0001078782-15-001320.txt : 20150814 0001078782-15-001320.hdr.sgml : 20150814 20150814140305 ACCESSION NUMBER: 0001078782-15-001320 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20150630 FILED AS OF DATE: 20150814 DATE AS OF CHANGE: 20150814 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: 151054688 BUSINESS ADDRESS: STREET 1: 1290 HOLCOMB AVE. CITY: RENO STATE: NV ZIP: 89502 BUSINESS PHONE: (775) 322-4621 MAIL ADDRESS: STREET 1: 1290 HOLCOMB AVE. CITY: RENO STATE: NV ZIP: 89502 FORMER COMPANY: FORMER CONFORMED NAME: LUCKY JOE MINING CO DATE OF NAME CHANGE: 20020222 10-Q 1 f10q063015_10q.htm FORM 10-Q QUARTERLY REPORT Form 10-Q Quarterly Report


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, 2015

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.)

 

 

1290 Holcomb Ave. Reno, NV

89502

(Address of principal executive offices)

(Zip Code)

 

 

(775) 337-8057

(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 August 14, 2015: 13,056,603.






DESERT HAWK GOLD CORP.

Form 10-Q

June 30, 2015


TABLE OF CONTENTS



 

Page

Part I-Financial Information

3

 

 

Item 1

Financial Statements

3

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

21

 

 

 

Part II-Other Information

21

 

 

 

Item 6

Exhibits

21

Signatures

22






2




PART I – FINANCIAL INFORMATION


Item 1.  Financial Statements


DESERT HAWK GOLD CORP

 

 

 

 

 

BALANCE SHEETS

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

 

2015

 

2014

ASSETS

 

(unaudited)

 

 

CURRENT ASSETS

 

 

 

 

 

Cash

$

98,052

$

161,645

 

Inventories (Note 4)

 

 

2,130,092

 

1,745,377

 

Prepaid expenses and other current assets

 

39,978

 

142,825

 

     Total Current Assets

 

 

2,268,122

 

2,049,847

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, net (Note 5)

 

4,702,892

 

3,190,156

MINERAL PROPERTIES AND INTERESTS, net (Note 6)

 

1,269,592

 

1,372,887

RECLAMATION BONDS

 

1,416,862

 

1,412,804

 

 

 

 

 

 

TOTAL ASSETS

$

9,657,468

$

8,025,694

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable and accrued expenses

$

793,356

$

813,559

 

Accrued liabilities-officer wages (Note 12)

 

253,000

 

247,500

 

Interest payable (Notes 7 and 8)

 

4,321,143

 

3,382,152

 

Convertible debt (Note 7)

 

600,000

 

600,000

 

Notes payable - equipment (Note 9)

 

705,633

 

146,171

 

Note payable - related party (Note 8)

 

3,481,357

 

2,125,348

 

Redemption of gold proceeds payable (Note 11)

 

151,406

 

56,609

 

Stock redeemable with gold proceeds (Note 11)

 

-

 

82,000

 

     Total Current Liabilities

 

 

10,305,895

 

7,453,339

 

 

 

 

 

 

 

LONG-TERM LIABILITIES

 

 

 

 

 

Asset retirement obligation (Note 10)

 

770,234

 

740,268

 

Notes payable - equipment (Note  9)

 

1,372,585

 

372,388

 

Note payable - related party (Note 8)

 

8,559,135

 

9,665,144

 

 

 

 

10,701,954

 

10,777,800

TOTAL LIABILITIES

 

21,007,849

 

18,231,139

 

 

 

 

 

 

 

COMMITMENTS  (Note 10,11 and 12)

 

 

 

 

 

 

 

 

 

 

 

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  shares issued and outstanding

 

180

 

180

 

     Series B: 249,603 shares issued and outstanding

 

250

 

250

 

Common stock,  $0.001 par value, 100,000,000  shares authorized;
    13,056,603 shares issued and outstanding

 

12,928

 

12,928

 

Additional paid-in capital

 

8,328,806

 

8,328,806

 

Accumulated deficit

 

(19,693,503)

 

(18,548,567)

 

     Total Stockholders' (Deficit)

 

(11,350,381)

 

(10,205,445)

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT)

$

9,657,468

$

8,025,694


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



3




DESERT HAWK GOLD CORP

 

 

 

 

 

 

 

 

STATEMENTS OF OPERATIONS (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

REVENUE:

 

 

 

 

 

 

 

 

 

Concentrate sales

$

854,772

$

-

$

2,094,641

$

-

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

General project costs

$

558,734

$

360,316

$

1,585,327

$

423,711

 

Exploration expense

 

3,366

 

15,206

 

9,270

 

31,736

 

Consulting

 

1,343

 

8,100

 

1,343

 

20,927

 

Officers and directors fees

 

48,423

 

144,286

 

89,961

 

178,671

 

Legal and professional

 

19,946

 

35,545

 

45,871

 

77,729

 

General and administrative

 

96,873

 

89,093

 

233,683

 

144,984

 

Depreciation and amortization

 

158,812

 

20,373

 

300,148

 

20,772

 

 

 

887,497

 

672,919

 

2,265,603

 

898,530

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

(32,725)

 

(672,919)

 

(170,962)

 

(898,530)

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Interest  and other income

 

477

 

1,191

 

857

 

1,191

 

Change in fair value of derivatives

 

-

 

-

 

-

 

6,673

 

Financing expense

 

-

 

249,603

 

-

 

(998,412)

 

Interest expense

 

(500,297)

 

(350,599)

 

(974,831)

 

(718,165)

 

 

 

(499,820)

 

(99,805)

 

(973,974)

 

(1,708,713)

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

(532,545)

 

(772,724)

 

(1,144,936)

 

(2,607,243)

INCOME TAXES

 

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

NET LOSS

$

(532,545)

$

(772,724)

$

(1,144,936)

$

(2,607,243)

 

 

 

 

 

 

 

 

 

 

BASIC AND DILUTED NET LOSS PER SHARE

$

(0.04)

$

(0.07)

$

(0.09)

$

(0.25)

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED

 

13,056,603

 

11,637,047

 

13,056,603

 

10,575,441



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




4




DESERT HAWK GOLD CORP

 

 

 

 

STATEMENTS OF CASH FLOWS (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

June 30,

 

June 30,

 

 

 

 

2015

 

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net loss

$

(1,144,936)

$

(2,607,243)

 

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

 

 

 

 

 

 

Depreciation and amortization

 

430,309

 

20,772

 

 

Common stock issued for services

 

-

 

85,483

 

 

Common stock issued for interest expense

 

-

 

45,000

 

 

Preferred stock issued for financing expense

 

-

 

998,412

 

 

Accretion of asset retirement obligation

 

29,966

 

18,615

 

 

Change in fair value of derivatives

 

-

 

(6,673)

 

 

Net gain on disposal of asset

 

 

 

(3,370)

 

 

Loss on stock redeemed with gold proceeds

 

12,797

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Inventories

 

(384,715)

 

-

 

 

Prepaid expenses and other current assets

 

102,847

 

(131,854)

 

 

Accounts payable and accrued expenses

 

129,172

 

(32,715)

 

 

Accrued liabilities - officer wages

 

5,500

 

(14,500)

 

 

Interest payable, net of amount capitalized

 

938,991

 

719,431

 

Net cash provided (used) by operating activities

 

119,931

 

(908,642)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Additions to property and equipment

 

(214,474)

 

(1,540,953)

 

 

Refund of reclamation bonds

 

-

 

92,455

 

 

Increase in reclamation bonds

 

(4,058)

 

(1,348,796)

 

Net cash (used) by investing activities

 

(218,532)

 

(2,797,294)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from note payable-related party

 

250,000

 

4,125,000

 

 

Payment of note payable - equipment

 

(214,992)

 

(3,066)

 

Net cash provided (used) by financing activities

 

35,008

 

4,121,934

 

 

 

 

 

 

 

NET INCREASE (DECREASE) IN CASH

 

(63,593)

 

415,998

CASH, BEGINNING OF PERIOD

 

161,645

 

8,523

 

 

 

 

 

 

 

CASH, END OF PERIOD

$

98,052

$

424,521

 

 

 

 

 

 

 

NON-CASH FINANCING AND INVESTING ACTIVITIES:

 

 

 

 

 

Equipment acquired with notes payable - equipment

$

1,624,276

$

38,050

 

Accounts payable converted to notes payable - equipment

 

150,375

 

-

 

Addition to redemption of gold proceeds payable

 

94,797

 

-

 

Fair value of cancelled conversion option

 

-

 

164,140

 

Equipment acquired with accounts payable

 

-

 

210,216



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



5




DESERT HAWK GOLD CORP

FOOTNOTES


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.  On June 30, 2014, the Company dissolved its sole subsidiary, Blue Fin Capital, Inc.  As a result the Company has no subsidiaries.


During the year ended December 31, 2009, the Company entered into Joint Venture Agreements with the Clifton Mining Company, the Woodman Mining Company and the Moeller Family Trust for the lease of certain of their property interests in the Gold Hill Mining District of Utah.  In 2011 the Company entered into an agreement with DMRJ group which allowed for long term funding of the Kiewit project and helped to provide cash flow for operations during the period from 2009 until 2014 while the permitting process was ongoing. The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.  Construction at the site was substantially complete at September 30, 2014.  Revenue from the Kiewit heap leach operation began in October 2014 with the first sales of gold and silver.


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


In the opinion of management, the accompanying unaudited interim balance sheets and statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of June 30, 2015, and the results of its operations and its cash flows for the three and six months ended June 30, 2015 and 2014. The operating and financial results for the Company for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.


These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. These unaudited interim financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 31, 2015.


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 bodies of mineralized material, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves.


Inventories


The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered.  The Company records ore on leach pad, ore in carbon column in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value.  Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses.  Revenue from the sale of silver is accounted for as by-product and is deducted from production costs.  Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad.



6




Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type).  The nature of the leaching process inherently limits the ability to precisely monitor inventory levels.  As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time.  As of June 30, 2015, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements.


Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months.


Property and Equipment


Property and equipment are stated at cost.  Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years, or units of production over estimated ounces to be produced.  The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired.  The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts.  Maintenance and repairs are charged to operations as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.  


Mineral Properties and Leases


The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights.  Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ounces to be produced.  Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.  If a property is abandoned or sold, its capitalized costs are charged to operations.  Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing.  These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility.  Additionally, interest is capitalized to mine development until such assets are ready for their intended use.  The Company does not have proven and probable reserves at this time.  See Note 6.


Reclamation and Remediation


The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies.  The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets.  A corresponding asset is also recorded and depreciated over the life of the asset.  After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation.  Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.


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.



7




Earnings (loss) Per Share


Basic earnings (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company.  At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows:


 

 

June 30, 2015

 

June 30, 2014

 

 

 

 

 

Convertible debt

 

857,143

 

857,143

Convertible preferred stock

 

27,718,333

 

27,718,333

 

 

 

 

 

Total

 

28,575,476

 

28,575,476


However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses.


Going Concern


As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through June 30, 2015, 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 final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.  Construction at the site was substantially complete at September 30, 2014.  The Company will need significant funding to continue operations and increase development through the next fiscal year.  This funding is expected to come via sales revenues, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships.  


If the going concern assumption were not appropriate for these 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 data from prior periods to the current presentation.  These reclassifications have no effect on the results of operations or stockholders’ deficit.


New Accounting Pronouncement


In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market.  Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. The new guidance will be effective for in fiscal years beginning after December 15, 2016, including interim periods within those years.  Management believes that this new standard will have minimal impact on its financial statements.


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.


No shares of stock have been issued during the first six months of 2015.



