued interest - related party | 29,160 | 14,250 |
Accrued payroll, benefits, and taxes | (6,730) | (18,449) |
Net cash used by operating activities | (450,354) | (532,642) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of mineral rights | 0 | (18,000) |
Refund of reclamation bond | 12,500 | 0 |
Proceeds from lease of mineral rights | 32,105 | 25,594 |
Net cash provided by investing activities | 44,605 | 7,594 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock and warrants, net | 600,000 | 600,000 |
Cash paid on payment obligation | (28,294) | 0 |
Net cash provided by financing activities | 571,706 | 600,000 |
Net increase in cash and cash equivalents | 165,957 | 74,952 |
CASH AT BEGINNING OF PERIOD | 30,757 | 110,736 |
CASH AT END OF PERIOD | 196,714 | 185,688 |
NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Warrants issued for purchase of mineral properties | $ 0 | $ 176,000 |
Note 1 - Organization and Descr
Note 1 - Organization and Description of Business | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 1 - Organization and Description of Business: | NOTE 1 ORGANIZATION AND DESCRIPTION OF BUSINESS: Timberline Resources Corporation (Timberline or the Company) was incorporated in August of 1968 under the laws of the State of Idaho as Silver Crystal Mines, Inc., for the purpose of exploring for precious metal deposits and advancing them to production. In 2008, the Company reincorporated into the State of Delaware, pursuant to a merger agreement approved by its shareholders. Basis of Presentation - |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 2 - Summary of Significant Accounting Policies: | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Companys management, which is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of the financial statements. a. Going Concern The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. b. New Accounting Pronouncements - Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. c. Principles of Consolidation d. Reclassifications e. Reclamation Bonds f. Estimates and Assumptions g. Stock-based Compensation The value of common stock awards is determined based upon the closing price of the Companys stock on the grant date of the award. Compensation expense for grants that vest is recognized ratably over the vesting period. The fair value of stock unit or stock awards is determined by the closing price of the Companys common stock on the date of the grant h. Net Income (Loss) per Share The dilutive effect of convertible and outstanding securities as of December 31, 2019 and 2018 is as follows: December 31, 2019 December 31, 2018 Stock options 5,650,000 3,280,000 Warrants 53,541,908 49,106,373 Total potential dilution 59,191,908 52,386,373 At December 31, 2019 and 2018, the effect of the Companys common stock equivalents would have been anti-dilutive. |
Note 3 - Property, Mineral Righ
Note 3 - Property, Mineral Rights, and Equipment | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 3 - Property, Mineral Rights, and Equipment: | NOTE 3 PROPERTY, MINERAL RIGHTS, AND EQUIPMENT: The following is a summary of property, mineral rights, and equipment and accumulated depreciation at December 31, 2019 and September 30, 2019, respectively: Expected Useful Lives (years) December 31, 2019 September 30, 2019 Mineral rights Eureka - $ 13,671,546 $ 13,703,651 Mineral rights Elder Creek - 1,218,715 1,218,715 Mineral rights Other - 50,000 50,000 Total mineral rights 14,940,261 14,972,366 Equipment and vehicles 2-5 53,678 53,678 Office equipment and furniture 3-7 70,150 70,150 Land - 51,477 51,477 Total property and equipment 175,305 175,305 Less accumulated depreciation (123,828) (123,828) Property, mineral rights, and equipment, net $ 14,991,738 $ 15,023,843 Depreciation expense for the quarters ended December 31, 2019 and 2018, was nil and nil, respectively. For the quarters ended December 31, 2019 and 2018, the Company received lease payments of $32,105 and $25,594, respectively, from a third party on two of the Companys leases at the Companys Eureka property. Monthly payments in the amount of approximately $8,500 are expected to continue to be received. These receipts are recorded as a reduction to property, mineral rights, and equipment. Elder Creek property: The Company met the 2018 work commitment, and issued 5,000,000 Class G warrants during the quarter ended December 31, 2018 as required by the amended agreement, which were fair valued