New Jersey Mining Company

0001052918-19-000246.txt : 20190814 0001052918-19-000246.hdr.sgml : 20190814 20190814080200 ACCESSION NUMBER: 0001052918-19-000246 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 74 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190814 DATE AS OF CHANGE: 20190814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW JERSEY MINING CO CENTRAL INDEX KEY: 0001030192 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 820490295 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-28837 FILM NUMBER: 191022885 BUSINESS ADDRESS: STREET 1: 89 APPLEBERG RD STREET 2: PO BOX 1019 CITY: KELLOGG STATE: ID ZIP: 83837 BUSINESS PHONE: 208-783-3331 MAIL ADDRESS: STREET 1: 89 APPLEBERG ROAD STREET 2: PO BOX 1019 CITY: KELLOGG STATE: ID ZIP: 83837 10-Q 1 njm10qaug13-19.htm NEW JERSEY MINING COMPANY FORM 10-Q New Jersey Mining Company

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 June 30, 2019
	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 No. 000-28837

NEW JERSEY MINING COMPANY

(Exact name of Registrant as specified in its charter)

Idaho		82-0490295
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

201 N. Third Street, Coeur d’Alene, ID 83814

(Address of principal executive offices)

Registrant’s telephone number: (208) 625-9001

Securities registered pursuant to Section 12(g) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, no par value	NJMC	OTCQB

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer ¨

Accelerated Filer ¨

Non-Accelerated Filer x

Small Reporting Company x

Emerging Growth Company ¨

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS:

At August 1, 2019, 123,812,144 shares of the registrant’s common stock were outstanding.

NEW JERSEY MINING COMPANY

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD

ENDED JUNE 30, 2019

TABLE OF CONTENNTS

PART I-FINANCIAL INFORMATION3

Item 1: CONSOLIDATED FINANCIAL STATEMENTS3

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS14

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK15

Item 4: CONTROLS AND PROCEDURES15

PART II - OTHER INFORMATION15

Item 1. LEGAL PROCEEDINGS15

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.15

Item 3. DEFAULTS UPON SENIOR SECURITIES16

Item 4. MINE SAFETY DISCLOSURES16

Item 5. OTHER INFORMATION16

Item 6. EXHIBITS17

SIGNATURES18

PART I-FINANCIAL INFORMATION

Item 1: CONSOLIDATED FINANCIAL STATEMENTS

New Jersey Mining Company Consolidated Balance Sheets (Unaudited) June 30, 2019 and December 31, 2018
ASSETS
		June 30, 2019		December 31, 2018

Current assets:
Cash and cash equivalents	$	261,922	$	248,766
Gold sales receivable		202,898		74,673
Inventories		214,163		183,069
Joint venture receivable		2,424		2,051
Note receivable		-		150,000
Other current assets		111,842		103,223
Total current assets		793,249		761,782

Property, plant and equipment, net of accumulated depreciation		6,963,444		6,567,350
Mineral properties, net of accumulated amortization		2,753,144		2,759,339
Investment in joint venture		435,000		435,000
Reclamation bond		103,320		103,320
Deposit on equipment		-		11,958
Total assets	$	11,048,157	$	10,638,749

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	664,087	$	401,501
Accrued payroll and related payroll expenses		70,558		58,359
Notes payable related parties, current portion		33,895		47,591
Notes payable, current portion		272,182		217,679
Total current liabilities		1,040,722		725,130

Asset retirement obligation		158,763		154,292
Notes payable related parties, long term		222,035		189,236
Notes payable, long term		788,960		424,184
Total long term liabilities		1,169,758		767,712

Total liabilities		2,210,480		1,492,842

Commitments (Note 10)

Stockholders’ equity:
Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding		-		-
Common stock, no par value, 200,000,000 shares authorized; June 30, 2019-123,812,144 shares and December 31, 2018-123,413,569 shares issued and outstanding		17,682,999		17,492,980
Accumulated deficit		(11,885,477)		(11,420,305)
Total New Jersey Mining Company stockholders’ equity		5,797,522		6,072,675
Non-controlling interest		3,040,155		3,073,232
Total stockholders' equity		8,837,677		9,145,907

Total liabilities and stockholders’ equity	$	11,048,157	$	10,638,749

The accompanying notes are an integral part of these consolidated financial statements.

New Jersey Mining Company Consolidated Statements of Operations (Unaudited) For the Three and Six Month Periods Ended June 30, 2019 and 2018
	June 30, 2019				June 30, 2018
	Three Months		Six Months		Three Months		Six Months
Revenue:
Gold sales	$	1,547,654	$	2,692,328	$	489,555	$	1,590,946
Total revenue		1,547,654		2,692,328		489,555		1,590,946

Costs of Sales:
Cost of sales and other direct production costs		1,328,213		2,284,006		1,026,459		2,052,178
Depreciation and amortization		141,906		270,858		76,504		145,564
Total costs of sales		1,470,119		2,554,864		1,102,963		2,197,742
Gross profit (loss)		77,535		137,464		(613,408)		(606,796)

Other operating expenses (income):
Pre-development expense		-		65,567		-		-
Exploration		54,302		127,185		109,038		208,270
Gain on sale of mineral property		-		-		(2,947,862)		(2,947,862)
Management		37,714		75,529		47,178		68,980
Professional services		25,404		81,411		35,057		101,633
General and administrative		271,050		320,345		134,615		185,697
Total other operating expenses (income)		388,470		670,037		(2,621,974)		(2,383,282)
Operating income (loss)		(310,935)		(532,573)		2,008,566		1,776,486

Other (income) expense:
Timber revenue		(10,571)		(10,571)		-		-
Interest income		(17,587)		(32,539)		(396)		(1,992))
Interest expense		16,583		33,019		22,116		47,460
Change in fair value of forward gold contracts		-		-		(2,131)		7,887
Total other (income) expense		(11,575)		(10,091)		19,589		53,355

Net income (loss)		(299,360)		(522,482)		1,988,977		1,723,131
Net loss attributable to non-controlling interest		(39,592)		(57,310)		(17,009)		(29,616)
Net income (loss) attributable to New Jersey Mining Company	$	(259,768)	$	(465,172)	$	2,005,986	$	1,752,747

Net income (loss) per common share-basic and diluted	$	Nil	$	Nil	$	0.02	$	0.01

Weighted average common shares outstanding-basic		123,588,767		123,501,652		121,699,503		117,382,967
Weighted average common shares outstanding-diluted		123,588,767		123,501,652		123,924,436		119,430,274

The accompanying notes are an integral part of these consolidated financial statements.