8




The Company issued a total of 117,854 shares of stock to the note holders of the convertible debt for interest expense through November 30, 2014.  These shares were valued at a fair value of $82,500 based upon the stated interest rate contained in the debt agreements.  The Company failed to repay the loan in full on the November 30, 2014 maturity date, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders.  This issuance was valued at $0.04 per share ($12,000) which was determined by management to be the fair value of a share of common stock based on a 2014 valuation analysis performed by a consultant.  The consultant determined that the fair value of the common stock of the Company on a non-controlling, non-marketable basis to be $0.04 per share. Management assessed the consultant’s valuation and found the methodology to be appropriate for the Company and concluded that the fair value of common shares is $0.04.  The issuance was accounted for as financing expense during the fourth quarter 2014.  As part of this agreement, the due date of the notes was extended to November 30, 2015, with interest to be paid in cash after November 30, 2014.  See Note 7.


On May 1, 2014, the Company issued 3,137,066 shares to its president, Rick Havenstrite, as a management incentive.  Also, as a part of this agreement, Mr. Havenstrite agreed to forgive $40,000 of accrued but unpaid wages.  The issued shares were valued at $0.04 per share as determined by the consultant (see above).  Based on this rate, the fair value of the shares issued to Mr. Havenstrite was determined to be $125,483.  Of this amount, $85,483 was recognized as officers and directors fees during the year ended December 31, 2014 and $40,000 was recognized as a reduction of accrued officer wages.


Preferred Stock


On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group.  The Tenth Amendment provides for funding of construction of the heap leach pad and process facility, mining development, and operations through a series of monthly term loan advances totaling a maximum of $5,700,000 over five months.  As a part of this amendment, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock.  The conversion rate of the Series B Preferred Stock is 100 shares of common stock for each share of Series B Preferred Stock. During the quarter ended March 31, 2014, financing expense in the amount of $1,248,015 was recorded in association with this share issuance, using an estimated fair value of the equivalent common shares of $0.05.  During the quarter ended June 30, 2014, the Company revised the estimated fair value of the equivalent common shares to be $998,412 based upon a fair value of $0.04 per share.  Thus a reduction to financing expense of $249,603 was recorded in the second quarter 2014.


As a result of this issuance, DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible into 27,718,333 shares of common stock.  DMRJ is considered a related party.


In connection with this amendment, the Company amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude from the definition of convertible securities the shares of all preferred stock previously issued to DMRJ Group and any future issuances of any shares of Series A, Series, B, and Series A-1 and A-2 to DMRJ Group or any of its affiliates.


NOTE 4 – INVENTORIES


The following table provides the components of inventories:


 

 

June 30,

2015

 

December 31,

2014

Ore on leach pad

$

1,951,547

$

1,508,761

Carbon column in process

 

169,905

 

211,115

Dore finished goods

 

8,640

 

25,501

     Total

$

2,130,092

$

1,745,377

 

Inventories are valued at the lower of cost or net realizable value, which at June 30, 2015 is cost.  



9




NOTE 5 - PROPERTY AND EQUIPMENT


The following is a summary of property, equipment, and accumulated depreciation at June 30, 2015 and December 31, 2014:


 

June 30,

 

December 31,

 

2015

 

2014

Equipment

$

3,090,105

 

$

1,465,827

Furniture and fixtures, temporary housing

 

10,781

 

 

10,781

Electronic and computerized equipment

 

52,874

 

 

19,011

Vehicles

 

56,830

 

 

65,330

 

 

3,210,590

 

 

1,560,949

   Less accumulated depreciation

 

(548,670)

 

 

(357,983)

 

 

2,661,920

 

 

1,202,966

 

 

 

 

 

 

Kiewit property facilities

 

2,331,520

 

 

2,153,411

   Less accumulated amortization

 

(290,548)

 

 

(166,221)

 

 

2,040,972

 

 

1,987,190

 

 

 

 

 

 

     Total

$

4,702,892

 

$

3,190,156


NOTE 6 – MINERAL PROPERTIES AND INTERESTS


Mineral properties and interests as of June 30, 2015 and December 31, 2014 are as follows:


 

 

 

June 30,

2015

 

December 31,

2014

          Initial lease fee

 

 

 

 

 

              Yellow Hammer Site

 

$

175,000

$

175,000

              Kiewit, Cactus Mill and all other sites

 

 

600,000

 

600,000

                    Total

 

 

775,000

 

775,000

 

 

 

 

 

 

          Asset retirement obligation

 

 

 

 

 

               Kiewit Site

 

 

687,475

 

687,475

               Kiewit Exploration

 

 

10,780

 

10,780

               Cactus Mill

 

 

16,133

 

16,133

       Total

 

 

714,388

 

714,388

    Accumulated amortization

 

 

(219,796)

 

(116,501)

Total

 

$

1,269,592

$

1,372,887


The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting of 247 unpatented claims, including the unpatented mill site claim, and two Utah state mineral leases located on state trust lands.  Annual claims fees are currently $155 per claim plus administrative fees.


On January 6, 2014, we obtained the final permit necessary to commence construction of the heap leach pad and process facility.  On February 20, 2014, the Kiewit reclamation bond in the amount of $1,348,000 was posted with the State of Utah, Division of Oil, Gas and Mining.  This newly calculated bond amount includes bonding for the Yellow Hammer Small Mine and the Yellow Hammer Exploration sites along with the Herat Exploration site.  As such, the asset retirement obligation for these sites was absorbed by the new bond. Funds of $92,705 were received in April 2014 by the Company for these refunded reclamation bonds.  Total reclamation bonds posted at June 30, 2015 and December 31, 2014 are $1,416,862 and $1,412,804, respectively.  


On March 20, 2013, the Confederated Tribes of the Goshute Reservation (“Tribes”) sent a letter to the Bureau of Land Management (“BLM”) outlining their review of the Kiewit Mine Project Draft Environmental Assessment.  The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources.  On February 6, 2014 the Tribes filed an appeal of the permit with the BLM.  On April 10, 2014, the BLM was granted an extension of time to May 7, 2014 to answer the appeal and on May 8, 2014 an additional extension of time was granted to the BLM to June 6, 2014 to answer the appeal.  On June 6, 2014 the BLM submitted their response to the appeal.  On August 14, 2014, the BLM rejected the Tribe’s request for a stay.



10




NOTE 7 – 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 $0.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group (see Note 10).  The notes are convertible into potentially 857,143 shares of common stock and principal and interest were initially due November 30, 2012.


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 Company failed to repay the loan in full on the November 30, 2012, November 30, 2013 and November 30, 2014 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. As part of this agreement, the due date of the note was extended each year and has now been extended to November 30, 2015. Interest was paid with stock through November 30, 2014 and will be paid in cash thereafter.  Accrued interest payable at June 30, 2015 and 2014 includes $52,500 and $-0-, respectively, for these notes.


NOTE 8 – NOTE PAYABLE - RELATED PARTY


DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible to 27,718,333 shares of common stock (See Note 3).  They are considered a related party.  In July 2010, the Company entered into an Investment Agreement with DMRJ.  The Agreement has been modified numerous times and currently operates under the Twelfth Amendment to the Investment Agreement dated June 5, 2015.  The Amendments have provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement.  


The total due to DMRJ at June 30, 2015 and December 31, 2014 is as follows:


 

 

June 30,

 

December 31,

 

 

2015

 

2014

Principal

 

 

 

 

       Current

$

3,481,357

$

2,124,348

       Long-term

 

8,559,135

 

9,665,144

                Total

 

12,040,492

 

11,789,492

Interest payable - current

 

4,268,643

 

3,375,652

 

$

16,309,135

$

15,165,144


The Investment Agreement contains certain negative covenants which prohibit us from the following actions or activities:


·

Incurring any indebtedness except in limited circumstances;

·

Creating any significant liens on any of our properties or assets;

·

Enter into any sale and lease-back transaction involving any of our properties;

·

Make any investments in or loans or advances to other parties;

·

Engage in any merger, consolidation, sale of assets or acquisition transaction, except for the purchase or sale of inventory or certain limited investments;

·

Declare or pay any dividends, except for dividends to DMRJ Group;

·

Engage in any business transactions with affiliates;

·

Make capital expenditures except as permitted in the agreement pertaining to our current mining business;

·

Create any lease obligations;

·

Amend, supplement or modify any existing indebtedness;

·

Enter into any swap, forward, future or derivative transaction;

·

Make any change in our accounting policies or reporting practices;

·

Form additional subsidiaries; or

·

Modify or grant a waiver or release under or terminate any principal lease agreement or other material contract.



11




2015 Activity


An Eleventh Amendment to the Investment Agreement was entered into on March 17, 2015 which established new minimum principal and interest payment dates which were then revised with the Twelfth Amendment to the Investment Agreement. The Twelfth Amendment was entered into on June 5, 2015 and allowed for additional funding in the amount of $250,000 which was received by the Company in May and June 2015 and also established new minimum principal and interest payment dates beginning in August 2015 as follows:

 

 

 

August 31, 2015             

$

500,000

November 30, 2015

 

1,000,000

December 31, 2015

 

4,000,000

February 28, 2016

 

1,500,000

May 31, 2016

 

750,000

August 31, 2016

 

3,000,000

November 30, 2016

 

3,000,000

 

 

 

Total

$

13,750,000


Management anticipates that the August 31, 2015 payment will not be made.  Discussions are currently underway with DMRJ to provide additional funding to finance the purchase of crushing plant equipment to allow for in-house crushing, additional working capital and to finance the expansion into the east extension of the pit.  The equipment purchase is anticipated to reduce crushing costs by as much as $100,000 per month.  This funding will be provided through the use of the provisional funds established in the Twelfth Amendment to the Investment Agreement as well as additional funding to be provided for in a future amendment to the Investment Agreement.  New funding is expected to be approximately $675,000 during July and August 2015.


2014 Activity


In January 2014, pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount of $25,000.  The January 31, 2014 loan payment that was due was not made.


On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. The Tenth Amendment provides for funding of mining operations through a series of advances (the “Monthly Term Loan Advances”) totaling a maximum of $5,700,000 over five months.  A total of $5,500,000 was drawn.  As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016.  The interest rate on the loan balance was reduced from 24% to 15% and minimum principal and interest payment amounts were established.  The first minimum payment, due February 28, 2015, was not made.    Payment terms were changed in 2015 pursuant to the Eleventh and Twelfth Amendments (see 2015 Activity).


The Company’s ability to meet these minimum payments will be dependent upon a number of factors including production variables, metals market pricing, demand for products and services, and the availability of opportunities for expansion through affiliations and other business relationships.   


In 2014, the first Monthly Term Loan, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit.  A total of $5,525,000 was drawn during the year ended December 31, 2014 in connection with the Tenth Amendment Monthly Term Loan Advances.  In addition, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock. See Note 3.  Onsite construction of the project is essentially complete at December 31, 2014.  If the Company is unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate the Company’s mining leases and other assets.



12




NOTE 9 – NOTES PAYABLE – EQUIPMENT


The following is a summary of the equipment notes payable:


 

 

June 30,

2015

 

December 31, 2014

Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,424 including interest at 4.99%.

$

101,305

$

-

 

 

 

 

 

Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%.

 

1,521,998

 

-

 

 

 

 

 

Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%.

 

8,412

 

-

 

 

 

 

 

Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,594 including interest at 2.99%.

 

430,398

 

492,955

 

 

 

 

 

Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,629 including interest at 1.75%.

 

16,105

 

25,604

 

 

2,078,218

 

518,559

Current portion

 

(705,633)

 

(146,171)

Long Term portion

$

1,372,585

$

372,388

 

 

 

 

 

Principal payments are as follows for the twelve months ended June 30,

 

 

 

 

2016

 

 

$

705,633

2017

 

 

 

716,548

2018

 

 

 

597,706

2019

 

 

 

58,331

    Total

 

 

$

2,078,218


During the first quarter 2015, accounts payable balance of $150,375 relating to lease costs for equipment was converted to notes payable – equipment when the Company acquired the equipment.


NOTE 10 – REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION


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.  In calculating the present value of the asset retirement obligation the Company used a credit adjusted risk free interest rate of 8% to 10% and projected mine lives of five to 12 years, depending on the site.  On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions.  