at $176,000 on the date the commitment was satisfied. Lookout Mountain LLC: On June 28, 2019, the Company entered into a Limited Liability Company Agreement to form a Limited Liability Company (the Agreement) with PM&Gold Mines, Inc. (PM&G) for the advanced exploration, and if determined feasible, the development of the Companys Lookout Mountain Gold project. The LLC Agreement calls for PM&G to fund exploration and development activities in two stages for an earned equity in the project. Timberline contributed certain claims that constitute the Lookout Mountain project and adjacent historical Oswego Mine area (the Project) to the limited liability company in exchange for its ownership position. Timberline will manage the project at least through Stage I of investment. PM&G shall retain the right to manage all Stage II activities with or without Timberlines participation. Concurrent with completion of the Agreement, PM&G also participated in a private placement and acquired 3,367,441 shares, or 4.99%, of Timberlines common shares. The placement includes the right of PM&G to maintain its position in Timberline by pro-rata participation in future financings. The initial interests in the LLC are 51% PM&G and 49% Timberline. The Company accounts for its investment in the LLC on the cost basis. During the quarter ended December 31, 2019, the Company paid $19,963 for Stage I exploration costs incurred by the Company on behalf of Lookout Mountain LLC, predominantly consulting and related expenses paid to consultants employed by the Company. The reimbursable costs were included as an Account receivable on the Companys balance sheet. |
Note 4 - Related-party Transact
Note 4 - Related-party Transactions | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 4 - Related-party Transactions: | NOTE 4 RELATED-PARTY TRANSACTIONS: In addition to the related-party transactions described in Notes 3 and 6, during the quarter ended December 31, 2019, a member of the Board of Directors, William Matlack, participated in a private placement offering of Units of the Company, purchasing 7,500,000 units for total proceeds of $600,000. Mr. Matlack subscribed to 7,125,000 units for a total of $570,000. See Note 7 for details of the private placement. In connection with the definitive agreement with AGEI for the purchase of two joint venture interests during the fiscal year ended September 30, 2018, Mr. Donald J. McDowell and Mr. Dave Mathewson were appointed to the Companys Board of Directors on June 21, 2018. Mr. McDowell is the majority owner of AGEI and is the beneficial owner of the majority of the consideration for the Transaction. Therefore, he is the beneficial owner of the majority of the 5,000,000 Class G warrants issued to AGEI at December 31, 2018 . During the quarter ended December 31, 2018, the Company issued 100,000 stock options to acquire shares of common stock of the Company to Mr. Ted R. Sharp, the Companys Chief Financial Officer, appointed to the position in September of 2018. The options were valued at $5,000 based on a fair value computation using a Black-Scholes model at the date of grant. During the quarter ended December 31, 2018, two executive officers participated in a private placement offering of Units of the Company purchasing, in the aggregate, 1,062,500 units for proceeds of $85,000. Each Unit was priced at $0.08 and consisted of one share of common stock of the Company and one common share Class E Warrant, with each warrant exercisable to acquire an additional share of common stock of the Company at a price of $0.14 per share until April 30, 2021. The participation of the executive officers of the Company was done at the same terms as the other investors in the private placement offering. The Board of Directors approved the insiders participation in the private placement. |
Note 5 - Payment Obligation