New Jersey Mining Company Consolidated Statement of Changes in Stockholders' Equity (Unaudited) For the Six Month Periods Ended June 30, 2019 and 2018
	Common Stock				Accumulated		Non-Controlling		Stockholders’
	Shares		Amount		Deficit Attributable to New Jersey Mining Company		Interest		Equity
Balance, January 1, 2018	112,310,372	$	15,985,512	$	(12,250,319)	$	3,112,294	$	6,847,487
Contribution from non-controlling interest in Mill JV	-		-		-		5,400		5,400
Issuance of common stock for cash net of offering costs	5,012,423		607,571		-		-		607,571
Issuance of common stock for property	1,333,333		233,333		-		-		233,333
Stock based compensation relating to options	-		16,634		-		-		16,634
Net income (loss)	-		-		(253,239)		(12,607)		(265,846)
Balance, March 31, 2018	118,656,128	$	16,843,050	$	(12,503,558)	$	3,105,087	$	7,444,579
Contribution from non-controlling interest in Mill JV	-		-		-		8,057		8,057
Issuance of common stock for cash net of offering costs	3,846,154		500,000		-		-		500,000
Issuance of common stock for warrant conversion	8,000		1,200		-		-		1,200
Stock based compensation relating to options	-		10,505		-		-		10,505
Net income (loss)	-		-		2,005,986		(17,009)		1,988,977
Balance June 30, 2018	122,510,282	$	17,354,755	$	(10,497,572)	$	3,096,135	$	9,953,318

Balance, January 1, 2019	123,413,569	$	17,492,980	$	(11,420,305)	$	3,073,232	$	9,145,907
Contribution from non-controlling interest in Mill JV	-		-		-		2,357		2,357
Net income (loss)	-		-		(205,404)		(17,718)		(223,122)
Balance, March 31, 2019	123,413,569	$	17,492,980	$	(11,625,709)	$	3,057,871	$	8,925,142
Contribution from non-controlling interest in Mill JV	-		-		-		21,876		21,876
Issuance of common stock for cashless warrant exercise	398,575		-		-		-		-
Stock based compensation relating to options	-		190,019		-		-		190,019
Net income (loss)	-		-		(259,768)		(39,592)		(299,360)
Balance June 30, 2019	123,812,144	$	17,682,999	$	(11,885,477)	$	3,040,155	$	8,837,677

The accompanying notes are an integral part of these consolidated financial statements.

New Jersey Mining Company Consolidated Statements of Cash Flows (Unaudited) For the Six Month Periods Ended June 30, 2019 and 2018
		June 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$		(522,482)	$	1,723,131
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization			270,858		145,564
Accretion of asset retirement obligation			4,471		7,007
Stock based compensation			190,019		27,140
Change in fair value of forward gold contracts			-		7,887
Gain on sale of mineral property			-		(2,947,862)
Change in operating assets and liabilities:
Gold sales receivable			(128,225)		271,331
Inventories			(31,094)		82,744
Joint venture receivable			(373)		573
Other current assets			(8,619)		(814)
Accounts payable and other accrued liabilities			262,586		(4,096)
Accrued payroll and related payroll expenses			12,199		19,886
Interest payable to related parties			-		(10,772)
Net cash provided (used) by operating activities			49,340		(678,281)

Cash flows from investing activities:
Issuance of note receivable			-		(250,000)
Payment received on note receivable			150,000		-
Proceeds from sale of mineral property			-		3,000,000
Purchases of property, plant and equipment			(51,995)		(242,603)
Purchase of mineral property			-		(257,619)
Deposit on equipment			-		(10,330)
Net cash provided (used) by investing activities			98,005		2,239,448

Cash flows from financing activities:
Sales of common stock and warrants, net of issuance costs			-		1,107,571
Proceeds from exercise of stock options			-		1,200
Payments on forward gold contracts			-		(126,287)
Gold purchased for payments on forward gold contracts			-		(172,113)
Principal payments on notes payable			(127,525)		(193,320)
Principal payments on notes payable, related parties			(30,897)		(1,014,770)
Contributions from non-controlling interest			24,233		13,456
Net cash provided (used) by financing activities			(134,189)		(384,263)

Net change in cash and cash equivalents			13,156		1,176,904
Cash and cash equivalents, beginning of period			248,766		124,617
Cash and cash equivalents, end of period	$		261,922	$	1,301,521

Non-cash investing and financing activities:
Deposit on equipment applied to purchase of equipment			-	$	30,000
Note payable for equipment purchase			546,804	$	456,964
Forward gold contract exchanged for note payable, related party			-	$	492,783
Mineral property acquired with payable and shares of common stock			-	$	826,587
Note from related party for equipment purchase			50,000		-

The accompanying notes are an integral part of these consolidated financial statements.

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

1. The Company and Significant Accounting Policies

These unaudited interim consolidated financial statements have been prepared by the management of New Jersey Mining Company (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim consolidated financial statements have been included.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's financial position and results of operations. Operating results for the three and six month periods ended June 30, 2019 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019.

For further information refer to the financial statements and footnotes thereto in the Company’s audited financial statements for the year ended December 31, 2018 as filed with the Securities and Exchange Commission.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the consolidated balance sheets and statements of operations.

Revenue Recognition

Gold Revenue Recognition and Receivables-Sales of gold sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of our concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. For sales of dore’ and metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner.

Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. Costs charged by customers include fixed costs per ton of concentrate and price escalators. Refining, selling and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred. See Note 4 for more information on our sales of products.

Other Revenue Recognition-Revenue from harvest of raw timber is recognized when the performance obligation under a contract and transfer of control have both been completed. Sales of timber found on the Company’s mineral properties are not a part of normal operations.

Inventories

Inventories are stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Supplies inventory is stated at the lower of cost or estimated net realizable value.

Fair Value Measurements

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

At June 30, 2019 and December 31, 2018, the Company determined they had no assets or liabilities that required measurement at fair value on a recurring basis.

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

1.The Company and Significant Accounting Policies, Continued

Reclassifications

Certain prior period amounts have been reclassified to conform to the 2019 financial statement presentation. Reclassifications had no effect on net income (loss), stockholders’ equity, or cash flows as previously reported.