Changes in the reclamation liability for the periods ended June 30, 2015 and December 31, 2014 are as follows:


 

 

Six months ended

 June 30,

2015

 

Year ended December 31,

2014

Reclamation and remediation liability, beginning of period

$

740,268

$

69,920

     Obligation incurred

 

-

 

656,567

     Accretion expense

 

29,966

 

13,781

Reclamation and remediation liability, end of period

$

770,234

$

740,268




13




NOTE 11 – STOCK REDEEMABLE WITH GOLD PROCEEDS


An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of the Company’s common stock. This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of the Company’s common stock.  Under the terms of this offering, the shares can be redeemed for 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. Shares will be converted on whole ounces only.   Each investor received 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.  Due to the redemption feature of these shares, management has concluded that the conversion shares should be recorded as a liability and not as equity.  


Once sales of concentrate began in 2014, all investors in this equity financing had the option to convert their shares for cash from 5% of the gold sales, and all parties chose to convert.  Amounts due to these shareholders are disclosed in the following table.  The share conversion is complete at June 30, 2015 and amounts due to shareholders are past due.  These amounts are expected to be paid to shareholders in 2015.


 

 

Conversion Shares Due based on $1,000 Gold Price

 

Additional Amount Based on Actual Gold Sales Price

 

Total Due to Shareholders at June 30, 2015

Original Conversion Liability

 

130,000

 

 

 

 

Less Conversion:

 

 

 

 

 

 

     December 31, 2014

 

48,000

 

8,609

 

56,609

     June 30, 2015

 

82,000

 

12,797

 

94,797

          Total

$

130,000

$

21,406

$

151,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining balance to be redeemed at June 30, 2015

$

-


NOTE 12– 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 lease of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah.  Pursuant to the agreement, 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 payments to the Trust of $50,000.  The Yellow Hammer operated for several months in 2011.  Under the terms of the Joint Venture Agreement, the Company is 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.  There were no sales and no royalty expense to date for the Yellow Hammer in 2015 or in 2014.  No payment has been made on this property and no official forfeiture notice has been received regarding this nonpayment.


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 lease of their property interests in the Gold Hill Mining District of Utah.  Under the terms of the Joint Venture Agreement, the Company is 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 is also required to pay a 6% net smelter return on any production from the Kiewit gold property. Additionally, if the Company does not place the Kiewit property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three year period, it will be required to make annual payments to Clifton Mining in the amount of $50,000 per location. The annual payments due on July 24, 2014 were made on July 22, 2014 and accepted by Clifton Mining for the Clifton Shears and Kiewit properties. The Cane Springs property payment was not made in 2013 and this claim was released back to Clifton Mining at that time.  Production at the Kiewit property began in the fourth quarter 2014.


Royalties of 6% are due to Clifton Mining on sales of gold and silver.  Royalties due to Clifton Mining at June 30, 2015 and December 31, 2014 from production at the Kiewit property are $87,980 and $ -0-, respectively. Royalty payments are past due and are expected to be paid in 2015.  Royalty expense for the quarter and six months ended June 30, 2015 is $50,276 and $123,289, respectively.



14




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 was for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year.  Termination agreements have been reached with the former CEO and one director, providing for payment of accrued compensation and consulting payable over several months commencing with the funding of the Kiewit project.  These payments began in February 2014.  As of June 30, 2015 and December 31, 2014 accrued compensation of $253,000 and $247,500, and consulting fees payable of $-0- and $15,000, respectively, were due to directors and officers.  Of the $253,000 due at June 30, 2015, accrued compensation of $192,700 is due to Rick Havenstrite, President, $42,300 to Marianne Havenstrite, Treasurer, and $18,000 remains to be paid pursuant to the termination agreements.  In addition, as part of a management incentive award on May 1, 2014, Rick Havenstrite was awarded 3,137,066 shares of common stock.  As part of this award, Mr. Havenstrite agreed to forgive $40,000 in accrued compensation.  See Note 3.


NOTE 13 – RELATED PARTY TRANSACTIONS


The Company recognized rent expense for rental of office space of $3,000 for the six months ending June 30, 2015 and 2014, respectively, paid to RMH Overhead, LLC, a company owned by Rick Havenstrite, the Company’s president and a director.  Of the amounts recognized as expense, RMH Overhead, LLC was paid $6,000 and $5,000 in the first six months of 2015 and 2014, respectively, leaving a balance of $13,850 remaining in accounts payable at June 30, 2015 and 2014.  In addition, the Company purchased equipment for $3,500 and $16,500 from Overhead Door Co. of SNR, another company owned by Rick Havenstrite, during the periods ended June 30, 2015 and December 31, 2014.


During the six months ended June 30, 2015 and June 30, 2014, the Company recognized wage expense of $13,846 and $5,538, respectively, for office and accounting services performed by Marianne Havenstrite, wife of Rick Havenstrite, who became an officer of the Company during 2013. $42,300 and $28,500 of accrued wages remains unpaid at June 30, 2015 and December 31, 2014 and is reflected in accrued liabilities.   


During the six months ended June 30, 2015 and 2014, the Company recognized general project cost expense of $3,105 and $12,827, respectively, for geological services provided by Stuart Havenstrite, the father of Rick Havenstrite.  $18,276 and $21,649 remain unpaid to Mr. Havenstrite at June 30, 2015 and December 31, 2014. These amounts are included in accounts payable at those dates. Payments were also made to other family members for the six months ended June 30, 2015 and 2014 for accounting and engineering services in the amount of $42,001 and $22,892.





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, 2014 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:


·

maintaining necessary mining permits;

·

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.


Overview


Desert Hawk Gold Corp. 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 projects are located in the Gold Hill Mining District in Tooele County, Utah.  We are currently producing gold and silver at the Kiewit property and had our first sales from the property in October 2014.


We were originally incorporated in the State of Idaho on November 5, 1957.  For several years we bought and sold mining leases and claims, but in 1995 we ceased all principal business operations.  In 2008, we changed our domicile 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.



16




On January 6, 2014 we obtained the final permit necessary to commence construction and development of the Kiewit property. The reclamation bond was posted in February 2014 in the amount of $1,348,000.  Development of the project was essentially completed in 2014 using funding provided by DMRJ Group.  The property is located in a historical mining district that has existing disturbances and mine wastes and is in a very arid, desolate area.  The property is also adjacent to, and uphill from, the Dugway Proving Grounds and Air Force Gunnery Range that is deemed an environmentally insensitive area, with low water quality.  Management believes that through our leased patented claims we have adequate private land for process facilities.  There is no material access from any metropolitan area or community.


On March 20, 2013, the Confederated Tribes of the Goshute Reservation (“Tribes”) sent a letter to the Bureau of Land Management (“BLM”) outlining their review of the Kiewit Mine Project Draft Environmental Assessment.  The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources.  On February 6, 2014 the Tribes filed an appeal of the permit with the BLM.  On April 10, 2014, the BLM was granted an extension of time to May 7, 2014 to answer the appeal and on May 8, 2014 an additional extension of time was granted to the BLM to June 6, 2014 to answer the appeal.  On June 6, 2014 the BLM submitted their response to the appeal.  On August 14, 2014, the BLM rejected the Tribe’s request for a stay.


On July 24, 2009, we entered into a Joint Venture Agreement with the Clifton Mining Company and Woodman Mining Company under which Clifton Mining granted to us exclusive possession of certain patented and unpatented mining claims and an unpatented mill site claim and certain Utah state mineral leases covering lands in the Gold Hill Mining District located in Tooele County, Utah, for exploration, development and mining, and the right to occupy the properties and to explore, develop and mine the properties for minerals. Woodman Mining also granted us the same rights in certain of these patented mining claims owned jointly with Clifton Mining. Also, on July 24, 2009, we entered into a Joint Venture Agreement with the Jeneane C. Moeller Family Trust under which the Trust granted to us exclusive possession of four patented mining claims covering lands in the Gold Hill Mining District located in Tooele County, Utah, for exploration, development and mining, and the right to occupy the properties and to explore, develop and mine the properties for minerals. These properties are known as the Yellow Hammer claims.  No payments have been made to keep this agreement current and no formal forfeiture notification has been received.


Prior to July 1, 2010, we notified Clifton Mining that we would surrender certain of the mining claims and leases originally obtained in our lease agreement with it. Also, in 2010 and in 2012, certain amendments were made to the lease agreements.  As part of these agreements, if we did not place the Kiewit property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three-year period from the date of the agreement, we would be required to make annual payments to Clifton Mining of $50,000 per property to retain our rights to those properties. The Clifton Shears-Smelter Tunnel property payment has not yet been made for this year.  The property payment is not due on the Kiewit property as it has been placed into production and royalties are generated.  The Cane Springs property was released back to Clifton Mining in 2013.  


We currently hold leasehold interests within the Gold Hill Mining District consisting of 247 unpatented mining claims, including an unpatented mill site claim, and two Utah state mineral leases located on state trust lands, all covering approximately 33 square miles. Initial payment for the claims fees for 2015-2016 will be made in August 2015.  We intend to concentrate our activities on the Kiewit project.  Mineral extraction activities on the property at this time will be open-pit.  


In July 2010, we entered into an Investment Agreement with DMRJ.  The Agreement has been modified numerous times and currently operates under the Twelfth Amendment to the Investment Agreement.  The Amendments have provided for extensions of payment dates, increased funding and other modifications to the debt agreement.  


On February 19, 2014, we agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group.  The Tenth Amendment provides for funding of construction of the heap leach pad and process facility, mining development, and operations through a series of monthly term loan advances totaling a maximum of $5,700,000 over five months.  As a part of this amendment, on February 19, 2014, we issued to DMRJ Group 249,603 shares of Series B Preferred Stock.  The conversion rate of the Series B Preferred Stock is 100 shares of common stock for each share of Series B Preferred Stock. During 2014, financing expense in the amount of $998,412 was recorded in association with this share issuance, using an estimated fair value of the equivalent common shares of $0.04.



17




As a result of this issuance, DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible into 27,718,333 shares of common stock.  DMRJ is considered a related party.


In connection with this amendment, we amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude from the definition of convertible securities the shares of all preferred stock previously issued to DMRJ Group and any future issuances.


The total due to DMRJ at June 30, 2015 and December 31, 2014 is as follows:


 

 

June 30,

 

December 31,

 

 

2015

 

2014

Principal

 

 

 

 

       Current

$

3,481,357

$

2,124,348

       Long-term

 

8,559,135

 

9,665,144

                Total

 

12,040,492

 

11,789,492

Interest payable - current

 

4,268,643

 

3,375,652

 

$

16,309,135

$

15,165,144


The Investment Agreement contains certain negative covenants which prohibit us from the following actions or activities:


·

Incurring any indebtedness except in limited circumstances;

·

Creating any significant liens on any of our properties or assets;

·

Enter into any sale and lease-back transaction involving any of our properties;

·

Make any investments in or loans or advances to other parties;

·

Engage in any merger, consolidation, sale of assets or acquisition transaction, except for the purchase or sale of inventory or certain limited investments;

·

Declare or pay any dividends, except for dividends to DMRJ Group;

·

Engage in any business transactions with affiliates;

·

Make capital expenditures except as permitted in the agreement pertaining to our current mining business;

·

Create any lease obligations;

·

Amend, supplement or modify any existing indebtedness;

·

Enter into any swap, forward, future or derivative transaction;

·

Make any change in our accounting policies or reporting practices;

·

Form additional subsidiaries; or

·

Modify or grant a waiver or release under or terminate any principal lease agreement or other material contract.


A Twelfth Amendment to the Investment Agreement was entered into on June 5, 2015 which allowed for additional funding in the amount of $250,000 during the months of May and June 2015, and provisional funding of up to an additional $500,000, and established new minimum payment dates beginning in August 2015 as follows:


August 31, 2015

$

500,000

November 30, 2015

 

1,000,000

December 31, 2015

 

4,000,000

February 28, 2016

 

1,500,000

May 31, 2016

 

750,000

August 31, 2016

 

3,000,000

November 30, 2016

 

3,000,000

 

 

 

Total

$

13,750,000


Management anticipates that we will not be able to make the August 31, 2015 payment.  Discussions are currently underway with DMRJ to provide additional funding to finance the purchase of crushing plant equipment to allow for in-house crushing, additional working capital and to finance the expansion into the East extension of the pit.  The equipment purchase is anticipated to reduce crushing costs by as much as $100,000 per month.  This funding will be provided through the use of the provisional funds established in the Twelfth Amendment to the Investment Agreement as well as additional funding to be provided for in a future Amendment to the Investment Agreement.  New funding is expected to be approximately $675,000 during July and August 2015.