Note 5 - Payment Obligation | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 5 - Payment Obligation: | NOTE 5 PAYMENT OBLIGATION: On September 12, 2017, the Company entered into an agreement (the Payment Agreement) with a creditor (the Creditor) to pay by way of a payment plan an existing obligation of $250,000 (the Payment Obligation) related to a potential corporate transaction in 2015 that was not completed. Pursuant to the Payment Agreement, the Company agreed to pay the Payment Obligation to the Creditor, including interest, on or before September 12, 2020. Interest accrues on the unpaid principal amount of the Payment Obligation at the Wells Fargo Bank prime rate (4.75% at December 31, 2019), as such rate may change from time to time, plus 3% per annum. The Company agreed to pay the Creditor 5% of the gross proceeds of any funds raised, whether through equity sales, borrowings or sales of assets. If the gross proceeds of any equity financing are at least $1 million, then the Company agreed to also commence monthly installment payments of $10,000 until the Payment Obligation is paid. On December 30, 2019, the Company entered into Addendum 1 to the Payment Agreement under which Creditor has agreed to waive a default condition in consideration of a $5,000 fee and a payment of $12,500, 5% of the second Senior unsecured note of $250,000. Payment of the remaining $40,470 of delinquent amounts, representing 5% of thee private placements of $80,000, $160,000 and $269,395 respectively and 5% on a Senior unsecured notes payable totaling $300,000, will be paid from the next equity or debt raise in addition to any 5% fee due thereon. The obligation to commence monthly installment payments of $10,000 until the Payment Obligation is paid has not yet been triggered because the Company has not completed a financing with gross proceeds of at least $1 million. The due date of the Payment Agreement was not modified by the Addendum. During the quarter ended December 31, 2019, the Company paid $42,500 including interest of $14,206 to the Creditor. At December 31, 2019, an additional cash payment of $40,470 is due to the Creditor. The balance of the Payment Obligation was $150,239 and $178,533 at December 31, 2019 and September 30, 2019, respectively. |
Note 6 - Senior Unsecured Note
Note 6 - Senior Unsecured Note Payable - Related Party | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 6 - Senior Unsecured Note Payable - Related Party: | NOTE 6 SENIOR UNSECURED NOTE PAYABLE RELATED PARTY: On July 30, 2018, the Company entered into a loan agreement and promissory note with William Matlack, a significant shareholder and a director as of October 29, 2019, (the Lender), thereafter becoming a related party. Under the loan agreement, the Lender loaned the Company $300,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on January 20, 2020, but may be repaid early without penalty. Pursuant to the terms of the loan agreement, the Company issued to the Lender 3,265,500 non-transferrable Series F Warrants to purchase common shares of the Company. The exercise price of the warrants was $0.09, and the warrants contained a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Companys outstanding common shares. The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $110,900, based upon a total fair value as calculated by a Black-Scholes option-pricing model. On October 4, 2019, the Company entered into an agreement with the note holder to extend the due date of the note for a period of three years to mature on January 20, 2023, with the terms of the original note staying the same. The Series F Warrants were cancelled and replaced with 4,000,000 Series K Warrants issued solely in relation to the extension of the note, with expiration at February 1, 2023 and an exercise price of $0.08. As a result of the extension of the due date, this note has been included in long-term debt on the Companys consolidated balance sheet. The modifications to the terms of this note are being accounted for as a Troubled Debt Restructure and extinguishment of debt under ASC 470-60-55 Debt Series K Warrants Issued October 4, 2019 Series F Warrants Canceled October 4, 2019 Expected volatility 147.20% 147.20% Stock price on date of grant $0.07 $0.07 Exercise price $0.08 $0.09 Expected dividends - - Expected term (in years) 3.333 .333 Risk-free rate 1.34% 1.34% Expected forfeiture rate 0% 0% The unamortized discount related to the Series F warrants was $25,111. The net difference in the fair values of the warrants of $170,500, together with the unamortized discount, were recorded as a loss on extinguishment of debt of $195,611 in the quarter ended December 31, 2019. At December 31, 2019, the note payable was $300,000, with all discounts fully amortized. At September 30, 2019, the note payable was $274,889, which is net of the unamortized discount of $25,111. On May 8, 2019, the Company entered into an additional binding loan agreement and promissory note with William Matlack (the Lender). Under the loan agreement, the