New Accounting Pronouncement

Accounting Standards Updates Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02 Leases (Topic 842). The update modified the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update was effective for fiscal years beginning after December 15, 2018, with early adoption permitted. Adoption of this update as of January 1, 2019 did not have a material impact on the Company’s consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07 Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The update involves simplification of several aspects of accounting for nonemployee share-based payment transactions by expanding the scope of Topic 718 to include nonemployee awards. The update was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this update as of January 1, 2019 did not have a material impact on the Company’s consolidated financial statements.

Accounting Standards Updates to Become Effective in Future Periods

In August 2018, the FASB issued ASU No. 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The update removes, modifies and makes additions to the disclosure requirements on fair value measurements. The update is effective for fiscal years beginning after December 15, 2019, with early adoption permitted. Management is evaluating the impact of this update on the Company’s fair value measurement disclosures.

2.Going Concern

The Company is currently producing from both the open-pit and underground at the Golden Chest Mine. In early March 2019, the Company increase production by 40% as more ore became available from the open pit and underground which is expected to improve cash flows from operations. In the past, the Company has been successful in raising required capital from sale of common stock, forward gold contracts, and additional debt. As a result of its planned production, equity sales and ability to restructure debt, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.

3. Inventories

At June 30, 2019 and December 31, 2018, the Company’s inventories consisted of the following:

		June 30, 2019		December 31, 2018

Gold concentrate	$	189,497	$	137,530
Materials and supplies		24,666		45,539
Total	$	214,163	$	183,069

At June 30, 2019, gold concentrate inventory is carried at allocated production costs as it is lower than estimated net realizable value based on current metal prices.

4. Sales of Products

Our products consist of both gold floatation concentrates which we sell to a broker (H&H Metal), and an unrefined gold-silver product known as doré which we sell to a precious metal refinery. Revenue is recognized upon the completion of the performance obligations and transfer of control of the product to the customer, and the transaction price can be determined or reasonably estimated.

For gold flotation concentrate sales, the performance obligation is met when the transaction price can be reasonably estimated and revenue is recognized generally at the time when risk is transferred to H&H Metal based on contractual terms. Based on contractual terms, we have determined the performance obligation is met and title is transferred to H&H Metal when the Company receives its first provisional payment on the concentrate because, at that time, 1) legal title is transferred to the customer, 2) the customer has accepted the concentrate lot and obtained the ability to realize all of the benefits from the product, 3) the concentrate content specifications are known, have been communicated to H&H Metal, and H&H Metal has the significant risks and rewards of ownership to it, 4) it is very unlikely a concentrate will be rejected by H&H Metal upon physical receipt, and 5) we have the right to payment for the concentrate. Concentrates lots that have been sold are held at our mill from 30 to 60 days, until H&H Metal provides shipping instructions.

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

4. Sales of Products, continued

Judgment is required in identifying the performance obligations for our concentrate sales. We have determined that the individual performance obligation is satisfied at a point in time when control of the concentrate is transferred to H&H Metal which is when H&H Metal pays us the first provisional payment on the concentrate based on contractual terms.

Our concentrate sales sometimes involve variable consideration, as they can be subject to changes in metals prices between the time of shipment and their final settlement. However, we are able to reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the estimated month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement for financial reporting purposes. Also, it is unlikely a significant reversal of revenue for any one concentrate lot will occur. As such, we use the expected value method to price the concentrate until the final settlement date occurs, at which time the final transaction price is known. At June 30, 2019, metals contained in concentrates and exposed to future price changes totaled 1,507 ounces of gold.

Sales and accounts receivable for concentrate shipments are recorded net of charges for treatment and other charges negotiated by us with H&H Metal, which represent components of the transaction price. Charges are estimated by us upon transfer of risk of the concentrates based on contractual terms, and actual charges typically do not vary materially from our estimates. Costs charged by the customer include fixed treatment, refining and costs per ton of concentrate and may include penalty charges for arsenic, lead and zinc content above a negotiated baseline as well as excessive moisture.

For sales of metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer.

Sales of products by metal for the three and six month periods ended June 30, 2019 and 2018 were as follows:

	June 30, 2019				June 30, 2018
	Three Months		Six Months		Three Months		Six Months
Gold	$	1,688,454	$	2,901,575	$	576,713	$	1,783,134
Silver		3,562		7,120		4,011		7,985
Less: Smelter and refining charges		(124,362)		(216,367)		(91,169)		(200,173)
Total	$	1,547,654	$	2,692,328	$	489,555	$	1,590,946

Sales by significant product type for the three and six month periods ended June 30, 2019 and 2018 were as follows:

	June 30, 2019				June 30, 2018
	Three Months		Six Months		Three Months		Six Months

Concentrate sales to H&H Metal	$	1,468,758	$	2,602,655	$	456,553	$	1,280,582
Dore sales to refinery		78,896		89,673		33,002		310,364
Total	$	1,547,654	$	2,692,328	$	489,555	$	1,590,946

At June 30, 2019 and December 31, 2018, our gold sales receivable balance related to contracts with customers of $202,898 and $74,673, respectively, consist only of amounts due from H&H Metal. There is no allowance for doubtful accounts.

We have determined our contracts do not include a significant financing component. For doré sales, payment is received at the time the performance obligation is satisfied. Consideration for concentrate sales is variable, and we receive payment for a significant portion of the estimated value of concentrate parcels at the time the performance obligation is satisfied.

We do not incur significant costs to obtain contracts, nor costs to fulfill contracts which are not addressed by other standards. Therefore, we have not recognized an asset for such costs as of June 30, 2019 or December 31, 2018.

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

5.Related Party Transactions

At June 30, 2019 and December 31, 2018, the Company had the following note and interest payable to related parties:

		June 30, 2019		December 31, 2018
Mine Systems Design (“MSD”), a company in which our Company’s Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through March 2019	$	-	$	14,696
Ophir Holdings LLC, a company owned by three of the Company’s Officers, 6% interest, monthly payments of $3,777 with a balloon payment of $148,285 in February 2021		205,930		222,131
H&H Metals, a company who owns 4% of the Company’s outstanding common stock, 8% interest, balance due April 2021		50,000		-
Total		255,930		236,827
Current portion		(33,895)		(47,591)
Long term portion	$	222,035	$	189,236

Related party interest expense for the six month periods ended June 30, 2019 and 2018 is as follows:

2019				2018
Three Months		Six Months		Three Months		Six Months
$	4,137	$	7,429	$	13,478	$	31,828

Future principal payments of related party notes payable at June 30, 2019 are as follows:

12 months ended June 30,
2020	$	33,895
2021		222,035
Total	$	255,930

As of June 30, 2019, and December 31, 2018, accrued interest payable to related parties was $669 and zero, respectively.