18




An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of our stock.  This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of our common stock.  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.  At June 30, 2015, conversion proceeds due to shareholders is $$151,406 for all 130,000 conversion shares.  Due to the redemption feature of these shares, management has concluded that the proceeds from these stock sales should be recorded as a liability and not as equity.  The amount owed to the shareholders in excess of $1,000 per ounce for redemptions through June 30, 2015 is $21,406.  This amount has been recorded as an administrative expense.


Historically, we have incurred net losses for the years ended December 31, 2014 and 2013, and have also incurred a loss for the three and six months ended June 30, 2015.


Our financial statements were prepared assuming that we would continue as a going concern. Our significant cumulative losses from operations as of June 30, 2015, raise substantial doubt about our ability to continue as a going concern. If the going-concern assumption were not appropriate for our 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. During 2015, we have continued to experience losses from operations. We will require additional funding to complete much of our planned mining exploration. Except for potential proceeds from the sale of equity in offerings by us, the issuance of debt, and revenue from existing operations, which has been minimal, we have no other source for additional funding. Our continued net operating losses and stockholders’ deficiency increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.


Results of Operations for the Six Months Ended June 30, 2015 and 2014


The operating loss of $170,962 for the six months ended June 30, 2015 as compared to the operating loss of $898,530 for the six months ended June 30, 2014 represents a decrease in loss of $727,568.  This decreased loss is due to the onset of production and the revenue from metals sales.  Other expense for the six months ended June 30, 2015 was $973,974 that consisted mainly of interest, decreased $734,739 as compared to the other expense amount of $1,708,713 for the six months ended June 30, 2014 that consisted of financing costs in association with the stock issuance to DMRJ Group in the amount of $998,412 as well as interest expense in the amount of $718,165.  The net overall decrease in net loss for the six months ended June 30, 2015 compared to June 30, 2014 was $1,462,307.


Liquidity and Cash Flow


Net cash provided by operating activities was $119,931 during the six month period ended June 30, 2015, compared with cash used by operating activities of $908,642 during the six month period ended June 30, 2014.  This $1,028,573 change in the amount of cash from operating activities is primarily attributable to the onset of production and sales revenue in 2015.

 

Net cash used by investing activities was $218,532 during the six month period ended June 30, 2015, compared to $2,797,294 cash used by investing activities during the six month period ended June 30, 2014.  This decrease of $2,578,762 in cash used for investing activities is due to investment in reclamation bonds and property and equipment in the first six months of 2014.


Net cash provided by financing activities was $35,008 during the six month period ended June 30, 2015, compared with $4,121,934 cash provided during the six month period ended June 30, 2014.  Cash provided in the first quarter of 2014 was provided with proceeds from the financing agreement with DMRJ Group.


As a result of the above, cash decreased by $63,593 during the six month period ended June 30, 2015, leaving us with a cash balance of $98,052 as of June 30, 2015.



19




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 bodies of mineralized material, and to expand the capacity of operating mines, are capitalized and amortized on a units-of-production basis over proven and probable reserves.


Inventories


Inventories consist of estimated gold on the heap leach pad and in the carbon process system and are valued at the lower of production cost or market value.  Gold on the heap leach pad is estimated to be 80% complete for cost purposes and gold in the process system is estimated at 95% complete.


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.


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.  We use assumptions about future costs, capital costs and reclamation costs.  Such assumptions are based on our current mining plan and the best available information for making such estimates.


For non-operating properties, we accrue 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.



20




Item 4.  Controls and Procedures


Evaluation of Disclosure Control and Procedures


Our President and Treasurer, who serve as our principal executive and principal financial officers, respectively, 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”), have 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 30, 2015, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.


PART II – OTHER INFORMATION


Item 4.  Mine Safety Disclosures


The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95 to this quarterly report.


Item 6.  Exhibits


Exhibit No.

Description

31.1

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

31.2

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

32.1

Section 1350 Certification of Principal Executive Officer

32.2

Section 1350 Certification of Principal Financial Officer

95

Mine Safety Disclosure

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




21




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: August 14, 2015,

By: /s/ Rick S. Havenstrite      

Rick S. Havenstrite, President

(Principal Executive Officer)


Date: August 14, 2015

By: /s/ Marianne Havenstrite     

Marianne Havenstrite, Treasurer

(Principal Financial Officer)




22


EX-31.1 2 f10q063015_ex31z1.htm EXHIBIT 31.1 SECTION 302 CERTIFICATION Exhibit 31.1 Section 302 Certification


Certification


I, Rick S. Havenstrite, certify that:


1.

I have reviewed this Form 10-Q quarterly report of Desert Hawk Gold Corp. for the quarter ended June 30, 2015;


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:  August 14, 2015



/s/ Rick S. Havenstrite                      

Rick S. Havenstrite, President

(Principal Executive Officer)



EX-31.2 3 f10q063015_ex31z2.htm EXHIBIT 31.2 SECTION 302 CERTIFICATION Exhibit 31.2 Section 302 Certification


Certification


I, Marianne Havenstrite, certify that:


1.

I have reviewed this Form 10-Q quarterly report of Desert Hawk Gold Corp. for the quarter ended June 30, 2015;


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:  August 14, 2015



/s/ Marianne Havenstrite                    

Marianne Havenstrite, Treasurer

(Principal Financial Officer)



EX-32.1 4 f10q063015_ex32z1.htm EXHIBIT 32.1 SECTION 906 CERTIFICATION Exhibit 32.1 Section 906 Certification



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 June 30, 2015, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal executive 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:  August 14, 2015



/s/ Rick S. Havenstrite                    

Rick S. Havenstrite, President

(Principal Executive Officer)



EX-32.2 5 f10q063015_ex32z2.htm EXHIBIT 32.2 SECTION 906 CERTIFICATION Exhibit 32.2 Section 906 Certification


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 June 30, 2015, as filed with the Securities and Exchange Commission (the “Report”), the undersigned principal 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:  August 14, 2015



/s/ Marianne Havenstrite                           

Marianne Havenstrite, Treasurer

(Principal Financial Officer)



EX-95 6 f10q063015_ex95.htm EXHIBIT 95 MINE SAFETY DATA Exhibit 95 Mine Safety Data


Exhibit 95


Mine Safety Disclosure Data


For the quarterly period ended June 30, 2015, the following Mine Safety and Health Administration (MSHA) violations or notices (6 total) have been received by the Company for its Gold Hill properties.  These citations have been terminated and the fines have been paid.


Date

Act Section

Violation

Description

Fine Imposed

5/27/15

104(a) C

56.12025

EXHAUST FAN NOT GROUNDED

$308

5/27/15

104(a) C

56.12013(b)

LAB EXHAUST FAN SPLICES NOT SEALED

$100

5/27/15

104(a) C

56.6502(a)

FUSE BURN RATE NOT POSTED

$100

5/27/15

104(a) C

56.12040

NO RESTRICTION TO SMALL CUMMINS GENERATOR ENERGIZED ELECTRICAL COMPONENTS

$308

5/27/15

104(a) C

56.6132(b)

POWDER MAGAZINE ELECTRICAL BONDING CONNECTION TO THE EARTH GROUNDING ROD WAS BROKEN

$100

5/27/15

104(g)(1) O

48.27(a)

HAUL TRUCK DRIVER NOT AWARE OF THE EMERGENCY STEERING SYSTEM

$343


There have been NO violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine health hazard under section 104.


Other Citations:  N/A


Footnote:


We certify that we had no mining-related fatalities during the quarterly period ended June 30, 2015.


We have not received an imminent danger order under Section 107(a) of the Federal Mine Safety and Health Act of 1977.


We have not received any notices of a pattern of violations, or of the potential to have such a pattern, of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health and safety hazards.


We have no pending legal actions before the Federal Mine Safety and Health Review Commission as of June 30, 2015, and have not instituted any legal actions during the quarterly period ended June 30, 2015.



