0001078782-12-002821.txt : 20121114 0001078782-12-002821.hdr.sgml : 20121114 20121114115045 ACCESSION NUMBER: 0001078782-12-002821 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20120930 FILED AS OF DATE: 20121114 DATE AS OF CHANGE: 20121114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Desert Hawk Gold Corp. CENTRAL INDEX KEY: 0001168081 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 820230997 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-169701 FILM NUMBER: 121202180 BUSINESS ADDRESS: STREET 1: 7723 NORTH MORTON STREET CITY: SPOKANE STATE: WA ZIP: 99208 BUSINESS PHONE: (509) 434-8161 MAIL ADDRESS: STREET 1: 7115 NORTH DIVISION STREET STREET 2: SUITE B #351 CITY: SPOKANE STATE: WA ZIP: 99208 FORMER COMPANY: FORMER CONFORMED NAME: LUCKY JOE MINING CO DATE OF NAME CHANGE: 20020222 10-Q 1 f10q093012_10q.htm SEPTEMBER 30, 2012 FORM 10-Q September 30, 2012 Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark One)


  X  . QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 2012

or


      . TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from _______________________to___________________________


Commission File Number: 333-169701


DESERT HAWK GOLD CORP.

(Exact name of registrant as specified in its charter)


Nevada

82-0230997

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

 

7723 N. Morton St., Spokane, WA

99208

(Address of principal executive offices)

(Zip Code)

 

 

(509) 434-8161

(Registrant’s telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  X  . No      .


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  X  . No      .


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer

      .

Accelerated filer

      .

Non-accelerated filer

      . (Do not check if a smaller reporting company)

Smaller reporting company

  X .


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      . No  X  .


Indicate the number of shares outstanding of the issuer’s common stock, as of November 6, 2012: 8,560,973.




DESERT HAWK GOLD CORP.

Form 10-Q

September 30, 2012


TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

3

 

 

Item 1.  Financial Statements

4

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

20

Item 4.  Controls and Procedures

20

 

 

PART II – OTHER INFORMATION

21

 

 

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

21

Item 6.  Exhibits

21

 

 

SIGNATURES

21





2



PART I – FINANCIAL INFORMATION


Item 1.  Financial Statements


 

 

Page

Consolidated Balance Sheets

 

4

Consolidated Statements of Operations (Unaudited)

 

5

Consolidated Statements of Cash Flows (Unaudited)

 

6

Notes to Unaudited Financial Statements

 

8




3




DESERT HAWK GOLD CORP

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

 

 

 

 

September 30,

 

 

December 31,

 

 

 

 

2012

 

 

2011

ASSETS

 

(unaudited)

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash

$

10,745

 

$

415,090

 

Accounts receivable

 

 

1,475

 

 

66,883

 

Prepaid expenses and other current assets

 

63,852

 

 

92,195

 

     Total Current Assets

 

 

76,072

 

 

574,168

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $140,993 and $88,976

 

325,740

 

 

377,757

MINERAL PROPERTIES AND INTERESTS (Note 4)

 

885,556

 

 

835,237

RECLAMATION BONDS (Note 4)

 

150,581

 

 

149,981

 

 

 

 

 

 

 

TOTAL ASSETS

$

1,437,949

 

$

1,937,143

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

$

111,928

 

$

6,771

 

Accrued expenses

 

75,273

 

 

22,886

 

Derivative liability-put option (Notes 7 and 9)

 

-

 

 

25,193

 

Derivative liability-conversion option (Notes 7 and 8)

 

188,560

 

 

230,714

 

Interest payable (Note 8)

 

885,521

 

 

419,559

 

Notes payable-net of discount (Note 8)

 

4,935,896

 

 

4,710,286

 

Convertible debt-net of discount (Note 6)

 

587,264

 

 

534,764

 

     Total Current Liabilities

 

 

6,784,442

 

 

5,950,173

 

 

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

 

Asset retirement obligation (Note 4)

 

62,141

 

 

57,502

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

6,846,583

 

 

6,007,675

 

 

 

 

 

 

 

 

COMMITMENTS  (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT (Note 3)

 

 

 

 

 

 

Preferred stock, $0.001 par value, 10,000,000 shares authorized

 

 

 

 

 

 

Series A:  958,033 shares issued and outstanding

 

958

 

 

958

 

Series A-1: No shares issued and outstanding

 

-

 

 

-

 

Series A-2: 180,000 and 100,000 shares issued and outstanding, respectively

 

180

 

 

100

 

Common stock,  $0.001 par value, 100,000,000  shares authorized;

8,460,973 and 8,314,883 shares issued and outstanding, respectively

 

8,463

 

 

8,316

 

Additional paid-in capital

 

6,088,487

 

 

5,058,563

 

Accumulated deficit prior to exploration stage

 

(1,016,591)

 

 

(1,016,591)

 

Accumulated deficit during exploration stage

 

(10,490,131)

 

 

(8,121,878)

 

     Total Stockholders' Deficit

 

(5,408,634)

 

 

(4,070,532)

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

$

1,437,949

 

$

1,937,143

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited financial statements




4




DESERT HAWK GOLD CORP

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Period from

 

 

 

 

 

 

 

 

May 1, 2009

 

 

 

 

 

 

 

 

 

 

 

 

(Inception of

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

Exploration Stage)

 

 

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

to September 30,

 

 

 

 

2012

 

2011

 

2012

 

2011

 

2012

 

 

 

 

 

 

 

 

 

 

 

INCOME EARNED DURING EXPLORATION STAGE

 

 

 

 

 

 

 

 

 

   

 

Concentrate sales

 

 

-

 

18,442

 

-

 

903,022

 

969,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

General project costs

 

 

31,008

 

124,570

 

134,906

 

1,047,299

 

1,620,651

 

Exploration expense

 

57,346

 

74,999

 

216,865

 

204,635

 

1,587,449

 

Consulting

 

39,260

 

30,000

 

111,200

 

150,670

 

573,604

 

Officers and directors fees

 

75,000

 

59,188

 

181,923

 

249,486

 

1,022,858

 

Legal and professional

 

16,929

 

10,423

 

69,339

 

75,919

 

433,788

 

General and administrative

 

35,226

 

50,599

 

118,686

 

156,650

 

564,226

 

Depreciation

 

17,402

 

16,360

 

52,017

 

49,982

 

142,359

 

Gain on termination of joint venture agreement

 

(200,000)

 

-

 

(200,000)

 

-

 

(200,000)

 

 

 

 

72,171

 

366,139

 

684,936

 

1,934,641

 

5,744,935

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

(72,171)

 

(347,697)

 

(684,936)

 

(1,031,619)

 

(4,775,030)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

Interest  and other income

 

3,572

 

-

 

3,572

 

14

 

66,423

 

Change in fair value of derivatives

 

42,958

 

(127,178)

 

67,347

 

(103,850)

 

(53,885)

 

Loss on extinguishment of debt  (Note 8)

 

-

 

-

 

-

 

(2,149,404)

 

(2,149,404)

 

Financing expense

 

(31,698)

 

(67,708)

 

(1,069,266)

 

(464,853)

 

(1,917,029)

 

Interest expense

 

(224,183)

 

(207,619)

 

(684,970)

 

(481,405)

 

(1,661,206)

 

 

 

(209,351)

 

(402,505)

 

(1,683,317)

 

(3,199,498)

 

(5,715,101)

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

(281,522)

 

(750,202)

 

(2,368,253)

 

(4,231,117)

 

(10,490,131)

INCOME TAXES

 

-

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

 

$

(281,522)

$

(750,202)

$

(2,368,253)

$

(4,231,117)

$

(10,490,131)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED NET LOSS PER SHARE

$

(0.03)

$

(0.09)

$

(0.28)

$

(0.54)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED

 

8,430,578

 

8,086,844

 

8,394,924

 

7,849,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these unaudited financial statements




5




DESERT HAWK GOLD CORP

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

 

 

 

 

 

 

 

 

 Period from

 

 

 

 

 

 

 May 1, 2009

 

 

 

 

 

 

 

 

 (Inception of

 

 

 

 

Nine Months Ended

 

Exploration Stage)

 

 

 

 

September 30,

 

September 30,

 

 to September 30,

 

 

 

2012

 

2011

 

2012

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

$

(2,368,253)

$

(4,231,117)

$

(10,490,131)

Adjustments to reconcile net loss to net cash used by operating activities:

 

 

 

 

 

 

 

Depreciation

 

52,017

 

49,982

 

142,360

 

Common stock issued for services

 

-

 

136,842

 

530,009

 

Common stock issued for interest expense

 

67,500

 

37,500

 

105,000

 

Preferred stock issued for financing agreement

 

920,000

 

-

 

920,000

 

Accretion of debt-related discounts

 

278,110

 

612,454

 

1,442,959

 

Accretion of asset retirement obligation

 

4,320

 

-

 

4,320

 

Change in fair value of derivatives

 

(67,347)

 

103,850

 

53,885

 

Loss on extinguishment of debt

 

-

 

2,149,404

 

2,149,404

 

(Gain) on sale of marketable securities

 

-

 

-

 

(2,540)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

(Increase) decrease in inventory

 

-

 

(49,738)

 

-

 

(Increase) decrease in accounts receivable

 

65,408

 

-

 

(1,475)

 

(Increase) decrease in prepaid expenses and other current assets

 

28,343

 

3,564

 

(4,421)

 

Increase (decrease) in accounts payable

 

105,158

 

(26,651)

 

108,754

 

Increase (decrease) in accrued expenses

 

52,387

 

(11,135)

 

34,582

 

Increase (decrease) in interest payable

 

488,462

 

264,706

 

908,022

Net cash used by operating activities

 

(373,895)

 

(960,339)

 

(4,099,272)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Purchase of property and equipment

 

-

 

(39,327)

 

(452,104)

 

Payments on mineral leases

 

(50,000)

 

(49,845)

 

(359,681)

 

Acquisition of reclamation bonds

 

(600)

 

(63,001)

 

(107,780)

 

Notes receivable

 

-

 

-

 

27,500

 

Proceeds from marketable securities

 

-

 

-

 

48,920

Net cash used by investing activities

 

(50,600)

 

(152,173)

 

(843,145)

 



6




 

 

 

 

 

 

 

 

 Period from

 

 

 

 

 

 

 

 

 May 1, 2009

 

 

 

 

 

 

 

 

 (Inception of

 

 

 

 

Nine Months Ended

 

Exploration Stage)

 

 

 

 

September 30,

 

September 30,

 

 to September 30,

 

 

 

 

2012

 

2011

 

2012

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from convertible notes payable

 

-

 

-

 

600,000

 

Proceeds from notes payable

 

-

 

1,000,000

 

3,500,000

 

Payment of note payable - equipment

 

-

 

(15,995)

 

(15,995)

 

Proceeds from issuance of common stock

 

20,150

 

316,125

 

1,363,833

 

Proceeds from issuance of preferred stock

 

-

 

-

 

958

 

Financing fees paid

 

-

 

(55,000)

 

(521,281)

Net cash provided by financing activities

 

20,150

 

1,245,130

 

4,927,515

 

 

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(404,345)

 

132,618

 

(14,902)

CASH, BEGINNING OF PERIOD

 

415,090

 

566,549

 

25,647

 

 

 

 

 

 

 

 

 

CASH, END OF PERIOD

$

10,745

$

699,167

$

10,745

 

 

 

 

 

 

 

 

 

NON-CASH FINANCING AND INVESTING ACTIVITIES:

 

 

 

 

 

 

Common stock issued for mineral lease

$

-

$

-

$

525,000

Common stock issued as incentive with convertible notes

 

-

 

-

 

210,000

Common stock issued for reclamation bond

 

-

 

-

 

42,802

Equipment acquired with note payable

 

-

 

-

 

15,995

Common stock issued for accrued liabilities-officer wages

 

-

 

131,259

 

131,259

Prepaid interest liability

 

-

 

-

 

441,175

Repayment premium obligation

 

-

 

-

 

588,325

Common stock issued for accrued interest

 

22,500

 

-

 

67,500

Preferred stock issued in connection with debt amendment

 

920,000

 

700,000

 

1,620,000

 

 

 

 

 

 

 

 

 



7



NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS


Desert Hawk Gold Corp. (the “Company”) was incorporated on November 5, 1957, in the State of Idaho as Lucky Joe Mining Company.  On July 17, 2008 the Company merged with its wholly-owned subsidiary, Lucky Joe Mining Company, a Nevada corporation, for the sole purpose of effecting a change in domicile from the State of Idaho to the State of Nevada.  Lucky Joe Mining Company (Nevada) was the continuing and surviving corporation and each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada).  On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp.


The Company was originally incorporated to pursue the mining business through the acquisition of prospective mining claims in the Wallace and Kellogg mining districts of Northern Idaho.  The Company never successfully generated any revenue or joint ventures from any of the activities it pursued and abandoned the mining business as a viable business model when the commodity prices cycled downward.  The Company remained dormant until it recommenced its mining activities and entered the exploration stage on May 1, 2009.  The Company is considered an exploration stage company and its financial statements are presented in a manner similar to a development stage company as defined in ASC 915-10-05 and interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7.


On December 31, 2009, the Company acquired all of the outstanding stock of Blue Fin Capital, Inc. (“Blue Fin”), a Utah corporation owning mining claims in Arizona.  The Company issued a total of 2,713,636 shares of its common stock to the shareholders of Blue Fin for all of the outstanding shares of Blue Fin.  Blue Fin was acquired from a related party, so the acquisition was recorded at the historical cost of Blue Fin.  Blue Fin became a wholly-owned subsidiary of the Company and all inter-company accounts have been eliminated.


These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.  Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2011. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented.  Operating results for the nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Mineral Exploration and Development Costs


The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining.  All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and amortized on units of production basis over proven and probable reserves.


Mineral Properties and Leases


The Company accounts for mineral properties in accordance with ASC Topic 930 Extractive Activities-Mining.  Costs of acquiring mineral properties and leases are capitalized by project area upon purchase of the associated claims (see Note 4).  Mineral properties are periodically assessed for impairment of value.


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 an entity similar to fully diluted earnings per share.  At September 30, 2012, common stock equivalents outstanding are 1,146,433 shares of common stock into which the convertible debt (see Note 6) and 2,758,033 shares of  preferred stock into which the DMRJ debt (see Note 3) can be converted.  However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s net loss.


Going Concern


As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through September 30, 2012 and limited cash at September 30, 2012, which raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.




8



The Company will need significant funding to continue operations and increase development through the next fiscal year.  The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships.  Management intends 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.


If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.


Reclassifications


Certain reclassifications have been made to conform the prior period’s data to the current presentation.  These reclassifications have no effect on the results of reported operations or stockholders’ deficit.


NOTE 3 - CAPITAL STOCK


Common Stock


The Company is authorized to issue 100,000,000 shares of common stock.  All shares have equal voting rights and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.


An equity financing was initiated in third quarter of 2011.  This financing raised $355,833 through sales of 309,420 shares of common stock.  This offering concluded January 31, 2012.   A separate equity financing was initiated February 20, 2012 for the sale of up to 2,000,000 shares of stock.  No sales were recorded in conjunction with this offering, which ended June 30, 2012.


An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.  As of September 30, 2012 no sales had been recorded in conjunction with this offering.  Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.  Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.  Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.  As of November 6, 2012, this offering had raised $110,000 through sales of 110,000 shares of stock.


Preferred Stock


In July 2010 the Company filed a Certificate of Designations with the State of Nevada to create 958,033 shares of Series A Preferred Stock. The Series A Preferred Shares have voting rights with the common stock equal to the conversion value of the preferred shares into common shares.


In July 2010 the Company issued 958,033 shares of its Series A Preferred Stock to DMRJ Group in connection with financing (see Note 8). These preferred shares are convertible into shares of the Company’s common stock at the rate of one common share for each preferred share converted, subject to certain adjustments.


In connection with the Fourth Amendment to the DMRJ Group funding (see Note 8), on May 3, 2011, the Company created and designated 2,500,000 shares of its authorized preferred stock as Series A-1 Preferred Stock and 1,000,000 shares as Series A-2 Preferred Stock.  During the quarter ended June 30, 2011, 100,000 shares of Series A-2 Preferred stock were issued in connection with this Fourth Amendment.  These shares are convertible by the holder into 1,000,000 shares of the Company’s common stock, subject to the beneficial ownership rules detailed below.


Each share of Series A-1 Preferred Stock and Series A-2 Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to (i) for the Series A-1 Preferred Stock ten times the Series A-1 Issue Price ($0.70) divided by the conversion price for Series A-1 Preferred and (ii) for the Series A-2 Preferred Stock ten times the Series A-2 Issue Price ($1.00) divided by the conversion price for such Series A-2 Preferred Stock.  The initial conversion price of the Series A-1 preferred stock is $0.70 per share and the conversion price of the Series A-2 preferred stock is $1.00.  If the Company issues or sell shares of its common stock, or grant options or other convertible securities which are exercisable or convertible into common shares, at prices less than the conversion price of Series A-1 or A-2 shares, except in certain exempted situations, then the conversion price of the Series A-1 and A-2 shares will be reduced to this lower of sale or conversion price.  The Series A-1 and A-2 shares may not be converted into common shares if the beneficial owner of such shares would thereafter exceed 4.9% of the outstanding common shares.


In connection with the Forbearance Agreement of the DMRJ Group funding arrangement (see Note 8) dated June 29, 2012, an additional 80,000 shares of Series A-2 Preferred stock were issued.  These shares are convertible by the holder into 800,000 shares of the Company’s common stock, subject to the beneficial ownership rules mentioned above.  



9



NOTE 4 – MINERAL PROPERTIES AND INTERESTS


Mineral properties and interests as of September 30, 2012 and December 31, 2011 are as follows:


 

 

September 30, 2012

 

December 31, 2011

     Yellow Hammer Site

 

 

 

 

          Initial Lease Fee

$

175,000

$

175,000

          Asset Retirement Obligation

 

30,908

 

30,908

               Total

 

205,908

 

205,908

 

 

 

 

 

     Kiewit, Cactus Mill and all other sites

 

 

 

 

          Initial Lease Fee

 

600,000

 

600,000

          Annual Lease Payment

 

50,000

 

-

          Asset Retirement Obligation

 

26,913

 

26,594

               Total

 

676,913

 

626,594

 

 

 

 

 

     Blue Fin Claims

 

 

 

 

         Initial Claim Fee

 

2,735

 

2,735

 

 

 

 

 

               Total

 

2,735

 

2,735

 

 

 

 

 

Total Mineral Properties and Leases

$

885,556

$

835,237


The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting originally of 419 unpatented mining claims, including an unpatented mill site claim, 42 patented claims, and seven Utah state mineral leases located on state trust lands, all covering approximately 33 square miles.  In August 2010 and 2011, as a result of further evaluation, the Company allowed certain of the claims and interests to lapse back to Clifton Mining.  The Company has retained 299 unpatented claims, including the unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands.  All but four of these mining claims and interests were obtained under the terms of the Amended and Restated Lease Agreement effective July 24, 2009, with Clifton Mining Company and Woodman Mining Company as lessors.  Rights to the four Yellow Hammer patented claims were obtained under the terms of the Amended and Restated Lease Agreement dated July 24, 2009, with the Jeneane C. Moeller Family Trust.  The properties are located approximately 190 miles west-southwest of Salt Lake City, Utah, and 56 miles south southeast of Wendover, Utah.  The Company intends to concentrate its exploration activities on the Kiewit project consisting of seven of the unpatented Kiewit claims, the Clifton Shears, Cane Springs, Oquirrh Springs, the Frankie, the Rustler, the Lion Vein, and the Lucy L sites.  Each of these is a potential near-term development target.  Mineral extraction activities on the property at this time will be open-pit and the Company anticipates conducting underground mining exploration in the future.  Annual lease fees are required on the 299 claims that make up the Company’s Gold Hill property.  Of these, four claims are within the Yellow Hammer site.  Annual claims fees are currently $140 per claim plus administrative fees.  The Company renewed 299 of the above claims in August 2012, at a total cost of about $42,159.


Kiewit Gold Project


The Company, through its lease agreement with Clifton Mining, has purchased all data, core samples and related reports from Dumont Nickel Inc. (which in 2010 changed its name to DNI Metals Inc. and was the former owner of the leases) associated with the aforementioned properties.  In addition, the Company has access to all data and related information available and held by Clifton Mining.  Desert Hawk has made application for a Large Mining Operations Permit to construct a heap leach facility and commence production activities on these claims.  Tentative approval of the NOI was received from the Utah Division of Oil, Gas and Mining (DOGM) on September 28, 2012.  A 30 day public comment period closes November 13, 2012.  Conditional final approval will be issued if there are no substantive public comments.  The NOI is expected to be issued during fourth quarter 2012 after posting of the required reclamation bond in the approximate amount of $1,278,000.  


In January 2010 the Company submitted a Notice of Intent to Commence Large Mining Operations application to DOGM for three surface mines and a leach gold operation on the Kiewit unpatented claims.  In February 2010 the Company submitted a Plan of Operations to the Bureau of Land Management. The Plan of Operations is deemed to be substantially complete and along with the Environmental Assessment is expected to be issued by the BLM during fourth quarter 2012.




10



Cactus Mill Plant


Located on the Cactus Mill site are two process facilities.   A 150 ton per day mill built by Woodman Mining and operated until the 1980’s using equipment to process copper, gold, silver, and tungsten ores from the district.  In addition, there is a second facility, constructed in the 1990’s, for custom milling precious metals concentrates.  Equipment from both mills was used to construct a 240 ton per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims.  In September 2010 the Company completed its rebuild of the pilot mill and testing of the pilot plan was conducted.  Commencement of processing activities began in fourth quarter 2010.  Pursuant to the Company’s lease agreement with Clifton Mining, it has access to Cane Springs, a natural flowing spring approximately 1,000 feet above the Cactus Mill site, as well as the Cane Springs mine shaft located approximately one-quarter mile south of the Cactus Mill property.  The Company holds a permit from the Utah Division of Oil, Gas and Mining for the pilot plant which allows flotation and gravity concentration.  The Company commenced operation of the Cactus Mill pilot plant in November 2010, and processed and sold concentrates on a pilot test basis through June of 2011.  Operations at the Cactus Mill pilot plant have been temporarily suspended.


Yellow Hammer Claims


The Company holds a Small Mine Permit for the Yellow Hammer site from the Utah Division of Oil, Gas and Mining and has posted reclamation bonds totaling $60,800.  This permit stipulates that the Company may conduct exploration or mining operations on these claims so long as such activities are limited to an area within nine acres.