During the three and six month periods ended June 30, 2019 and 2018 (up until May 2019), the Company paid $3,000 per month to the Company’s chairman of the board, Del Steiner for consulting purposes.

All sales of concentrate are to H&H Metals, who owns 4% of the Company’s outstanding common stock. See Note 4

6. Joint Ventures

New Jersey Mill Joint Venture Agreement

The Company owns 65% of the New Jersey Mill Joint Venture and has significant influence in its operations. Thus the venture is included in the consolidated financial statements along with presentation of the non-controlling interest. At June 30, 2019 and December 31, 2018, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (“Crescent”), for $2,424 and $2,051, respectively, for shared operating costs as defined in the JV agreement.

Butte Highlands JV, LLC (“BHJV”)

On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) from Timberline Resources Corporation for $225,000 in cash and 3,000,000 restricted shares of the Company’s common stock valued at $210,000 for a total consideration of $435,000. Highland Mining, LLC (“Highland”) is the other 50% owner and manager of the joint venture. Under the agreement, Highland will fund all future project exploration and mine development costs. The agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the joint venture’s activities, it accounts for its investment on a cost basis. The Company purchased the interest in the BHJV to provide additional opportunities for exploration and development and expand the Company’s mineral property portfolio.

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

7.Earnings per Share

For the three and six month periods ending June 30, 2019, all outstanding stock options (Note 12) and warrants (Note 11) were excluded from the computation of diluted loss per share because they were anti-dilutive due to net losses in those periods. For the three and six month periods ending June 30, 2018 basic and diluted earnings (loss) per share are calculated by dividing net income (loss) by the weighted average number of common shares outstanding–basic and diluted, respectively. The calculation of the weighted average number of common shares outstanding–diluted includes the following common stock equivalents:

	June 30, 2018
	Three Months		Six Months

Stock options		7,321,665		7,491,141
Stock purchase warrants		1,200,000		1,200,000
Total		16,958,334		8,862,500

8. Property, Plant, and Equipment

Property, plant and equipment at June 30, 2019 and December 31, 2018 consisted of the following:

		June 30, 2019		December 31, 2018
Mill
Land	$	225,289	$	225,289
Building		536,193		536,193
Equipment		4,192,940		4,192,940
		4,954,422		4,954,422
Less accumulated depreciation		(653,911)		(557,502)
Total mill		4,300,511		4,396,920

Building and equipment
Buildings		124,677		124,677
Equipment		2,292,665		1,631,908
		2,417,342		1,756,585
Less accumulated depreciation		(621,879)		(453,625)
Total building and equipment		1,795,463		1,302,960

Land
Bear Creek		266,934		266,934
BOW		230,449		230,449
Eastern Star		250,817		250,817
Gillig		79,137		79,137
Highwater		40,133		40,133
Total land		867,470		867,470
Total	$	6,963,444	$	6,567,350

9.Mineral Properties

Mineral properties at June 30, 2019 and December 31, 2018 consisted of the following:

		June 30, 2019		December 31, 2018
New Jersey	$	248,289	$	248,289
McKinley		250,000		250,000
Golden Chest		1,677,972		1,677,972
Crown Point		333,333		333,333
Butte Potosi		274,440		274,440
Less accumulated amortization		(30,890)		(24,695)
Total	$	2,753,144	$	2,759,339

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

10. Notes Payable

At June 30, 2019 and December 31, 2018, notes payable are as follows:

	June 30, 2019		December 31, 2018
Property with shop, 36 month note payable, 4.91% interest rate payable monthly, remaining principal of note due in one payment at end of term in June 2019, monthly payments of $459	$	29,205		$	31,319
Haul truck, 20 month note payable, 10.0% interest rate payable monthly through May 2019, monthly payments of 6,020		-			31,657
Compressor, 48 month note payable, 5.25% interest rate payable monthly through November 2021, monthly payments of $813		23,373			27,616
Jumbo drill and 1 yrd. LHD, 12 month note payable, 8% interest rate payable monthly through January 2019, monthly payments of $10,874		-			10,802
Atlas Copco loader, 60 month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550		138,547			152,125
Caterpillar excavator and skid steer, 48 month note payable, 6.8% interest rate payable monthly through June 2022, monthly payments of $2,392		77,715			89,199
2018 pick-up, 72 month note payable, 9% interest rate payable monthly through June 2024, monthly payments of $701		33,607			36,230
2008 pick-up, 60 month note payable, 9% interest rate payable monthly through June 2023, monthly payments of $562		22,496			24,798
Haul truck, 13 month note payable, 8.0% interest rate payable monthly through July 2019, monthly payments of 5,000		4,967			34,085
Caterpillar 938 loader, 60 month note payable, 6.8% interest rate payable monthly through August 2023, monthly payments of $3,751		162,917			179,552
MultiQuip DCA70 Generator, 48 month note payable, 7.25% interest rate payable through August 2022, monthly payments of $635		21,511			24,480
CaterpillarAD22 underground truck, 48 month note payable, 6.45% interest rate payable through June 2023, monthly payments of $12,979		546,804			-
Total notes payable		1,061,142			641,863
Due within one year		272,182			217,679
Due after one year	$	788,960		$	424,184

All notes are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at June 30, 2019 are as follows:

12 months ended June 30,
2020	$	272,182
2021		255,573
2022		270,012
2023		248,147
2024		15,228
Total	$	1,061,142

11. Stockholders’ Equity

The Company offered private placements in the first half of 2018. Under the private placements, the Company sold 8,858,577 units for net proceeds of $1,107,571. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.22 for 24 months. In the second quarter of 2019, 1,200,000 warrants were exercised in exchange for 398,575 shares of the Company’s common stock in a cashless warrant exercise.

Stock Purchase Warrants Outstanding

The activity in stock purchase warrants is as follows:

	Number of Warrants	Exercise Prices
Balance December 31, 2017	9,295,834	0.10-0.20
Issued in connection with private placements	4,804,289	0.18-0.22
Balance December 31, 2018	14,100,123	0.10-0.22
Exercised	(1,200,000)	0.10
Balance June 30, 2019	12,900,123	$0.18-0.22

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

11. Stockholders’ Equity, continued

These warrants expire as follows:

Shares	Exercise Price	Expiration Date
2,137,500	$0.20	February 28, 2020
4,250,000	$0.20	March 28, 2020
1,708,334	$0.20	November 3, 2020
4,429,289	$0.22	March 30, 2020
375,000	$0.18	December 14, 2023
12,900,123	-	-

12. Stock Options

In June 2019 2,100,000 stock options were granted to non-officer employees. These options vested immediately and are exercisable at $0.14 for 3 years. Total stock based compensation recognized on these options was $190,019. The weighted average fair value of stock option awards granted and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows: volatility of 98.6%, risk-free interest rate of 1.81%, and an expected term of three years.