EX-101.CAL 7 dhgc-20150630_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT EX-101.DEF 8 dhgc-20150630_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT EX-101.INS 9 dhgc-20150630.xml XBRL INSTANCE DOCUMENT 98052 161645 2130092 1745377 39978 142825 2268122 2049847 4702892 3190156 1269592 1372887 1416862 1412804 9657468 8025694 793356 813559 253000 247500 4321143 3382152 600000 600000 705633 146171 3481357 2125348 151406 56609 0 82000 10305895 7453339 770234 740268 1372585 372388 8559135 9665144 10701954 10777800 21007849 18231139 958 958 0 0 180 180 250 250 12928 12928 8328806 8328806 -19693503 -18548567 -11350381 -10205445 9657468 8025694 0.001 0.001 10000000 10000000 958033 958033 958033 958033 0 0 0 0 180000 180000 180000 180000 249603 249603 249603 249603 0.001 0.001 100000000 100000000 13056603 13056603 13056603 13056603 854772 0 2094641 0 558734 360316 1585327 423711 3366 15206 9270 31736 1343 8100 1343 20927 48423 144286 89961 178671 19946 35545 45871 77729 96873 89093 233683 144984 158812 20373 300148 20772 887497 672919 2265603 898530 -32725 -672919 -170962 -898530 477 1191 857 1191 0 0 0 6673 0 249603 0 -998412 -500297 -350599 -974831 -718165 -499820 -99805 -973974 -1708713 -532545 -772724 -1144936 -2607243 0 0 0 0 -532545 -772724 -1144936 -2607243 -0.04 -0.07 -0.09 -0.25 13056603 11637047 13056603 10575441 -1144936 -2607243 430309 20772 0 85483 0 45000 0 998412 29966 18615 0 -6673 0 -3370 12797 0 -384715 0 102847 -131854 129172 -32715 5500 -14500 938991 719431 119931 -908642 -214474 -1540953 0 92455 -4058 -1348796 -218532 -2797294 250000 4125000 214992 3066 35008 4121934 -63593 415998 161645 8523 98052 424521 1624276 38050 150375 0 94797 0 0 164140 0 210216 <!--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.&nbsp; On June 30, 2014, the Company dissolved its sole subsidiary, Blue Fin Capital, Inc.&nbsp; As a result the Company has no subsidiaries.</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 Joint Venture Agreements with the Clifton Mining Company, the Woodman Mining Company and the Moeller Family Trust for the lease of certain of their property interests in the Gold Hill Mining District of Utah.&nbsp; In 2011 the Company entered into an agreement with DMRJ group which allowed for long term funding of the Kiewit project and helped to provide cash flow for operations during the period from 2009 until 2014 while the permitting process was ongoing. The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.&nbsp; Construction at the site was substantially complete at September 30, 2014.&nbsp; Revenue from the Kiewit heap leach operation began in October 2014 with the first sales of gold and silver.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</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'>In the opinion of management, the accompanying unaudited interim balance sheets and statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of June 30, 2015, and the results of its operations and its cash flows for the three and six months ended June 30, 2015 and 2014. The operating and financial results for the Company for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.</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 by management in accordance with generally accepted accounting principles used in the United States of America (&#147;U.S. GAAP&#148;) and are presented in U.S. dollars. These unaudited interim financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited financial statements included in the Company&#146;s annual report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 31, 2015.</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 bodies of mineralized material, and to expand the capacity of operating mines are capitalized and will be 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;text-autospace:'><u>Inventories</u></p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting &#147;pregnant&#148; solution is further processed in a plant where gold is recovered.&nbsp; The Company records ore on leach pad, ore in carbon column in process and gold dor&#233;, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value.&nbsp; Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses.&nbsp; Revenue from the sale of silver is accounted for as by-product and is deducted from production costs.&nbsp; Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type).&nbsp; The nature of the leaching process inherently limits the ability to precisely monitor inventory levels.&nbsp; As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time.&nbsp; As of June 30, 2015, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><u>Property and Equipment</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Property and equipment are stated at cost. &nbsp;Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years, or units of production over estimated ounces to be produced. &nbsp;The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. &nbsp;The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts.&nbsp; Maintenance and repairs are charged to operations as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations. &nbsp;</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 capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights.&nbsp; Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ounces to be produced.&nbsp; Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.&nbsp; If a property is abandoned or sold, its capitalized costs are charged to operations.&nbsp; Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing.&nbsp; These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility.&nbsp; Additionally, interest is capitalized to mine development until such assets are ready for their intended use.&nbsp; The Company does not have proven and probable reserves at this time.&nbsp; See Note 6.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'><u>Reclamation and Remediation</u></p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>The Company&#146;s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. &nbsp;The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. &nbsp;A corresponding asset is also recorded and depreciated over the life of the asset. &nbsp;After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. &nbsp;Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>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. &nbsp;Such costs are based on management&#146;s estimate of amounts expected to be incurred when the remediation work is performed.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><u>Earnings (loss) 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 (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company.&nbsp; At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows: </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30, 2015</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30, 2014</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Convertible debt</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>857,143</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>857,143</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Convertible preferred stock</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>27,718,333</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>27,718,333</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Total</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>28,575,476</p></td> <td valign="top" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>28,575,476</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'>However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company&#146;s recurring losses.</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 has an accumulated deficit incurred through June 30, 2015, 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 final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.&nbsp; Construction at the site was substantially complete at September 30, 2014.&nbsp; The Company will need significant funding to continue operations and increase development through the next fiscal year.&nbsp; This funding is expected to come via sales revenues, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships.&nbsp; </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 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'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><u>Reclassifications</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Certain reclassifications have been made to conform data from prior periods to the current presentation.&nbsp; These reclassifications have no effect on the results of operations or stockholders&#146; deficit.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><u>New Accounting Pronouncement</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>In July 2015, the Financial Accounting Standards Board issued <font style='text-decoration:none;text-underline:none'>Accounting Standards Update 2015-11</font>, <i>Simplifying the Measurement of Inventory</i>, which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market.&nbsp; Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. The new guidance will be effective for in fiscal years beginning after December 15, 2016, including interim periods within those years.&nbsp; Management believes that this new standard will have minimal impact on its financial statements.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 3 - CAPITAL STOCK </b></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.&nbsp; 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'>No shares of stock have been issued during the first six months of 2015.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>The Company issued a total of 117,854 shares of stock to the note holders of the convertible debt for interest expense through November 30, 2014. &nbsp;These shares were valued at a fair value of $82,500 based upon the stated interest rate contained in the debt agreements. &nbsp;The Company failed to repay the loan in full on the November 30, 2014 maturity date, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders. &nbsp;This issuance was valued at $0.04 per share ($12,000) which was determined by management to be the fair value of a share of common stock based on a 2014 valuation analysis performed by a consultant. &nbsp;The consultant determined that the fair value of the common stock of the Company on a non-controlling, non-marketable basis to be $0.04 per share. Management assessed the consultant&#146;s valuation and found the methodology to be appropriate for the Company and concluded that the fair value of common shares is $0.04. &nbsp;The issuance was accounted for as financing expense during the fourth quarter 2014. &nbsp;As part of this agreement, the due date of the notes was extended to November 30, 2015, with interest to be paid in cash after November 30, 2014. &nbsp;See Note 7.</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>On May 1, 2014, the Company issued 3,137,066 shares to its president, Rick Havenstrite, as a management incentive. &nbsp;Also, as a part of this agreement, Mr. Havenstrite agreed to forgive $40,000 of accrued but unpaid wages. &nbsp;The issued shares were valued at $0.04 per share as determined by the consultant (see above). &nbsp;Based on this rate, the fair value of the shares issued to Mr. Havenstrite was determined to be $125,483. &nbsp;Of this amount, $85,483 was recognized as officers and directors fees during the year ended December 31, 2014 and $40,000 was recognized as a reduction of accrued officer wages.</p> <p style='background:#fdfdfd;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'>On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. &nbsp;The Tenth Amendment provides for funding of construction of the heap leach pad and process facility, mining development, and operations through a series of monthly term loan advances totaling a maximum of $5,700,000 over five months. &nbsp;As a part of this amendment, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock.&nbsp; The conversion rate of the Series B Preferred Stock is 100 shares of common stock for each share of Series B Preferred Stock. During the quarter ended March 31, 2014, financing expense in the amount of $1,248,015 was recorded in association with this share issuance, using an estimated fair value of the equivalent common shares of $0.05.&nbsp; During the quarter ended June 30, 2014, the Company revised the estimated fair value of the equivalent common shares to be $998,412 based upon a fair value of $0.04 per share.&nbsp; Thus a reduction to financing expense of $249,603 was recorded in the second quarter 2014.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>As a result of this issuance, DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible into 27,718,333 shares of common stock.&nbsp; DMRJ is considered a related party.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>In connection with this amendment, the Company amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude from the definition of convertible securities the shares of all preferred stock previously issued to DMRJ Group and any future issuances of any shares of Series A, Series, B, and Series A-1 and A-2 to DMRJ Group or any of its affiliates. </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 4 &#150; INVENTORIES</b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The following table provides the components of inventories:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" width="381" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'></td> <td width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">June 30,</font></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2015</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">December 31,</font></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2014</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">Ore on leach pad</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,951,547</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,508,761</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">Carbon column in process</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">169,905</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">211,115</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">Dore finished goods</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,640</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>25,501</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp;&nbsp;&nbsp; Total </font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,130,092</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,745,377</font></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'>Inventories are valued at the lower of cost or net realizable value, which at June 30, 2015 is cost.&nbsp; </p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 5 - PROPERTY AND EQUIPMENT</b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The following is a summary of property, equipment, and accumulated depreciation at June 30, 2015 and December 31, 2014:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="94" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:70.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">June 30,</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:62.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">December 31,</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="94" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:70.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2015</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:62.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2014</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Equipment</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="78" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">3,090,105</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="72" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,465,827</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Furniture and fixtures, temporary housing</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">10,781</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">10,781</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Electronic and computerized equipment</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">52,874</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">19,011</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Vehicles</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">56,830</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">65,330</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">3,210,590</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,560,949</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp; Less accumulated depreciation</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(548,670)</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(357,983)</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,661,920</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,202,966</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Kiewit property facilities</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,331,520</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,153,411</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp; Less accumulated amortization</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(290,548)</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(166,221)</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,040,972</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,987,190</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp;&nbsp;&nbsp; Total </font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">4,702,892</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">3,190,156</font></p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 6 &#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 June 30, 2015 and December 31, 2014 are as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2014</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial lease fee</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yellow Hammer Site</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>175,000</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>175,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kiewit, Cactus Mill and all other sites</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>600,000</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>600,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <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;&nbsp; Total </p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>775,000</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>775,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset retirement obligation</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kiewit Site</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>687,475</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>687,475</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kiewit Exploration</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>10,780</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>10,780</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cactus Mill</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,133</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,133</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt 0.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total </p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>714,388</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>714,388</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt 27.25pt'>&nbsp;&nbsp;&nbsp; Accumulated amortization</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(219,796)</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(116,501)</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt 52.6pt'>Total </p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,269,592</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,372,887</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 of 247 unpatented claims, including the unpatented mill site claim, and two Utah state mineral leases located on state trust lands.&nbsp; Annual claims fees are currently $155 per claim plus administrative fees.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>On January 6, 2014, we obtained the final permit necessary to commence construction of the heap leach pad and process facility.&nbsp; On February 20, 2014, the Kiewit reclamation bond in the amount of $1,348,000 was posted with the State of Utah, Division of Oil, Gas and Mining. &nbsp;This newly calculated bond amount includes bonding for the Yellow Hammer Small Mine and the Yellow Hammer Exploration sites along with the Herat Exploration site. &nbsp;As such, the asset retirement obligation for these sites was absorbed by the new bond. Funds of $92,705 were received in April 2014 by the Company for these refunded reclamation bonds. &nbsp;Total reclamation bonds posted at June 30, 2015 and December 31, 2014 are $1,416,862 and $1,412,804, respectively. &nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>On March 20, 2013, the Confederated Tribes of the Goshute Reservation (&#147;Tribes&#148;) sent a letter to the Bureau of Land Management (&#147;BLM&#148;) outlining their review of the Kiewit Mine Project Draft Environmental Assessment.&nbsp; The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources.&nbsp; On February 6, 2014 the Tribes filed an appeal of the permit with the BLM.&nbsp; On April 10, 2014, the BLM was granted an extension of time to May 7, 2014 to answer the appeal and on May 8, 2014 an additional extension of time was granted to the BLM to June 6, 2014 to answer the appeal.&nbsp; On June 6, 2014 the BLM submitted their response to the appeal.&nbsp; On August 14, 2014, the BLM rejected the Tribe&#146;s request for a stay.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 7 &#150; CONVERTIBLE DEBT</b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</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. 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 $0.70 due to the note holders&#146; agreement to subordinate their debt to DMRJ Group (see Note 10).&nbsp; The notes are convertible into potentially 857,143 shares of common stock and principal and interest were initially due November 30, 2012.</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.</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 repay the loan in full on the November 30, 2012, November 30, 2013 and November 30, 2014 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. As part of this agreement, the due date of the note was extended each year and has now been extended to November 30, 2015. Interest was paid with stock through November 30, 2014 and will be paid in cash thereafter.&nbsp; Accrued interest payable at June 30, 2015 and 2014 includes $52,500 and $-0-, respectively, for these notes.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 8 &#150; NOTE PAYABLE - RELATED PARTY</b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible to 27,718,333 shares of common stock (See Note 3).&nbsp; They are considered a related party.&nbsp; In July 2010, the Company entered into an Investment Agreement with DMRJ.&nbsp; The Agreement has been modified numerous times and currently operates under the Twelfth Amendment to the Investment Agreement dated June 5, 2015.&nbsp; The Amendments have provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement.&nbsp; </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The total due to DMRJ at June 30, 2015 and December 31, 2014 is as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0"> <tr style='height:0.1in'> <td valign="top" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30,</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31,</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2014</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>Principal</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Current </p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,481,357</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>2,124,348</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term </p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,559,135</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>9,665,144</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>12,040,492</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>11,789,492</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>Interest payable - current</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>4,268,643</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,375,652</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,309,135</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>15,165,144</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 Investment Agreement contains certain negative covenants which prohibit us from the following actions or activities:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <ul type="disc" style='margin-top:0in'> <li style='text-align:justify'>Incurring any indebtedness except in limited circumstances;</li> <li style='text-align:justify'>Creating any significant liens on any of our properties or assets;</li> <li style='text-align:justify'>Enter into any sale and lease-back transaction involving any of our properties;</li> <li style='text-align:justify'>Make any investments in or loans or advances to other parties;</li> <li style='text-align:justify'>Engage in any merger, consolidation, sale of assets or acquisition transaction, except for the purchase or sale of inventory or certain limited investments;</li> <li style='text-align:justify'>Declare or pay any dividends, except for dividends to DMRJ Group;</li> <li style='text-align:justify'>Engage in any business transactions with affiliates;</li> <li style='text-align:justify'>Make capital expenditures except as permitted in the agreement pertaining to our current mining business;</li> <li style='text-align:justify'>Create any lease obligations;</li> <li style='text-align:justify'>Amend, supplement or modify any existing indebtedness;</li> <li style='text-align:justify'>Enter into any swap, forward, future or derivative transaction;</li> <li style='text-align:justify'>Make any change in our accounting policies or reporting practices;</li> <li style='text-align:justify'>Form additional subsidiaries; or</li> <li style='text-align:justify'>Modify or grant a waiver or release under or terminate any principal lease agreement or other material contract.</li></ul> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><u>2015 Activity</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>An Eleventh Amendment to the Investment Agreement was entered into on March 17, 2015 which established new minimum principal and interest payment dates which were then revised with the Twelfth Amendment to the Investment Agreement. The Twelfth Amendment was entered into on June 5, 2015 and allowed for additional funding in the amount of $250,000 which was received by the Company in May and June 2015 and also established new minimum principal and interest payment dates beginning in August 2015 as follows:</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>August 31, 2015&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>500,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>November 30, 2015</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>December 31, 2015</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>4,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>February 28, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,500,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>May 31, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>750,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>August 31, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>November 30, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="91" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:68.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Total</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="top" width="91" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:68.2pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>13,750,000</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'>Management anticipates that the August 31, 2015 payment will not be made.&nbsp; Discussions are currently underway with DMRJ to provide additional funding to finance the purchase of crushing plant equipment to allow for in-house crushing, additional working capital and to finance the expansion into the east extension of the pit.&nbsp; The equipment purchase is anticipated to reduce crushing costs by as much as $100,000 per month.&nbsp; This funding will be provided through the use of the provisional funds established in the Twelfth Amendment to the Investment Agreement as well as additional funding to be provided for in a future amendment to the Investment Agreement.&nbsp; New funding is expected to be approximately $675,000 during July and August 2015.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><u>2014 Activity</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>In January 2014, pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount of $25,000. &nbsp;The January 31, 2014 loan payment that was due was not made.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. The Tenth Amendment provides for funding of mining operations through a series of advances (the &#147;Monthly Term Loan Advances&#148;) totaling a maximum of $5,700,000 over five months. &nbsp;A total of $5,500,000 was drawn.&nbsp; As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016. &nbsp;The interest rate on the loan balance was reduced from 24% to 15% and minimum principal and interest payment amounts were established.&nbsp; The first minimum payment, due February 28, 2015, was not made.&nbsp;&nbsp;&nbsp; Payment terms were changed in 2015 pursuant to the Eleventh and Twelfth Amendments (see 2015 Activity).</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The Company&#146;s ability to meet these minimum payments will be dependent upon a number of factors including production variables, metals market pricing, demand for products and services, and the availability of opportunities for expansion through affiliations and other business relationships.&nbsp;&nbsp; </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>In 2014, the first Monthly Term Loan, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit.&nbsp; A total of $5,525,000 was drawn during the year ended December 31, 2014 in connection with the Tenth Amendment Monthly Term Loan Advances. &nbsp;In addition, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock. See Note 3. &nbsp;Onsite construction of the project is essentially complete at December 31, 2014.&nbsp; If the Company is unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate the Company&#146;s mining leases and other assets.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 9 &#150; NOTES PAYABLE &#150; EQUIPMENT</b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The following is a summary of the equipment notes payable:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31, 2014</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,424 including interest at 4.99%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>101,305</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,521,998</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,412</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,594 including interest at 2.99%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>430,398</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>492,955</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,629 including interest at 1.75%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,105</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>25,604</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>2,078,218</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>518,559</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Current portion</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(705,633)</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(146,171)</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Long Term portion</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,372,585</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>372,388</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt 5.85pt;text-indent:-5.85pt'>Principal payments are as follows for the twelve months ended June 30,</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2016</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>705,633</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2017</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>716,548</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2018</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>597,706</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2019</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>58,331</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp; Total</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>2,078,218</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'>During the first quarter 2015, accounts payable balance of $150,375 relating to lease costs for equipment was converted to notes payable &#150; equipment when the Company acquired the equipment.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 10 &#150; REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION </b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Remediation, reclamation and mine closure costs are based principally on legal and regulatory requirements.&nbsp; Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties.&nbsp; The Company uses assumptions about future costs, capital costs and reclamation costs.&nbsp; Such assumptions are based on the Company&#146;s current mining plan and the best available information for making such estimates.&nbsp; In calculating the present value of the asset retirement obligation the Company used a credit adjusted risk free interest rate of 8% to 10% and projected mine lives of five to 12 years, depending on the site.&nbsp; On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions.&nbsp; </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Changes in the reclamation liability for the periods ended June 30, 2015 and December 31, 2014 are as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Six months ended</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;June 30,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Year ended December 31,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2014</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Reclamation and remediation liability, beginning of period</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>740,268</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>69,920</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; Obligation incurred </p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>656,567</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; Accretion expense</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>29,966</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>13,781</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Reclamation and remediation liability, end of period</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>770,234</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>740,268</p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 11 &#150; STOCK REDEEMABLE WITH GOLD PROCEEDS</b></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='background:#fdfdfd;text-align:justify;margin:0in 0in 0pt'>An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of the Company&#146;s common stock. This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of the Company&#146;s common stock.&nbsp; Under the terms of this offering, the shares can be redeemed for 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. Shares will be converted on whole ounces only.&nbsp;&nbsp; Each investor received 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; Due to the redemption feature of these shares, management has concluded that the conversion shares should be recorded as a liability and not as equity.&nbsp; </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Once sales of concentrate began in 2014, all investors in this equity financing had the option to convert their shares for cash from 5% of the gold sales, and all parties chose to convert.&nbsp; Amounts due to these shareholders are disclosed in the following table.&nbsp; The share conversion is complete at June 30, 2015 and amounts due to shareholders are past due.&nbsp; These amounts are expected to be paid to shareholders in 2015. </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Conversion Shares Due based on $1,000 Gold Price</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Additional Amount Based on Actual Gold Sales Price</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Total Due to Shareholders at June 30, 2015</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 25.4pt 0pt 0in'>Original Conversion Liability</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>130,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Less Conversion:</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; December 31, 2014</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>48,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,609</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>56,609</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; June 30, 2015</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>82,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>12,797</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>94,797</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>130,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>21,406</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>151,406</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="458" colspan="5" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:343.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Remaining balance to be redeemed at June 30, 2015</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 12&#150; COMMITMENTS</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 lease of the Trust&#146;s Yellow Hammer property in the Gold Hill Mining District of Utah. &nbsp;Pursuant to the agreement, 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 payments to the Trust of $50,000. &nbsp;The Yellow Hammer operated for several months in 2011. &nbsp;Under the terms of the Joint Venture Agreement, the Company is 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;There were no sales and no royalty expense to date for the Yellow Hammer in 2015 or in 2014.&nbsp; No payment has been made on this property and no official forfeiture notice has been received regarding this nonpayment. </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 lease of their property interests in the Gold Hill Mining District of Utah. &nbsp;Under the terms of the Joint Venture Agreement, the Company is 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 is also required to pay a 6% net smelter return on any production from the Kiewit gold property. Additionally, if the Company does not place the Kiewit property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three year period, it will be required to make annual payments to Clifton Mining in the amount of $50,000 per location. The annual payments due on July 24, 2014 were made on July 22, 2014 and accepted by Clifton Mining for the Clifton Shears and Kiewit properties. The Cane Springs property payment was not made in 2013 and this claim was released back to Clifton Mining at that time. &nbsp;Production at the Kiewit property began in the fourth quarter 2014.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'><font style='background:#fdfdfd'>Royalties of 6% are due to Clifton Mining on sales of gold and silver.&nbsp; Royalties due to Clifton Mining at June 30, 2015 and December 31, 2014 from production at the Kiewit property are $87,980 and $ -0-, respectively. Royalty payments are past due and are expected to be paid in 2015.&nbsp; </font>Royalty expense for the quarter and six months ended June 30, 2015 is $50,276 and $123,289, respectively.</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 was for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year. &nbsp;Termination agreements have been reached with the former CEO and one director, providing for payment of accrued compensation and consulting payable over several months commencing with the funding of the Kiewit project. &nbsp;These payments began in February 2014.&nbsp; As of June 30, 2015 and December 31, 2014 accrued compensation of $253,000 and $247,500, and consulting fees payable of $-0- and $15,000, respectively, were due to directors and officers.&nbsp; Of the $253,000 due at June 30, 2015, accrued compensation of $192,700 is due to Rick Havenstrite, President, $42,300 to Marianne Havenstrite, Treasurer, and $18,000 remains to be paid pursuant to the termination agreements.&nbsp; In addition, as part of a management incentive award on May 1, 2014, Rick Havenstrite was awarded 3,137,066 shares of common stock.&nbsp; As part of this award, Mr. Havenstrite agreed to forgive $40,000 in accrued compensation.&nbsp; See Note 3.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><b>NOTE 13 &#150; RELATED PARTY TRANSACTIONS</b></p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>The Company recognized rent expense for rental of office space of $3,000 for the six months ending June 30, 2015 and 2014, respectively, paid to RMH Overhead, LLC, a company owned by Rick Havenstrite, the Company&#146;s president and a director.&nbsp; Of the amounts recognized as expense, RMH Overhead, LLC was paid $6,000 and $5,000 in the first six months of 2015 and 2014, respectively, leaving a balance of $13,850 remaining in accounts payable at June 30, 2015 and 2014.&nbsp; In addition, the Company purchased equipment for $3,500 and $16,500 from Overhead Door Co. of SNR, another company owned by Rick Havenstrite, during the periods ended June 30, 2015 and December 31, 2014.</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>During the six months ended June 30, 2015 and June 30, 2014, the Company recognized wage expense of $13,846 and $5,538, respectively, for office and accounting services performed by Marianne Havenstrite, wife of Rick Havenstrite, who became an officer of the Company during 2013. $42,300 and $28,500 of accrued wages remains unpaid at June 30, 2015 and December 31, 2014 and is reflected in accrued liabilities.