Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

6. Commitments and Contingencies

Property rent payments and Production Royalties

The Company has acquired a number of mineral properties outright. It has acquired exclusive rights to explore, develop and mine other portions of the Project under various mining lease agreements with landowners. 

The Company is required to make property rent payments related to its mining lease agreements with landholders, in the form of advance minimum royalties.  The total property rent payments for the three and six  months ended June 30, 2016 were $167 and $10,167 (three months ended June 30, 2015 – $50,167 and six months ended June 30, 3015 -$60,167), and the Company expects to pay approximately $30,000 in property rent payments in 2016.

Production royalty payments commenced during the first quarter of 2016. The Company has paid $40,000 and $41,802 in production royalties during the three and six months ended June 30, 2016, respectively.

There are multiple third party landholders and the royalty amount due to each landholder over the life of the Project varies with each property. 

Finder’s fee

The Company has agreed to issue 100,000 common shares as a finder’s fee in connection with certain property acquisitions upon commencement of commercial production, as defined in the agreement, at the Project. As of June 30, 2016, commercial production had not commenced and accordingly no shares have been issued.

Compliance with Environmental Regulations

The Company’s exploration and development activities are subject to laws and regulations controlling not only the exploration and mining of mineral properties, but also the effect of such activities on the environment. Compliance with such laws and regulations may necessitate additional capital outlays or affect the economics of a project, and cause changes or delays in the Company’s activities.

The Company may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. The Company believes that any adverse outcome of existing claims, individually or in the aggregate, would not have a material effect on its financial position, results of operations or cash flows.

See Note 12 for further details on the mining equipment loans.