No options were granted in 2018, however $27,140 in stock based compensation was recognized during the six month period ended 2018 for vesting of options granted prior to 2018.

Activity in the Company’s stock options is as follows:

	Number of Options		Exercise Prices
Balance December 31, 2017	7,662,500		0.10-0.18
Expired	(500,000)		0.10
Granted	(108,000)		0.15
Balance December 31, 2018	7,054,500		0.10-0.18
Expired	(750,000)		0.10
Granted	2,100,000		0.14
Balance June 30, 2019	8,404,500		0.10-0.18
Exercisable at June 30, 2019	8,404,500	$	0.10-0.18

At June 30, 2019, outstanding stock options have a weighted average remaining term of approximately 1.3 years and an intrinsic value of approximately $81,600.

13. Asset Retirement Obligation

The Company has established asset retirement obligations associated with the ultimate closing of its mineral properties where there has been or currently are operations. Activity for the six months ended June 30, 2019 and 2018 is as follows:

	Six Months Ended June 30,
	2019		2018

Balance at beginning of period	$	154,292	$	121,560
Accretion expense		4,471		7,007
Revision of estimated reclamation costs		-		10,771
Balance at end of period	$	158,763	$	139,338

The estimated retirement obligation costs were discounted using credit adjusted, risk-free interest rate of 6.0% from the time the obligation was incurred to the time management expects to pay the retirement obligations.

14. Note Receivable

On June 6, 2018, the Company loaned $250,000 to West Materials, Inc. and William J. West (collectively “West”) which bore interest at 8% if the loan went into default and had a term of fifteen months. Five equal payments were due quarterly with the first two payments received in cash during 2018 and the remaining outstanding $150,000 received in 2019. The note receivable was collateralized by a mortgage on the Butte Gulch real property and a related net smelter royalty rights.

Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Plan of Operation

New Jersey Mining Company is a gold producer focused on diversifying and building its asset base and cash flows through a portfolio of mineral properties located in historic producing gold districts in Idaho and Montana.

The Company’s plan of operation is to generate positive cash flow, while reducing debt and growing its production and asset base over time while being mindful of corporate overhead. The Companies management is focused on utilizing its in-house skills to build a portfolio of producing mines and milling operations with a primary focus on gold and secondary focus on silver and base metals.

The Company’s properties include: the Golden Chest Mine (currently in production), the New Jersey Mill (majority ownership interest), and a 50% carried to production interest in the past producing Butte Highlands Mine located in Montana. In addition to its producing and near-term production projects, New Jersey Mining Company has additional exploration prospects, including the McKinley and Eastern Star located in Central Idaho, and additional holdings near the Golden Chest in the Murray Gold Belt.

Highlights during the second quarter of 2019 include:

 For the quarter ending June 30, 2019 approximately 13,329 dry metric tonnes (dmt) were processed at the Company’s New Jersey mill at a head grade of 3.22 grams per tonne (gpt) with gold recovery of 86.81%. Gold sales for the quarter were 1,228 ounces.

Open pit mining progressed from the 1009 bench to the 1003 bench. The trend of lower stripping ratios in the open pit continued during the second quarter as the Skookum shoot was fully exposed in the pit. Open pit mine production averaged 1,150 tonnes per day (mineralized material and waste).

Underground mining focused on the completion of mining the 857 stope along with mining of the 848 stope. Backfilling of the 848 north stope was completed during the quarter and the addition of the Cat AD22 haultruck provided a substantial increase in the backfilling rate that reduced the time required to fill the stope by one-half.

The Company completed a column leaching test that indicated that heap leaching of lower grade oxide material at the Golden Chest could substantially enhance the economics of possible future mining of the property. An oxidized sample of quartzitic footwall material collected in the pit with a head grade of 1.19 gpt Au achieved 88% gold recovery in 11 days in the laboratory test.

Results of Operations

Our financial performance during the quarter is summarized below:

The Company had a gross profit for the three and six month periods ending June 30 2019 of $77,535 and $137,464 compared to a gross loss of $613,408 and $606,796 for the comparable periods in 2018. Gross profit increased as a result of improved grade from the open pit and increased production from the underground operations.

Revenue was $1,547,654 and $2,692,328 for the three and six month periods ending June 30, 2019 compared to $489,555 and $1,590,946 for the comparable periods of 2018. This was also a result of improved grade from the open pit and increased production from the underground operations.

A net loss attributable to New Jersey Mining Company shareholders of $259,768 and $465,172 in the three and six month periods ending June 30, 2019 compared to net income of $2,005,986 and 1,752,747 in the comparable periods of 2018. In the second quarter of 2018 the Company sold its Little Baldy/Toboggan properties to Hecla Mining Company for a net gain of $2,947,862 which is reflected in the net income for 2018.

The consolidated net loss for the first six months included non-cash charges as follows: depreciation and amortization of $270,858 ($145,564 in 2018), accretion of asset retirement obligation of $4,471 ($7,007 in 2018), stock based compensation of $190,019 ($27,140 in 2018), change in fair value of forward gold contracts, none in 2019 ($7,887 in 2018), and gain on sale of mineral property none in 2019 ($2,947,862 in 2018).

Financial Condition and Liquidity

	For the Six Months Ended June 30,
Net cash provided (used) by:		2019		2018
Operating activities	$	49,340	$	(678,281)
Investing activities		98,005		2,239,448
Financing activities		(134,189)		(384,263)
Net change in cash and cash equivalents		13,156		1,176,904
Cash and cash equivalents, beginning of period		248,766		124,617
Cash and cash equivalents, end of period	$	261,922	$	1,301,521

The Company is currently producing from both the open-pit and underground at the Golden Chest Mine. In the past, the Company has been successful in raising required capital from sale of common stock, forward gold contracts, and additional debt. As a result of its planned production, equity sales and ability to restructure debt, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.

As a result of its planned production, equity sales and ability to restructure debt, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.

Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for small reporting companies.