Lender loaned the Company $250,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on November 7, 2020, but may be repaid early without penalty. Pursuant to the terms of the May 8, 2019 loan agreement, the Company issued to the Lender 3,543,600 non-transferrable Series I Warrants to purchase common shares of the Company. The exercise price of the warrants is $0.07, with a term of eighteen months, and the warrants contain a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Companys outstanding common shares. The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $94,300, based upon a total fair value as calculated by a Black-Scholes option-pricing model. The relative fair value of the warrants was recorded as a discount of the note, with $16,017 amortized to interest expense in the quarter ended December 31, 2019. At December 31, 2019, the note payable was $193,383, net of the unamortized discount of $56,617. At September 30, 2019, the note payable was $177,366, net of the unamortized discount of $72,634. Warrants Issued During the Year Ended September 30, 2019 Expected volatility 138.5% Stock price on date of the note $0.07 Exercise price $0.07 Expected dividends - Expected term (in years) 1.5 Risk-free rate 2.26% Expected forfeiture rate 0% The amortization of discounts was $34,907 and $20,071 for the quarters ended December 31, 2019 and 2018, respectively. The accrued interest on the senior unsecured notes payable was $86,953 and $25,314 at December 31, 2019 and September 30, 2019, respectively. Interest expense related to the Senior unsecured notes payable to this related party was $26,160 for the three months ended December 31, 2019, and $73,714 for the year ended September 30, 2019. The senior unsecured notes payable are senior to all other debt with the exception of the Payment obligation. The notes require that when the Company enters into any other financings, 25% of the proceeds of such financings will be paid toward reduction of the principal and interest accrued on these notes. No such payments have been made by the Company to the Lender, and the Lender has provided a waiver of default on the Notes that would otherwise exist due to these non-payments. |
Note 7 - Common Stock and Warra
Note 7 - Common Stock and Warrants | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 7 - Common Stock and Warrants: | NOTE 7 COMMON STOCK AND WARRANTS: Common Shares - Private Placement On October 23, 2019, the Company closed a private placement offering of 7,500,000 Units of the Company at a price of US$0.08 per Unit, for total proceeds to the Company of $600,000. Each Unit consisted of one share of common stock of the Company and one-half common share purchase Class J Warrant (each whole such warrant a Warrant), with each Warrant exercisable to acquire an additional share of common stock of the Company at a price of US$0.12 per share until the Warrant expiration date of October 15, 2024. As a result, 7,500,000 shares of common stock of the Company and 3,750,000 Warrants were issued and 3,750,000 shares of common stock were reserved for issuance pursuant to Warrant exercises. A director of the Company, William Matlack, participated in the Offering and subscribed for 7,125,000 Units. The Warrants comprised in Mr. Matlacks Units contain a voluntary restriction on exercise preventing Mr. Matlack from completing any Warrant exercise if such exercise would cause him to beneficially own or control 20% or more of the issued and outstanding common shares of the Company. The fair value of warrants was determined with a Black-Scholes option-pricing model to be $266,500. The assumptions used to calculate fair values are noted in the following table: Series J Warrants Issued October 23, 2019 Expected volatility 149.30% Stock price on date of the note $0.08 Exercise price $0.12 Expected dividends - Expected term (in years) .5 5 Risk-free rate 1.58% Expected forfeiture rate 0% The fair value of the warrants was charged to additional paid-in capital as a deemed dividend, due to the warrants being issued with common shares and being immediately exercisable. Warrants During the quarter ended December 31, 2019, there were 3,750,000 Series J Warrants issued pursuant to the private placement offering and 4,000,000 Series K Warrants issued pursuant solely to extension of the Senior unsecured note payable, with 3,265,500 Series F Warrants canceled in connection with the extension. Additionally, there were 3,367,441 Series H Warrants issued pursuant to PM&Gs participation in a private placement in July 2019 that had not been issued or included in the September 30, 2019 warrants outstanding. As a result of these issuances, there were 53,541,908 and 45,689,967 warrants outstanding as of December 31, 2019 and September 30, 2019, respectively. The warrants expire from January 31, 2020 through October 15, 2024. The weighted average exercise price was $0.20 and $0.21 as of December 31, 2019 and September 30, 2019, respectively. |
