Long-Term Debt and Capital Lease Obligations

Long-term debt and capital lease obligations at December 31, 2013 and 2012 consisted of the following:



Note Description	2013			2012
$5,000,000 Note Payable (Auramet Facility) - Paid in full in 2013.	$	—		$	5,422,200

$5,000,000 Note Payable (Caterpillar Equipment Facility) - Principal and interest at 5.85% payable in monthly installments of $179,556 with the final payment due on or before March 31, 2015. Secured by certain equipment of the Company.	1,863,193			4,405,906

$484,000 Note Payable (Caterpillar Equipment Facility) - Principal and interest at 4.95% payable in monthly installments of $11,142 with the final payment due on or before August 16, 2017. Secured by certain equipment of the Company.	448,402			—

$2,500,000 Note Payable (Dayton Property "Golden Goose", as amended) - Principal payable in installments of $62,500 in January and April 2014. Secured by first deed of trust on the land. At December 31, 2013 and 2012, the note payable was net of imputed interest of $0 and $325,938, respectively.	125,000			2,050,966

$725,000 Note Payable (Donovan Property) - Principal and interest at 6% payable in monthly installments of $6,178 with final payment due on or before July 1, 2015. Secured by deeds of trust on land and unpatented claims.	611,870			647,409

$340,000 Note Payable (Gold Hill Hotel) - Principal and interest at 4.5% payable in monthly installments of $2,601 with the final payment due on or before April 30, 2026. Secured by first deed of trust on rental property.	296,496			313,938

$300,000 Note Payable (White House) - Principal and interest at 4.5% payable in monthly installments of $1,520 with the final payment due on or before April 1, 2017. Secured by first deed of trust on the land.	291,811			296,798

$240,000 Note Payable (Railroad & Gold Property) - Principal and interest at 4.5% payable in monthly installments of $1,835 with the final payment due on or before April 1, 2017. Secured by first deed of trust on the land.	220,618			232,421

Notes Payable – Other – Various other notes payable with interest rates between 4.5% and 8% payable in monthly installments due on or before September 1, 2019. Secured by first deed of trust on various property owned by the Company.	403,278			362,017

$3,824,297 Caterpillar Equipment Capital Lease - Principal and interest at 4.45% payable in monthly installments of $73,029 due on or before October 17, 2017. Secured by certain equipment under capital lease.	3,646,806			—

Subtotal	7,907,474			13,731,655


Less current portion	(2,675,800		)	(7,720,764		)
Long-term portion of long-term debt and capital lease obligations	$	5,231,674		$	6,010,891

Debt Obligations

Caterpillar Equipment Facility

In July 2012, the Company entered into a Master Loan and Security Agreement and other arrangements with Caterpillar Financial Services Corporation (the “Cat Equipment Facility”) pursuant to which the Company may borrow up to $5 million secured by certain equipment of the Company. During 2012, the Company borrowed $5 million under the Cat Equipment Facility. The Cat Equipment Facility bears interest at a rate of 5.85% with a term of 30 months except in the event of a default, including the occurrence of certain liquidity events, in which case the principal balance will bear interest at a rate of the lesser of 18% per annum or the highest applicable rate allowed by law.

During the year ended December 31, 2013, the Company reduced the net outstanding balance due on the Cat Equipment Facility by $2,542,713, of which $1,028,180 resulted from the transfer of mining vehicles.