Exploration Expenditures


Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2012 and 2011 were as follows:


 

 

 

Three Months Ended September 30, 2012

 

 

Three Months Ended September 30, 2011

 

 

Nine Months Ended September 30, 2012

 

 

Nine Months Ended September 30, 2011

Assaying

 

$

940

 

$

3,390

 

$

13,541

 

$

15,609

Permitting

 

 

56,406

 

 

50,557

 

 

203,247

 

 

98,485

Geological consulting fees

 

 

-

 

 

20,579

 

 

-

 

 

84,759

Maps and miscellaneous

 

 

-

 

 

473

 

 

77

 

 

5,782

Total Exploration Expenditures

 

$

57,346

 

$

74,999

 

$

216,865

 

$

204,635


NOTE 5 – JOINT VENTURE


On February 7, 2012, we signed a letter of intent (“LOI”) with Shoshone Silver/Gold Mining Company (“Shoshone”) whereby Shoshone would acquire a 50% interest in our mineral properties located in Tooele County, Utah.  The terms of the LOI were that Shoshone would contribute $10 million in project equity, as well as a $2 million project loan to have been used for the startup of the Kiewit gold heap leach operation.  Under the terms of the deal, Shoshone had a 120 day exclusive right to provide the $10 million, for which $100,000 was advanced to us as a nonrefundable deposit.  Shoshone would also provide a $2 million, 10% interest loan, with a four year maturity, which bears a preferential payback from operational cash flow.  The two companies would have been 50-50 partners on the entire project with a four man operating committee consisting of two members from each company.  The proceeds of the Shoshone transaction, which was originally scheduled to close in June but had been extended to September 30, 2012, would have been used to retire the DMRJ Group debt as well as fund a portion of the heap leach operation.  The joint venture had not been finalized as of June 30, 2012 and an additional deposit of $100,000 had been agreed to as of June 29, 2012 to extend the agreement to joint venture the property until September 30, 2012.  Although this additional deposit was received, other terms of the extension were not met and effective July 31, 2012 the joint venture agreement was terminated and the $200,000 received was recognized as gain on termination of a joint venture agreement.


These joint venture transactions have resulted in an event of default in regard to the DMRJ Group note payable.  Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.  See Note 8.




11



NOTE 6 – CONVERTIBLE DEBT


On November 18, 2009 the Company issued convertible promissory notes to two of its minority shareholders for a total of $600,000.  The notes bear interest at 15% per annum.  Interest-only is payable in equal monthly installments of $7,500.  The notes were originally convertible at any time at a rate of $1.50 per share, but on July 14, 2010 the promissory notes were amended thereby reducing the conversion price to $.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group (see Note 8).  The notes are convertible into potentially 857,143 shares of common stock, and principal and interest are due November 30, 2012. On November 18, 2009, the holders of the notes were issued 300,000 bonus shares at a rate of one share for each $2 loaned, resulting in a debt discount of $210,000 that is being accreted over the life of the loan.


On July 5, 2011 the Company entered into an agreement with the two holders of the convertible debt to begin paying their monthly interest in stock rather than cash.  The note holders have been issued 91,071 shares of stock each, valued at $.70, to convert accrued interest for the months of May 2011 through September 2012.


In the event the Company fails to repay the loan or interest thereon in full on the maturity date of November 30, 2012, the Company will be required to issue an additional 300,000 shares of common stock to the holders of the convertible debt.  Funding of these notes payable is under discussion as part of the negotiations with DMRJ Group regarding a future business relationship.  See Note 8.


NOTE 7 – DERIVATIVE LIABILITIES


The fair value of outstanding derivative instruments not designed as hedging instruments on the accompanying Consolidated Balance Sheets was as follows:


Derivative Instruments

 

 

September 30, 2012

 

 

December 31, 2011

 

 

 

 

 

Put option

 

 

Expired – 3/30/12

 

$

25,193

Conversion option

 

$

188,560

 

$

230,714


A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company’s derivatives using the following assumptions at September 30, 2012 and December 31, 2011:


 

 

Number of

Shares

 

Volatility

 

Risk-Free Rate

 

Expected

Life

(in years)

 

Stock price

September 30, 2012

 

 

 

 

 

 

 

 

 

 

Conversion option

 

414,589

 

80.91%

 

.10%

 

.13

$

1.15

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

Put option

 

60,824

 

116.41%

 

.06%

 

.164

$

1.15

Conversion option

 

407,435

 

91.72%

 

.90%

 

.77

$

1.15


NOTE 8 – DMRJ GROUP FUNDING


On July 14, 2010, the Company entered into an Investment Agreement with DMRJ Group I, LLC (“DMRJ Group”).  According to the original terms of the agreement, DMRJ Group had committed to loan the Company up to $6,500,000 pursuant to certain terms and conditions as evidenced by a promissory note, under which advances made to the Company were due not later than July 14, 2012.  These loan advances could only be used by the Company to pay transaction fees and expenses incurred in connection with the loan transaction, to purchase certain mining equipment, and as working capital to advance our Yellow Hammer and Kiewit mining activities.  The maximum amounts allocable to the Yellow Hammer and Kiewit projects were $2,500,000 and $2,750,000, respectively, and were subject to meeting certain milestones on the projects.  Advances for operations on the Kiewit project were conditioned upon the Company’s ability to obtain and maintain all environmental and mining permits necessary to commence mining activities and the timely payment of the initial Yellow Hammer advances.  The Company had received loan advances from DMRJ Group for total principal due of $3,500,000 at September 30, 2012 and December 31, 2011.


Each principal advance amount bears interest of 15% per annum from the date of borrowing.  The Company was also required to prepay one year’s interest on each loan advance, or on a shorter period if the advance was less than one year prior to the maturity date of the promissory note. This prepayment of interest was nonrefundable if the Company prepaid the advance or went into default.  In addition, at the time the Company repays or prepays the advance, it was required to pay an additional amount (the Repayment Obligation) equal to 20% of the principal and interest amount being repaid or prepaid.


In July 2010, in connection with this agreement, the Company issued 958,033 shares of its Series A Preferred Stock to DMRJ Group at $.001 par value for $958 cash.  The Company recorded a discount to the DMRJ Group loan proceeds in the amount of $669,664, which was the common stock price of $.70 less the cash received for the preferred stock.



12



Loan advances made for the Yellow Hammer and Kiewit projects were subject to mandatory prepayments by the Company.  Yellow Hammer advances were originally to be repaid, together with prepayment interest and any outstanding monthly interest, commencing on or before the fifth business day of the month beginning February 2011 and each month thereafter through September 2011.  Kiewit advances were to be repaid, together with prepayment interest and any outstanding monthly interest, beginning in month seven after the initial advance on this project and continuing through month twelve.  However, the repayment dates have been deferred due to waivers, forbearances, and amendments to the Initial Investment Agreement as stated in the following paragraphs.


Pursuant to a Security Agreement dated July 14, 2010, the Company has secured repayment of any advances made by DMRJ Group with all of its assets.

In connection with the DMRJ Group transaction, both of the Company’s convertible note holders, each of whom had loaned $300,000 to the Company on November 18, 2009, agreed to subordinate their debt to DMRJ Group.  In consideration for their agreement to subordinate their loans, the Company reduced the conversion price of the loans from $1.50 to $0.70 per share (see Note 6).  All other material terms of the convertible loans remain unchanged.


On February 25, 2011, the Company entered into a Second Amendment to Investment Agreement with DMRJ Group which amended the Investment Agreement, dated as of July 14, 2010, as amended by the First Amendment and Waiver dated as of November 8, 2010.  The Second Amendment allowed the Company to receive a term loan advance of up to $125,000.  This advance was made without satisfying the provisions requiring the Company to meet certain milestones in connection with its Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.


On March 6, 2011, the Company entered into a Forbearance Agreement with DMRJ Group pursuant to which DMRJ Group agreed to forbear until April 6, 2011, from exercising its rights and remedies with respect to an event of default by virtue of the Company’s failure to make a mandatory prepayment as required under the Investment Agreement.  The Company failed to make the mandatory prepayment to DMRJ Group on March 7, 2011, as required in the Investment Agreement.  Pursuant to the Forbearance Agreement if the Company cured this prepayment default on or prior to April 6, 2011 no default interest would be due with respect to the period between the date of the prepayment default and April 6, 2011.


On March 11, 2011, the Company entered into a Third Amendment to Investment Agreement with DMRJ Group.  This amendment allowed the Company to make a further request for a term loan advance under the Investment Agreement of up to $500,000 without satisfying the provisions requiring the Company to meet certain milestones in connection with the Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  Two $125,000 term loan advances were received as part of this amendment.  These advances are not deemed to be Kiewit Advances, which means that they were not subject to the mandatory prepayment requirements under the Investment Agreement.


The Company failed to make its mandatory prepayment of $1,011,616 to DMRJ Group on April 7, 2011, as required pursuant to the Investment Agreement with DMRJ Group, and thus entered into a Fourth Amendment.


On April 21, 2011, the Company entered into a Fourth Amendment to Investment Agreement with DMRJ Group.  This amendment allowed the Company to make a further request for a term loan advance under the Investment Agreement of up to $625,000 without satisfying the provisions requiring the Company to meet certain milestones in connection with the Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.  The Amendment also eliminated the requirement of the Investment Agreement to make mandatory prepayments for the Yellow Hammer advances.


The Fourth Amendment also contained provisions for DMRJ Group to elect to convert the outstanding payable balances to shares of Series A-1 Preferred Stock (for the Yellow Hammer Advances) and Series A-2 Preferred Stock (for the Term Loan Advances).  See description of the Preferred Stock in Note 3.


The Series A-1 and Series A-2 Preferred Stock are convertible into shares of the Company’s common stock.  The conversion rate of the preferred stock to shares of the Company’s common stock is adjustable based upon factors not found in a standard fixed-for-fixed pricing model. As such, the Company considered the provisions of ASC 815 “Derivatives and Hedging”, and recorded the fair value of $108,279 for the embedded conversion option liability associated with the amended agreement with an offset to the carrying value of the debt.  The assumptions used in the Black-Scholes option pricing model at May 3, 2011, were as follows: (1) dividend yield of 0%; (2) expected volatility of 96.8%, (3) risk-free interest rate of 0.40%, and (4) expected life of 1.25 years.  The conversion option liability is adjusted to its fair value at the end of each reporting period with the change in fair value recognized in net income (loss).  The conversion option derivative liability at September 30, 2012 is recorded at $188,560 (see Note 7).




13



Also in connection with entering the Fourth Amendment the Company issued 100,000 shares of Series A-2 Preferred Stock valued at $700,000 to DMRJ Group.  The value was determined by calculating the number of common shares into which the Series A-2 Preferred shares were convertible (1,000,000 common shares) times the current fair value for shares of common stock ($0.70).  The Company recognized the amount in the loss on extinguishment of debt related to the Fourth Amendment.


The Company considered the impact of ASC 470-50 “Debt-Modifications and Extinguishments” on the accounting treatment of the Fourth Amendment.  ASC 470-50 states that a transaction resulting in a significant change in the nature of a debt instrument should be accounted for as an extinguishment of debt.  The difference between the reacquisition price and the net carrying amount of the extinguished debt was recognized currently in income of the period of extinguishment.  The Company concluded that the amendment constituted a substantial modification.  During the quarter ended June 30, 2011, the Company recognized a loss on extinguishment of the DMRJ note of $2,149,404 representing the difference between the fair value of the amended note, including consideration and fees, and the carrying value of the original note, including related unamortized discount.


A summary of DMRJ Group-related amounts as of September 30, 2012 and December 31, 2011 is as follows:


 

 

 

 

 

 

September 30, 2012

December 31, 2011

 

$

 

$

 

Yellow Hammer Advances

2,500,000

2,500,000

20% accrued repayment obligation

 

588,235

 

588,235

15% accrued prepaid interest obligation

 

441,175

 

441,175

 

 

3,529,410

 

3,529,410

Term Loan Advance Principal

 

1,000,000

 

1,000,000

20% accrued repayment obligation

 

235,294

 

235,294

15% accrued prepaid interest obligation

 

176,470

 

176,470

 

 

1,411,764

 

1,411,764

                   Total principal

 

4,941,174

 

4,941,174

Less related discounts and unamortized balances

 

(5,278)

 

(230,888)

 

 

 

 

 

                   Carrying Value

$

4,935,896

$

4,710,286


This debt is all current in nature and was due in three installments (which include interest payable) of $1,550,000 on June 30, 2012, $2,945,000 on September 30, 2012 and $1,370,492 on December 31, 2012.  On June 29, 2012 a Forbearance Agreement was signed and the payment terms were changed to allow the Company three additional months to pay the June 30, 2012 loan payment, in exchange for the issuance of 80,000 shares of Series A-2 Preferred Stock, carrying a value to DMRJ Group of $920,000.  This value was determined by calculating the number of common shares into which the Series A-2 Preferred shares were convertible (800,000 common shares) times the current fair value (most recent sales price) for shares of common stock ($1.15).  Financing expense in the amount of $920,000 was recognized for the quarter ended June 30, 2012 for this stock issuance pursuant to the Forbearance Agreement.  Pursuant to the Forbearance Agreement DMRJ Group agreed to forbear from exercising its rights relating to a payment default if the payment due on June 30, 2012 was not paid.  The Company failed to make the payment on June 30, 2012, and therefore an event of default occurred under the investment agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Because additional terms of the Forbearance Agreement were not met, it terminated on July 31, 2012.  


The Company failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Under the Investment Agreement, DMRJ Group therefore has the right, at its option, to notify the Company and declare the full amount of all of the loans immediately due and payable, foreclose on the security for the loans, or exercise any other legal rights based upon breach of the agreement.  DMRJ Group has not notified the Company of its intent to exercise any of its rights based upon default of the Company under the agreement.  Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.




14



On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.  The first $50,000 advance was received on October 17, 2012.   The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ Group is moved from December 31, 2012 to December 15, 2012.  The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857.  


NOTE 9 – COMMITMENTS


Mining Properties


During the year ended December 31, 2009 the Company entered into a Joint Venture Agreement with the Moeller Family Trust for the leasing of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah.  Pursuant to the agreement, Moeller Family Trust received 250,000 shares of the Company’s restricted common stock.  If the Company does not place the Yellow Hammer property into commercial production within a three year period it will be required to make annual lease payments to the Trust of $50,000.  Under the terms of the Joint Venture agreement, the Company will be required to pay a 6% net smelter royalty on the production of base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold and silver, as applicable.  The Company put the property into commercial production in 2011 which resulted in royalty payments to the Moeller Family Trust in the amount of $90,360 during 2011.  Operations have been temporarily suspended and royalties are not currently accruing.


Also during the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company and the Woodman Mining Company for the leasing of their property interests in the Gold Hill Mining District of Utah. Under the terms of the Joint Venture agreement, the Company will be required to pay a 4% net smelter royalty on base metals in all other areas except for production from the Kiewit gold property and a net smelter royalty on gold and silver, except for production from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable.  The Company will also be required to pay a 6% net smelter return on any production from the Kiewit gold property.  Additionally, if the Company did not place the Kiewit, Clifton Shears/smelter tunnel deposit, and the Cane Springs deposits into commercial production within the  three year period ending July 24, 2012, it was required to make annual lease payments to Clifton Mining in the amount of $50,000 per each of the three locations.  The terms of this lease were renegotiated on June 30, 2012 and payment due dates for the properties for 2012 have been extended as shown below.  The July 24, 2012 and October 24, 2012 payments were timely made.  Negotiations regarding the December 24, 2012 Cane Springs property lease payment are currently ongoing.


Kiewit property

July 24, 2012

Clifton Shears/smelter tunnel property

October 24, 2012

Cane Springs property

December 24, 2012


In September 2009, the Company acquired all of the rights and interests of Clifton Mining in a $42,802 reclamation contract and cash surety deposit with the State of Utah Division of Oil, Gas and Mining for the property covered by the joint venture. As consideration for Clifton Mining selling its interest in the reclamation contract and surety deposit, the Company issued 60,824 shares to Clifton Mining. For a period of two years the Company had the right to repurchase the shares for $48,000 or during the 180-day period after this two year period, Clifton Mining had the option to put the shares to the Company for $48,000.  In connection with the issuance of this put option, management concluded that the 60,824 shares should be recorded as a derivative liability, and not as equity.  The put option expired March 30, 2012.


Employment Agreements


In September 2010, the Company entered into employment agreements with its Chief Executive Officer (“CEO”) and its President and entered into a consulting agreement with one of its directors.  Each agreement is for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year.  As of September 30, 2012, the salaries and payments under these contracts are accruing rather than being paid.  As of September 30, 2012, the total amount included in accrued expenses for officer wages is $75,000 and for director consulting fees is $30,000.


NOTE 10 – SUBSEQUENT EVENTS


DMRJ Loan


On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.   The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ is moved from December 31, 2012 to December 15, 2012.  The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857.  


Stock Offering


An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.  As of September 30, 2012 no sales were recorded in conjunction with this offering, however,  110,000 shares of stock under this offering had been sold as of November 6, 2012.  Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.  Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.  Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.



15



Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations


The following discussion and analysis should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2011, and with the unaudited consolidated financial statements and related notes thereto presented in this Quarterly Report on Form 10-Q.


Forward-looking statements


The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, potential growth opportunities, potential operating performance improvements, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct.  Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.


Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this quarterly report. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, the following:


·

a decline in metal prices;


·

environmental hazards;


·

metallurgical and other processing problems;


·

unusual or unexpected geological formations;


·

global economic and political conditions;


·

disruptions in credit and financial markets;


·

global productive capacity;


·

changes in product costing; and


·

competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, flooding, landslides, power outages, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities).


Mining operations are subject to a variety of existing laws and regulations relating to exploration, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with.  Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those expected.  We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.


These risk factors could cause our results to differ materially from those expressed in forward-looking statements.




16



Overview


Desert Hawk Gold Corp. (the “Company”) is an exploration stage company, which means we are engaged in the search for mineral deposits or reserves which could be economically and legally extracted or produced.  None of our mining properties has any known reserves and our proposed programs on these properties are exploratory in nature.  Our proposed projects are located in the Gold Hill Mining District in Tooele County, Utah.


We were originally incorporated in the State of Idaho on November 5, 1957.  For several years the Company bought and sold mining leases and claims, but in 1995 we ceased all principal business operations.  In 2008 we changed the domicile of the Company from the State of Idaho to the State of Nevada.  In May 2009 we raised funds to recommence mining activities.  In July 2009 we entered into agreements to commence exploration activities on mining claims in the Gold Hill Mining District.


We are currently focused primarily on the permitting of the Kiewit and Clifton Shears projects.  Tentative approval of the Notice of Intent (“NOI”) was received from the Utah Division of Oil, Gas and Mining (“DOGM”) on September 28, 2012.  This tentative approval will be subject to a 30 day public comment period, which closes November 13, 2012, after which conditional final approval will be issued if there are no substantive public comments.  The NOI is expected to be issued during fourth quarter 2012 after posting of the required reclamation bond in the approximate amount of $1,278,000.  The Plan of Operations is deemed to be substantially complete and along with the Environmental Assessment is expected to be issued by the BLM during fourth quarter 2012.


We currently hold leasehold interests within the Gold Hill Mining District consisting of 299 unpatented mining claims, including an unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands, all covering approximately 33 square miles.  The Company intends to concentrate its exploration activities on the Kiewit project consisting of seven of the unpatented Kiewit claims, the Clifton Shears, Cane Springs, Oquirrh Springs, the Frankie, the Rustler, the Lion Vein, and the Lucy L sites.  Each of these is a potential near-term development target.  Mineral extraction activities on the property at this time will be open-pit and the Company anticipates conducting underground mining exploration in the future.


Refurbishing of our Cactus Mill plant was completed in the fall of 2010 and processing of mineralized material was ongoing through December of 2011.  Operations were suspended in December 2011 due to the lack of a Large Mine Permit as well as difficulties recovering tungsten in the mill.  The tungsten recovery issues continue to be a work in progress but at a minimum, will require some modification to the existing mill circuit.


We have continued to conduct limited exploration activities through the third quarter of 2012.  Several veins within the Clifton Shears, including the Lion Vein, have been sampled with ongoing geological work taking place.  Confirmation work at the Frankie and continued exploration of the Kiewit and Rainbow Hill areas have also been a priority.  We do not have any proven or probable reserves on any of our mineral claims or mining leases.


We have previously entered into an agreement with DMRJ Group, LLC (“DMRJ Group”) through which we can borrow up to $6,500,000 for our mining operations and our general and administrative expenses, of which we have $3,000,000 remaining available to us upon reaching certain milestones.  This note is currently in default.  On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.  The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ Group is moved from December 31, 2012 to December 15, 2012.  The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857.  Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.


On February 7, 2012, we signed a letter of intent (“LOI”) with Shoshone Silver/Gold Mining Company (“Shoshone”) whereby Shoshone would acquire a 50% interest in our mineral properties located in Tooele County, Utah.  The terms of the LOI were that Shoshone would contribute $10 million in project equity, as well as a $2 million project loan to be used for the startup of the Kiewit gold heap leach operation.  Under the terms of the deal, Shoshone would have a 120 day exclusive right to provide the $10 million, for which $100,000 was advanced to us as a nonrefundable deposit.  On June 29, 2012, as part of the Forbearance Agreement with DMRJ Group, this agreement was extended to September 30, 2012 in exchange for additional non-refundable deposits of $100,000 each to be due to the Company on or before July 5 and July 31, 2012.  The July 5, 2012, payment was received on July 9, 2012.  The July 31, 2012 payment was not received and Shoshone has notified the Company that it will not be funding the additional $100,000.  Effective July 31, 2012 the joint venture agreement was terminated and the $200,000 received was recognized as gain on termination of a joint venture agreement.


Historically, we have incurred net losses for the years ended December 31, 2011 and 2010, and have also incurred a loss for the nine months ended September 30, 2012.  If we are unable to negotiate a long-term funding arrangement, we will not be able to meet our obligations to repay the loan advances to DMRJ Group and will likely lose our interest in all of our assets and mining claims.




17



Third Quarter Highlights


We are currently focused primarily on the permitting of the Kiewit and Clifton Shears projects.  Tentative approval of the Notice of Intent (“NOI”) was received from the Utah Division of Oil, Gas and Mining (“DOGM”) on September 28, 2012.  This tentative approval will be subject to a 30 day public comment period, which closes November 13, 2012, after which conditional final approval will be issued if there are no substantive public comments.  The NOI is expected to be issued during fourth quarter 2012 after posting of the required reclamation bond in the approximate amount of $1,278,000.  The BLM initiated an Environmental Assessment (EA) of the project in December 2011.  JBR Consultants of Salt Lake City, Utah, is completing this review on behalf of the BLM.  The Plan of Operations is deemed to be substantially complete and along with the EA is expected to be issued by the BLM during fourth quarter 2012.