Item 4: CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

At June 30, 2019, our President who also serves as our Chief Accounting Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), which disclosure controls and procedures are designed to insure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within required time periods specified by the Securities & Exchange Commission rules and forms.

Based upon that evaluation, it was concluded that our disclosure controls were effective as of June 30, 2019, to ensure timely reporting with the Securities and Exchange Commission. Specifically, the Company’s corporate governance and disclosure controls and procedures provided reasonable assurance that required reports were timely and accurately reported in our periodic reports filed with the Securities and Exchange Commission.

Changes in internal control over financial reporting

There was no material change in internal control over financial reporting in the quarter ended June 30, 2019.

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Neither the constituent instruments defining the rights of the Company’s securities filers nor the rights evidenced by the Company’s outstanding common stock have been modified, limited or qualified.

During the first half of 2018 the Company issued 8,858,577 shares of unregistered common stock at $0.13 per share for net proceeds of $1,107,571 net of commission and brokerage costs as a result of a private placement offering, additionally 8,000 shares were issued in exchange for stock options at $0.15 per share for net proceeds of $1,200. In the second quarter of 2019 1.200.000 warrants were exercised in exchange for 398,576 shares of the Company’s common stock in a cashless warrant exercise.

The Company relied on the transaction exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D Rule 506(b). The common shares are restricted securities which may not be publicly sold unless registered for resale with the Securities and Exchange Commission or exempt from the registration requirements of the Securities Act of 1933, as amended.

Item 3. DEFAULTS UPON SENIOR SECURITIES

The Company has no outstanding senior securities.

Item 4. MINE SAFETY DISCLOSURES

Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the quarter ended June 30, 2019, the Company had no citations for a violation of mandatory health or safety standards that could significantly and substantially (S&S citation) contribute to the cause and effect a mine safety or health hazard under section 104 of the Federal Mine Safety and Health Act of 1977. There were no legal actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS

3.0*	Articles of Incorporation of New Jersey Mining Company filed July 18, 1996
3.1*	Articles of Amendment filed September 29, 2003
3.2*	Articles of Amendment filed November 10, 2011
3.3*	Bylaws of New Jersey Mining Company
10.1*	Venture Agreement with United Mine Services, Inc. dated January 7, 2011.
10.2*	Idaho Champion Resources Lease with Cox dated September 4, 2013
10.3**	Rupp Mining Lease dated May 3, 2013
10.4**	Mining Lease with Hecla Silver Valley, Inc. Little Baldy prospect dated September 12, 2012
10.5***	Consent, Waiver and Assumption of Venture Agreement by Crescent dated February 14, 2014
10.6	Form of Forward Gold Purchase Agreement dated July 13, 2016 between the Registrant and Ophir Holdings LLC and incorporated by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on July 18, 2016.
10.7	Form of Forward Gold Purchase Agreement dated July 29, 2016 between the Registrant and Investors and incorporated by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on August 2, 2016.
10.8	Registrant’s Grant of Options to Directors and Officers dated December 30, 2016, incorporated by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on January 4, 2017.
10.9	Form of Agreement to Purchase the “Four Square Property Group” of Patented and Un-Patented Mining Claims dated March 2, 2018, incorporated by reference to the Company’s Form 8-K as filed with the Securities and Exchange Commission on March 7, 2018
10.10	Asset Purchase Agreement with Hecla Silver Valley, Inc. to Sell Patented and Un-Patented Mining Claims dated May 18th, 2018 and reported on the Company’s Form 8-K filed with the Securities and Exchange Commission on May 24, 2018 and filed with the Securities and Exchange Commission on April 1, 2019.
14*	Code of Ethical Conduct.
21*	Subsidiaries of the Registrant
31.1****	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2****	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1****	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2****	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
99(i)	Audit Committee Pre-Approval Policies-Filed as an exhibit to the registrant’s annual report on Form 10-KSB for the year ended December 31, 2003 and incorporated by reference herein.
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

* Filed with the Registrant’s Form 10 on June 4, 2014.

**Filed July 2, 2014

***Filed March 31, 2015.

****Filed herewith.

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.

NEW JERSEY MINING COMPANY

By: /s/ John Swallow

John Swallow,

its: President and Chief Executive Officer

Date August 14, 2019

By: /s/ Grant Brackebusch

Grant Brackebusch,

its: Vice President and Chief Financial Officer

Date: August 14, 2019

EX-31 2 ex31-1.htm CERTIFICATION Exhibit 31

Exhibit 31.1

Certification

I, John Swallow, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of New Jersey Mining Company.

(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) I am 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 my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) I have disclosed, based on my 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: August 14, 2019

By /s/ John Swallow

John Swallow

Chief Executive Officer

EX-31 3 ex31-2.htm CERTIFICATION Exhibit 31

Exhibit 31.2

Certification

I, Grant Brackebusch, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of New Jersey Mining Company.

(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: August 14, 2019

By /s/ Grant Brackebusch

Grant Brackebusch

Chief Financial Officer

EX-32 4 ex32-1.htm CERTIFICATION Exhibit 32

Exhibit 32.1

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 New Jersey Mining Company, (the "Company") on Form 10-Q for the period ending June 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John Swallow, Chief Executive Officer and Director of New Jersey Mining Company, certify, 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: August 14, 2019

By /s/ John Swallow

John Swallow

Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to New Jersey Mining Company and will be retained by New Jersey Mining Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q

EX-32 5 ex32-2.htm CERTIFICATION Exhibit 32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Brackebusch, Chief Financial Officer and Director of New Jersey Mining Company, certify, 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: August 14, 2019

By /s/ Grant Brackebusch

Grant Brackebusch

Chief Financial Officer

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q

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Principles of Consolidation   The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (NJMJV). Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the consolidated balance sheets and statements of operations.

Revenue Recognition   Gold Revenue Recognition and Receivables-Sales of gold sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of our concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. For sales of dore and metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner.   Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. Costs charged by customers include fixed costs per ton of concentrate and price escalators. Refining, selling and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred. See Note 4 for more information on our sales of products.   Other Revenue Recognition-Revenue from harvest of raw timber is recognized when the performance obligation under a contract and transfer of control have both been completed. Sales of timber found on the Companys mineral properties are not a part of normal operations.

Inventories   Inventories are stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Supplies inventory is stated at the lower of cost or estimated net realizable value.

Fair Value Measurements   When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.   At June 30, 2019 and December 31, 2018, the Company determined they had no assets or liabilities that required measurement at fair value on a recurring basis.