Note 8 - Stock-based Awards
Note 8 - Stock-based Awards | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 8 - Stock-based Awards: | NOTE 8 STOCK-BASED AWARDS: On October 29, 2019, the Company granted to directors and management stock options to acquire an aggregate of 2,450,000 common shares of the Companys common stock. The options vested immediately and are exercisable at a price of $0.08 per common share for a period of five years from the date of the grant. Also, in connection with his appointment to the Board of Directors, Mr. Matlack was granted 100,000 options to acquire shares of the Companys common stock. The options have an exercise price of $0.08 per share, vested immediately, and have a term of five years. The fair value of the option awards granted during the quarter ended December 31, 2019 was $161,100, measured on the date of the grant with a Black-Scholes option-pricing model using the assumptions noted in the following table: Options Granted During the Quarter Ended December 31, 2019 Expected volatility 149.5% Stock price on date of the note $0.07 Exercise price $0.08 Expected dividends - Expected term (in years) 5 Risk-free rate 1.66% Expected forfeiture rate 0% During the quarter ended December 31, 2018, the Board of Directors issued 100,000 stock options to the Chief Financial Officer. The fair value of the option award was $5,000 and measured on the date of the grant with a Black-Scholes option-pricing model. During the quarter ended December 31, 2018, 100,000 options were terminated as a result of the resignation of a member of the Board of Directors. The following is a summary of options issued and outstanding at December 31, 2019: Options Weighted Average Exercise Price Outstanding at September 30, 2018 3,280,000 $ 0.26 Granted 100,000 0.10 Terminated (100,000) (0.10) Outstanding at September 30, 2019 3,280,000 0.26 Granted 2,550,000 0.08 Expired (180,000) (0.48) Outstanding and exercisable at December 31, 2019 5,650,000 $ 0.17 The aggregate of options exercisable as of December 31, 2019 had an intrinsic value of nil, based on the closing price of $0.07 per share of the Companys common stock on December 31, 2019. |
Note 9 - Commitments and Contin
Note 9 - Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 9 - Commitments and Contingencies: | NOTE 9 COMMITMENTS AND CONTINGENCIES: Mineral Exploration The Company has the following commitments and contingencies: The Elder Creek Project is subject to certain future work expenditure requirements in order for the Company to earn an ownership portion of the property. The Year 1 and Year 2 work commitments were completed by December 31, 2018 and December 31, 2019, respectively: · · · A portion of the Companys mining claims on the Companys properties are subject to lease and option agreements with various terms, obligations, and royalties payable in certain circumstances. The Company pays federal and county claim maintenance fees on unpatented claims that are included in the Companys mineral exploration properties. Should the Company continue to explore all of the Companys mineral properties, it expects annual fees to total approximately $184,906 per year in the future, of which $113,014 is for the two joint venture mineral property interests (See Note 3). The claims maintenance fees for Lookout Mountain LLC are expected to be $97,587 and will be remitted from the earn-in funds provided by PM&G as part of the LLC Agreement. Real Estate Lease Commitments At September 30, 2019, the Company had real estate lease commitments for certain mineral property exploration facilities totaling $72,000 annually. The Companys office in Coeur dAlene, Idaho and its facilities in Eureka, Nevada are rented on a month-to-month basis. |
Note 10 - Subsequent Events
Note 10 - Subsequent Events | 3 Months Ended |
Dec. 31, 2019 | |
Notes | |
Note 10 - Subsequent Events: | NOTE 10 SUBSEQUENT EVENTS: There are no subsequent events to be reported at the date of filing of this report. |