On February 7, 2012, we signed a letter of intent (“LOI”) with Shoshone Silver/Gold Mining Company (“Shoshone”) whereby Shoshone would acquire a 50% interest in our mineral properties located in Tooele County, Utah.  The terms of the LOI are that Shoshone would contribute $10 million in project equity, as well as a $2 million project loan to be used for the startup of the Kiewit gold heap leach operation.  Under the terms of the deal, Shoshone would have a 120 day exclusive right to provide the $10 million, for which $100,000 was advanced to us as a nonrefundable deposit.  On June 29, this agreement was verbally extended to September 30, 2012 in exchange for additional non-refundable deposits of $100,000 each to be due to the Company on or before July 5 and July 31, 2012.  The July 5, 2012, payment was received on July 9, 2012.  The July 31, 2012 payment was not received and Shoshone has notified the Company that it will not be funding the additional $100,000.  Effective July 31, 2012 the joint venture agreement was terminated and the $200,000 received was recognized as gain on termination of a joint venture agreement.


During 2010 to 2011 draw advances totaling $3.5 million were obtained through a funding agreement with DMRJ Group.  No additional advances were taken during the first nine months of 2012.  Term loan advances under the terms of the Fourth Amendment, and all prior advances, were due in three payments due on June 30, 2012, September 30, 2012, and December 31, 2012.  This note is now in default.


On June 29, 2012 the Company entered into a forbearance agreement with DMRJ Group which extended the due date of the June 30, 2012 loan payment to September 30, 2012 in exchange for 80,000 shares of Series A-2 Preferred Stock.  Pursuant to the Company’s Investment Agreement with DMRJ Group, on June 30, 2012, the Company was obligated to repay $1,550,000 of the funds previously loaned to the Company by DMRJ Group.  Pursuant to the forbearance agreement DMRJ Group agreed to forbear from exercising its rights relating to a payment default if the payment due on June 30, 2012 was not paid.  The Company failed to make the payment on June 30, 2012, and therefore an event of default occurred under the investment agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Because the terms of the forbearance agreement were not met, it was terminated on July 31, 2012.


The Company failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Under the Investment Agreement, DMRJ Group therefore has the right at its option to notify the Company and declare the full amount of all of the loans immediately due and payable, foreclose on the security for the loans, or exercise any other legal rights based upon breach of the agreement.  DMRJ Group has not notified the Company of its intent to exercise any of its rights based upon default of the Company under the agreement.


On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.  The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ is moved from December 31, 2012 to December 15, 2012.  The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857.  Negotiations regarding a future long-term business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.


An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.  As of September 30, 2012 no sales were recorded in conjunction with this offering however, 110,000 shares of stock had been sold as of November 6, 2012.  Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.  Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.  Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.


In September 2010, the Company entered into employment agreements with its Chief Executive Officer (“CEO”) and its President and entered into a consulting agreement with one of its directors.  Each agreement is for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year.  As of September 30, 2012, the salaries and payments under these contracts are accruing rather than being paid.  The total amount accrued as of September 30, 2012 for officer wages is $75,000 and for director consulting fees is $30,000.




18



Results of Operations for the Nine Months Ended September 30, 2012 and 2011


Operations were suspended in December 2011 due to the lack of a Large Mine Permit as well as difficulties recovering tungsten in the mill. The tungsten recovery issues continue to be a work in progress but at a minimum, will require some modification to the existing mill circuit.


During the nine months ended September 30, 2012, the Company had a net loss of $2,368,253 compared to a net loss of $4,231,117 during the nine months ended September 30, 2011.  This represents a decreased net loss of $1,862,864 for the nine months ended September 30, 2012 which is attributable to the reduction in expenses due to cessation of pilot mill operations along with reductions in debt-related expenses from the prior year.  The operating loss for the nine months ended September 30, 2012, as compared to the nine months ended September 30, 2011, decreased by $346,683 due to the scaled-back operations and the proceeds from the joint venture agreement.  In addition, other expense, consisting mostly of interest and financing costs, for the nine months ended September 30, 2012, decreased by $,1,516,181 over the period ending September 30, 2011.  This reduction was due to reductions in debt related expense.


Liquidity and Cash Flow


Net cash used by operating activities was $373,895 during the nine month period ended September 30, 2012, compared with $960,339 during the nine month period ended September 30, 2011.  The decrease in the amount of cash used by operating activities is primarily attributable to reduction in net loss from operations and suspension of mill operations.


Net cash used by investing activities was $50,600 during the nine month period ended September 30, 2012, compared to $152,173 cash used during the nine month period ended September 30, 2011.  The decrease in cash used by investing activities is attributable to the reduction in fixed asset purchases and reductions in leases and bond acquisitions.


Net cash provided by financing activities was $20,150 during the nine month period ended September 30, 2012, compared with $1,245,130 cash provided during the nine month period ended September 30, 2011.  Cash provided from financing for the nine month period ended September 30, 2012 was from issuance of stock while cash provided during the nine month period ended September 30, 2011 was primarily from DMRJ Group loan proceeds along with issuance of common stock from sales of stock.  The DMRJ Group loan is now in default and negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.


As a result of the above, cash decreased by $404,345 during the nine month period ended September 30, 2012, leaving the Company with a cash balance of $10,745 as of September 30, 2012.


Critical Accounting Policies


The selection and application of accounting policies is an important process that has developed as our business activities have evolved and as the accounting rules have changed.  Accounting rules generally do not involve a selection among alternatives, but involve an implementation and interpretation of existing rules, and the use of judgment, to the specific set of circumstances existing in our business.  Discussed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported.  See Note 2, “Summary of Significant Accounting Policies,” in our attached unaudited consolidated financial statements for a discussion of those policies.


Mineral Exploration and Development Costs


We account for mineral exploration costs in accordance with ASC 932 Extractive Activities.  All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.  Expenditures to explore new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basis over proven and probable reserves.


Mineral Properties


We account for mineral properties in accordance with ASC 930 Extractive Activities-Mining.  Costs of acquiring mineral properties are capitalized by project area upon purchase of the associated claims.  Mineral properties are periodically assessed for impairment of value and any diminution in value.




19



Revenue


As an exploration stage company, our revenue from operations is referred to as income earned during the exploration stage.  Revenue is recognized when title and risk of ownership of metals or metal bearing concentrate have passed and collection is reasonably assured.  Revenue from the sale of metals 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.


Reclamation and Remediation


Remediation, reclamation and mine closure costs are based principally on legal and regulatory requirements.  Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties.  The Company uses assumptions about future costs, capital costs and reclamation costs.  Such assumptions are based on the Company’s current mining plan and the best available information for making such estimates.


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.


Off-Balance Sheet Arrangements


We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, result of operations, liquidity, capital expenditures or capital resources.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk


As a smaller reporting company, we have elected not to provide the disclosure required by this item.


Item 4.  Controls and Procedures


Evaluation of Disclosure Control and Procedures


Our CEO, who is also our principal financial officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”), has concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow timely decisions regarding required disclosure.


Changes in Internal Control Over Financial Reporting


There were no changes in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) that occurred during our most recent quarter ended June September 30, 2012, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.




20



PART II – OTHER INFORMATION


Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds


On July 5, 2011 the Company entered into an agreement with West C Street LLC and Ibearhouse LLC, the holders of convertible debt acquired from us in 2009, permitting payment of their monthly interest in stock rather than cash.  Since then, we have issued a total of 182,142 shares of stock, valued at $.70, to the note holders to convert accrued interest for the months of May 2011 through September 2012.  These shares were issued without registration under the Securities Act by reason of the exemption from registration afforded by the provisions of Section 4(a)(5) and/or Section 4(a)(2) thereof, and Rule 506 promulgated thereunder, as a transaction by an issuer not involving any public offering.  Each of the note holders was an accredited investor as defined in Regulation D.  Each investor delivered appropriate investment representations with respect to these issuances and consented to the imposition of restrictive legends upon the stock certificates representing the shares.  Each investor represented that it had not entered into the transaction with us as a result of or subsequent to any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast on television or radio, or presented at any seminar or meeting.  Each investor was afforded the opportunity to ask questions of our management and to receive answers concerning the terms and conditions of the transaction.  No underwriting discounts or commissions were paid in connection with the stock issuance.


Item 6.  Exhibits


Exhibit No.

Description

31.1

Rule 15d-14(a) Certification by Principal Executive Officer and Principal Financial Officer

32.1

Section 1350 Certification of Principal Executive Officer and Principal Financial Officer

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Desert Hawk Gold Corp.



Date: November 14, 2012

By: /s/ Robert E. Jorgensen                                  

      Robert E. Jorgensen, Chief Executive Officer

      (Principal Executive and Financial Officer)



21


EX-31.1 2 f10q093012_ex31z1.htm EXHIBIT 31.1 SECTION 302 CERTIFICATIONS Exhibit 31.1 Section 302 Certifications

Certification


I, Robert E. Jorgensen, certify that:


1.

I have reviewed this Form 10-Q quarterly report of Desert Hawk Gold Corp. for the quarter ended September 30, 2012;


2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:


(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:  November 14, 2012



/s/ Robert E. Jorgensen                                      

Robert E. Jorgensen, Chief Executive Officer

(Principal Executive Officer and Principal

Financial Officer)



EX-32.1 3 f10q093012_ex32z1.htm EXHIBIT 32.1 SECTION 906 CERTIFICATIONS Exhibit 32.1 Section 906 Certifications


CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350


AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the quarterly report of Desert Hawk Gold Corp. (the “Company”) on Form 10-Q for the quarter ended September 30, 2012, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive and financial officer of the Company, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:


(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date:  November 14, 2012



/s/ Robert E. Jorgensen                                                           

Robert E. Jorgensen, Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)