&nbsp;&nbsp; </p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>During the six months ended June 30, 2015 and 2014, the Company recognized general project cost expense of $3,105 and $12,827, respectively, for geological services provided by Stuart Havenstrite, the father of Rick Havenstrite.&nbsp; $18,276 and $21,649 remain unpaid to Mr. Havenstrite at June 30, 2015 and December 31, 2014. These amounts are included in accounts payable at those dates. Payments were also made to other family members for the six months ended June 30, 2015 and 2014 for accounting and engineering services in the amount of $42,001 and $22,892.</p> <p style='margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</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 bodies of mineralized material, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'><u>Inventories</u></p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting &#147;pregnant&#148; solution is further processed in a plant where gold is recovered.&nbsp; The Company records ore on leach pad, ore in carbon column in process and gold dor&#233;, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value.&nbsp; Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses.&nbsp; Revenue from the sale of silver is accounted for as by-product and is deducted from production costs.&nbsp; Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type).&nbsp; The nature of the leaching process inherently limits the ability to precisely monitor inventory levels.&nbsp; As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time.&nbsp; As of June 30, 2015, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><u>Property and Equipment</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p>Property and equipment are stated at cost. &nbsp;Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years, or units of production over estimated ounces to be produced. &nbsp;The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. &nbsp;The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts.&nbsp; Maintenance and repairs are charged to operations as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations <!--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 capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights.&nbsp; Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ounces to be produced.&nbsp; Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.&nbsp; If a property is abandoned or sold, its capitalized costs are charged to operations.&nbsp; Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing.&nbsp; These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility.&nbsp; Additionally, interest is capitalized to mine development until such assets are ready for their intended use.&nbsp; The Company does not have proven and probable reserves at this time.&nbsp; See Note 6.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'><u>Reclamation and Remediation</u></p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>The Company&#146;s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies. &nbsp;The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets. &nbsp;A corresponding asset is also recorded and depreciated over the life of the asset. &nbsp;After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation. &nbsp;Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>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. &nbsp;Such costs are based on management&#146;s estimate of amounts expected to be incurred when the remediation work is performed.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><u>Earnings (loss) 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 (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company.&nbsp; At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows: </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30, 2015</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30, 2014</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Convertible debt</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>857,143</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>857,143</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Convertible preferred stock</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>27,718,333</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>27,718,333</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Total</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>28,575,476</p></td> <td valign="top" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>28,575,476</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'>However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company&#146;s recurring losses.</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 has an accumulated deficit incurred through June 30, 2015, 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 final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.&nbsp; Construction at the site was substantially complete at September 30, 2014.&nbsp; The Company will need significant funding to continue operations and increase development through the next fiscal year.&nbsp; This funding is expected to come via sales revenues, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships.&nbsp; </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p>If the going concern assumption were not appropriate for these 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 <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><u>Reclassifications</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt'>Certain reclassifications have been made to conform data from prior periods to the current presentation.&nbsp; These reclassifications have no effect on the results of operations or stockholders&#146; deficit.</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'><u>New Accounting Pronouncement</u></p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <p style='text-align:justify;margin:0in 0in 0pt;text-autospace:'>In July 2015, the Financial Accounting Standards Board issued <font style='text-decoration:none;text-underline:none'>Accounting Standards Update 2015-11</font>, <i>Simplifying the Measurement of Inventory</i>, which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market.&nbsp; Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. The new guidance will be effective for in fiscal years beginning after December 15, 2016, including interim periods within those years.&nbsp; Management believes that this new standard will have minimal impact on its financial statements.</p> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>.&nbsp; At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows: </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30, 2015</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30, 2014</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Convertible debt</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>857,143</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>857,143</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Convertible preferred stock</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>27,718,333</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>27,718,333</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="167" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:125.45pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Total</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>28,575,476</p></td> <td valign="top" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="99" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:74.4pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>28,575,476</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'>The following table provides the components of inventories:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" width="381" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'></td> <td width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">June 30,</font></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2015</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">December 31,</font></p> <p align="center" style='text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2014</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">Ore on leach pad</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,951,547</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,508,761</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">Carbon column in process</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">169,905</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">211,115</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">Dore finished goods</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,640</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>25,501</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="159" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:119.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp;&nbsp;&nbsp; Total </font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:67.65pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,130,092</font></p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="90" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,745,377</font></p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The following is a summary of property, equipment, and accumulated depreciation at June 30, 2015 and December 31, 2014:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="94" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:70.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">June 30,</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:62.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">December 31,</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="94" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:70.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2015</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" colspan="2" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:62.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="center" style='layout-grid-mode:char;text-align:center;margin:0in 0in 0pt'><font lang="EN-GB">2014</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Equipment</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="78" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">3,090,105</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="72" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,465,827</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Furniture and fixtures, temporary housing</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">10,781</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">10,781</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Electronic and computerized equipment</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">52,874</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">19,011</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Vehicles</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">56,830</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">65,330</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">3,210,590</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,560,949</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp; Less accumulated depreciation</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(548,670)</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(357,983)</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,661,920</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,202,966</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">Kiewit property facilities</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,331,520</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,153,411</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp; Less accumulated amortization</font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(290,548)</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">(166,221)</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">2,040,972</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">1,987,190</font></p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="231" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:173.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p style='layout-grid-mode:char;margin:0in 0in 0pt'><font lang="EN-GB">&nbsp;&nbsp;&nbsp;&nbsp; Total </font></p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="78" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:58.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">4,702,892</font></p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">$</font></p></td> <td valign="bottom" width="72" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:53.75pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:1.4pt;border-left:#f0f0f0;padding-right:1.4pt;background-color:transparent'> <p align="right" style='layout-grid-mode:char;text-align:right;margin:0in 0in 0pt'><font lang="EN-GB">3,190,156</font></p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>Mineral properties and interests as of June 30, 2015 and December 31, 2014 are as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2014</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Initial lease fee</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Yellow Hammer Site</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>175,000</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>175,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kiewit, Cactus Mill and all other sites</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>600,000</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>600,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <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;&nbsp; Total </p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>775,000</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>775,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Asset retirement obligation</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kiewit Site</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>687,475</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>687,475</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Kiewit Exploration</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>10,780</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>10,780</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cactus Mill</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,133</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,133</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt 0.5in'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total </p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>714,388</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>714,388</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt 27.25pt'>&nbsp;&nbsp;&nbsp; Accumulated amortization</p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(219,796)</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(116,501)</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="266" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:199.15pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt 52.6pt'>Total </p></td> <td valign="top" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="20" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:14.65pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,269,592</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:1in;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,372,887</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'>The total due to DMRJ at June 30, 2015 and December 31, 2014 is as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0"> <tr style='height:0.1in'> <td valign="top" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30,</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31,</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2014</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>Principal</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;Current </p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,481,357</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>2,124,348</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term </p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,559,135</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>9,665,144</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>12,040,492</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>11,789,492</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>Interest payable - current</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>4,268,643</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'></td> <td valign="bottom" width="84" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,375,652</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="141" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:105.75pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,309,135</p></td> <td valign="bottom" width="12" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="84" style='border-top:windowtext 1pt solid;height:0.1in;border-right:#f0f0f0;width:63pt;border-bottom:windowtext 2.25pt double;padding-bottom:0in;padding-top:0in;padding-left:0in;border-left:#f0f0f0;padding-right:0in;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>15,165,144</p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The Twelfth Amendment was entered into on June 5, 2015 and allowed for additional funding in the amount of $250,000 which was received by the Company in May and June 2015 and also established new minimum principal and interest payment dates beginning in August 2015 as follows:</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>August 31, 2015&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>500,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>November 30, 2015</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>December 31, 2015</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>4,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>February 28, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,500,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>May 31, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>750,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>August 31, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>November 30, 2016</p></td> <td valign="bottom" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="96" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:72.25pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>3,000,000</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="91" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:68.2pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="122" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:91.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Total</p></td> <td valign="top" width="21" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:15.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="top" width="91" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:68.2pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>13,750,000</p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>The following is a summary of the equipment notes payable:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>June 30,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>December 31, 2014</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,424 including interest at 4.99%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>101,305</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,521,998</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,412</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,594 including interest at 2.99%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>430,398</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>492,955</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,629 including interest at 1.75%.</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>16,105</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>25,604</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>2,078,218</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>518,559</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Current portion</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(705,633)</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>(146,171)</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Long Term portion</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>1,372,585</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>372,388</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt 5.85pt;text-indent:-5.85pt'>Principal payments are as follows for the twelve months ended June 30,</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2016</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>705,633</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2017</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>716,548</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2018</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>597,706</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>2019</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>58,331</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="471" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:353.25pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp; Total</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>2,078,218</p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>Changes in the reclamation liability for the periods ended June 30, 2015 and December 31, 2014 are as follows:</p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="top" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Six months ended</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;June 30,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2015</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Year ended December 31,</p> <p align="center" style='text-align:center;margin:0in 0in 0pt'>2014</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Reclamation and remediation liability, beginning of period</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>740,268</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>69,920</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; Obligation incurred </p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>656,567</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; Accretion expense</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>29,966</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>13,781</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="335" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:250.9pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Reclamation and remediation liability, end of period</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>770,234</p></td> <td valign="bottom" width="18" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:13.