Note 2 - Summary of Significa_2
Note 2 - Summary of Significant Accounting Policies: a. Going Concern (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
a. Going Concern | a. Going Concern The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used. |
Note 2 - Summary of Significa_3
Note 2 - Summary of Significant Accounting Policies: b. New Accounting Pronouncements (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
b. New Accounting Pronouncements | b. New Accounting Pronouncements - Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. |
Note 2 - Summary of Significa_4
Note 2 - Summary of Significant Accounting Policies: c. Principles of Consolidation (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
c. Principles of Consolidation | c. Principles of Consolidation |
Note 2 - Summary of Significa_5
Note 2 - Summary of Significant Accounting Policies: d. Reclassifications (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
d. Reclassifications | d. Reclassifications |
Note 2 - Summary of Significa_6
Note 2 - Summary of Significant Accounting Policies: e. Reclamation Bonds (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
e. Reclamation Bonds | e. Reclamation Bonds |
Note 2 - Summary of Significa_7
Note 2 - Summary of Significant Accounting Policies: f. Estimates and Assumptions (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
f. Estimates and Assumptions | f. Estimates and Assumptions |
Note 2 - Summary of Significa_8
Note 2 - Summary of Significant Accounting Policies: g. Stock-based Compensation (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
g. Stock-based Compensation | g. Stock-based Compensation The value of common stock awards is determined based upon the closing price of the Companys stock on the grant date of the award. Compensation expense for grants that vest is recognized ratably over the vesting period. The fair value of stock unit or stock awards is determined by the closing price of the Companys common stock on the date of the grant |
Note 2 - Summary of Significa_9
Note 2 - Summary of Significant Accounting Policies: h. Net Income (Loss) per Share (Policies) | 3 Months Ended |
Dec. 31, 2019 | |
Policies | |
h. Net Income (Loss) per Share | h. Net Income (Loss) per Share The dilutive effect of convertible and outstanding securities as of December 31, 2019 and 2018 is as follows: December 31, 2019 December 31, 2018 Stock options 5,650,000 3,280,000 Warrants 53,541,908 49,106,373 Total potential dilution 59,191,908 52,386,373 At December 31, 2019 and 2018, the effect of the Companys common stock equivalents would have been anti-dilutive. |
Note 2 - Summary of Signific_10
Note 2 - Summary of Significant Accounting Policies: h. Net Income (Loss) per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Tables/Schedules | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | December 31, 2019 December 31, 2018 Stock options 5,650,000 3,280,000 Warrants 53,541,908 49,106,373 Total potential dilution 59,191,908 52,386,373 |
Note 3 - Property, Mineral Ri_2
Note 3 - Property, Mineral Rights, and Equipment: Property, Plant and Equipment (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Tables/Schedules | |
Property, Plant and Equipment | Expected Useful Lives (years) December 31, 2019 September 30, 2019 Mineral rights Eureka - $ 13,671,546 $ 13,703,651 Mineral rights Elder Creek - 1,218,715 1,218,715 Mineral rights Other - 50,000 50,000 Total mineral rights 14,940,261 14,972,366 Equipment and vehicles 2-5 53,678 53,678 Office equipment and furniture 3-7 70,150 70,150 Land - 51,477 51,477 Total property and equipment 175,305 175,305 Less accumulated depreciation (123,828) (123,828) Property, mineral rights, and equipment, net $ 14,991,738 $ 15,023,843 |
Note 6 - Senior Unsecured Not_2
Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and canceled (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Loan Agreement and Note | |
Summary of fair value of warrants issued and canceled | Series K Warrants Issued October 4, 2019 Series F Warrants Canceled October 4, 2019 Expected volatility 147.20% 147.20% Stock price on date of grant $0.07 $0.07 Exercise price $0.08 $0.09 Expected dividends - - Expected term (in years) 3.333 .333 Risk-free rate 1.34% 1.34% Expected forfeiture rate 0% 0% |
Note 6 - Senior Unsecured Not_3
Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and outstanding (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Additional Loan Agreement and Note | |