EX-101.INS 4 dhgc-20120930.xml XBRL INSTANCE DOCUMENT 10-Q 2012-09-30 false Desert Hawk Gold Corp. 0001168081 --12-31 Smaller Reporting Company Yes No No 2012 Q3 10745 415090 1475 66883 63852 92195 76072 574168 325740 377757 885556 835237 150581 149981 1437949 1937143 111928 6771 75273 22886 0 25193 188560 230714 885521 419559 4935896 4710286 587264 534764 6784442 5950173 62141 57502 6846583 6007675 958 958 0 0 180 100 8463 8316 6088487 5058563 -1016591 -1016591 -10490131 -8121878 -5408634 -4070532 1437949 1937143 140993 88976 0.001 0.001 10000000 10000000 958033 958033 958033 958033 0 0 0 0 180000 100000 180000 100000 0.001 0.001 100000000 100000000 8460973 8314883 8460973 8314883 0 18442 0 903022 969905 31008 124570 134906 1047299 1620651 57346 74999 216865 204635 1587449 39260 30000 111200 150670 573604 75000 59188 181923 249486 1022858 16929 10423 69339 75919 433788 35226 50599 118686 156650 564226 17402 16360 52017 49982 142359 72171 366139 684936 1934641 5744935 -72171 -347697 -684936 -1031619 -4775030 3572 0 3572 14 66423 42958 -127178 67347 -103850 -53885 0 0 0 -2149404 -2149404 -31698 -67708 -1069266 -464853 -1917029 -224183 -207619 -684970 -481405 -1661206 -209351 -402505 -1683317 -3199498 -5715101 -281522 -750202 -2368253 -4231117 -10490131 0 0 0 0 0 -281522 -750202 -2368253 -4231117 -10490131 -0.03 -0.09 -0.28 -0.54 8430578 8086844 8394924 7849793 -2368253 -4231117 -10490131 52017 49982 142360 0 136842 530009 67500 37500 105000 920000 0 920000 278110 612454 1442959 4320 0 4320 -67347 103850 53885 0 2149404 2149404 0 0 -2540 0 -49738 0 65408 0 -1475 28343 3564 -4421 105158 -26651 108754 52387 -11135 34582 488462 264706 908022 -373895 -960339 -4099272 0 -39327 -452104 -50000 -49845 -359681 -600 -63001 -107780 0 0 48920 -50600 -152173 -843145 0 0 600000 0 1000000 3500000 0 -15995 -15995 20150 316125 1363833 0 0 958 0 -55000 -521281 20150 1245130 4927515 -404345 132618 -14902 566549 25647 699167 0 0 525000 0 0 210000 0 0 42802 0 0 15995 0 131259 131259 0 0 441175 0 0 588325 22500 0 67500 920000 700000 1620000 <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>NOTE 1 &#150; ORGANIZATION AND DESCRIPTION OF BUSINESS</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Desert Hawk Gold Corp. (the &#147;Company&#148;) was incorporated on November 5, 1957, in the State of Idaho as Lucky Joe Mining Company.&nbsp; On July 17, 2008 the Company merged with its wholly-owned subsidiary, Lucky Joe Mining Company, a Nevada corporation, for the sole purpose of effecting a change in domicile from the State of Idaho to the State of Nevada.&nbsp; Lucky Joe Mining Company (Nevada) was the continuing and surviving corporation and each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada).&nbsp; On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company was originally incorporated to pursue the mining business through the acquisition of prospective mining claims in the Wallace and Kellogg mining districts of Northern Idaho.&nbsp; The Company never successfully generated any revenue or joint ventures from any of the activities it pursued and abandoned the mining business as a viable business model when the commodity prices cycled downward.&nbsp; The Company remained dormant until it recommenced its mining activities and entered the exploration stage on May 1, 2009.&nbsp; The Company is considered an exploration stage company and its financial statements are presented in a manner similar to a development stage company as defined in ASC 915-10-05 and interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On December 31, 2009, the Company acquired all of the outstanding stock of Blue Fin Capital, Inc. (&#147;Blue Fin&#148;), a Utah corporation owning mining claims in Arizona.&nbsp; The Company issued a total of 2,713,636 shares of its common stock to the shareholders of Blue Fin for all of the outstanding shares of Blue Fin.&nbsp; Blue Fin was acquired from a related party, so the acquisition was recorded at the historical cost of Blue Fin.&nbsp; Blue Fin became a wholly-owned subsidiary of the Company and all inter-company accounts have been eliminated.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.&nbsp; Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.&nbsp; These unaudited interim financial statements should be read in conjunction with the Company&#146;s audited financial statements for the year ended December 31, 2011. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented.&nbsp; Operating results for the nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.</p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>NOTE 2 &#150; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Mineral Exploration and Development Costs</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 <i>Extractive Activities - Mining</i>.&nbsp; All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.&nbsp; Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and amortized on units of production basis over proven and probable reserves.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Mineral Properties and Leases</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company accounts for mineral properties in accordance with ASC Topic 930 <i>Extractive Activities-Mining</i>.&nbsp; Costs of acquiring mineral properties and leases are capitalized by project area upon purchase of the associated claims (see Note 4).&nbsp; Mineral properties are periodically assessed for impairment of value.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Earnings Per Share</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">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.&nbsp; Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share.&nbsp; At September 30, 2012, common stock equivalents outstanding are 1,146,433 shares of common stock into which the convertible debt (see Note 6) and 2,758,033 shares of&nbsp; preferred stock into which the DMRJ debt (see Note 3) can be converted.&nbsp; However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company&#146;s net loss.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Going Concern</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through September 30, 2012 and limited cash at September 30, 2012, which raises substantial doubt about the Company&#146;s ability to continue as a going concern.&nbsp; 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.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company will need significant funding to continue operations and increase development through the next fiscal year.&nbsp; The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships.&nbsp; Management intends 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.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="X-NONE"></font>&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u><font lang="X-NONE">Reclassifications</font></u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="X-NONE"></font>&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="X-NONE">Certain reclassifications have been made to conform the prior period&#146;s data to the current presentation.&nbsp; These reclassifications have no effect on the results of reported operations or stockholders&#146; deficit.</font></p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b><font lang="X-NONE">NOTE 3 - CAPITAL STOCK </font></b><font lang="X-NONE"></font></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Common Stock</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company is authorized to issue 100,000,000 shares of common stock.&nbsp; 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.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">An equity financing was initiated in third quarter of 2011.&nbsp; This financing raised $355,833 through sales of 309,420 shares of common stock.&nbsp; This offering concluded January 31, 2012.&nbsp;&nbsp; A separate equity financing was initiated February 20, 2012 for the sale of up to 2,000,000 shares of stock.&nbsp; No sales were recorded in conjunction with this offering, which ended June 30, 2012.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.&nbsp; As of September 30, 2012 no sales had been recorded in conjunction with this offering.&nbsp; Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.&nbsp; Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.&nbsp; Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.&nbsp; As of November 6, 2012, this offering had raised $110,000 through sales of 110,000 shares of stock.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Preferred Stock</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In July 2010 the Company filed a Certificate of Designations with the State of Nevada to create 958,033 shares of Series A Preferred Stock. The Series A Preferred Shares have voting rights with the common stock equal to the conversion value of the preferred shares into common shares.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In July 2010 the Company issued 958,033 shares of its Series A Preferred Stock to DMRJ Group in connection with financing (see Note 8). These preferred shares are convertible into shares of the Company&#146;s common stock at the rate of one common share for each preferred share converted, subject to certain adjustments.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In connection with the Fourth Amendment to the DMRJ Group funding (see Note 8), on May 3, 2011, the Company created and designated 2,500,000 shares of its authorized preferred stock as Series A-1 Preferred Stock and 1,000,000 shares as Series A-2 Preferred Stock.&nbsp; During the quarter ended June 30, 2011, 100,000 shares of Series A-2 Preferred stock were issued in connection with this Fourth Amendment.&nbsp; These shares are convertible by the holder into 1,000,000 shares of the Company&#146;s common stock, subject to the beneficial ownership rules detailed below.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Each share of Series A-1 Preferred Stock and Series A-2 Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to (i) for the Series A-1 Preferred Stock ten times the Series A-1 Issue Price ($0.70) divided by the conversion price for Series A-1 Preferred and (ii) for the Series A-2 Preferred Stock ten times the Series A-2 Issue Price ($1.00) divided by the conversion price for such Series A-2 Preferred Stock.&nbsp; The initial conversion price of the Series A-1 preferred stock is $0.70 per share and the conversion price of the Series A-2 preferred stock is $1.00.&nbsp; If the Company issues or sell shares of its common stock, or grant options or other convertible securities which are exercisable or convertible into common shares, at prices less than the conversion price of Series A-1 or A-2 shares, except in certain exempted situations, then the conversion price of the Series A-1 and A-2 shares will be reduced to this lower of sale or conversion price.&nbsp; The Series A-1 and A-2 shares may not be converted into common shares if the beneficial owner of such shares would thereafter exceed 4.9% of the outstanding common shares.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In connection with the Forbearance Agreement of the DMRJ Group funding arrangement (see Note 8) dated June 29, 2012, an additional 80,000 shares of Series A-2 Preferred stock were issued.&nbsp; These shares are convertible by the holder into 800,000 shares of the Company&#146;s common stock, subject to the beneficial ownership rules mentioned above.&nbsp; </p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>NOTE 4 &#150; MINERAL PROPERTIES AND INTERESTS</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Mineral properties and interests as of September 30, 2012 and December 31, 2011 are as follows:</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <div align="center"> <table style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">September 30, 2012</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">December 31, 2011</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp; Yellow Hammer Site</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Lease Fee</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">175,000</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">175,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset Retirement Obligation</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">30,908</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">30,908</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">205,908</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">205,908</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp; Kiewit, Cactus Mill and all other sites</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Lease Fee</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">600,000</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">600,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Annual Lease Payment</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">50,000</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">-</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset Retirement Obligation</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">26,913</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">26,594</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">676,913</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">626,594</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp; Blue Fin Claims</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Claim Fee</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">Total Mineral Properties and Leases</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">885,556</p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">835,237</p></td></tr></table></div> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting originally of 419 unpatented mining claims, including an unpatented mill site claim, 42 patented claims, and seven Utah state mineral leases located on state trust lands, all covering approximately 33 square miles.&nbsp; In August 2010 and 2011, as a result of further evaluation, the Company allowed certain of the claims and interests to lapse back to Clifton Mining.&nbsp; The Company has retained 299 unpatented claims, including the unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands.&nbsp; All but four of these mining claims and interests were obtained under the terms of the Amended and Restated Lease Agreement effective July 24, 2009, with Clifton Mining Company and Woodman Mining Company as lessors.&nbsp; Rights to the four Yellow Hammer patented claims were obtained under the terms of the Amended and Restated Lease Agreement dated July 24, 2009, with the Jeneane C. Moeller Family Trust.&nbsp; The properties are located approximately 190 miles west-southwest of Salt Lake City, Utah, and 56 miles south southeast of Wendover, Utah.&nbsp; The Company intends to concentrate its exploration activities on the Kiewit project consisting of seven of the unpatented Kiewit claims, the Clifton Shears, Cane Springs, Oquirrh Springs, the Frankie, the Rustler, the Lion Vein, and the Lucy L sites.&nbsp; Each of these is a potential near-term development target.&nbsp; Mineral extraction activities on the property at this time will be open-pit and the Company anticipates conducting underground mining exploration in the future.&nbsp; Annual lease fees are required on the 299 claims that make up the Company&#146;s Gold Hill property.&nbsp; Of these, four claims are within the Yellow Hammer site.&nbsp; Annual claims fees are currently $140 per claim plus administrative fees.&nbsp; The Company renewed 299 of the above claims in August 2012, at a total cost of about $42,159.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify"><b>Kiewit Gold Project</b></p> <p style="TEXT-ALIGN:justify">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company, through its lease agreement with Clifton Mining, has purchased all data, core samples and related reports from Dumont Nickel Inc. (which in 2010 changed its name to DNI Metals Inc. and was the former owner of the leases) associated with the aforementioned properties.&nbsp; In addition, the Company has access to all data and related information available and held by Clifton Mining.&nbsp; Desert Hawk has made application for a Large Mining Operations Permit to construct a heap leach facility and commence production activities on these claims.&nbsp; Tentative approval of the NOI was received from the Utah Division of Oil, Gas and Mining (DOGM) on September 28, 2012.&nbsp; A 30 day public comment period closes November 13, 2012.&nbsp; Conditional final approval will be issued if there are no substantive public comments.&nbsp; The NOI is expected to be issued during fourth quarter 2012 after posting of the required reclamation bond in the approximate amount of $1,278,000.&nbsp; </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In January 2010 the Company submitted a Notice of Intent to Commence Large Mining Operations application to DOGM for three surface mines and a leach gold operation on the Kiewit unpatented claims.&nbsp; In February 2010 the Company submitted a Plan of Operations to the Bureau of Land Management. The Plan of Operations is deemed to be substantially complete and along with the Environmental Assessment is expected to be issued by the BLM during fourth quarter 2012. </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>Cactus Mill Plant</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Located on the Cactus Mill site are two process facilities.&nbsp;&nbsp; A 150 ton per day mill built by Woodman Mining and operated until the 1980&#146;s using equipment to process copper, gold, silver, and tungsten ores from the district.&nbsp; In addition, there is a second facility, constructed in the 1990&#146;s, for custom milling precious metals concentrates.&nbsp; Equipment from both mills was used to construct a 240 ton per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims.&nbsp; In September 2010 the Company completed its rebuild of the pilot mill and testing of the pilot plan was conducted.&nbsp; Commencement of processing activities began in fourth quarter 2010.&nbsp; Pursuant to the Company&#146;s lease agreement with Clifton Mining, it has access to Cane Springs, a natural flowing spring approximately 1,000 feet above the Cactus Mill site, as well as the Cane Springs mine shaft located approximately one-quarter mile south of the Cactus Mill property.&nbsp; The Company holds a permit from the Utah Division of Oil, Gas and Mining for the pilot plant which allows flotation and gravity concentration.&nbsp; The Company commenced operation of the Cactus Mill pilot plant in November 2010, and processed and sold concentrates on a pilot test basis through June of 2011.&nbsp; Operations at the Cactus Mill pilot plant have been temporarily suspended.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>Yellow Hammer Claims</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company holds a Small Mine Permit for the Yellow Hammer site from the Utah Division of Oil, Gas and Mining and has posted reclamation bonds totaling $60,800.&nbsp; This permit stipulates that the Company may conduct exploration or mining operations on these claims so long as such activities are limited to an area within nine acres.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>Exploration Expenditures</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font lang="X-NONE">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font lang="X-NONE">Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2012 and 2011 were as follows:</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font lang="EN-GB">&nbsp;</font></b></p> <div align="center"> <table width="751" style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Three Months Ended September 30, 2012</font></p></td> <td width="40" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Three Months Ended September 30, 2011</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Nine Months Ended September 30, 2012</font></p></td> <td width="36" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Nine Months Ended September 30, 2011</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="EN-GB">Assaying</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">940</font></p></td> <td width="40" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">3,390</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">13,541</font></p></td> <td width="36" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="103" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">15,609</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="EN-GB">Permitting</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">56,406</font></p></td> <td width="40" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">50,557</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">203,247</font></p></td> <td width="36" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">98,485</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="EN-GB">Geological consulting fees</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">-</font></p></td> <td width="40" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">20,579</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">-</font></p></td> <td width="36" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">84,759</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt"><font lang="EN-GB">Maps and miscellaneous</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">-</font></p></td> <td width="40" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">473</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">77</font></p></td> <td width="36" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">5,782</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt"><font lang="EN-GB">Total Exploration Expenditures </font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">57,346</font></p></td> <td width="40" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="101" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">74,999</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="101" style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">216,865</font></p></td> <td width="36" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="103" style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">204,635</font></p></td></tr></table></div> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><b><font style="LINE-HEIGHT:95%">NOTE 6 &#150; CONVERTIBLE DEBT</font></b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On November 18, 2009 the Company issued convertible promissory notes to two of its minority shareholders for a total of $600,000.&nbsp; The notes bear interest at 15% per annum.&nbsp; Interest-only is payable in equal monthly installments of $7,500.&nbsp; The notes were originally convertible at any time at a rate of $1.50 per share, but on July 14, 2010 the promissory notes were amended thereby reducing the conversion price to $.70 due to the note holders&#146; agreement to subordinate their debt to DMRJ Group (see Note 8).&nbsp; The notes are convertible into potentially 857,143 shares of common stock, and principal and interest are due November 30, 2012. On November 18, 2009, the holders of the notes were issued 300,000 bonus shares at a rate of one share for each $2 loaned, resulting in a debt discount of $210,000 that is being accreted over the life of the loan.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On July 5, 2011 the Company entered into an agreement with the two holders of the convertible debt to begin paying their monthly interest in stock rather than cash.&nbsp; The note holders have been issued 91,071 shares of stock each, valued at $.70, to convert accrued interest for the months of May 2011 through September 2012.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In the event the Company fails to repay the loan or interest thereon in full on the maturity date of November 30, 2012, the Company will be required to issue an additional 300,000 shares of common stock to the holders of the convertible debt.&nbsp; Funding of these notes payable is under discussion as part of the negotiations with DMRJ Group regarding a future business relationship.&nbsp; See Note 8.</p> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><b><font style="LINE-HEIGHT:95%">NOTE 7 &#150; DERIVATIVE LIABILITIES</font></b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">The fair value of outstanding derivative instruments not designed as hedging instruments on the accompanying Consolidated Balance Sheets was as follows:</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <div align="center"> <table width="488" style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="145" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Derivative Instruments</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="19" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="27" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.45pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.25pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">September 30, 2012</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:21.15pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="128" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">December 31, 2011</font><font style="LINE-HEIGHT:95%"></font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="145" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 221.3pt 0pt 0in"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="19" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="152" colspan="2" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:113.7pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="156" colspan="2" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:117.15pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="145" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Put option</font></p></td> <td width="19" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="27" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.45pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="124" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.25pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">Expired &#150; 3/30/12</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:21.15pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="128" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">25,193</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.6pt"> <td width="145" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Conversion option</font></p></td> <td width="19" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="27" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="124" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.25pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">188,560</font></p></td> <td width="16" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="28" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:21.15pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="128" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">230,714</font></p></td></tr></table></div> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company&#146;s derivatives using the following assumptions at September 30, 2012 and December 31, 2011:</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <div align="center"> <table width="587" style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Number of</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Shares</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Volatility</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Risk-Free Rate</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Expected</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Life</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">(in years)</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Stock price</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">September 30, 2012</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Conversion option</font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">414,589</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">80.91%</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.10%</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.13</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="64" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">1.15</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">December 31, 2011</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Put option</font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">60,824</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">116.41%</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.06%</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.164</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="64" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">1.15</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Conversion option</font></p></td> <td width="30" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">407,435</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">91.72%</font></p></td> <td width="18" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.90%</font></p></td> <td width="24" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.77</font></p></td> <td width="20" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="64" style="BORDER-BOTTOM:#ece9d8; BORDER-LEFT:#ece9d8; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#ece9d8; BORDER-RIGHT:#ece9d8; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">1.15</font></p></td></tr></table></div> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><b><font style="LINE-HEIGHT:95%">NOTE 8 &#150; DMRJ GROUP FUNDING</font></b><font style="LINE-HEIGHT:95%"></font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On July 14, 2010, the Company entered into an Investment Agreement with DMRJ Group I, LLC (&#147;DMRJ Group&#148;).&nbsp; According to the original terms of the agreement, DMRJ Group had committed to loan the Company up to $6,500,000 pursuant to certain terms and conditions as evidenced by a promissory note, under which advances made to the Company were due not later than July 14, 2012.&nbsp; These loan advances could only be used by the Company to pay transaction fees and expenses incurred in connection with the loan transaction, to purchase certain mining equipment, and as working capital to advance our Yellow Hammer and Kiewit mining activities.&nbsp; The maximum amounts allocable to the Yellow Hammer and Kiewit projects were $2,500,000 and $2,750,000, respectively, and were subject to meeting certain milestones on the projects.&nbsp; Advances for operations on the Kiewit project were conditioned upon the Company&#146;s ability to obtain and maintain all environmental and mining permits necessary to commence mining activities and the timely payment of the initial Yellow Hammer advances.&nbsp; The Company had received loan advances from DMRJ Group for total principal due of $3,500,000 at September 30, 2012 and December 31, 2011.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Each principal advance amount bears interest of 15% per annum from the date of borrowing.&nbsp; The Company was also required to prepay one year&#146;s interest on each loan advance, or on a shorter period if the advance was less than one year prior to the maturity date of the promissory note. This prepayment of interest was nonrefundable if the Company prepaid the advance or went into default.&nbsp; In addition, at the time the Company repays or prepays the advance, it was required to pay an additional amount (the Repayment Obligation) equal to 20% of the principal and interest amount being repaid or prepaid.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In July 2010, in connection with this agreement, the Company issued 958,033 shares of its Series A Preferred Stock to DMRJ Group at $.001 par value for $958 cash.&nbsp; The Company recorded a discount to the DMRJ Group loan proceeds in the amount of $669,664, which was the common stock price of $.70 less the cash received for the preferred stock.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Loan advances made for the Yellow Hammer and Kiewit projects were subject to mandatory prepayments by the Company.&nbsp; Yellow Hammer advances were originally to be repaid, together with prepayment interest and any outstanding monthly interest, commencing on or before the fifth business day of the month beginning February 2011 and each month thereafter through September 2011.&nbsp; Kiewit advances were to be repaid, together with prepayment interest and any outstanding monthly interest, beginning in month seven after the initial advance on this project and continuing through month twelve.&nbsp; However, the repayment dates have been deferred due to waivers, forbearances, and amendments to the Initial Investment Agreement as stated in the following paragraphs.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Pursuant to a Security Agreement dated July 14, 2010, the Company has secured repayment of any advances made by DMRJ Group with all of its assets.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In connection with the DMRJ Group transaction, both of the Company&#146;s convertible note holders, each of whom had loaned $300,000 to the Company on November 18, 2009, agreed to subordinate their debt to DMRJ Group.&nbsp; In consideration for their agreement to subordinate their loans, the Company reduced the conversion price of the loans from $1.50 to $0.70 per share (see Note 6).&nbsp; All other material terms of the convertible loans remain unchanged.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On February 25, 2011, the Company entered into a Second Amendment to Investment Agreement with DMRJ Group which amended the Investment Agreement, dated as of July 14, 2010, as amended by the First Amendment and Waiver dated as of November 8, 2010.&nbsp; The Second Amendment allowed the Company to receive a term loan advance of up to $125,000.&nbsp; This advance was made without satisfying the provisions requiring the Company to meet certain milestones in connection with its Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.&nbsp; The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On March 6, 2011, the Company entered into a Forbearance Agreement with DMRJ Group pursuant to which DMRJ Group agreed to forbear until April 6, 2011, from exercising its rights and remedies with respect to an event of default by virtue of the Company&#146;s failure to make a mandatory prepayment as required under the Investment Agreement.&nbsp; The Company failed to make the mandatory prepayment to DMRJ Group on March 7, 2011, as required in the Investment Agreement.&nbsp; Pursuant to the Forbearance Agreement if the Company cured this prepayment default on or prior to April 6, 2011 no default interest would be due with respect to the period between the date of the prepayment default and April 6, 2011.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On March 11, 2011, the Company entered into a Third Amendment to Investment Agreement with DMRJ Group.&nbsp; This amendment allowed the Company to make a further request for a term loan advance under the Investment Agreement of up to $500,000 without satisfying the provisions requiring the Company to meet certain milestones in connection with the Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.&nbsp; Two $125,000 term loan advances were received as part of this amendment.&nbsp; These advances are not deemed to be Kiewit Advances, which means that they were not subject to the mandatory prepayment requirements under the Investment Agreement.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company failed to make its mandatory prepayment of $1,011,616 to DMRJ Group on April 7, 2011, as required pursuant to the Investment Agreement with DMRJ Group, and thus entered into a Fourth Amendment.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On April 21, 2011, the Company entered into a Fourth Amendment to Investment Agreement with DMRJ Group.&nbsp; This amendment allowed the Company to make a further request for a term loan advance under the Investment Agreement of up to $625,000 without satisfying the provisions requiring the Company to meet certain milestones in connection with the Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.&nbsp; The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.&nbsp; The Amendment also eliminated the requirement of the Investment Agreement to make mandatory prepayments for the Yellow Hammer advances. </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Fourth Amendment also contained provisions for DMRJ Group to elect to convert the outstanding payable balances to shares of Series A-1 Preferred Stock (for the Yellow Hammer Advances) and Series A-2 Preferred Stock (for the Term Loan Advances).&nbsp; See description of the Preferred Stock in Note 3.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Series A-1 and Series A-2 Preferred Stock are convertible into shares of the Company&#146;s common stock.&nbsp; The conversion rate of the preferred stock to shares of the Company&#146;s common stock is adjustable based upon factors not found in a standard fixed-for-fixed pricing model. As such, the Company considered the provisions of ASC 815 &#147;Derivatives and Hedging&#148;, and recorded the fair value of $108,279 for the embedded conversion option liability associated with the amended agreement with an offset to the carrying value of the debt.&nbsp; The assumptions used in the Black-Scholes option pricing model at May 3, 2011, were as follows: (1) dividend yield of 0%; (2) expected volatility of 96.8%, (3) risk-free interest rate of 0.40%, and (4) expected life of 1.25 years.&nbsp; The conversion option liability is adjusted to its fair value at the end of each reporting period with the change in fair value recognized in net income (loss).&nbsp; The conversion option derivative liability at September 30, 2012 is recorded at $188,560 (see Note 7).</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Also in connection with entering the Fourth Amendment the Company issued 100,000 shares of Series A-2 Preferred Stock valued at $700,000 to DMRJ Group.&nbsp; The value was determined by calculating the number of common shares into which the Series A-2 Preferred shares were convertible (1,000,000 common shares) times the current fair value for shares of common stock ($0.70).&nbsp; The Company recognized the amount in the loss on extinguishment of debt related to the Fourth Amendment.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company considered the impact of ASC 470-50 &#147;Debt-Modifications and Extinguishments&#148; on the accounting treatment of the Fourth Amendment.&nbsp; ASC 470-50 states that a transaction resulting in a significant change in the nature of a debt instrument should be accounted for as an extinguishment of debt.&nbsp; The difference between the reacquisition price and the net carrying amount of the extinguished debt was recognized currently in income of the period of extinguishment.&nbsp; The Company concluded that the amendment constituted a substantial modification.&nbsp; During the quarter ended June 30, 2011, the Company recognized a loss on extinguishment of the DMRJ note of $2,149,404 representing the difference between the fair value of the amended note, including consideration and fees, and the carrying value of the original note, including related unamortized discount. </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">A summary of DMRJ Group-related amounts as of September 30, 2012 and December 31, 2011 is as follows:</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <div align="center"> <table width="560" style="WIDTH:420.1pt; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">September 30, 2012</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">December 31, 2011</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:26.25pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:26.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Yellow Hammer Advances</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:26.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">2,500,000</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:26.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">2,500,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">20% accrued repayment obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">588,235</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">588,235</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">15% accrued prepaid interest obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">441,175</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">441,175</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:13.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">3,529,410</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">3,529,410</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Term Loan Advance Principal</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,000,000</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,000,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">20% accrued repayment obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">235,294</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">235,294</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:13.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">15% accrued prepaid interest obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">176,470</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">176,470</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:13.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,411,764</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,411,764</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total principal</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,941,174</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,941,174</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:16.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Less related discounts and unamortized balances</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">(5,278)</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">(230,888)</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:15pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Carrying Value</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,935,896</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,710,286</p></td></tr></table></div> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">This debt is all current in nature and was due in three installments (which include interest payable) of $1,550,000 on June 30, 2012, $2,945,000 on September 30, 2012 and $1,370,492 on December 31, 2012.&nbsp; On June 29, 2012 a Forbearance Agreement was signed and the payment terms were changed to allow the Company three additional months to pay the June 30, 2012 loan payment, in exchange for the issuance of 80,000 shares of Series A-2 Preferred Stock, carrying a value to DMRJ Group of $920,000.&nbsp; This value was determined by calculating the number of common shares into which the Series A-2 Preferred shares were convertible (800,000 common shares) times the current fair value (most recent sales price) for shares of common stock ($1.15).&nbsp; Financing expense in the amount of $920,000 was recognized for the quarter ended June 30, 2012 for this stock issuance pursuant to the Forbearance Agreement.&nbsp; Pursuant to the Forbearance Agreement DMRJ Group agreed to forbear from exercising its rights relating to a payment default if the payment due on June 30, 2012 was not paid.&nbsp; The Company failed to make the payment on June 30, 2012, and therefore an event of default occurred under the investment agreement, subject to DMRJ Group&#146;s agreement to forbear exercise its rights because of this default.&nbsp; Because additional terms of the Forbearance Agreement were not met, it terminated on July 31, 2012.&nbsp; </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group&#146;s agreement to forbear exercise its rights because of this default.&nbsp; Under the Investment Agreement, DMRJ Group therefore has the right, at its option, to notify the Company and declare the full amount of all of the loans immediately due and payable, foreclose on the security for the loans, or exercise any other legal rights based upon breach of the agreement.&nbsp; DMRJ Group has not notified the Company of its intent to exercise any of its rights based upon default of the Company under the agreement.&nbsp; Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.&nbsp; The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.&nbsp; The first $50,000 advance was received on October 17, 2012.&nbsp;&nbsp; The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.&nbsp; In addition, the maturity date of the entire loan balance due to DMRJ Group is moved from December 31, 2012 to December 15, 2012.&nbsp; The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857.&nbsp; </p> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><b><font style="LINE-HEIGHT:95%">NOTE 9 &#150; COMMITMENTS</font></b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Mining Properties</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">During the year ended December 31, 2009 the Company entered into a Joint Venture Agreement with the Moeller Family Trust for the leasing of the Trust&#146;s Yellow Hammer property in the Gold Hill Mining District of Utah.&nbsp; Pursuant to the agreement, Moeller Family Trust received 250,000 shares of the Company&#146;s restricted common stock.&nbsp; If the Company does not place the Yellow Hammer property into commercial production within a three year period it will be required to make annual lease payments to the Trust of $50,000.&nbsp; Under the terms of the Joint Venture agreement, the Company will be required to pay a 6% net smelter royalty on the production of base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold and silver, as applicable.&nbsp; The Company put the property into commercial production in 2011 which resulted in royalty payments to the Moeller Family Trust in the amount of $90,360 during 2011.&nbsp; Operations have been temporarily suspended and royalties are not currently accruing.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Also during the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company and the Woodman Mining Company for the leasing of their property interests in the Gold Hill Mining District of Utah. Under the terms of the Joint Venture agreement, the Company will be required to pay a 4% net smelter royalty on base metals in all other areas except for production from the Kiewit gold property and a net smelter royalty on gold and silver, except for production from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable.&nbsp; The Company will also be required to pay a 6% net smelter return on any production from the Kiewit gold property.&nbsp; Additionally, if the Company did not place the Kiewit, Clifton Shears/smelter tunnel deposit, and the Cane Springs deposits into commercial production within the&nbsp; three year period ending July 24, 2012, it was required to make annual lease payments to Clifton Mining in the amount of $50,000 per each of the three locations.&nbsp; The terms of this lease were renegotiated on June 30, 2012 and payment due dates for the properties for 2012 have been extended as shown below.&nbsp; The July 24, 2012 and October 24, 2012 payments were timely made.&nbsp; Negotiations regarding the December 24, 2012 Cane Springs property lease payment are currently ongoing.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <div align="center"> <table style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="223" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:167.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Kiewit property</p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">July 24, 2012</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="223" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:167.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Clifton Shears/smelter tunnel property</p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">October 24, 2012</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="223" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:167.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Cane Springs property</p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">December 24, 2012</p></td></tr></table></div> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In September 2009, the Company acquired all of the rights and interests of Clifton Mining in a $42,802 reclamation contract and cash surety deposit with the State of Utah Division of Oil, Gas and Mining for the property covered by the joint venture. As consideration for Clifton Mining selling its interest in the reclamation contract and surety deposit, the Company issued 60,824 shares to Clifton Mining. For a period of two years the Company had the right to repurchase the shares for $48,000 or during the 180-day period after this two year period, Clifton Mining had the option to put the shares to the Company for $48,000.&nbsp; In connection with the issuance of this put option, management concluded that the 60,824 shares should be recorded as a derivative liability, and not as equity.&nbsp; The put option expired March 30, 2012.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Employment Agreements</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">In September 2010, the Company entered into employment agreements with its Chief Executive Officer (&#147;CEO&#148;) and its President and entered into a consulting agreement with one of its directors.&nbsp; Each agreement is for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year.&nbsp; As of September 30, 2012, the salaries and payments under these contracts are accruing rather than being paid.&nbsp; As of September 30, 2012, the total amount included in accrued expenses for officer wages is $75,000 and for director consulting fees is $30,000.</p> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><b><font style="LINE-HEIGHT:95%">NOTE 10 &#150; SUBSEQUENT EVENTS</font></b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>DMRJ Loan</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.&nbsp; The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.&nbsp;&nbsp; The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.&nbsp; In addition, the maturity date of the entire loan balance due to DMRJ is moved from December 31, 2012 to December 15, 2012.&nbsp; The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857.&nbsp; </p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Stock Offering</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.&nbsp; As of September 30, 2012 no sales were recorded in conjunction with this offering, however,&nbsp; 110,000 shares of stock under this offering had been sold as of November 6, 2012.&nbsp; Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.&nbsp; Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.&nbsp; Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.