Reclassifications   Certain prior period amounts have been reclassified to conform to the 2019 financial statement presentation. Reclassifications had no effect on net income (loss), stockholders equity, or cash flows as previously reported.

6.             Joint Ventures   New Jersey Mill Joint Venture Agreement   The Company owns 65% of the New Jersey Mill Joint Venture and has significant influence in its operations. Thus the venture is included in the consolidated financial statements along with presentation of the non-controlling interest. At June 30, 2019 and December 31, 2018, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (Crescent), for $2,424 and $2,051, respectively, for shared operating costs as defined in the JV agreement.   Butte Highlands JV, LLC (BHJV)   On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (BHJV) from Timberline Resources Corporation for $225,000 in cash and 3,000,000 restricted shares of the Companys common stock valued at $210,000 for a total consideration of $435,000. Highland Mining, LLC (Highland) is the other 50% owner and manager of the joint venture. Under the agreement, Highland will fund all future project exploration and mine development costs. The agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the joint ventures activities, it accounts for its investment on a cost basis. The Company purchased the interest in the BHJV to provide additional opportunities for exploration and development and expand the Companys mineral property portfolio.

225289 225289 536193 536193 4192940 4192940 -653911 -557502 4300511 4396920

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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Aug. 01, 2019
Details
Registrant CIK	0001030192
Fiscal Year End	--12-31
Registrant Name	New Jersey Mining Company
SEC Form	10-Q
Period End date	Jun. 30, 2019
Trading Symbol	NJMC
Trading Exchange	NONE
Tax Identification Number (TIN)	82-0490295
Number of common stock shares outstanding		123,812,144
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	false
Small Business	true
Emerging Growth Company	false
Entity File Number	000-28837
Entity Incorporation, State or Country Code	ID
Entity Address, Address Line One	201 N. Third Street
Entity Address, City or Town	Coeur d’Alene
Entity Address, State or Province	ID
Entity Address, Postal Zip Code	83814
City Area Code	208
Local Phone Number	625-9001
Title of 12(b) Security	Common Stock, no par value
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Document Quarterly Report	true
Document Transition Report	false

XML 13 R2.htm IDEA: XBRL DOCUMENT

New Jersey Mining Company Consolidated Balance Sheets (Unaudited) - USD ($)

New Jersey Mining Company Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Details
Preferred Stock, No Par Value	$ 0	$ 0
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, Shares Issued	0	0
Common Stock, No Par Value	$ 0	$ 0
Common Stock, Shares Authorized	200,000,000
Common Stock, Shares, Issued	123,812,144	123,413,569

New Jersey Mining Company Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue:
Gold sales	$ 1,547,654	$ 489,555	$ 2,692,328	$ 1,590,946
Total revenue	1,547,654	489,555	2,692,328	1,590,946
Costs of Sales:
Cost of sales and other direct production costs	1,328,213	1,026,459	2,284,006	2,052,178
Depreciation and amortization	141,906	76,504	270,858	145,564
Total costs of sales	1,470,119	1,102,963	2,554,864	2,197,742
Gross profit	77,535	(613,408)	137,464	(606,796)
Other operating expenses (income):
Pre-development expense	0	0	65,567	0
Exploration	54,302	109,038	127,185	208,270
Gain on sale of mineral property	0	(2,947,862)	0	(2,947,862)
Management	37,714	47,178	75,529	68,980
Professional services	25,404	35,057	81,411	101,633
General and administrative	271,050	134,615	320,345	185,697
Total other operating expenses (income)	388,470	(2,621,974)	670,037	(2,383,282)
Operating income (expense)	(310,935)	2,008,566	(532,573)	1,776,486
Other (income) expense:
Timber revenue	(10,571)	0	(10,571)	0
Interest income	(17,587)	(396)	(32,539)	(1,992)
Interest expense	16,583	22,116	33,019	47,460
Change in fair value of forward gold contracts	0	(2,131)	0	7,887
Total other (income) expense	(11,575)	19,589	(10,091)	53,355
Net income (loss)	(299,360)	1,988,977	(522,482)	1,723,131
Net loss attributable to non-controlling interest	(39,592)	(17,009)	(57,310)	(29,616)
Net income (loss) attributable to New Jersey Mining Company	$ (259,768)	$ 2,005,986	$ (465,172)	$ 1,752,747
Net income (loss) per common share-basic and diluted	$ 0.00	$ 0.02	$ 0.00	$ 0.01
Weighted average common shares outstanding-basic	123,588,767	121,699,503	123,501,652	117,382,967
Weighted average common shares outstanding-diluted	123,588,767	123,924,436	123,501,652	119,430,274

New Jersey Mining Company Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Retained Earnings	Noncontrolling Interest	Total
Equity Balance at Dec. 31, 2017	$ 15,985,512	$ (12,250,319)	$ 3,112,294	$ 6,847,487
Equity Balance, shares at Dec. 31, 2017	112,310,372
Contribution from non-controlling interest in Mill JV	$ 0	0	5,400	5,400
Issuance of common stock for cash net of offering costs	$ 607,571	0	0	607,571
Issuance of common stock for cash net of offering costs	5,012,423
Issuance of common stock for property	$ 233,333	0	0	233,333
Issuance of common stock for property	1,333,333
Stock based compensation relating to options	$ 16,634	0	0	16,634
Stock based compensation relating to options	0
Net income (loss)	$ 0	(253,239)	(12,607)	(265,846)
Equity Balance, shares at Mar. 31, 2018	118,656,128
Equity Balance at Mar. 31, 2018	$ 16,843,050	(12,503,558)	3,105,087	7,444,579
Equity Balance at Dec. 31, 2017	$ 15,985,512	(12,250,319)	3,112,294	6,847,487
Equity Balance, shares at Dec. 31, 2017	112,310,372
Contribution from non-controlling interest in Mill JV	$ 0	0	8,057	8,057
Issuance of common stock for property				826,587
Stock based compensation relating to options	$ 10,505	$ 0	$ 0	$ 10,505
Stock based compensation relating to options	0
Issuance of common stock for cash net of offering costs	500,000	0	0	500,000
Issuance of common stock for cash net of offering costs	$ 3,846,154
Issuance of common stock for warrant conversion	1,200	0	0	1,200
Issuance of common stock for warrant conversion	$ 8,000
Net income (loss)	$ 0	$ 2,005,986	$ (17,009)	$ 1,988,977
Equity Balance, shares at Jun. 30, 2018	122,510,282
Equity Balance at Jun. 30, 2018	$ 17,354,755	(10,497,572)	3,096,135	9,953,318
Equity Balance at Dec. 31, 2018	$ 17,492,980	(11,420,305)	3,073,232	9,145,907
Equity Balance, shares at Dec. 31, 2018	123,413,569
Contribution from non-controlling interest in Mill JV	$ 0	0	2,357	2,357
Net income (loss)	$ 0	(205,404)	(17,718)	(223,122)
Equity Balance, shares at Mar. 31, 2019	123,413,569
Equity Balance at Mar. 31, 2019	$ 17,492,980	(11,625,709)	3,057,871	8,925,142
Equity Balance at Dec. 31, 2018	$ 17,492,980	(11,420,305)	3,073,232	9,145,907
Equity Balance, shares at Dec. 31, 2018	123,413,569
Contribution from non-controlling interest in Mill JV	$ 0	0	21,876	21,876
Issuance of common stock for property				0
Stock based compensation relating to options	$ 190,019	$ 0	$ 0	$ 190,019
Stock based compensation relating to options	0
Stock issued during period shares non-cash warrant exercise	0	0	0	0
Stock issued during period value non-cash warrant exercise	$ 398,575
Net income (loss)	$ 0	$ (259,768)	$ (39,592)	$ (299,360)
Equity Balance, shares at Jun. 30, 2019	123,812,144
Equity Balance at Jun. 30, 2019	$ 17,682,999	$ (11,885,477)	$ 3,040,155	$ 8,837,677