Summary of fair value of warrants issued and outstanding | Warrants Issued During the Year Ended September 30, 2019 Expected volatility 138.5% Stock price on date of the note $0.07 Exercise price $0.07 Expected dividends - Expected term (in years) 1.5 Risk-free rate 2.26% Expected forfeiture rate 0% |
Note 7 - Common Stock and War_2
Note 7 - Common Stock and Warrants: Summary of fair value of series J options issued and outstanding (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Series J | |
Summary of fair value of series J options issued and outstanding | Series J Warrants Issued October 23, 2019 Expected volatility 149.30% Stock price on date of the note $0.08 Exercise price $0.12 Expected dividends - Expected term (in years) .5 5 Risk-free rate 1.58% Expected forfeiture rate 0% |
Note 8 - Stock-based Awards_ Su
Note 8 - Stock-based Awards: Summary of fair value of director options issued and outstanding (Tables) | 3 Months Ended |
Dec. 31, 2019 | |
Directors | |
Summary of fair value of director options issued and outstanding | Options Granted During the Quarter Ended December 31, 2019 Expected volatility 149.5% Stock price on date of the note $0.07 Exercise price $0.08 Expected dividends - Expected term (in years) 5 Risk-free rate 1.66% Expected forfeiture rate 0% |
Note 8 - Stock-based Awards_ Sh
Note 8 - Stock-based Awards: Share-based Compensation, Stock Options, Activity (Tables) | 3 Months Ended |
Dec. 31, 2018 | |
Tables/Schedules | |
Share-based Compensation, Stock Options, Activity | Options Weighted Average Exercise Price Outstanding at September 30, 2018 3,280,000 $ 0.26 Granted 100,000 0.10 Terminated (100,000) (0.10) Outstanding at September 30, 2019 3,280,000 0.26 Granted 2,550,000 0.08 Expired (180,000) (0.48) Outstanding and exercisable at December 31, 2019 5,650,000 $ 0.17 |
Note 2 - Summary of Signific_11
Note 2 - Summary of Significant Accounting Policies: h. Net Income (Loss) per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Details | ||
Stock options | 5,650,000 | 3,280,000 |
Warrants | 53,541,908 | 49,106,373 |
Total potential dilution | 59,191,908 | 52,386,373 |
Note 3 - Property, Mineral Ri_3
Note 3 - Property, Mineral Rights, and Equipment: Property, Plant and Equipment (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2019 | Sep. 30, 2019 | |
Details | ||
Mineral rights Eureka | $ 13,671,546 | $ 13,703,651 |
Mineral rights Elder Creek | 1,218,715 | 1,218,715 |
Mineral rights | 50,000 | 50,000 |
Mineral rights | 14,940,261 | 14,972,366 |
Equipment and vehicles | 53,678 | 53,678 |
Office equipment and furniture | 70,150 | 70,150 |
Land | 51,477 | 51,477 |
Property, Plant and Equipment, Gross | 175,305 | 175,305 |
Depreciation, Depletion and Amortization, Nonproduction | (123,828) | |
Property, mineral rights and equipment, net | $ 14,991,738 | $ 15,023,843 |
Note 3 - Property, Mineral Ri_4
Note 3 - Property, Mineral Rights, and Equipment (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation | $ 0 | $ 0 |
Proceeds from lease of mineral rights | $ 32,105 | $ 25,594 |
Elder Creek | ||
Equity Method Investment, Description of Principal Activities | The Company met the 2018 work commitment, and issued 5,000,000 Class G warrants during the quarter ended December 31, 2018 as required by the amended agreement, which were fair valued at $176,000 on the date the commitment was satisfied. | |
Lookout Mountain | ||
Equity Method Investment, Description of Principal Activities | On June 28, 2019, the Company entered into a Limited Liability Company Agreement to form a Limited Liability Company (the “Agreement”) with PM&Gold Mines, Inc. (“PM&G”) for the advanced exploration, and if determined feasible, the development of the Company’s Lookout Mountain Gold project. |
Note 4 - Related-party Transa_2
Note 4 - Related-party Transactions (Details) | 3 Months Ended |
Dec. 31, 2018USD ($)shares | |
Details | |
Related Party Transaction, Description of Transaction | In connection with the definitive agreement with AGEI for the purchase of two joint venture interests during the fiscal year ended September 30, 2018, Mr. Donald J. McDowell and Mr. Dave Mathewson were appointed to the Company’s Board of Directors on June 21, 2018. |
Stock options issued to officer | 100,000 |
Stock options issued to officer, value | $ | $ 5,000 |
Private placement units sold to related parties | 1,062,500 |