</p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Mineral Exploration and Development Costs</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 <i>Extractive Activities - Mining</i>.&nbsp; All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.&nbsp; Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and amortized on units of production basis over proven and probable reserves.</p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Earnings Per Share</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">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.&nbsp; Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share.&nbsp; At September 30, 2012, common stock equivalents outstanding are 1,146,433 shares of common stock into which the convertible debt (see Note 6) and 2,758,033 shares of&nbsp; preferred stock into which the DMRJ debt (see Note 3) can be converted.&nbsp; However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company&#146;s net loss.</p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Going Concern</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through September 30, 2012 and limited cash at September 30, 2012, which raises substantial doubt about the Company&#146;s ability to continue as a going concern.&nbsp; 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.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company will need significant funding to continue operations and increase development through the next fiscal year.&nbsp; The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships.&nbsp; Management intends 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.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.</p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u><font lang="X-NONE">Reclassifications</font></u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="X-NONE"></font>&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="X-NONE">Certain reclassifications have been made to conform the prior period&#146;s data to the current presentation.&nbsp; These reclassifications have no effect on the results of reported operations or stockholders&#146; deficit.</font></p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>NOTE 5 &#150; JOINT VENTURE</b></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt; BACKGROUND:#fdfdfd">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">On February 7, 2012, we signed a letter of intent (&#147;LOI&#148;) with Shoshone Silver/Gold Mining Company (&#147;Shoshone&#148;) whereby Shoshone would acquire a 50% interest in our mineral properties located in Tooele County, Utah.&nbsp; The terms of the LOI were that Shoshone would contribute $10 million in project equity, as well as a $2 million project loan to have been used for the startup of the Kiewit gold heap leach operation.&nbsp; Under the terms of the deal, Shoshone had a 120 day exclusive right to provide the $10 million, for which $100,000 was advanced to us as a nonrefundable deposit.&nbsp; Shoshone would also provide a $2 million, 10% interest loan, with a four year maturity, which bears a preferential payback from operational cash flow.&nbsp; The two companies would have been 50-50 partners on the entire project with a four man operating committee consisting of two members from each company.&nbsp; The proceeds of the Shoshone transaction, which was originally scheduled to close in June but had been extended to September 30, 2012, would have been used to retire the DMRJ Group debt as well as fund a portion of the heap leach operation.&nbsp; The joint venture had not been finalized as of June 30, 2012 and an additional deposit of $100,000 had been agreed to as of June 29, 2012 to extend the agreement to joint venture the property until September 30, 2012.&nbsp; Although this additional deposit was received, other terms of the extension were not met and effective July 31, 2012 the joint venture agreement was terminated and the $200,000 received was recognized as gain on termination of a joint venture agreement.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">These joint venture transactions have resulted in an event of default in regard to the DMRJ Group note payable.&nbsp; Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.&nbsp; See Note 8.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> 0 0 27500 <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><u>Mineral Properties and Leases</u></p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">The Company accounts for mineral properties in accordance with ASC Topic 930 <i>Extractive Activities-Mining</i>.&nbsp; Costs of acquiring mineral properties and leases are capitalized by project area upon purchase of the associated claims (see Note 4).&nbsp; Mineral properties are periodically assessed for impairment of value.</p> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">The fair value of outstanding derivative instruments not designed as hedging instruments on the accompanying Consolidated Balance Sheets was as follows:</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <div align="center"> <table width="488" style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="145" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Derivative Instruments</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="19" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="27" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.45pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.25pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">September 30, 2012</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:21.15pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="128" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">December 31, 2011</font><font style="LINE-HEIGHT:95%"></font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="145" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 221.3pt 0pt 0in"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="19" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="152" colspan="2" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:113.7pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="156" colspan="2" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:117.15pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="145" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Put option</font></p></td> <td width="19" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="27" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.45pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.25pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">Expired &#150; 3/30/12</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:21.15pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">25,193</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.6pt"> <td width="145" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:108.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Conversion option</font></p></td> <td width="19" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.6pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="27" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.25pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">188,560</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:21.15pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.6pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">230,714</font></p></td></tr></table></div> <!--egx--><p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company&#146;s derivatives using the following assumptions at September 30, 2012 and December 31, 2011:</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p> <div align="center"> <table width="587" style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Number of</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Shares</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Volatility</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Risk-Free Rate</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Expected</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Life</font></p> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">(in years)</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">Stock price</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">September 30, 2012</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="center"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Conversion option</font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">414,589</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">80.91%</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.10%</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.13</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="64" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">1.15</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">December 31, 2011</font><font style="LINE-HEIGHT:95%"></font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="64" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Put option</font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">60,824</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">116.41%</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.06%</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.164</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="64" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">1.15</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid"> <td width="125" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.85pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">Conversion option</font></p></td> <td width="30" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:22.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">407,435</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="78" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:58.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">91.72%</font></p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.90%</font></p></td> <td width="24" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:0.25in; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">&nbsp;</font></p></td> <td width="66" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:49.5pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">.77</font></p></td> <td width="20" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:14.95pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">$</font></p></td> <td width="64" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:48pt; PADDING-RIGHT:5.4pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; LINE-HEIGHT:95%; MARGIN:0in 0in 0pt" align="right"><font style="LINE-HEIGHT:95%">1.15</font></p></td></tr></table></div> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">A summary of DMRJ Group-related amounts as of September 30, 2012 and December 31, 2011 is as follows:</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <div align="center"> <table width="560" style="WIDTH:420.1pt; BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">September 30, 2012</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">December 31, 2011</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" rowspan="2" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:26.25pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:26.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Yellow Hammer Advances</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:26.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">2,500,000</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:26.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">2,500,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">20% accrued repayment obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">588,235</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">588,235</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">15% accrued prepaid interest obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">441,175</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">441,175</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:13.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">3,529,410</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">3,529,410</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Term Loan Advance Principal</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,000,000</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,000,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">20% accrued repayment obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">235,294</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">235,294</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:13.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">15% accrued prepaid interest obligation</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">176,470</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">176,470</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:13.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,411,764</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:13.5pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">1,411,764</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total principal</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,941,174</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,941,174</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:16.5pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Less related discounts and unamortized balances</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">(5,278)</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:16.5pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">(230,888)</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.75pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="126" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="124" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.75pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:15pt"> <td width="268" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:201pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Carrying Value</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="126" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:94.2pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,935,896</p></td> <td width="21" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:15.8pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">$</p></td> <td width="124" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; PADDING-LEFT:5.4pt; WIDTH:93.3pt; PADDING-RIGHT:5.4pt; BACKGROUND:white; HEIGHT:15pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">4,710,286</p></td></tr></table></div> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Mineral properties and interests as of September 30, 2012 and December 31, 2011 are as follows:</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <div align="center"> <table style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">September 30, 2012</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">December 31, 2011</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp; Yellow Hammer Site</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Lease Fee</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">175,000</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">175,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset Retirement Obligation</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">30,908</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">30,908</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">205,908</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">205,908</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp; Kiewit, Cactus Mill and all other sites</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Lease Fee</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">600,000</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">600,000</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Annual Lease Payment</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">50,000</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">-</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset Retirement Obligation</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">26,913</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">26,594</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">676,913</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">626,594</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp; Blue Fin Claims</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial Claim Fee</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">2,735</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="95" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="252" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:189pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">Total Mineral Properties and Leases</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:1in; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">885,556</p></td> <td width="18" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:13.5pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="95" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:70.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">835,237</p></td></tr></table></div> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><b>Exploration Expenditures</b></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font lang="X-NONE">&nbsp;</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><font lang="X-NONE">Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2012 and 2011 were as follows:</font></p> <p style="TEXT-ALIGN:justify; LINE-HEIGHT:normal; MARGIN:0in 0in 0pt"><b><font lang="EN-GB">&nbsp;</font></b></p> <div align="center"> <table width="751" style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Three Months Ended September 30, 2012</font></p></td> <td width="40" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Three Months Ended September 30, 2011</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Nine Months Ended September 30, 2012</font></p></td> <td width="36" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:black 1pt solid; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:center; MARGIN:0in 0in 0pt" align="center"><font lang="EN-GB">Nine Months Ended September 30, 2011</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="EN-GB">Assaying</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">940</font></p></td> <td width="40" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">3,390</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">$</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">13,541</font></p></td> <td width="36" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="103" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">15,609</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="EN-GB">Permitting</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">56,406</font></p></td> <td width="40" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">50,557</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">203,247</font></p></td> <td width="36" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">98,485</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt"><font lang="EN-GB">Geological consulting fees</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">-</font></p></td> <td width="40" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">20,579</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">-</font></p></td> <td width="36" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">84,759</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt"><font lang="EN-GB">Maps and miscellaneous</font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="96" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">-</font></p></td> <td width="40" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">473</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="101" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">77</font></p></td> <td width="36" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="103" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">5,782</font></p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="167" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:125.45pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt"><font lang="EN-GB">Total Exploration Expenditures </font></p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="MARGIN:0in 0in 0pt">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="96" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:72.35pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">57,346</font></p></td> <td width="40" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:29.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="101" style="BORDER-BOTTOM:windowtext 1.5pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:windowtext 1pt solid; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">74,999</font></p></td> <td width="28" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:20.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="16" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:11.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="101" style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:75.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">216,865</font></p></td> <td width="36" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:26.8pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">&nbsp;</p></td> <td width="17" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:12.9pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">$</font></p></td> <td width="103" style="BORDER-BOTTOM:windowtext 2.25pt double; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:77.3pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="bottom"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right"><font lang="EN-GB">204,635</font></p></td></tr></table></div> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <!--egx--><p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Negotiations regarding the December 24, 2012 Cane Springs property lease payment are currently ongoing.</p> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">&nbsp;</p> <div align="center"> <table style="BORDER-COLLAPSE:collapse" cellpadding="0" cellspacing="0"> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="223" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:167.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Kiewit property</p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">July 24, 2012</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="223" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:167.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Clifton Shears/smelter tunnel property</p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">October 24, 2012</p></td></tr> <tr style="PAGE-BREAK-INSIDE:avoid; HEIGHT:12.25pt"> <td width="223" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:167.4pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">Cane Springs property</p></td> <td width="128" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:5.4pt; WIDTH:96pt; PADDING-RIGHT:5.4pt; HEIGHT:12.25pt; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:justify; MARGIN:0in 0in 0pt">December 24, 2012</p></td></tr></table></div> -200000 0 -200000 0 -200000 2713636 1146433 2758033 100000000 355833 309420 2000000 1150000 110000 1000 110000 958033 0 958033 0 0 2500000 0 1000000 100000 1000000 -0.70 -1.00 0.70 1.00 0.0490 80000 800000 175000 175000 30908 30908 205908 205908 600000 600000 50000 26913 26594 676913 626594 2735 2735 2735 2735 885556 835237 419 42 33 334 140 299 42159 1278000 150 240 60800 940 3390 13541 15609 56406 50557 203247 98485 20579 84759 473 77 5782 57346 74999 216865 204635 0.5000 10000000 2000000 10000000 100000 2000000 0.1000 100000 200000 600000 15 7500 1.50 0.70 857143 300000 2 210000 91071 0.70 300000 0 25193 188560 230714 414589 407435 0 60824 0.8091 0.9172 0 1.1641 0.0010 0.0090 0 0.0006 1.15 1.15 0 1.15 6500000 2500000 2750000 300000 0.70 3500000 3500000 0.1500 0.1500 0.2000 0.2000 958033 0.001 958 669664 0.70 125000 500000 125000 1011616 625000 108279 0.0000 0.9680 0.0040 1.25 188560 100000 700000 1000000 0.70 2149404 2500000 2500000 3529410 3529410 1000000 1000000 588235 588235 441175 441175 1411764 1411764 4941174 4941174 -5278 -230888 4935896 4710286 1550000 2945000 1370492 80000 920000 800000 1.15 4495000 100000 50000 5865492 0.0200 6148857 920000 235294 235294 176470 176470 50000 0.0600 0.0200 0.1500 90360 50000 250000 42802 48000 48000 60824 120000 75000 30000 100000 50000 5865492 0.0200 6148857 1150000 110000 0.0500 1000 8560973 0001168081 2012-01-01 2012-09-30 0001168081 2012-11-06 0001168081 2012-09-30 0001168081 2011-12-31 0001168081 2012-07-01 2012-09-30 0001168081 2011-07-01 2011-09-30 0001168081 2011-01-01 2011-09-30 0001168081 2009-05-01 2012-09-30 0001168081 2011-09-30 0001168081 2010-12-31 0001168081 2009-04-30 0001168081 2009-12-31 0001168081 2012-06-30 0001168081 2012-02-20 0001168081 2012-08-21 0001168081 2010-07-31 0001168081 2011-05-03 0001168081 2011-04-01 2011-06-30 0001168081 2011-06-30 0001168081 2012-06-29 0001168081 2012-02-07 0001168081 2009-11-18 0001168081 2011-07-05 0001168081 2010-07-14 0001168081 2010-07-01 2010-07-31 0001168081 2011-02-25 0001168081 2011-03-11 0001168081 2011-04-07 0001168081 2011-04-21 0001168081 2012-12-31 0001168081 2012-10-17 0001168081 2012-12-15 0001168081 2012-04-01 2012-06-30 0001168081 2009-01-01 2009-12-31 0001168081 2011-01-01 2011-12-31 0001168081 2009-09-30 0001168081 2010-09-30 iso4217:USD shares iso4217:USD shares pure EX-101.CAL 5 dhgc-20120930_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT EX-101.DEF 6 dhgc-20120930_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT EX-101.LAB 7 dhgc-20120930_lab.xml XBRL TAXONOMY EXTENSION LABELS LINKBASE DOCUMENT Interest rate accrued Interest rate accrued Percentage of net smelter royalty on gold and silver minimum Percentage of net smelter royalty on gold and silver minimum Loan amount failed to make payment Loan amount failed to make payment DMRJ Group Funding Summary of DMRJ group related amounts Put Option Number Of Shares expected life 0.164 years Put Option Number Of Shares expected life 0.164 years Convertible common stock shares Convertible common stock shares Contribution from Shoshone Contribution from Shoshone Annual claim fees including administrative fees Annual claim fees including administrative fees Initial Lease Fee Initial Lease Fee Number of convertible common stock shares Number of convertible common stock shares Number of common stock shares sold Number of common stock shares sold JOINT VENTURE {1} JOINT VENTURE Disclosure of joint venture or partnership that is included in the enterprise's financial statements using the proportionate consolidation method of accounting. Net cash used by operating activities Increase (decrease) in interest payable Common stock issued for interest expense The amount adjustment of Common stock issued for interest expense during the period. General project costs The amount of expenses towards general projected cost during the period. STOCKHOLDERS DEFICIT (Note 3) Document Fiscal Year Focus Percentage of proceedings during the first year of production Percentage of proceedings during the first year of production Annual payments to Clifton Mining per each of the three locations Annual payments to Clifton Mining per each of the three locations Accrued interest rate per month on loan amount due to DMRJ Group Accrued interest rate per month on loan amount due to DMRJ Group 20% accrued repayment obligation Term Loan Advance Principal Expected Volatility Expected Volatility DMRJ Group Series A Preferred Stock Shares Put Option risk free rate Put Option risk free rate Non refundable advance deposit Non refundable advance deposit Reclamation bond price for Kiewit Gold Project Reclamation bond price for Kiewit Gold Project Initial Claim Fee Initial Claim Fee Asset Retirement Obligation Series A 1 Preferred Stock Issue Price Series A 1 Preferred Stock Issue Price. Sale value of common stock shares Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reclassifications Proceeds from notes payable WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED The average number of shares or units issued and outstanding that are used in calculating basic and diluted EPS. NET LOSS Loss on extinguishment of debt (Note 8) Derivative liability-conversion option (Notes 7 and 8) Carrying amount as of the balance sheet date of the liability arising from a derivative instrument or a contract used to mitigate a specified risk and which are expected to be converted into cash or otherwise disposed of within a year or the normal operating cycle, if longer. Value of the option to put the shares to the company Value of the option to put the shares to the company Financing expense, Financing expense, Less related discounts and unamortized balances Less related discounts and unamortized balances Issuance of Series A-2 Preferred stock under fourth amendment Issuance of Series A-2 Preferred stock under fourth amendment Discount to the DMRJ Group loan proceeds Discount to the DMRJ Group loan proceeds Loan amount committed by DMRJ Group Loan amount committed by DMRJ Group Additional proceeds received Additional proceeds received Number of tons per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims Number of tons per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims Total Mineral Properties and Leases'. Total Mineral Properties and Leases'. Percentage of beneficial conversion feature Percentage of beneficial conversion feature Preferred stock shares series A issued to DMRJ Group Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt. DERIVATIVE LIABILITIES ORGANIZATION AND DESCRIPTION OF BUSINESS Common stock issued for accrued liabilities-officer wages Common stock issued for accrued liabilities-officer wages. NET INCREASE (DECREASE) IN CASH Common Stock, shares issued Asset retirement obligation (Note 4) Entity Filer Category Base salary or fees to CEO and President Base salary or fees to CEO and President Number of restricted common stock shares received by Moeller Family Trust Number of restricted common stock shares received by Moeller Family Trust Debt current and due in three installments (which include interest payable) Debt current and due in three installments (which include interest payable) Term loan advance allowed by Second amendment Term loan advance allowed by Second amendment Reduced Conversion price of the loan per share from $1.50 Reduced Conversion price of the loan per share from $1.50 DERIVATIVE LIABILITIES OutStanding Derivative Instruments Monthly interest payable Monthly interest payable Permitting Permitting Total area of mines in square miles Total area of mines in square miles Number of convertible common stock share Number of convertible common stock share SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share Mineral Exploration and Development Costs The entire policy text block is about Mineral Properties and Leases during the period. Common stock issued for mineral lease Common stock issued for mineral lease. Proceeds from issuance of preferred stock OTHER INCOME (EXPENSE) Preferred Stock Series A-2, shares outstanding Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased. Notes payable-net of discount (Note 8) Accrued expenses MINERAL PROPERTIES AND INTERESTS (Note 4) Additional funds to receive Additional funds to receive Percentage of net smelter royalty on gold and silver maximum Percentage of net smelter royalty on gold and silver maximum Number of shares Series A-2 Preferred stock convertible into common stock shares Number of shares Series A-2 Preferred stock convertible into common stock shares Yellow Hammer Advances Yellow Hammer Advances Two term loan advances received as part of amendment Two term loan advances received as part of amendment Interest rate of each prinipal advance amount Interest rate of each prinipal advance amount Bonues shares issued Bonues shares issued JOINT VENTURE {2} JOINT VENTURE Kiewit, Cactus Mill and all other sites Common stocks shares authorized The maximum number of common shares permitted to be issued by an entity's charter and bylaws. DERIVATIVE LIABILITIES (Tables) SUBSEQUENT EVENTS {1} SUBSEQUENT EVENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CASH FLOWS FROM FINANCING ACTIVITIES: Loss on extinguishment of debt The amount adjustment of loss on extinguishment of debt during the period, Consulting The amount of expenses towards consulting during the period. Accumulated depreciation on Property and Equipment Convertible debt-net of discount (Note 6) Accounts payable PROPERTY AND EQUIPMENT, net of accumulated depreciation of $140,993 and $88,976 Document Fiscal Period Focus Entity Common Stock, Shares Outstanding Total due at December 15, 2012 Total due at December 15, 2012 COMMITMENTS Clifton Mining Additional funds received under fifth amendment in two advances ($50000 each) Additional funds received under fifth amendment in two advances ($50000 each) 15% accrued prepaid interest obligation 15% accrued prepaid interest obligation DMRJ Group Funding assumptions used in option princing Issuance of shares of Series A Preferred Stock to DMRJ Group Issuance of shares of Series A Preferred Stock to DMRJ Group Conversion Option Volatility Conversion Option Volatility Convertible promissoy notes to two minority shareholders Convertible promissoy notes to two minority shareholders Project Loan Project Loan Initial Lease Fee. Initial Lease Fee Series A 2 Preferred Stock Issue Price Series A 2 Preferred Stock Issue Price. CAPITAL STOCK Equity Financing Mineral Properties and Interest Tabular disclosure of Mineral Properties and interest of the entity during the period. Common stock issued for accrued interest Common stock issued for accrued interest. Changes in operating assets and liabilities: Common stock issued for services The amount adjustment of Common stock issued for services during the period. Net loss. CASH FLOWS FROM OPERATING ACTIVITIES: LOSS BEFORE INCOME TAXES EXPENSES Common Stock, par value COMMITMENTS (Note 9) Interest payable (Note 8) ASSETS Entity Well-known Seasoned Issuer Determined price per ounce of the investment Determined price per ounce of the investment Total loan amount due Total loan amount due Risk free interest rate Risk free interest rate Common stock price discount to the DMRJ Group loan Common stock price discount to the DMRJ Group loan Conversion Option Stock Price Conversion Option Stock Price Convertible price Convertible price Loan from Shoshone Loan from Shoshone Total reclamation bonds posted Total reclamation bonds posted Total Initial Claim Fee CAPITAL STOCK Preferred Stock COMMITMENTS (Tables) DERIVATIVE LIABILITIES {1} DERIVATIVE LIABILITIES MINERAL PROPERTIES AND INTERESTS {1} MINERAL PROPERTIES AND INTERESTS The entire disclosure for mineral properties and interests of the entity during the period. Equipment acquired with note payable Equipment acquired with note payable. Interest and other income TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT Accumulated deficit during exploration stage Additional paid-in capital Preferred stock, $0.001 par value, 10,000,000 shares authorized Series A-1: No shares issued and outstanding Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity. LONG-TERM LIABILITIES Total Current Liabilities Amount included in officer wages Amount included in officer wages Issuance of shares Series A-2 Preferred Stock in exchange of loan payment Issuance of shares Series A-2 Preferred Stock in exchange of loan payment 20% accrued repayment obligation, 20% accrued repayment obligation, Value of Series A-2 Preferred Stock Value of Series A-2 Preferred Stock Amount allocable to the Yellow Hammer Amount allocable to the Yellow Hammer CONVERTIBLE DEBT Promissoy Notes Geological consulting fees Geological consulting fees MINERAL PROPERTIES AND INTERESTS Leases And Kiewit Gold Project MINERAL PROPERTIES AND INTERESTS {2} MINERAL PROPERTIES AND INTERESTS Designated preferred stock shares series A 1 Designated preferred stock shares series A 1 Common stock equivalents outstanding Common stock equivalents outstanding DMRJ GROUP FUNDING CAPITAL STOCK {1} CAPITAL STOCK ORGANIZATION AND DESCRIPTION OF BUSINESS {1} ORGANIZATION AND DESCRIPTION OF BUSINESS Financing fees paid The cash outflow for loan and debt issuance costs. Proceeds from issuance of common stock Adjustments to reconcile net loss to net cash used by operating activities: Interest expense Common Stock, shares outstanding Preferred Stock Series A 1, shares issued Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt. Preferred Stock, Series A shares authorized Document Type Additional funds for each Additional funds for each Annual payments required to the Trust Annual payments required to the Trust Current fair value common stock shares per share Current fair value common stock shares per share Recognized loss on extinguishment of the DMRJ note Recognized loss on extinguishment of the DMRJ note Mandatory prepayment amount failed by the company to DMRJ Group Mandatory prepayment amount failed by the company to DMRJ Group Total amount of principal due DERIVATIVE LIABILITIES Fair Value Conversion price per share Conversion price per share Percentage of interest acquired by Shoshone Percentage of interest acquired by Shoshone. Number of claims requiring annual lease fees Number of claims requiring annual lease fees CAPITAL STOCK Series A 2 Preferred Stock Finanicing raised through sales of common stock Finanicing raised through sales of common stock Going Concern Mineral Properties and Leases The entire policy text block is about Mineral Properties and Leases during the period. Net cash used by investing activities Accretion of asset retirement obligation Preferred stock issued for financing agreement The amount adjustment of Preferred stock issued for financing agreement during the period. BASIC AND DILUTED NET LOSS PER SHARE Change in fair value of derivatives OPERATING LOSS Gain on termination of joint venture agreement Depreciation Concentrate sales SUBSEQUENT EVENTS Stock Offering Royalty payments to the Moeller Family Trust Royalty payments to the Moeller Family Trust First advance amount was received First advance amount was received Total Yellow Hammer Advances Total Yellow Hammer Advances Fair value of conversion price liability Fair value of conversion price liability Put Option Volatility Put Option Volatility Rate of amount for on share of loaned Rate of amount for on share of loaned Amount to be provided exclusive right by Shoshone Amount to be provided exclusive right by Shoshone Number of claims to renew in August, 2012 Number of claims to renew in August, 2012 Annual Lease Payment. Annual Lease Payment. CAPITAL STOCK Preferred Stock Convertible Price Sale of common stock shares The maximum number of common shares permitted to be issued by an entity's charter and bylaws. DMRJ GROUP FUNDING (Tables) SUBSEQUENT EVENTS CAPITAL STOCK Preferred stock issued in connection with debt amendment Preferred stock issued in connection with debt amendment. Payments on mineral leases (Gain) on sale of marketable securities Total Expenses Legal and professional The amount of expenses towards legal and professional during the period. INCOME EARNED DURING EXPLORATION STAGE Derivative liability-put option (Notes 7 and 9) Accounts receivable Statement [Line Items] Value of reclamation contract and cash surety deposit Value of reclamation contract and cash surety deposit DMRJ Group Funding Financing Expense Total term loan advance principal Total term loan advance principal Expected life (in years) Expected life (in years) Par value of Series A preferred stock issued to DMRJ Group Par value of Series A preferred stock issued to DMRJ Group Put Option Stock Price Put Option Stock Price CONVERTIBLE DEBT Agreement Rate of interest on loan Rate of interest on loan MINERAL PROPERTIES AND INTERESTS Cactus Mill Plant And Yellow Hammer Claims Total. Total Kiewit, Cactus Mills and all other sites. Initial conversion price of Series A 1 Preferred stock Initial conversion price of Series A 1 Preferred stock. Designated preferred stock shares series A The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws. Shares issued to Blue Fin Shareholders JOINT VENTURE Disclosure of joint venture or partnership that is included in the enterprise's financial statements using the proportionate consolidation method of accounting. Repayment premium obligation Repayment premium obligations. Increase (decrease) in accounts payable (Increase) decrease in accounts receivable Depreciation. INCOME TAXES Total Stockholders Deficit Preferred stock, $0.001 par value, 10,000,000 shares authorized Series A-2: 180,000 and 100,000 shares issued and outstanding, respectively Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity. TOTAL LIABILITIES CURRENT LIABILITIES Cash {1} Cash CASH, BEGINNING OF PERIOD CASH, END OF PERIOD Entity Voluntary Filers Number of shares recordes as a derivative liability Number of shares recordes as a derivative liability Carrying Value Carrying Value 15% accrued prepaid interest obligation, 15% accrued prepaid interest obligation, Common stock shares convertible into Series A-2 Preferred Shares Common stock shares convertible into Series A-2 Preferred Shares Amount allocable to the Kiewit projects Amount allocable to the Kiewit projects Additional common stock shares required to issue Additional common stock shares required to issue Interest rate of convertible promissoy notes Interest rate of convertible promissoy notes MINERAL PROPERTIES AND INTERESTS Exploration Expenditures Number of unpatented mining claims Number of unpatented mining claims. Additional series A 2 Preferred Stock Issued Additional series A 2 Preferred Stock Issued Cane Springs Property lease payments Tabular disclosure of Cane Springs Property lease payments of the entity during the period. Earnings Per Share COMMITMENTS {1} COMMITMENTS COMMITMENTS Common stock issued for reclamation bond Common stock issued for reclamation bond. NON-CASH FINANCING AND INVESTING ACTIVITIES: Notes receivable Increase (decrease) in accrued expenses (Increase) decrease in prepaid expenses and other current assets Change in fair value of derivatives. Preferred Stock Series A 1, shares outstanding Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased. 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Derivative Instruments Put option expired on March 30, 2012 Derivative Instruments Put option expired on March 30, 2012 Reduced conversion price Reduced conversion price Maps and miscellaneous Maps and miscellaneous Series A 2 Preferred Stock shares issued Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt. Common stock convertible into debt and preferred stock Common stock convertible into debt and preferred stock Summary of DMRJ Group-related amounts DMRJ GROUP FUNDING {1} DMRJ GROUP FUNDING Proceeds from convertible notes payable The cash inflow from Proceeds from convertible notes payable Proceeds from marketable securities Preferred Stock Series A-2, shares issued Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt. Preferred stock, $0.001 par value, 10,000,000 shares authorized Series A: 958,033 shares issued and outstanding Statement [Table] Document Period End Date Amount due Amount due Term Loan Advance Principal Term Loan Advance Principal Term loan advance allowed by fourth amendment Term loan advance allowed by fourth amendment Percentage of principal and interest amount being repaid or prepaid Percentage of principal and interest amount being repaid or prepaid Conversion Option Number Of Shares expected life 0.38 years and 0.77 years Conversion Option Number Of Shares expected life 0.38 years and 0.77 years. Debt discount accreted over the life of the loan Debt discount accreted over the life of the loan Total costs Total costs Blue Fin Claims Estimate the fair value derivatives using the assumptions MINERAL PROPERTIES AND INTERESTS (Tables) CASH FLOWS FROM INVESTING ACTIVITIES: Financing expense The financing expenses related to the interest on the amount borrowed as per the Investment agreement with DMRJ. Preferred Stock, par value Stockholders Equity Par value Current Fiscal Year End Date Amendment Flag Document and Entity Information Sale of shares of commom stock Sale of shares of commom stock Value of right to repurchase of shares by the company Value of right to repurchase of shares by the company Entire loan balance due to DMRJ Group fifth amendment Entire loan balance due to DMRJ Group fifth amendment Total principal Total principal Dividend Yield Dividend Yield Value of shares issued to DMRJ Group Value of shares issued to DMRJ Group Conversion Option risk free rate Conversion Option risk free rate Number of shares issued by the note holders Number of shares issued by the note holders Number of tons per day mill built by Woodman Mining and operated until the 1980s Number of tons per day mill built by Woodman Mining and operated until the 1980s Asset Retirement Obligation. The carrying amount of a liability for an asset retirement obligation. An asset retirement obligation is a legal obligation associated with the disposal or retirement of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. Initial conversion price of Series A 2 Preferred stock Initial conversion price of Series A 2 Preferred stock Base price per ounce Base price per ounce. Derivative Instruments in Consolidated Balance Sheets Exploration Expenditures Tabular disclosure of Exploration Expenditures of the entity during the period. CONVERTIBLE DEBT {1} CONVERTIBLE DEBT MINERAL PROPERTIES AND INTERESTS Prepaid interest liability The amount of prepaid interest liability during the period. (Increase) decrease in inventory RECLAMATION BONDS (Note 4) Carrying amount as of the balance sheet date of Reclamation bonds. Entity Current Reporting Status COMMITMENTS Employment Agreements DMRJ Group Funding and Fifth amendment Conversion option derivative liability Conversion option derivative liability DMRJ Group Funding Second, third and fourth amendment DMRJ Group Funding Investment agreement Additional deposit agreed Additional deposit agreed Assaying Assaying Total' Total Blue fin Claims. ORGANIZATION AND DESCRIPTION OF BUSINESS {2} ORGANIZATION AND DESCRIPTION OF BUSINESS CONVERTIBLE DEBT Common stock issued as incentive with convertible notes Common stock issued as incentive with convertible notes. Payment of note payable - equipment Accretion of debt-related discounts Total Other Expense General and administrative Exploration expense Common Stock, shares authorized Accumulated deficit prior to exploration stage Accumulated deficit prior to exploration stage. LIABILITIES AND STOCKHOLDERS DEFICIT Prepaid expenses and other current assets Entity Central Index Key SUBSEQUENT EVENTS DMRJ Loan COMMITMENTS Mining Properties COMMITMENTS Mining Properties Current fair value for shares of common stock Current fair value for shares of common stock Convertible note holders, each of whom loaned to the Company Convertible note holders, each of whom loaned to the Company Derivative Instruments Conversion option Derivative Instruments Conversion option Total Exploration Expenditures Total Exploration Expenditures Number of patented mining claims Number of patented mining claims Yellow Hammer Site Designated preferred stock shares series A 2 Designated preferred stock shares series A 2. CAPITAL STOCK Common Stock SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {1} SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Net cash provided by financing activities Acquisition of reclamation bonds The cash inflow from Proceeds from deposits on Joint venture. 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DMRJ Group Series A Preferred Stock Shares (Details) (USD $)
1 Months Ended
Jul. 31, 2010
Issuance of shares of Series A Preferred Stock to DMRJ Group 958,033
Par value of Series A preferred stock issued to DMRJ Group $ 0.001
Value of shares issued to DMRJ Group $ 958
Discount to the DMRJ Group loan proceeds $ 669,664
Common stock price discount to the DMRJ Group loan $ 0.70
XML 11 R48.htm IDEA: XBRL DOCUMENT v2.4.0.6
SUBSEQUENT EVENTS DMRJ Loan (Details) (USD $)
Oct. 17, 2012
Additional funds to receive $ 100,000
Additional funds for each 50,000
Amount due 5,865,492
Interest rate accrued 2.00%
Total due at December 15, 2012 $ 6,148,857
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COMMITMENTS Clifton Mining (Details) (USD $)
Sep. 30, 2009
Value of reclamation contract and cash surety deposit $ 42,802
Value of right to repurchase of shares by the company 48,000
Value of the option to put the shares to the company $ 48,000
Number of shares recordes as a derivative liability 60,824
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CONVERTIBLE DEBT Promissoy Notes (Details) (USD $)
Nov. 18, 2009
Convertible promissoy notes to two minority shareholders $ 600,000
Interest rate of convertible promissoy notes 1500.00%
Monthly interest payable 7,500
Conversion price per share $ 1.50
Reduced conversion price $ 0.70
Convertible common stock shares 857,143
Bonues shares issued 300,000
Rate of amount for on share of loaned 2
Debt discount accreted over the life of the loan $ 210,000
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CAPITAL STOCK Preferred Stock (Details)
May 03, 2011
Jul. 31, 2010
Designated preferred stock shares series A 0 958,033
Preferred stock shares series A issued to DMRJ Group 0 958,033
Designated preferred stock shares series A 1 2,500,000 0
Designated preferred stock shares series A 2 1,000,000 0
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DMRJ Group Funding Summary of DMRJ group related amounts (Details) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Yellow Hammer Advances $ 2,500,000 $ 2,500,000
20% accrued repayment obligation 588,235 588,235
15% accrued prepaid interest obligation 441,175 441,175
Total Yellow Hammer Advances 3,529,410 3,529,410
Term Loan Advance Principal 1,000,000 1,000,000
20% accrued repayment obligation, 235,294 235,294
15% accrued prepaid interest obligation, 176,470 176,470
Total term loan advance principal 1,411,764 1,411,764
Total principal 4,941,174 4,941,174
Less related discounts and unamortized balances (5,278) (230,888)
Carrying Value $ 4,935,896 $ 4,710,286
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DMRJ Group Funding Investment agreement (Details) (USD $)
Jul. 14, 2010
Nov. 18, 2009
Loan amount committed by DMRJ Group $ 6,500,000  
Amount allocable to the Yellow Hammer 2,500,000  
Amount allocable to the Kiewit projects 2,750,000  
Convertible note holders, each of whom loaned to the Company   $ 300,000
Reduced Conversion price of the loan per share from $1.50   $ 0.70
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COMMITMENTS Employment Agreements (Details) (USD $)
Sep. 30, 2012
Sep. 30, 2010
Base salary or fees to CEO and President   $ 120,000
Amount included in officer wages 75,000  
Amount included in consulting fees $ 30,000  
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MINERAL PROPERTIES AND INTERESTS
9 Months Ended
Sep. 30, 2012
MINERAL PROPERTIES AND INTERESTS  
MINERAL PROPERTIES AND INTERESTS