New Jersey Mining Company Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ (522,482)	$ 1,723,131
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
Depreciation and amortization	270,858	145,564
Accretion of asset retirement obligation	4,471	7,007
Stock based compensation	190,019	27,140
Change in fair value of forward gold contracts	0	7,887
Gain on sale of mineral property	0	(2,947,862)
Change in operating assets and liabilities:
Gold sales receivable	(128,225)	271,331
Inventories	(31,094)	82,744
Joint venture receivable	(373)	573
Other current assets	(8,619)	(814)
Accounts payable and other accrued liabilities	262,586	(4,096)
Accrued payroll and related payroll expenses	12,199	19,886
Interest payable to related parties	0	(10,772)
Net cash provided (used) by operating activities	49,340	(678,281)
Cash flows from investing activities:
Issuance of note receivable	0	(250,000)
Payment received on note receivable	150,000	0
Proceeds from sale of mineral property	0	3,000,000
Purchases of property, plant and equipment	(51,995)	(242,603)
Purchase of mineral property	0	(257,619)
Deposit on equipment	0	(10,330)
Net cash provided (used) by investing activities	98,005	2,239,448
Cash flows from financing activities:
Sales of common stock and warrants, net of issuance costs	0	1,107,571
Proceeds from exercise of stock options	0	1,200
Payments on forward gold contracts	0	(126,287)
Gold purchased for payments on forward gold contracts	0	(172,113)
Principal payments on notes payable	(127,525)	(193,320)
Principal payments on notes payable, related parties	(30,897)	(1,014,770)
Contributions from non-controlling interest	24,233	13,456
Net cash provided (used) by financing activities	(134,189)	(384,263)
Net change in cash and cash equivalents	13,156	1,176,904
Cash and cash equivalents, beginning of period	248,766	124,617
Cash and cash equivalents, end of period	261,922	1,301,521
Non-cash investing and financing activities:
Deposit on equipment applied to purchase of equipment	0	30,000
Note payable for equipment purchase	546,804	456,964
Forward gold contract exchanged for note payable, related party	0	492,783
Mineral property acquired with payable and shares of common stock	0	826,587
Note from related party for equipment purchase	$ 50,000	$ 0

3. Inventories: Schedule of Inventory, Current (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Gold concentrate	$ 189,497	$ 137,530
Materials and supplies	24,666	45,539
Total	$ 214,163	$ 183,069

5. Related Party Transactions: Related Party Principal Payments (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Long-term Debt, Maturities, Repayments of Principal in Year Two	$ 33,895
Long-term Debt, Maturities, Repayments of Principal in Year Three	222,035
Total	$ 255,930	$ 236,827

5. Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
5. Related Party Transactions (Details) - USD ($)	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Details
Accrued interest payable to related parties	$ 669		$ 669		$ 0
Payments for Other Fees	$ 3,000	$ 3,000	$ 3,000	$ 3,000

8. Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
Mill land	$ 225,289	$ 225,289
Mill building	536,193	536,193
Milling equipment	4,192,940	4,192,940
Mill buildings and improvements, accumulated depreciation	(653,911)	(557,502)
Mill Buildings and Improvements, Net	4,300,511	4,396,920
Buildings and Improvements, Gross	124,677	124,677
Equipment	2,292,665	1,631,908
Buildings and improvements, accumulated depreciation	(621,879)	(453,625)
Buildings and improvements net	1,795,463	1,302,960
Bear Creek Land	266,934	266,934
BOW Land	230,449	230,449
Eastern Star Land	250,817	250,817
Gillig Land	79,137	79,137
Highwater Land	40,133	40,133
Land	867,470	867,470
Total	$ 6,963,444	$ 6,567,350

9. Mineral Properties: Schedule of mineral properties (Details)	Jun. 30, 2019 USD ($)
Details
Mineral Properties 1	$ 248,289
Mineral Properties 2	250,000
Mineral Properties 3	1,677,972
Mineral Properties 4	333,333
Mineral Properties 6	274,440
Accumulated Amortization of Other Deferred Costs	(24,695)
Mineral properties net	$ 2,759,339

10. Notes Payable: Schedule of Debt (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Details
1,061,142	$ 1,061,142	$ 641,863
272,182	272,182	217,679
788,960	$ 788,960	$ 424,184

12. Stock Options: Share-based Compensation, Stock Options, Activity (Details) - shares	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	8,404,500	7,054,500	7,662,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period	(750,000)	(500,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	2,100,000		(108,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	8,404,500

12. Stock Options (Details)	Jun. 30, 2019 USD ($)
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 81,600

13. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Details
Balance at beginning of period	$ 121,560
Asset Retirement Obligation, Period Increase (Decrease)	7,007
Asset Retirement Obligation, Liabilities Incurred	10,771
Asset Retirement Obligation	$ 139,338

14. Note Receivable (Details) - USD ($)		6 Months Ended
14. Note Receivable (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Details
Issuance of note receivable	$ 250,000	$ 0	$ 250,000