Auramet Facility

In July 2012, the Company entered into an agreement with Resource Income Fund ("RIF"), with Auramet Trading, LLC ("Auramet") acting as gold agent, pursuant to which the Company may borrow up to $5 million outstanding at any one time (the “Auramet Facility”). The Company's obligations under the Auramet Facility are secured by a security interest in all personal property of the Company and certain real estate owned by the Company within the Company's starter mine (the "Starter Mine Patents"). The proceeds will be repaid through the delivery of 3,720 ounces of gold payable in 12 semimonthly deliveries of 310 ounces each beginning February 2013 and ending July 2013, or December 2013, if any amounts are redrawn under the agreement. The agreement is non-interest bearing except in the event of a default, in which case the balance would then bear interest at the lesser rate of 15% per annum or the highest applicable rate allowed by law. In connection with entry into the Auramet Facility, the Company also entered into a purchase and sale agreement with Auramet, and the Company entered into a trading agreement the terms of which will govern all transactions of metals between Auramet and the Company. The Company drew down $5 million under the agreement in July 2012. The proceeds from the agreement have been recorded using an imputed interest rate of approximately 24%. The agreements contain a covenant that requires the Company to maintain a minimum liquidity balance of $3 million (including cash and cash equivalents and short-term securities). The agreements additionally contain customary representations, warranties, affirmative covenants, negative covenants, and events of default, as well as conditions to borrowings.

In connection with the Auramet Facility, the Company granted RIF a call option to purchase 5,950 ounces of gold at a strike price of $2,000 per ounce, exercisable on, and expiring on, July 24, 2013. The value of the option of $124,691 was accounted for as a reduction to the debt proceeds at the date of the transaction and was amortized as interest expense over the term of the agreement. Additionally, the Company purchased an option to put 10,000 ounces of gold to Auramet at a strike price of $1,250 per ounce for $172,500. The put option expired on January 29, 2013. Each of these call and put options has been recognized in the accompanying consolidated balance sheets at fair value as a derivative asset or liability by the Company. Changes in the fair value of these derivatives have been recognized currently within the consolidated statements of operations and included as a component of change in fair value of derivatives.

During the year ended December 31, 2013, the Company completed the repayment of the Auramet Facility, including imputed interest of $953,397, by delivery of gold with a total of $2,723,107 and cash of $2,819,065. As the Company settled the Auramet Facility during a decline in gold prices, it recognized a gain of $286,535. The gain is included as a component of other income in the consolidated statements of operations.

Dayton Property “Golden Goose”

During the year ended December 31, 2012, the Company issued a $2.5 million 0% note payable to The Golden Goose Mine (“Golden Goose”) in connection with the purchase of the Dayton Resource Area “Golden Goose” mineral property. The mineral property and associated note payable was recorded imputing a 5.0% interest rate.

During the period January 1, 2013 through October 31, 2013, the Company issued 37,141 shares of common stock for principal payments totaling $75,000.

In November 2013, the Company entered into an agreement with Golden Goose to settle the remaining note payable obligation and cancel all future royalties payable (3% net smelter royalty payable) with respect to Golden Goose’s relevant mining claims on the Dayton Resource Area property purchased by the Company with the issuance of the note payable. The note payable had a net carrying value of $2,200,000. Under the terms of the agreement, we agreed to make cash payments totaling $200,000; $75,000 paid in November 2013; $62,500 paid in January 2014; and $62,500 to be paid on April 4, 2014. In addition, we issued Golden Goose 1,000,000 shares of common stock valued at $1,840,000 in November 2013 for payment of notes payable with a net carrying value of $2,000,000. As part of the agreement, the Company agreed to make an additional payment to the noteholder on December 31, 2014 equal to the difference between $2,000,000 and the cash proceeds received from the noteholder’s subsequent sale of the common stock shares issued plus the value of any remaining unsold shares held by the noteholder on December 15, 2014.

Future maturities of long-term debt and capital leases obligations are as follows:



Years Ending December 31:
2014	$	2,675,800
2015	2,108,978
2016	989,918
2017	1,902,724
2018	—
Thereafter	230,054
	$	7,907,474

Capital Lease Obligations

Caterpillar Equipment Capital Lease

In September 2013, the Company entered into capital lease obligations totaling $3.8 million with Caterpillar Financial Services Corporation for the acquisition of mining vehicles and equipment.

The annual maturities of capital lease obligations, including interest, are as follows:



Years Ending December 31:	Amount
2014	$	876,351
2015	876,351
2016	876,352
2017	1,389,984
Total	4,019,038
Less: Interest	(372,232		)
Net capital lease obligations	3,646,806
Less: current portion	(730,009		)
Long-term portion of capital lease obligations	$	2,916,797