NOTE 4 – MINERAL PROPERTIES AND INTERESTS

 

Mineral properties and interests as of September 30, 2012 and December 31, 2011 are as follows:

 

 

 

September 30, 2012

 

December 31, 2011

     Yellow Hammer Site

 

 

 

 

          Initial Lease Fee

$

175,000

$

175,000

          Asset Retirement Obligation

 

30,908

 

30,908

               Total

 

205,908

 

205,908

 

 

 

 

 

     Kiewit, Cactus Mill and all other sites

 

 

 

 

          Initial Lease Fee

 

600,000

 

600,000

          Annual Lease Payment

 

50,000

 

-

          Asset Retirement Obligation

 

26,913

 

26,594

               Total

 

676,913

 

626,594

 

 

 

 

 

     Blue Fin Claims

 

 

 

 

         Initial Claim Fee

 

2,735

 

2,735

 

 

 

 

 

               Total

 

2,735

 

2,735

 

 

 

 

 

Total Mineral Properties and Leases

$

885,556

$

835,237

 

The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting originally of 419 unpatented mining claims, including an unpatented mill site claim, 42 patented claims, and seven Utah state mineral leases located on state trust lands, all covering approximately 33 square miles.  In August 2010 and 2011, as a result of further evaluation, the Company allowed certain of the claims and interests to lapse back to Clifton Mining.  The Company has retained 299 unpatented claims, including the unpatented mill site claim, 42 patented claims, and three Utah state mineral leases located on state trust lands.  All but four of these mining claims and interests were obtained under the terms of the Amended and Restated Lease Agreement effective July 24, 2009, with Clifton Mining Company and Woodman Mining Company as lessors.  Rights to the four Yellow Hammer patented claims were obtained under the terms of the Amended and Restated Lease Agreement dated July 24, 2009, with the Jeneane C. Moeller Family Trust.  The properties are located approximately 190 miles west-southwest of Salt Lake City, Utah, and 56 miles south southeast of Wendover, Utah.  The Company intends to concentrate its exploration activities on the Kiewit project consisting of seven of the unpatented Kiewit claims, the Clifton Shears, Cane Springs, Oquirrh Springs, the Frankie, the Rustler, the Lion Vein, and the Lucy L sites.  Each of these is a potential near-term development target.  Mineral extraction activities on the property at this time will be open-pit and the Company anticipates conducting underground mining exploration in the future.  Annual lease fees are required on the 299 claims that make up the Company’s Gold Hill property.  Of these, four claims are within the Yellow Hammer site.  Annual claims fees are currently $140 per claim plus administrative fees.  The Company renewed 299 of the above claims in August 2012, at a total cost of about $42,159.

 

Kiewit Gold Project

 

The Company, through its lease agreement with Clifton Mining, has purchased all data, core samples and related reports from Dumont Nickel Inc. (which in 2010 changed its name to DNI Metals Inc. and was the former owner of the leases) associated with the aforementioned properties.  In addition, the Company has access to all data and related information available and held by Clifton Mining.  Desert Hawk has made application for a Large Mining Operations Permit to construct a heap leach facility and commence production activities on these claims.  Tentative approval of the NOI was received from the Utah Division of Oil, Gas and Mining (DOGM) on September 28, 2012.  A 30 day public comment period closes November 13, 2012.  Conditional final approval will be issued if there are no substantive public comments.  The NOI is expected to be issued during fourth quarter 2012 after posting of the required reclamation bond in the approximate amount of $1,278,000. 

 

In January 2010 the Company submitted a Notice of Intent to Commence Large Mining Operations application to DOGM for three surface mines and a leach gold operation on the Kiewit unpatented claims.  In February 2010 the Company submitted a Plan of Operations to the Bureau of Land Management. The Plan of Operations is deemed to be substantially complete and along with the Environmental Assessment is expected to be issued by the BLM during fourth quarter 2012.

 

Cactus Mill Plant

 

Located on the Cactus Mill site are two process facilities.   A 150 ton per day mill built by Woodman Mining and operated until the 1980’s using equipment to process copper, gold, silver, and tungsten ores from the district.  In addition, there is a second facility, constructed in the 1990’s, for custom milling precious metals concentrates.  Equipment from both mills was used to construct a 240 ton per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims.  In September 2010 the Company completed its rebuild of the pilot mill and testing of the pilot plan was conducted.  Commencement of processing activities began in fourth quarter 2010.  Pursuant to the Company’s lease agreement with Clifton Mining, it has access to Cane Springs, a natural flowing spring approximately 1,000 feet above the Cactus Mill site, as well as the Cane Springs mine shaft located approximately one-quarter mile south of the Cactus Mill property.  The Company holds a permit from the Utah Division of Oil, Gas and Mining for the pilot plant which allows flotation and gravity concentration.  The Company commenced operation of the Cactus Mill pilot plant in November 2010, and processed and sold concentrates on a pilot test basis through June of 2011.  Operations at the Cactus Mill pilot plant have been temporarily suspended.

 

Yellow Hammer Claims

 

The Company holds a Small Mine Permit for the Yellow Hammer site from the Utah Division of Oil, Gas and Mining and has posted reclamation bonds totaling $60,800.  This permit stipulates that the Company may conduct exploration or mining operations on these claims so long as such activities are limited to an area within nine acres.

 

Exploration Expenditures

 

Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2012 and 2011 were as follows:

 

 

 

 

Three Months Ended September 30, 2012

 

 

Three Months Ended September 30, 2011

 

 

Nine Months Ended September 30, 2012

 

 

Nine Months Ended September 30, 2011

Assaying

 

$

940

 

$

3,390

 

$

13,541

 

$

15,609

Permitting

 

 

56,406

 

 

50,557

 

 

203,247

 

 

98,485

Geological consulting fees

 

 

-

 

 

20,579

 

 

-

 

 

84,759

Maps and miscellaneous

 

 

-

 

 

473

 

 

77

 

 

5,782

Total Exploration Expenditures

 

$

57,346

 

$

74,999

 

$

216,865

 

$

204,635

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DMRJ Group Funding and Fifth amendment (Details) (USD $)
Dec. 31, 2012
Dec. 15, 2012
Oct. 17, 2012
Sep. 30, 2012
Jun. 30, 2012
Debt current and due in three installments (which include interest payable) $ 1,370,492     $ 2,945,000 $ 1,550,000
Issuance of shares Series A-2 Preferred Stock in exchange of loan payment         80,000
Value of shares exchanged for loan payment         920,000
Number of shares Series A-2 Preferred stock convertible into common stock shares         800,000
Current fair value common stock shares per share         $ 1.15
Loan amount failed to make payment       4,495,000  
Additional funds received under fifth amendment in two advances ($50000 each)     100,000    
First advance amount was received     50,000    
Entire loan balance due to DMRJ Group fifth amendment     5,865,492    
Accrued interest rate per month on loan amount due to DMRJ Group     2.00%    
Total loan amount due   $ 6,148,857      

XML 22 R29.htm IDEA: XBRL DOCUMENT v2.4.0.6
MINERAL PROPERTIES AND INTERESTS Leases And Kiewit Gold Project (Details) (USD $)
Sep. 30, 2012
Number of unpatented mining claims 419
Number of patented mining claims 42
Total area of mines in square miles 33
Number of claims requiring annual lease fees 334
Annual claim fees including administrative fees $ 140
Number of claims to renew in August, 2012 299
Total costs 42,159
Reclamation bond price for Kiewit Gold Project $ 1,278,000
XML 23 R28.htm IDEA: XBRL DOCUMENT v2.4.0.6
MINERAL PROPERTIES AND INTERESTS (Details) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Yellow Hammer Site    
Initial Lease Fee $ 175,000 $ 175,000
Asset Retirement Obligation 30,908 30,908
Total 205,908 205,908
Kiewit, Cactus Mill and all other sites    
Initial Lease Fee. 600,000 600,000
Annual Lease Payment. 50,000  
Asset Retirement Obligation. 26,913 26,594
Total. 676,913 626,594
Blue Fin Claims    
Initial Claim Fee 2,735 2,735
Total' 2,735 2,735
Total Mineral Properties and Leases'. $ 885,556 $ 835,237
XML 24 R44.htm IDEA: XBRL DOCUMENT v2.4.0.6
DMRJ Group Funding Financing Expense (Details) (USD $)
3 Months Ended
Jun. 30, 2012
Financing expense, $ 920,000
XML 25 R30.htm IDEA: XBRL DOCUMENT v2.4.0.6
MINERAL PROPERTIES AND INTERESTS Cactus Mill Plant And Yellow Hammer Claims (Details) (USD $)
Sep. 30, 2012
Number of tons per day mill built by Woodman Mining and operated until the 1980s 150
Number of tons per day pilot mill capable of recovering copper, gold, silver and tungsten ores initially extracted from the Yellow Hammer claims 240
Total reclamation bonds posted $ 60,800
XML 26 R31.htm IDEA: XBRL DOCUMENT v2.4.0.6
MINERAL PROPERTIES AND INTERESTS Exploration Expenditures (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Assaying $ 940 $ 3,390 $ 13,541 $ 15,609
Permitting 56,406 50,557 203,247 98,485
Geological consulting fees   20,579   84,759
Maps and miscellaneous   473 77 5,782
Total Exploration Expenditures $ 57,346 $ 74,999 $ 216,865 $ 204,635
XML 27 R8.htm IDEA: XBRL DOCUMENT v2.4.0.6
CAPITAL STOCK
9 Months Ended
Sep. 30, 2012
CAPITAL STOCK  
CAPITAL STOCK

NOTE 3 - CAPITAL STOCK

 

Common Stock

 

The Company is authorized to issue 100,000,000 shares of common stock.  All shares have equal voting rights and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.

 

An equity financing was initiated in third quarter of 2011.  This financing raised $355,833 through sales of 309,420 shares of common stock.  This offering concluded January 31, 2012.   A separate equity financing was initiated February 20, 2012 for the sale of up to 2,000,000 shares of stock.  No sales were recorded in conjunction with this offering, which ended June 30, 2012.

 

An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.  As of September 30, 2012 no sales had been recorded in conjunction with this offering.  Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.  Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.  Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.  As of November 6, 2012, this offering had raised $110,000 through sales of 110,000 shares of stock.

 

Preferred Stock

 

In July 2010 the Company filed a Certificate of Designations with the State of Nevada to create 958,033 shares of Series A Preferred Stock. The Series A Preferred Shares have voting rights with the common stock equal to the conversion value of the preferred shares into common shares.

 

In July 2010 the Company issued 958,033 shares of its Series A Preferred Stock to DMRJ Group in connection with financing (see Note 8). These preferred shares are convertible into shares of the Company’s common stock at the rate of one common share for each preferred share converted, subject to certain adjustments.

 

In connection with the Fourth Amendment to the DMRJ Group funding (see Note 8), on May 3, 2011, the Company created and designated 2,500,000 shares of its authorized preferred stock as Series A-1 Preferred Stock and 1,000,000 shares as Series A-2 Preferred Stock.  During the quarter ended June 30, 2011, 100,000 shares of Series A-2 Preferred stock were issued in connection with this Fourth Amendment.  These shares are convertible by the holder into 1,000,000 shares of the Company’s common stock, subject to the beneficial ownership rules detailed below.