Private placement units sold to related parties, value | $ | $ 85,000 |
Private placement units sold to related parties, price per unit | 0.08 |
Note 5 - Payment Obligation (De
Note 5 - Payment Obligation (Details) - USD ($) | Sep. 12, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Details | |||
Debt Instrument, Description | On September 12, 2017, the Company entered into an agreement (the “Payment Agreement”) with a creditor (the “Creditor”) to pay by way of a payment plan an existing obligation of $250,000 (the “Payment Obligation”) related to a potential corporate transaction in 2015 that was not completed. | ||
Payment obligation | $ 150,239 | $ 178,533 |
Note 6 - Senior Unsecured Not_4
Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and canceled (Details) | 3 Months Ended |
Dec. 31, 2019$ / shares | |
Series K issued | |
Expected volatility | 147.20% |
Stock price on date of grant | $ 0.07 |
Exercise price | $ 0.08 |
Expected term simplified | 3.333 |
Risk free interest rate | 1.34% |
Expected forfeiture rate | 0.00% |
Series F canceled | |
Expected volatility | 147.20% |
Stock price on date of grant | $ 0.07 |
Exercise price | $ 0.09 |
Expected term simplified | .333 |
Risk free interest rate | 1.34% |
Expected forfeiture rate | 0.00% |
Note 6 - Senior Unsecured Not_5
Note 6 - Senior Unsecured Note Payable - Related Party: Summary of fair value of warrants issued and outstanding (Details) - Issued during the year | 3 Months Ended |
Dec. 31, 2019$ / shares | |
Expected volatility | 138.50% |
Stock price on date of grant | $ 0.07 |
Exercise price | $ 0.07 |
Expected term simplified | 1.5 |
Risk free interest rate | 2.26% |
Expected forfeiture rate | 0.00% |
Note 7 - Common Stock and War_3
Note 7 - Common Stock and Warrants: Summary of fair value of series J options issued and outstanding (Details) | 3 Months Ended |
Dec. 31, 2019$ / shares | |
Series J Issued | |
Expected volatility | 149.30% |
Stock price on date of grant | $ 0.08 |
Exercise price | $ 0.12 |
Expected term simplified | .55 |
Risk free interest rate | 1.58% |
Expected forfeiture rate | 0.00% |
Series J | |
Stock price on date of grant | $ 0.07 |
Note 8 - Stock-based Awards_ _2
Note 8 - Stock-based Awards: Summary of fair value of director options issued and outstanding (Details) | 3 Months Ended |
Dec. 31, 2019$ / shares | |
Directors | |
Expected volatility | 149.50% |
Exercise price | $ 0.08 |
Expected term simplified | 5 |
Risk free interest rate | 1.66% |
Expected forfeiture rate | 0.00% |
Series J | |
Stock price on date of grant | $ 0.07 |
Note 8 - Stock-based Awards_ _3
Note 8 - Stock-based Awards: Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 3 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2019 | |
Details | |||
Weighted Average Exercise Price, Outstanding | $ 0.17 | $ 0.26 | |
Weighted Average Exercise Price, Granted | 0.08 | $ 0.10 | |
Weighted Average Exercise Price, Expired | $ (0.48) | $ (0.10) |
Note 9 - Commitments and Cont_2
Note 9 - Commitments and Contingencies (Details) | 12 Months Ended |
Sep. 30, 2018 | |
Elder Creek | |
Other Commitments, Description | The Elder Creek Project is subject to certain future work expenditure requirements in order for the Company to earn an ownership portion of the property. |
Mining Claims | |
Other Commitments, Description | A portion of the Company’s mining claims on the Company’s properties are subject to lease and option agreements with various terms, obligations, and royalties payable in certain circumstances. |
Claim Maintenance Fees | |
Other Commitments, Description | The Company pays federal and county claim maintenance fees on unpatented claims that are included in the Company’s mineral exploration properties. Should the Company continue to explore all of the Company’s mineral properties, it expects annual fees to total approximately $184,906 per year in the future, of which $113,014 is for the two joint venture mineral property interests (See Note 3). The claims maintenance fees for Lookout Mountain LLC are expected to be $97,587 and will be remitted from the earn-in funds provided by PM&G as part of the LLC Agreement. |
Real Estate Commitments | |
Other Commitments, Description | At September 30, 2019, the Company had real estate lease commitments for certain mineral property exploration facilities totaling $72,000 annually. The Company’s office in Coeur d’Alene, Idaho and its facilities in Eureka, Nevada are rented on a month-to-month basis. |