 

Each share of Series A-1 Preferred Stock and Series A-2 Preferred Stock is convertible at the option of the holder at any time into that number of shares of common stock equal to (i) for the Series A-1 Preferred Stock ten times the Series A-1 Issue Price ($0.70) divided by the conversion price for Series A-1 Preferred and (ii) for the Series A-2 Preferred Stock ten times the Series A-2 Issue Price ($1.00) divided by the conversion price for such Series A-2 Preferred Stock.  The initial conversion price of the Series A-1 preferred stock is $0.70 per share and the conversion price of the Series A-2 preferred stock is $1.00.  If the Company issues or sell shares of its common stock, or grant options or other convertible securities which are exercisable or convertible into common shares, at prices less than the conversion price of Series A-1 or A-2 shares, except in certain exempted situations, then the conversion price of the Series A-1 and A-2 shares will be reduced to this lower of sale or conversion price.  The Series A-1 and A-2 shares may not be converted into common shares if the beneficial owner of such shares would thereafter exceed 4.9% of the outstanding common shares.

 

In connection with the Forbearance Agreement of the DMRJ Group funding arrangement (see Note 8) dated June 29, 2012, an additional 80,000 shares of Series A-2 Preferred stock were issued.  These shares are convertible by the holder into 800,000 shares of the Company’s common stock, subject to the beneficial ownership rules mentioned above. 

XML 28 R32.htm IDEA: XBRL DOCUMENT v2.4.0.6
JOINT VENTURE (Details) (USD $)
Jun. 29, 2012
Feb. 07, 2012
Percentage of interest acquired by Shoshone   50.00%
Contribution from Shoshone   $ 10,000,000
Project Loan   2,000,000
Amount to be provided exclusive right by Shoshone   10,000,000
Non refundable advance deposit   100,000
Loan from Shoshone   2,000,000
Rate of interest on loan   10.00%
Additional deposit agreed 100,000  
Additional proceeds received $ 200,000  
XML 29 R40.htm IDEA: XBRL DOCUMENT v2.4.0.6
DMRJ Group Funding Second, third and fourth amendment (Details) (USD $)
Apr. 21, 2011
Apr. 07, 2011
Mar. 11, 2011
Feb. 25, 2011
Term loan advance allowed by Second amendment       $ 125,000
Term loan advance allowed by Third amendment     500,000  
Two term loan advances received as part of amendment     125,000  
Mandatory prepayment amount failed by the company to DMRJ Group   1,011,616    
Term loan advance allowed by fourth amendment $ 625,000      
XML 30 R2.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED BALANCE SHEETS (USD $)
Sep. 30, 2012
Dec. 31, 2011
CURRENT ASSETS    
Cash $ 10,745 $ 415,090
Accounts receivable 1,475 66,883
Prepaid expenses and other current assets 63,852 92,195
Total Current Assets 76,072 574,168
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $140,993 and $88,976 325,740 377,757
MINERAL PROPERTIES AND INTERESTS (Note 4) 885,556 835,237
RECLAMATION BONDS (Note 4) 150,581 149,981
TOTAL ASSETS 1,437,949 1,937,143
CURRENT LIABILITIES    
Accounts payable 111,928 6,771
Accrued expenses 75,273 22,886
Derivative liability-put option (Notes 7 and 9) 0 25,193
Derivative liability-conversion option (Notes 7 and 8) 188,560 230,714
Interest payable (Note 8) 885,521 419,559
Notes payable-net of discount (Note 8) 4,935,896 4,710,286
Convertible debt-net of discount (Note 6) 587,264 534,764
Total Current Liabilities 6,784,442 5,950,173
LONG-TERM LIABILITIES    
Asset retirement obligation (Note 4) 62,141 57,502
TOTAL LIABILITIES 6,846,583 6,007,675
COMMITMENTS (Note 9)      
STOCKHOLDERS DEFICIT (Note 3)    
Preferred stock, $0.001 par value, 10,000,000 shares authorized Series A: 958,033 shares issued and outstanding 958 958
Preferred stock, $0.001 par value, 10,000,000 shares authorized Series A-1: No shares issued and outstanding 0 0
Preferred stock, $0.001 par value, 10,000,000 shares authorized Series A-2: 180,000 and 100,000 shares issued and outstanding, respectively 180 100
Common stock, $0.001 par value, 100,000,000 shares authorized; 8,460,973 and 8,314,883 shares issued and outstanding, respectively 8,463 8,316
Additional paid-in capital 6,088,487 5,058,563
Accumulated deficit prior to exploration stage (1,016,591) (1,016,591)
Accumulated deficit during exploration stage (10,490,131) (8,121,878)
Total Stockholders Deficit (5,408,634) (4,070,532)
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT $ 1,437,949 $ 1,937,143
XML 31 R45.htm IDEA: XBRL DOCUMENT v2.4.0.6
COMMITMENTS Mining Properties (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2009
Number of restricted common stock shares received by Moeller Family Trust   250,000
Annual payments required to the Trust   $ 50,000
Percentage of required to pay of net smelter royalty   6.00%
Percentage of net smelter royalty on gold and silver minimum   2.00%
Percentage of net smelter royalty on gold and silver maximum   15.00%
Royalty payments to the Moeller Family Trust 90,360  
Annual payments to Clifton Mining per each of the three locations   $ 50,000
XML 32 R6.htm IDEA: XBRL DOCUMENT v2.4.0.6
ORGANIZATION AND DESCRIPTION OF BUSINESS
9 Months Ended
Sep. 30, 2012
ORGANIZATION AND DESCRIPTION OF BUSINESS  
ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

 

Desert Hawk Gold Corp. (the “Company”) was incorporated on November 5, 1957, in the State of Idaho as Lucky Joe Mining Company.  On July 17, 2008 the Company merged with its wholly-owned subsidiary, Lucky Joe Mining Company, a Nevada corporation, for the sole purpose of effecting a change in domicile from the State of Idaho to the State of Nevada.  Lucky Joe Mining Company (Nevada) was the continuing and surviving corporation and each outstanding share of Lucky Joe Mining Company (Idaho) was converted into one outstanding share of Lucky Joe Mining Company (Nevada).  On April 3, 2009, the Company filed a Certificate of Amendment with the State of Nevada changing the name of the Company to Desert Hawk Gold Corp.

 

The Company was originally incorporated to pursue the mining business through the acquisition of prospective mining claims in the Wallace and Kellogg mining districts of Northern Idaho.  The Company never successfully generated any revenue or joint ventures from any of the activities it pursued and abandoned the mining business as a viable business model when the commodity prices cycled downward.  The Company remained dormant until it recommenced its mining activities and entered the exploration stage on May 1, 2009.  The Company is considered an exploration stage company and its financial statements are presented in a manner similar to a development stage company as defined in ASC 915-10-05 and interpreted by the Securities and Exchange Commission for mining companies in Industry Guide 7.

 

On December 31, 2009, the Company acquired all of the outstanding stock of Blue Fin Capital, Inc. (“Blue Fin”), a Utah corporation owning mining claims in Arizona.  The Company issued a total of 2,713,636 shares of its common stock to the shareholders of Blue Fin for all of the outstanding shares of Blue Fin.  Blue Fin was acquired from a related party, so the acquisition was recorded at the historical cost of Blue Fin.  Blue Fin became a wholly-owned subsidiary of the Company and all inter-company accounts have been eliminated.

 

These unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.  Accordingly, these financial statements do not include all of the disclosures required by accounting principles generally accepted in the United States of America for complete financial statements.  These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2011. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented.  Operating results for the nine month period ended September 30, 2012, are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

XML 33 R35.htm IDEA: XBRL DOCUMENT v2.4.0.6
DERIVATIVE LIABILITIES OutStanding Derivative Instruments (Details) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Derivative Instruments Put option expired on March 30, 2012 $ 0 $ 25,193
Derivative Instruments Conversion option $ 188,560 $ 230,714
XML 34 R22.htm IDEA: XBRL DOCUMENT v2.4.0.6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Earnings Per Share (Details)
Sep. 30, 2012
Common stock equivalents outstanding 1,146,433
Common stock convertible into debt and preferred stock 2,758,033
XML 35 R36.htm IDEA: XBRL DOCUMENT v2.4.0.6
DERIVATIVE LIABILITIES Fair Value (Details) (USD $)
Sep. 30, 2012
Dec. 31, 2011
Conversion Option Number Of Shares expected life 0.38 years and 0.77 years 414,589 407,435
Put Option Number Of Shares expected life 0.164 years 0 60,824
Conversion Option Volatility 80.91% 91.72%
Put Option Volatility 0.00% 116.41%
Conversion Option risk free rate 0.10% 0.90%
Put Option risk free rate 0.00% 0.06%
Conversion Option Stock Price $ 1.15 $ 1.15
Put Option Stock Price $ 0 $ 1.15
XML 36 R24.htm IDEA: XBRL DOCUMENT v2.4.0.6
CAPITAL STOCK Equity Financing (Details) (USD $)
Nov. 06, 2012
Aug. 21, 2012
Sale of common stock shares 110,000 1,150,000
Base price per ounce   $ 1,000
Sale value of common stock shares $ 110,000  
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XML 38 R7.htm IDEA: XBRL DOCUMENT v2.4.0.6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9 Months Ended
Sep. 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Mineral Exploration and Development Costs

 

The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining.  All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and amortized on units of production basis over proven and probable reserves.

 

Mineral Properties and Leases

 

The Company accounts for mineral properties in accordance with ASC Topic 930 Extractive Activities-Mining.  Costs of acquiring mineral properties and leases are capitalized by project area upon purchase of the associated claims (see Note 4).  Mineral properties are periodically assessed for impairment of value.

 

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 an entity similar to fully diluted earnings per share.  At September 30, 2012, common stock equivalents outstanding are 1,146,433 shares of common stock into which the convertible debt (see Note 6) and 2,758,033 shares of  preferred stock into which the DMRJ debt (see Note 3) can be converted.  However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s net loss.

 

Going Concern

 

As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through September 30, 2012 and limited cash at September 30, 2012, which raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

The Company will need significant funding to continue operations and increase development through the next fiscal year.  The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships.  Management intends 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.

 

If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

 

Reclassifications

 

Certain reclassifications have been made to conform the prior period’s data to the current presentation.  These reclassifications have no effect on the results of reported operations or stockholders’ deficit.

XML 39 R3.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $)
Sep. 30, 2012
Dec. 31, 2011
Accumulated depreciation on Property and Equipment $ 140,993 $ 88,976
Preferred Stock, par value $ 0.001 $ 0.001
Preferred Stock, Series A shares authorized 10,000,000 10,000,000
Preferred Stock Series A, shares issued 958,033 958,033
Preferred Stock Series A, shares outstanding 958,033 958,033
Preferred Stock Series A 1, shares issued 0 0
Preferred Stock Series A 1, shares outstanding 0 0
Preferred Stock Series A-2, shares issued 180,000 100,000
Preferred Stock Series A-2, shares outstanding 180,000 100,000
Common Stock, par value $ 0.001 $ 0.001
Common Stock, shares authorized 100,000,000 100,000,000
Common Stock, shares issued 8,460,973 8,314,883
Common Stock, shares outstanding 8,460,973 8,314,883
XML 40 R17.htm IDEA: XBRL DOCUMENT v2.4.0.6
MINERAL PROPERTIES AND INTERESTS (Tables)
9 Months Ended
Sep. 30, 2012
MINERAL PROPERTIES AND INTERESTS (Tables)  
Mineral Properties and Interest

Mineral properties and interests as of September 30, 2012 and December 31, 2011 are as follows:

 

 

 

September 30, 2012

 

December 31, 2011

     Yellow Hammer Site

 

 

 

 

          Initial Lease Fee

$

175,000

$

175,000

          Asset Retirement Obligation

 

30,908

 

30,908

               Total

 

205,908

 

205,908

 

 

 

 

 

     Kiewit, Cactus Mill and all other sites

 

 

 

 

          Initial Lease Fee

 

600,000

 

600,000

          Annual Lease Payment

 

50,000

 

-

          Asset Retirement Obligation

 

26,913

 

26,594

               Total

 

676,913

 

626,594

 

 

 

 

 

     Blue Fin Claims

 

 

 

 

         Initial Claim Fee

 

2,735

 

2,735

 

 

 

 

 

               Total

 

2,735

 

2,735

 

 

 

 

 

Total Mineral Properties and Leases

$

885,556

$

835,237

Exploration Expenditures

Exploration Expenditures

 

Exploration expenditures incurred by the Company during the three and nine months ended September 30, 2012 and 2011 were as follows:

 

 

 

 

Three Months Ended September 30, 2012

 

 

Three Months Ended September 30, 2011

 

 

Nine Months Ended September 30, 2012

 

 

Nine Months Ended September 30, 2011

Assaying

 

$

940

 

$

3,390

 

$

13,541

 

$

15,609

Permitting

 

 

56,406

 

 

50,557

 

 

203,247

 

 

98,485

Geological consulting fees

 

 

-

 

 

20,579

 

 

-

 

 

84,759

Maps and miscellaneous

 

 

-

 

 

473

 

 

77

 

 

5,782

Total Exploration Expenditures

 

$

57,346

 

$

74,999

 

$

216,865

 

$

204,635

 

XML 41 R1.htm IDEA: XBRL DOCUMENT v2.4.0.6
Document and Entity Information
9 Months Ended
Sep. 30, 2012
Nov. 06, 2012
Document and Entity Information    
Entity Registrant Name Desert Hawk Gold Corp.  
Document Type 10-Q  
Document Period End Date Sep. 30, 2012  
Amendment Flag false  
Entity Central Index Key 0001168081  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   8,560,973
Entity Filer Category Smaller Reporting Company  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Well-known Seasoned Issuer No  
Document Fiscal Year Focus 2012  
Document Fiscal Period Focus Q3  
XML 42 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
DERIVATIVE LIABILITIES (Tables)
9 Months Ended
Sep. 30, 2012
DERIVATIVE LIABILITIES (Tables)  
Derivative Instruments in Consolidated Balance Sheets

The fair value of outstanding derivative instruments not designed as hedging instruments on the accompanying Consolidated Balance Sheets was as follows:

 

Derivative Instruments

 

 

September 30, 2012

 

 

December 31, 2011

 

 

 

 

 

Put option

 

 

Expired – 3/30/12

 

$

25,193

Conversion option

 

$

188,560

 

$

230,714

Estimate the fair value derivatives using the assumptions

A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company’s derivatives using the following assumptions at September 30, 2012 and December 31, 2011:

 

 

 

Number of

Shares

 

Volatility

 

Risk-Free Rate

 

Expected

Life

(in years)

 

Stock price

September 30, 2012

 

 

 

 

 

 

 

 

 

 

Conversion option

 

414,589

 

80.91%

 

.10%

 

.13

$

1.15

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

Put option

 

60,824

 

116.41%

 

.06%

 

.164

$

1.15

Conversion option

 

407,435

 

91.72%

 

.90%

 

.77

$

1.15

XML 43 R4.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
3 Months Ended 9 Months Ended 41 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
INCOME EARNED DURING EXPLORATION STAGE          
Concentrate sales $ 0 $ 18,442 $ 0 $ 903,022 $ 969,905
EXPENSES          
General project costs 31,008 124,570 134,906 1,047,299 1,620,651
Exploration expense 57,346 74,999 216,865 204,635 1,587,449
Consulting 39,260 30,000 111,200 150,670 573,604
Officers and directors fees 75,000 59,188 181,923 249,486 1,022,858
Legal and professional 16,929 10,423 69,339 75,919 433,788
General and administrative 35,226 50,599 118,686 156,650 564,226
Depreciation 17,402 16,360 52,017 49,982 142,359
Gain on termination of joint venture agreement (200,000) 0 (200,000) 0 (200,000)
Total Expenses 72,171 366,139 684,936 1,934,641 5,744,935
OPERATING LOSS (72,171) (347,697) (684,936) (1,031,619) (4,775,030)
OTHER INCOME (EXPENSE)          
Interest and other income 3,572 0 3,572 14 66,423
Change in fair value of derivatives 42,958 (127,178) 67,347 (103,850) (53,885)
Loss on extinguishment of debt (Note 8) 0 0 0 (2,149,404) (2,149,404)
Financing expense (31,698) (67,708) (1,069,266) (464,853) (1,917,029)
Interest expense (224,183) (207,619) (684,970) (481,405) (1,661,206)
Total Other Expense (209,351) (402,505) (1,683,317) (3,199,498) (5,715,101)
LOSS BEFORE INCOME TAXES (281,522) (750,202) (2,368,253) (4,231,117) (10,490,131)
INCOME TAXES 0 0 0 0 0
NET LOSS $ (281,522) $ (750,202) $ (2,368,253) $ (4,231,117) $ (10,490,131)
BASIC AND DILUTED NET LOSS PER SHARE $ (0.03) $ (0.09) $ (0.28) $ (0.54)  
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED 8,430,578 8,086,844 8,394,924 7,849,793  
XML 44 R12.htm IDEA: XBRL DOCUMENT v2.4.0.6
DERIVATIVE LIABILITIES
9 Months Ended
Sep. 30, 2012
DERIVATIVE LIABILITIES  
DERIVATIVE LIABILITIES

NOTE 7 – DERIVATIVE LIABILITIES

 

The fair value of outstanding derivative instruments not designed as hedging instruments on the accompanying Consolidated Balance Sheets was as follows:

 

Derivative Instruments

 

 

September 30, 2012

 

 

December 31, 2011

 

 

 

 

 

Put option

 

 

Expired – 3/30/12

 

$

25,193

Conversion option

 

$

188,560

 

$

230,714

 

A Black-Scholes option-pricing model was used to estimate the fair value, using Level 2 inputs, of the Company’s derivatives using the following assumptions at September 30, 2012 and December 31, 2011:

 

 

 

Number of

Shares

 

Volatility

 

Risk-Free Rate

 

Expected

Life

(in years)

 

Stock price

September 30, 2012

 

 

 

 

 

 

 

 

 

 

Conversion option

 

414,589

 

80.91%

 

.10%

 

.13

$

1.15

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

Put option

 

60,824

 

116.41%

 

.06%

 

.164

$

1.15

Conversion option

 

407,435

 

91.72%

 

.90%

 

.77

$

1.15

XML 45 R11.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONVERTIBLE DEBT
9 Months Ended
Sep. 30, 2012
CONVERTIBLE DEBT  
CONVERTIBLE DEBT

NOTE 6 – CONVERTIBLE DEBT

 

On November 18, 2009 the Company issued convertible promissory notes to two of its minority shareholders for a total of $600,000.  The notes bear interest at 15% per annum.  Interest-only is payable in equal monthly installments of $7,500.  The notes were originally convertible at any time at a rate of $1.50 per share, but on July 14, 2010 the promissory notes were amended thereby reducing the conversion price to $.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group (see Note 8).  The notes are convertible into potentially 857,143 shares of common stock, and principal and interest are due November 30, 2012. On November 18, 2009, the holders of the notes were issued 300,000 bonus shares at a rate of one share for each $2 loaned, resulting in a debt discount of $210,000 that is being accreted over the life of the loan.

 

On July 5, 2011 the Company entered into an agreement with the two holders of the convertible debt to begin paying their monthly interest in stock rather than cash.  The note holders have been issued 91,071 shares of stock each, valued at $.70, to convert accrued interest for the months of May 2011 through September 2012.

 

In the event the Company fails to repay the loan or interest thereon in full on the maturity date of November 30, 2012, the Company will be required to issue an additional 300,000 shares of common stock to the holders of the convertible debt.  Funding of these notes payable is under discussion as part of the negotiations with DMRJ Group regarding a future business relationship.  See Note 8.

XML 46 R23.htm IDEA: XBRL DOCUMENT v2.4.0.6
CAPITAL STOCK Common Stock (Details) (USD $)
Jun. 30, 2012
Feb. 20, 2012
Common stocks shares authorized 100,000,000  
Finanicing raised through sales of common stock $ 355,833  
Number of common stock shares sold 309,420 2,000,000
XML 47 R19.htm IDEA: XBRL DOCUMENT v2.4.0.6
DMRJ GROUP FUNDING (Tables)
9 Months Ended
Sep. 30, 2012
DMRJ GROUP FUNDING (Tables)  
Summary of DMRJ Group-related amounts

A summary of DMRJ Group-related amounts as of September 30, 2012 and December 31, 2011 is as follows:

 

 

 

 

 

 

 

September 30, 2012

December 31, 2011

 

$

 

$

 

Yellow Hammer Advances

2,500,000

2,500,000

20% accrued repayment obligation

 

588,235

 

588,235

15% accrued prepaid interest obligation

 

441,175

 

441,175

 

 

3,529,410

 

3,529,410

Term Loan Advance Principal

 

1,000,000

 

1,000,000

20% accrued repayment obligation

 

235,294

 

235,294

15% accrued prepaid interest obligation

 

176,470

 

176,470

 

 

1,411,764

 

1,411,764

                   Total principal

 

4,941,174

 

4,941,174

Less related discounts and unamortized balances

 

(5,278)

 

(230,888)

 

 

 

 

 

                   Carrying Value

$

4,935,896

$

4,710,286

XML 48 R15.htm IDEA: XBRL DOCUMENT v2.4.0.6
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2012
SUBSEQUENT EVENTS  
SUBSEQUENT EVENTS

NOTE 10 – SUBSEQUENT EVENTS

 

DMRJ Loan

 

On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.   The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ is moved from December 31, 2012 to December 15, 2012.  The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857. 

 

Stock Offering

 

An equity financing was initiated August 21, 2012 for the sale of up to 1,150,000 shares of common stock.  As of September 30, 2012 no sales were recorded in conjunction with this offering, however,  110,000 shares of stock under this offering had been sold as of November 6, 2012.  Under the terms of this offering, stock can be converted to cash generated from the sale of gold, for a period of 12 months after commencement of operations at the Kiewit project.  Proceeds from 5% of the gold produced during the first year of production will be allocated to fund this option.  Each investor will receive the right to convert a minimum of one-half and up to all of his shares (on a pro rata basis) into the value of the number of ounces represented by the total investment, determined using a base price of $1,000 per ounce.

XML 49 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
DMRJ GROUP FUNDING
9 Months Ended
Sep. 30, 2012
DMRJ GROUP FUNDING  
DMRJ GROUP FUNDING

NOTE 8 – DMRJ GROUP FUNDING

 

On July 14, 2010, the Company entered into an Investment Agreement with DMRJ Group I, LLC (“DMRJ Group”).  According to the original terms of the agreement, DMRJ Group had committed to loan the Company up to $6,500,000 pursuant to certain terms and conditions as evidenced by a promissory note, under which advances made to the Company were due not later than July 14, 2012.  These loan advances could only be used by the Company to pay transaction fees and expenses incurred in connection with the loan transaction, to purchase certain mining equipment, and as working capital to advance our Yellow Hammer and Kiewit mining activities.  The maximum amounts allocable to the Yellow Hammer and Kiewit projects were $2,500,000 and $2,750,000, respectively, and were subject to meeting certain milestones on the projects.  Advances for operations on the Kiewit project were conditioned upon the Company’s ability to obtain and maintain all environmental and mining permits necessary to commence mining activities and the timely payment of the initial Yellow Hammer advances.  The Company had received loan advances from DMRJ Group for total principal due of $3,500,000 at September 30, 2012 and December 31, 2011.

 

Each principal advance amount bears interest of 15% per annum from the date of borrowing.  The Company was also required to prepay one year’s interest on each loan advance, or on a shorter period if the advance was less than one year prior to the maturity date of the promissory note. This prepayment of interest was nonrefundable if the Company prepaid the advance or went into default.  In addition, at the time the Company repays or prepays the advance, it was required to pay an additional amount (the Repayment Obligation) equal to 20% of the principal and interest amount being repaid or prepaid.

 

In July 2010, in connection with this agreement, the Company issued 958,033 shares of its Series A Preferred Stock to DMRJ Group at $.001 par value for $958 cash.  The Company recorded a discount to the DMRJ Group loan proceeds in the amount of $669,664, which was the common stock price of $.70 less the cash received for the preferred stock.

 

Loan advances made for the Yellow Hammer and Kiewit projects were subject to mandatory prepayments by the Company.  Yellow Hammer advances were originally to be repaid, together with prepayment interest and any outstanding monthly interest, commencing on or before the fifth business day of the month beginning February 2011 and each month thereafter through September 2011.  Kiewit advances were to be repaid, together with prepayment interest and any outstanding monthly interest, beginning in month seven after the initial advance on this project and continuing through month twelve.  However, the repayment dates have been deferred due to waivers, forbearances, and amendments to the Initial Investment Agreement as stated in the following paragraphs.

 

Pursuant to a Security Agreement dated July 14, 2010, the Company has secured repayment of any advances made by DMRJ Group with all of its assets.

In connection with the DMRJ Group transaction, both of the Company’s convertible note holders, each of whom had loaned $300,000 to the Company on November 18, 2009, agreed to subordinate their debt to DMRJ Group.  In consideration for their agreement to subordinate their loans, the Company reduced the conversion price of the loans from $1.50 to $0.70 per share (see Note 6).  All other material terms of the convertible loans remain unchanged.

 

On February 25, 2011, the Company entered into a Second Amendment to Investment Agreement with DMRJ Group which amended the Investment Agreement, dated as of July 14, 2010, as amended by the First Amendment and Waiver dated as of November 8, 2010.  The Second Amendment allowed the Company to receive a term loan advance of up to $125,000.  This advance was made without satisfying the provisions requiring the Company to meet certain milestones in connection with its Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.

 

On March 6, 2011, the Company entered into a Forbearance Agreement with DMRJ Group pursuant to which DMRJ Group agreed to forbear until April 6, 2011, from exercising its rights and remedies with respect to an event of default by virtue of the Company’s failure to make a mandatory prepayment as required under the Investment Agreement.  The Company failed to make the mandatory prepayment to DMRJ Group on March 7, 2011, as required in the Investment Agreement.  Pursuant to the Forbearance Agreement if the Company cured this prepayment default on or prior to April 6, 2011 no default interest would be due with respect to the period between the date of the prepayment default and April 6, 2011.

 

On March 11, 2011, the Company entered into a Third Amendment to Investment Agreement with DMRJ Group.  This amendment allowed the Company to make a further request for a term loan advance under the Investment Agreement of up to $500,000 without satisfying the provisions requiring the Company to meet certain milestones in connection with the Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  Two $125,000 term loan advances were received as part of this amendment.  These advances are not deemed to be Kiewit Advances, which means that they were not subject to the mandatory prepayment requirements under the Investment Agreement.

 

The Company failed to make its mandatory prepayment of $1,011,616 to DMRJ Group on April 7, 2011, as required pursuant to the Investment Agreement with DMRJ Group, and thus entered into a Fourth Amendment.

 

On April 21, 2011, the Company entered into a Fourth Amendment to Investment Agreement with DMRJ Group.  This amendment allowed the Company to make a further request for a term loan advance under the Investment Agreement of up to $625,000 without satisfying the provisions requiring the Company to meet certain milestones in connection with the Kiewit properties and permitting the Company to use the funds for working capital and ordinary course general corporate purposes not inconsistent with or prohibited by the Investment Agreement.  The advance was not deemed to be a Kiewit Advance, which means that it was not subject to the mandatory prepayment requirements under the Investment Agreement.  The Amendment also eliminated the requirement of the Investment Agreement to make mandatory prepayments for the Yellow Hammer advances.

 

The Fourth Amendment also contained provisions for DMRJ Group to elect to convert the outstanding payable balances to shares of Series A-1 Preferred Stock (for the Yellow Hammer Advances) and Series A-2 Preferred Stock (for the Term Loan Advances).  See description of the Preferred Stock in Note 3.

 

The Series A-1 and Series A-2 Preferred Stock are convertible into shares of the Company’s common stock.  The conversion rate of the preferred stock to shares of the Company’s common stock is adjustable based upon factors not found in a standard fixed-for-fixed pricing model. As such, the Company considered the provisions of ASC 815 “Derivatives and Hedging”, and recorded the fair value of $108,279 for the embedded conversion option liability associated with the amended agreement with an offset to the carrying value of the debt.  The assumptions used in the Black-Scholes option pricing model at May 3, 2011, were as follows: (1) dividend yield of 0%; (2) expected volatility of 96.8%, (3) risk-free interest rate of 0.40%, and (4) expected life of 1.25 years.  The conversion option liability is adjusted to its fair value at the end of each reporting period with the change in fair value recognized in net income (loss).  The conversion option derivative liability at September 30, 2012 is recorded at $188,560 (see Note 7).

 

Also in connection with entering the Fourth Amendment the Company issued 100,000 shares of Series A-2 Preferred Stock valued at $700,000 to DMRJ Group.  The value was determined by calculating the number of common shares into which the Series A-2 Preferred shares were convertible (1,000,000 common shares) times the current fair value for shares of common stock ($0.70).  The Company recognized the amount in the loss on extinguishment of debt related to the Fourth Amendment.

 

The Company considered the impact of ASC 470-50 “Debt-Modifications and Extinguishments” on the accounting treatment of the Fourth Amendment.  ASC 470-50 states that a transaction resulting in a significant change in the nature of a debt instrument should be accounted for as an extinguishment of debt.  The difference between the reacquisition price and the net carrying amount of the extinguished debt was recognized currently in income of the period of extinguishment.  The Company concluded that the amendment constituted a substantial modification.  During the quarter ended June 30, 2011, the Company recognized a loss on extinguishment of the DMRJ note of $2,149,404 representing the difference between the fair value of the amended note, including consideration and fees, and the carrying value of the original note, including related unamortized discount.

 

A summary of DMRJ Group-related amounts as of September 30, 2012 and December 31, 2011 is as follows:

 

 

 

 

 

 

 

September 30, 2012

December 31, 2011

 

$

 

$

 

Yellow Hammer Advances

2,500,000

2,500,000

20% accrued repayment obligation

 

588,235

 

588,235

15% accrued prepaid interest obligation

 

441,175

 

441,175

 

 

3,529,410

 

3,529,410

Term Loan Advance Principal

 

1,000,000

 

1,000,000

20% accrued repayment obligation

 

235,294

 

235,294

15% accrued prepaid interest obligation

 

176,470

 

176,470

 

 

1,411,764

 

1,411,764

                   Total principal

 

4,941,174

 

4,941,174

Less related discounts and unamortized balances

 

(5,278)

 

(230,888)

 

 

 

 

 

                   Carrying Value

$

4,935,896

$

4,710,286

 

This debt is all current in nature and was due in three installments (which include interest payable) of $1,550,000 on June 30, 2012, $2,945,000 on September 30, 2012 and $1,370,492 on December 31, 2012.  On June 29, 2012 a Forbearance Agreement was signed and the payment terms were changed to allow the Company three additional months to pay the June 30, 2012 loan payment, in exchange for the issuance of 80,000 shares of Series A-2 Preferred Stock, carrying a value to DMRJ Group of $920,000.  This value was determined by calculating the number of common shares into which the Series A-2 Preferred shares were convertible (800,000 common shares) times the current fair value (most recent sales price) for shares of common stock ($1.15).  Financing expense in the amount of $920,000 was recognized for the quarter ended June 30, 2012 for this stock issuance pursuant to the Forbearance Agreement.  Pursuant to the Forbearance Agreement DMRJ Group agreed to forbear from exercising its rights relating to a payment default if the payment due on June 30, 2012 was not paid.  The Company failed to make the payment on June 30, 2012, and therefore an event of default occurred under the investment agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Because additional terms of the Forbearance Agreement were not met, it terminated on July 31, 2012. 

 

The Company failed to make the loan payment of $4,495,000 on September 30, 2012, and therefore an event of default occurred under the Investment Agreement, subject to DMRJ Group’s agreement to forbear exercise its rights because of this default.  Under the Investment Agreement, DMRJ Group therefore has the right, at its option, to notify the Company and declare the full amount of all of the loans immediately due and payable, foreclose on the security for the loans, or exercise any other legal rights based upon breach of the agreement.  DMRJ Group has not notified the Company of its intent to exercise any of its rights based upon default of the Company under the agreement.  Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.

 

On October 17, 2012, the Company entered into a Fifth Amendment with DMRJ Group.  The Fifth Amendment provides for the Company to receive up to $100,000 in additional funds in two advances (October Term Loan Advances) of $50,000 each.  The first $50,000 advance was received on October 17, 2012.   The advances are not deemed to be Kiewit Advances, which means that they will not be subject to the mandatory prepayment requirements under the Investment Agreement.  In addition, the maturity date of the entire loan balance due to DMRJ Group is moved from December 31, 2012 to December 15, 2012.  The amount to be due under the newly executed Fifth Amendment is $5,865,492 as of October 17, 2012; plus accrued interest at 2% per month, for a total due at December 15, 2012 of $6,148,857. 

XML 50 R14.htm IDEA: XBRL DOCUMENT v2.4.0.6
COMMITMENTS
9 Months Ended
Sep. 30, 2012
COMMITMENTS  
COMMITMENTS

NOTE 9 – COMMITMENTS

 

Mining Properties

 

During the year ended December 31, 2009 the Company entered into a Joint Venture Agreement with the Moeller Family Trust for the leasing of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah.  Pursuant to the agreement, Moeller Family Trust received 250,000 shares of the Company’s restricted common stock.  If the Company does not place the Yellow Hammer property into commercial production within a three year period it will be required to make annual lease payments to the Trust of $50,000.  Under the terms of the Joint Venture agreement, the Company will be required to pay a 6% net smelter royalty on the production of base metals and a net smelter royalty on gold and silver based on a sliding scale of between 2% and 15% based on the price of gold and silver, as applicable.  The Company put the property into commercial production in 2011 which resulted in royalty payments to the Moeller Family Trust in the amount of $90,360 during 2011.  Operations have been temporarily suspended and royalties are not currently accruing.

 

Also during the year ended December 31, 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company and the Woodman Mining Company for the leasing of their property interests in the Gold Hill Mining District of Utah. Under the terms of the Joint Venture agreement, the Company will be required to pay a 4% net smelter royalty on base metals in all other areas except for production from the Kiewit gold property and a net smelter royalty on gold and silver, except for production from the Kiewit gold property, based on a sliding scale of between 2% and 15% based on the price of gold or silver, as applicable.  The Company will also be required to pay a 6% net smelter return on any production from the Kiewit gold property.  Additionally, if the Company did not place the Kiewit, Clifton Shears/smelter tunnel deposit, and the Cane Springs deposits into commercial production within the  three year period ending July 24, 2012, it was required to make annual lease payments to Clifton Mining in the amount of $50,000 per each of the three locations.  The terms of this lease were renegotiated on June 30, 2012 and payment due dates for the properties for 2012 have been extended as shown below.  The July 24, 2012 and October 24, 2012 payments were timely made.  Negotiations regarding the December 24, 2012 Cane Springs property lease payment are currently ongoing.

 

Kiewit property

July 24, 2012

Clifton Shears/smelter tunnel property

October 24, 2012

Cane Springs property

December 24, 2012

 

In September 2009, the Company acquired all of the rights and interests of Clifton Mining in a $42,802 reclamation contract and cash surety deposit with the State of Utah Division of Oil, Gas and Mining for the property covered by the joint venture. As consideration for Clifton Mining selling its interest in the reclamation contract and surety deposit, the Company issued 60,824 shares to Clifton Mining. For a period of two years the Company had the right to repurchase the shares for $48,000 or during the 180-day period after this two year period, Clifton Mining had the option to put the shares to the Company for $48,000.  In connection with the issuance of this put option, management concluded that the 60,824 shares should be recorded as a derivative liability, and not as equity.  The put option expired March 30, 2012.

 

Employment Agreements

 

In September 2010, the Company entered into employment agreements with its Chief Executive Officer (“CEO”) and its President and entered into a consulting agreement with one of its directors.  Each agreement is for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year.  As of September 30, 2012, the salaries and payments under these contracts are accruing rather than being paid.  As of September 30, 2012, the total amount included in accrued expenses for officer wages is $75,000 and for director consulting fees is $30,000.

XML 51 R16.htm IDEA: XBRL DOCUMENT v2.4.0.6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
9 Months Ended
Sep. 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)  
Mineral Exploration and Development Costs

Mineral Exploration and Development Costs

 

The Company accounts for mineral exploration and development costs in accordance with ASC Topic 930 Extractive Activities - Mining.  All exploration expenditures are expensed as incurred, previously capitalized costs are expensed in the period the property is abandoned.  Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and amortized on units of production basis over proven and probable reserves.

Mineral Properties and Leases

Mineral Properties and Leases

 

The Company accounts for mineral properties in accordance with ASC Topic 930 Extractive Activities-Mining.  Costs of acquiring mineral properties and leases are capitalized by project area upon purchase of the associated claims (see Note 4).  Mineral properties are periodically assessed for impairment of value.

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 an entity similar to fully diluted earnings per share.  At September 30, 2012, common stock equivalents outstanding are 1,146,433 shares of common stock into which the convertible debt (see Note 6) and 2,758,033 shares of  preferred stock into which the DMRJ debt (see Note 3) can be converted.  However, the diluted earnings per share are not presented because its effect would be anti-dilutive due to the Company’s net loss.

Going Concern

Going Concern

 

As shown in the accompanying financial statements, the Company had an accumulated deficit incurred through September 30, 2012 and limited cash at September 30, 2012, which raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

 

The Company will need significant funding to continue operations and increase development through the next fiscal year.  The timing and amount of capital requirements will depend on a number of factors, including demand for products and services and the availability of opportunities for expansion through affiliations and other business relationships.  Management intends 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.

 

If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

Reclassifications

Reclassifications

 

Certain reclassifications have been made to conform the prior period’s data to the current presentation.  These reclassifications have no effect on the results of reported operations or stockholders’ deficit.

XML 52 R34.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONVERTIBLE DEBT Agreement (Details) (USD $)
Jul. 05, 2011
Number of shares issued by the note holders 91,071
Convertible price $ 0.70
Additional common stock shares required to issue 300,000
XML 53 R21.htm IDEA: XBRL DOCUMENT v2.4.0.6
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details)
Dec. 31, 2009
Shares issued to Blue Fin Shareholders 2,713,636
XML 54 R26.htm IDEA: XBRL DOCUMENT v2.4.0.6
CAPITAL STOCK Series A 2 Preferred Stock (Details)
3 Months Ended
Jun. 30, 2011
Series A 2 Preferred Stock shares issued 100,000
Number of convertible common stock shares 1,000,000
XML 55 R49.htm IDEA: XBRL DOCUMENT v2.4.0.6
SUBSEQUENT EVENTS Stock Offering (Details) (USD $)
Sep. 30, 2012
Aug. 21, 2012
Sale of shares of commom stock 110,000 1,150,000
Percentage of proceedings during the first year of production 5.00%  
Determined price per ounce of the investment $ 1,000  
XML 56 R41.htm IDEA: XBRL DOCUMENT v2.4.0.6
DMRJ Group Funding assumptions used in option princing (Details) (USD $)
Sep. 30, 2012
May 03, 2011
Fair value of conversion price liability   $ 108,279
Dividend Yield   0.00%
Expected Volatility   96.80%
Risk free interest rate   0.40%
Expected life (in years)   1.25
Conversion option derivative liability 188,560  
Issuance of Series A-2 Preferred stock under fourth amendment 100,000  
Value of Series A-2 Preferred Stock 700,000  
Common stock shares convertible into Series A-2 Preferred Shares 1,000,000  
Current fair value for shares of common stock $ 0.70  
Recognized loss on extinguishment of the DMRJ note $ 2,149,404  
XML 57 R5.htm IDEA: XBRL DOCUMENT v2.4.0.6
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
9 Months Ended 41 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net loss. $ (2,368,253) $ (4,231,117) $ (10,490,131)
Adjustments to reconcile net loss to net cash used by operating activities:      
Depreciation. 52,017 49,982 142,360
Common stock issued for services 0 136,842 530,009
Common stock issued for interest expense 67,500 37,500 105,000
Preferred stock issued for financing agreement 920,000 0 920,000
Accretion of debt-related discounts 278,110 612,454 1,442,959
Accretion of asset retirement obligation 4,320 0 4,320
Change in fair value of derivatives. (67,347) 103,850 53,885
Loss on extinguishment of debt 0 2,149,404 2,149,404
(Gain) on sale of marketable securities 0 0 (2,540)
Changes in operating assets and liabilities:      
(Increase) decrease in inventory 0 (49,738) 0
(Increase) decrease in accounts receivable 65,408 0 (1,475)
(Increase) decrease in prepaid expenses and other current assets 28,343 3,564 (4,421)
Increase (decrease) in accounts payable 105,158 (26,651) 108,754
Increase (decrease) in accrued expenses 52,387 (11,135) 34,582
Increase (decrease) in interest payable 488,462 264,706 908,022
Net cash used by operating activities (373,895) (960,339) (4,099,272)
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchase of property and equipment 0 (39,327) (452,104)
Payments on mineral leases (50,000) (49,845) (359,681)
Acquisition of reclamation bonds (600) (63,001) (107,780)
Notes receivable 0 0 27,500
Proceeds from marketable securities 0 0 48,920
Net cash used by investing activities (50,600) (152,173) (843,145)
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from convertible notes payable 0 0 600,000
Proceeds from notes payable 0 1,000,000 3,500,000
Payment of note payable - equipment 0 (15,995) (15,995)
Proceeds from issuance of common stock 20,150 316,125 1,363,833
Proceeds from issuance of preferred stock 0 0 958
Financing fees paid 0 (55,000) (521,281)
Net cash provided by financing activities 20,150 1,245,130 4,927,515
NET INCREASE (DECREASE) IN CASH (404,345) 132,618 (14,902)
CASH, BEGINNING OF PERIOD 415,090 566,549 25,647
CASH, END OF PERIOD 10,745 699,167 10,745
NON-CASH FINANCING AND INVESTING ACTIVITIES:      
Common stock issued for mineral lease 0 0 525,000
Common stock issued as incentive with convertible notes 0 0 210,000
Common stock issued for reclamation bond 0 0 42,802
Equipment acquired with note payable 0 0 15,995
Common stock issued for accrued liabilities-officer wages 0 131,259 131,259
Prepaid interest liability 0 0 441,175
Repayment premium obligation 0 0 588,325
Common stock issued for accrued interest 22,500 0 67,500
Preferred stock issued in connection with debt amendment $ 920,000 $ 700,000 $ 1,620,000
XML 58 R10.htm IDEA: XBRL DOCUMENT v2.4.0.6
JOINT VENTURE
9 Months Ended
Sep. 30, 2012
JOINT VENTURE  
JOINT VENTURE

NOTE 5 – JOINT VENTURE

 

On February 7, 2012, we signed a letter of intent (“LOI”) with Shoshone Silver/Gold Mining Company (“Shoshone”) whereby Shoshone would acquire a 50% interest in our mineral properties located in Tooele County, Utah.  The terms of the LOI were that Shoshone would contribute $10 million in project equity, as well as a $2 million project loan to have been used for the startup of the Kiewit gold heap leach operation.  Under the terms of the deal, Shoshone had a 120 day exclusive right to provide the $10 million, for which $100,000 was advanced to us as a nonrefundable deposit.  Shoshone would also provide a $2 million, 10% interest loan, with a four year maturity, which bears a preferential payback from operational cash flow.  The two companies would have been 50-50 partners on the entire project with a four man operating committee consisting of two members from each company.  The proceeds of the Shoshone transaction, which was originally scheduled to close in June but had been extended to September 30, 2012, would have been used to retire the DMRJ Group debt as well as fund a portion of the heap leach operation.  The joint venture had not been finalized as of June 30, 2012 and an additional deposit of $100,000 had been agreed to as of June 29, 2012 to extend the agreement to joint venture the property until September 30, 2012.  Although this additional deposit was received, other terms of the extension were not met and effective July 31, 2012 the joint venture agreement was terminated and the $200,000 received was recognized as gain on termination of a joint venture agreement.

 

These joint venture transactions have resulted in an event of default in regard to the DMRJ Group note payable.  Negotiations regarding a future business relationship to fund the DMRJ Group note and provide equity for operations capital are currently ongoing.  See Note 8.

 

XML 59 R27.htm IDEA: XBRL DOCUMENT v2.4.0.6
CAPITAL STOCK Preferred Stock Convertible Price (Details) (USD $)
Jun. 29, 2012
Series A 1 Preferred Stock Issue Price $ (0.70)
Series A 2 Preferred Stock Issue Price $ (1.00)
Initial conversion price of Series A 1 Preferred stock $ 0.70
Initial conversion price of Series A 2 Preferred stock $ 1.00
Percentage of beneficial conversion feature 4.90%
Additional series A 2 Preferred Stock Issued 80,000
Number of convertible common stock share 800,000
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    DMRJ Group Funding Total principal due (Details) (USD $)
    Sep. 30, 2012
    Dec. 31, 2011
    Loan advances received total principal due $ 3,500,000 $ 3,500,000
    Interest rate of each prinipal advance amount 15.00% 15.00%
    Percentage of principal and interest amount being repaid or prepaid 20.00% 20.00%

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    COMMITMENTS (Tables)
    9 Months Ended
    Sep. 30, 2012
    COMMITMENTS (Tables)  
    Cane Springs Property lease payments

    Negotiations regarding the December 24, 2012 Cane Springs property lease payment are currently ongoing.

     

    Kiewit property

    July 24, 2012

    Clifton Shears/smelter tunnel property

    October 24, 2012

    Cane Springs property

    December 24, 2012