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="90" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:67.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>740,268</p></td></tr></table></div> <!--egx--><p style='text-align:justify;margin:0in 0in 0pt'>These amounts are expected to be paid to shareholders in 2015. </p> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> <div align="center"> <table cellspacing="0" cellpadding="0" border="0" style='border-collapse:collapse'> <tr style='height:0.1in'> <td valign="top" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Conversion Shares Due based on $1,000 Gold Price</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Additional Amount Based on Actual Gold Sales Price</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="center" style='text-align:center;margin:0in 0in 0pt'>Total Due to Shareholders at June 30, 2015</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 25.4pt 0pt 0in'>Original Conversion Liability</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>130,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Less Conversion:</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; December 31, 2014</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>48,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>8,609</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>56,609</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp; June 30, 2015</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>82,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>12,797</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1pt solid;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>94,797</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>130,000</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>21,406</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>151,406</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="top" width="211" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:157.95pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="16" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:11.8pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="106" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:79.35pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="102" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:76.5pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>&nbsp;</p></td></tr> <tr style='height:0.1in'> <td valign="bottom" width="458" colspan="5" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:343.6pt;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p style='margin:0in 0in 0pt'>Remaining balance to be redeemed at June 30, 2015</p></td> <td valign="bottom" width="24" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:0.25in;border-bottom:#f0f0f0;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>$</p></td> <td valign="bottom" width="108" style='border-top:#f0f0f0;height:0.1in;border-right:#f0f0f0;width:81pt;border-bottom:windowtext 1.5pt double;padding-bottom:0in;padding-top:0in;padding-left:5.4pt;border-left:#f0f0f0;padding-right:5.4pt;background-color:transparent'> <p align="right" style='text-align:right;margin:0in 0in 0pt'>-</p></td></tr></table></div> <p style='text-align:justify;margin:0in 0in 0pt'>&nbsp;</p> 100000000 0.5000 117854 82500 300000 12000 0.04 0.04 3137066 40000 125483 85483 40000 5700000 249603 100 1248015 0 0.05 0.04 0 998412 0 249603 0 0.6700 0 27718333 1951547 1508761 169905 211115 8640 25501 2130092 1745377 3090105 1465827 10781 10781 52874 19011 56830 65330 3210590 1560949 -548670 -357983 2661920 1202966 2331520 2153411 -290548 -166221 2040972 1987190 4702892 3190156 175000 175000 600000 600000 775000 775000 687475 687475 10780 10780 16133 16133 714388 714388 -219796 -116501 1269592 1372887 0 0 155 0 1348000 0 0 0 0 92705 0 0 0 0 1416862 1412804 600000 0.1500 7500 1.50 0.70 857143 300000 300000 300000 0 0 0 0 0 52500 0 0.6700 27718333 3481357 2124348 8559135 9665144 12040492 11789492 4268643 3375652 16309135 15165144 500000 1000000 4000000 1500000 750000 3000000 3000000 13750000 250000 100000 675000 25000 5700000 5500000 0.1500 2000000 5525000 249603 101305 0 1521998 0 8412 0 430398 492955 16105 25604 2078218 518559 -705633 -146171 1372585 372388 2424 0.0499 49242 0.0468 7600 520 0.0500 21000 11594 0.0299 1629 0.0175 705633 716548 597706 58331 2078218 150375 740268 69920 0 656567 29966 13781 770234 740268 0.1000 0 12 0 0 1150000 130000 0 130000 0 0.0500 0 1000 0 0.0500 0 0 0 0 130000 0 0 48000 8609 56609 82000 12797 94797 130000 21406 151406 0 0 0 50000 0 0 0.0600 0 0 0.0200 0 0 0.1500 0 0 0.0400 0 0 50000 0 0 0 50276 123289 120000 0 0 0 253000 247500 0 0 15000 0 15000 0 0 42300 0 0 18000 0 0 3137066 0 0 40000 0 3000 3000 6000 5000 13850 13850 3500 16500 13846 5538 42300 28500 3105 12827 18276 21649 42001 22892 10-Q 2015-06-30 false Desert Hawk Gold Corp. DHGC 0001168081 --12-31 13056603 Smaller Reporting Company Yes No No 2015 Q2 0001168081 2015-08-14 0001168081 2015-01-01 2015-06-30 0001168081 2015-06-30 0001168081 2014-12-31 0001168081 2015-04-01 2015-06-30 0001168081 2014-04-01 2014-06-30 0001168081 2014-01-01 2014-06-30 0001168081 2013-12-31 0001168081 2014-06-30 0001168081 2014-01-01 2014-12-31 0001168081 2014-02-19 0001168081 2014-01-01 2014-03-31 0001168081 2014-02-20 0001168081 2014-04-30 0001168081 2009-11-18 0001168081 2014-11-30 0001168081 2013-11-30 0001168081 2012-11-30 0001168081 2014-01-31 0001168081 2012-12-31 0001168081 2012-09-30 0001168081 fil:ConversionSharesDueBasedOn1000GoldPriceMember 2014-12-31 0001168081 fil:AdditionalAmountBasedOnActualGoldSalesPriceMember 2014-12-31 0001168081 fil:TotalDueToShareholdersMember 2014-12-31 0001168081 fil:ConversionSharesDueBasedOn1000GoldPriceMember 2015-01-01 2015-06-30 0001168081 fil:AdditionalAmountBasedOnActualGoldSalesPriceMember 2015-01-01 2015-06-30 0001168081 fil:TotalDueToShareholdersMember 2015-01-01 2015-06-30 0001168081 fil:ConversionSharesDueBasedOn1000GoldPriceMember 2015-06-30 0001168081 fil:AdditionalAmountBasedOnActualGoldSalesPriceMember 2015-06-30 0001168081 fil:TotalDueToShareholdersMember 2015-06-30 0001168081 2009-01-01 2009-12-31 0001168081 2010-09-30 shares iso4217:USD iso4217:USD shares pure EX-101.LAB 10 dhgc-20150630_lab.xml XBRL TAXONOMY EXTENSION LABELS LINKBASE DOCUMENT Related party payments Accrued compensation due to Marianne Havenstrite The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method Annual payments required to the Trust Annual payments required to the Trust Commitments Mining Properties Shares redeemed for cash generated from the sale of gold Projected mine lives from 5 years to Projected mine lives from 5 years to CAT Financial interest rate CAT Financial interest rate Komatsu Financial Parentheticals . Minimum payments due on May 31, 2016 Minimum payments due on May 31, 2016 Kiewit reclamation bond in the amount Kiewit reclamation bond in the amount Kiewit property facilities Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Financing expense in the amount recorded in association with this share issuance Financing expense in the amount recorded in association with this share issuance INVENTORIES (TABLES): Accounts payable converted to notes payable - equipment Accounts payable converted to notes payable - equipment Change in fair value of derivatives {1} Change in fair value of derivatives BASIC AND DILUTED NET LOSS PER SHARE Legal and professional Consulting REVENUE: Common Stock, shares authorized 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. Preferred Stock Series A, shares outstanding Accumulated deficit Total remaining in accounts payable Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Less Conversion as of December 31, 2014 Less Conversion as of December 31, 2014 Base price per ounce used for conversion Base price per ounce used for conversion Equipment notes payable for the twelve months ended 6/30/2018 Equipment notes payable for the twelve months ended 6/30/2018 Komatsu PC400 Excavator, due per month in 24 monthly installments Komatsu PC400 Excavator, due per month in 24 monthly installments The Tenth Amendment provides for funding of mining operations through a series of advances totaling a maximum The Tenth Amendment provides for funding of mining operations through a series of advances totaling a maximum Summary of total dues to DMRJ Convertible Debt Promissoy Notes Kiewit, Cactus Mill and all other sites Kiewit, Cactus Mill and all other sites Dore finished goods Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Company issued to DMRJ Group shares of Series B Preferred Stock 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. Capital Stock 2014 Activity Schedule of Inventory, Current RELATED PARTY TRANSACTIONS {1} RELATED PARTY TRANSACTIONS Preferred Stock Series A, shares issued Series B: 249,603 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. Inventories (Note 4) Cash Obligation incurred Reclamation and remediation liability, Obligation incurred in the year Total note payable Komatsu Financial Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer. Note payable to HCE Funding Note payable to HCE Funding Equipment purchase is anticipated to reduce crushing costs per month Equipment purchase is anticipated to reduce crushing costs per month Minimum payments due on August 31, 2015 Minimum payments due on August 31, 2015 DMRJ beneficially owns approximately of the Company (Shares) DMRJ beneficially owns shares the Company Accumulated amortization The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production. Net Property and Equipment Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Amount recognized as officers and directors fees during the year Noninterest expense related to directors' fees which are fees paid by an Entity to its directors. Directors' fees may be paid in addition to salary and other benefits. Company was required to issue an additional shares of common stock to these debt holders Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury CHANGES IN RECLAMATION LIABILITY (TABLES) Mineral Properties and Leases,Policy STOCK REDEEMABLE WITH GOLD PROCEEDS NOTE PAYABLE - RELATED PARTY {1} NOTE PAYABLE - RELATED PARTY NOTE PAYABLE - RELATED PARTY SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {1} SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Equipment acquired with accounts payable Equipment acquired with accounts payable NON-CASH FINANCING AND INVESTING ACTIVITIES: Payment of note payable - equipment Changes in operating assets and liabilities: Loss on stock redeemed with gold proceeds RECLAMATION BONDS RECLAMATION BONDS Entity Registrant Name Document and Entity Information The unpaid amounts are reflected in accounts payable for geological services The unpaid amounts are reflected in accounts payable for geological services Percentage of net smelter royalty on gold and silver minimum Percentage of net smelter royalty on gold and silver minimum Opening balance to be redeemed Opening balance to be redeemed Opening balance to be redeemed Opening balance to be redeemed Equity Components Proceeds of common stock issued under the terms of this offering Proceeds of common stock issued under the terms of this offering Convertible Debt Agreement Annual claim fees plus administrative fees per claim [Abstract] Initial lease fee Inventory Details Reduction to financing expense Reduction to financing expense STOCK REDEEMABLE WITH GOLD PROCEEDS {2} STOCK REDEEMABLE WITH GOLD PROCEEDS Reclamation and Remediation,Policy ReclamationAndRemediationPolicy Property and Equipment, Policy COMMITMENTS {1} COMMITMENTS COMMITMENTS Accretion of asset retirement obligation PROPERTY AND EQUIPMENT, net (Note 5) Current Fiscal Year End Date Percentage of required to pay of net smelter royalty on base metals Percentage of required to pay of net smelter royalty on base metals Equipment notes payable for the twelve months ended 6/30/2019 Equipment notes payable for the twelve months ended 6/30/2019 NOTES PAYABLE EQUIPMENT Details In addition, Company issued to DMRJ Group shares of Series B Preferred Stock In addition, Company issued to DMRJ Group shares of Series B Preferred Stock Minimum payments due on November 30, 2016 Minimum payments due on November 30, 2016 Total Principal amount Total Principal amount Investment Agreement with DMRJ Group Sum of the carrying values as of the balance sheet date of the portions of long-term notes payable due within one year or the operating cycle if longer Reduced conversion price Reduced conversion price Kiewit Exploration Mineral properties ans interest on Kiewit Exploration Furniture and fixtures, temporary housing Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Fair value of additional shares of common stock issued to these debt holders Fair value of additional shares of common stock issued to these debt holders Earnings Per Share, Policy REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION Fair value of cancelled conversion option Fair value of cancelled conversion option Depreciation and amortization Series A: 958,033 shares issued and outstanding Series A: 958,033 shares issued and outstanding Notes payable - equipment (Note 9) Entity Current Reporting Status Company recognized rent expense for rental of office space and a vehicle to be paid to RMH Overhead, LLC Company recognized rent expense for rental of office space and a vehicle to be paid to RMH Overhead, LLC Compensation to be paid pursuant to the termination agreements The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method Commitments Employment Agreements Percentage of required to pay of net smelter royalty Percentage of required to pay of net smelter royalty Less Conversion as of June 30, 2015 Less Conversion as of June 30, 2015 Komatsu D275 dozer, due in one monthly installment .Komatsu D275 dozer, due in one monthly installment HCE Funding interest rate CAT Financial interest rate DMRJ Group 2014 Activity Minimum payments due on August 31, 2016 Minimum payments due on August 31, 2016 Asset retirement obligation will be removed and funds received 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. Less accumulated amortization The decrease in accumulated depreciation, depletion and amortization (relating to property, plant and equipment) as a result of sales or disposals of property, plant and equipment during the period. Estimated per share fair value of the equivalent common shares Estimated per share fair value of the equivalent common shares NOTE PAYABLE DUE TO DMRJ NOTE PAYABLE - RELATED PARTY (TABLES): CAPITAL STOCK {1} CAPITAL STOCK Total Other Income (Expense) Total Other Income (Expense) OPERATING LOSS 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. Total Long-Term Liabilities Total Long-Term Liabilities Prepaid expenses and other current assets CURRENT ASSETS Company purchased equipment from RMH Overhead, LLC Carrying amount, net of valuation reserves and adjustments, as of the balance sheet date of items purchased for use as components of a finished product or pieces of machinery and equipment plus any items in their natural and unrefined state. This element may be used when the reporting entity combines raw materials and purchased parts into an aggregate amount. Amount owed by the company to the CEO as accrued compensation Amount owed by the company to the CEO as accrued compensation Percentage of net smelter royalty on gold and silver maximum Percentage of net smelter royalty on gold and silver maximum Total convertiable liability Less Conversion as of March 31, 2015 Total of amount drawn through a series of advances Total of amount drawn through a series of advances Interest rate of convertible promissoy notes Interest rate of convertible promissoy notes Annual claims fees Annual claims fees Total Initial lease fee The aggregate interest and fee income generated by: (1) loans the Entity has positive intent and ability to hold for the foreseeable future, or until maturity or payoff, including commercial and consumer loans, whether domestic or foreign, which may consist of: (a) industrial and agricultural; (b) real estate; and (c) real estate construction loans; (d) trade financing; (e) lease financing; (f) home equity lines-of-credit; (g) automobile and other vehicle loans; and (h) credit card and other revolving-type loans and (2) loans and leases held-for-sale which may include mortgage loans, direct Total Inventories Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Company issued a total of shares of stock to the note holders of the convertible debt for interest expense Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury Capital Stock Common Stock STOCK REDEEMABLE WITH GOLD PROCEEDS {3} STOCK REDEEMABLE WITH GOLD PROCEEDS STOCK REDEEMABLE WITH GOLD PROCEEDS SUMMARY OF PROPERTY,EQUIPMENT AND ACCUMLATED DEPRECIATION (TABLES) {1} SUMMARY OF PROPERTY,EQUIPMENT AND ACCUMLATED DEPRECIATION (TABLES) Reclassification, Policy ORGANIZATION AND DESCRIPTION OF BUSINESS Additions to property and equipment Net cash provided (used) by operating activities Net cash provided (used) by operating activities INCOME TAXES Total Expenses Total Expenses Preferred Stock Series B, 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. Notes payable - equipment (Note 9) {1} Notes payable - equipment (Note 9) Convertible debt (Note 7) Royalty expense Amount of expense related to royalty payments under a contractual arrangement such as payment for mineral and drilling rights and use of technology or intellectual property. Additional Amount Based on Actual Gold Sales Price Accretion expense Reclamation and remediation liability, Accretion expense in the year Total Equipment notes payable Total Equipment notes payable Komatsu Telehandler lift, due per month in 48 monthly installments Komatsu Telehandler lift, due per month in 48 monthly installments Less: Current portion Current portion of notes payable New funding New funding Minimum payments due on November 30, 2015 Minimum payments due on November 30, 2015 Total Mineral Properties And Interests Capitalized costs of proved properties that include fee ownership or a lease, concession, or other interest representing the right to extract oil or gas subject to such terms as may be imposed by the conveyance of that interest. Less accumulated depreciation Amount of accumulated depreciation, depletion and amortization for physical assets used in the normal conduct of business to produce goods and services. Amount recognized as a reduction of accrued officer wages. Amount recognized as a reduction of accrued officer wages. Fair value of common shares per share Fair value of common shares per share Mineral Exploration and Development Costs ACCOUNTING POLICIES REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION {1} REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION NOTES PAYABLE - EQUIPMENT: CONVERTIBLE DEBT {1} CONVERTIBLE DEBT Accrued liabilities - officer wages Accounts payable and accrued expenses {1} Accounts payable and accrued expenses WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED Interest and other income OTHER INCOME (EXPENSE) General and administrative Officers and directors fees General project costs General project costs Concentrate sales Common Stock, par value 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, par value COMMITMENTS (Note 10,11 and 12) Entity Central Index Key Document Period End Date Document Type Remaining balance to be redeemed Remaining balance to be redeemed Remaining balance to be redeemed Opening balance to be redeemed HCE Funding, due in one monthly installment HCE Funding, due in one monthly installment Additional shares of common stock issued to the debt holders Number of Additional shares of common stock issued to the debt holders Yellow Hammer Site Yellow Hammer Site Ore on leach pad Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. DMRJ beneficially owns approximately with this share issuance of the Company DMRJ beneficially owns approximately with this share issuance of the Company CHANGES IN RECLAMATION LIABILITY (TABLES) {1} CHANGES IN RECLAMATION LIABILITY (TABLES) ChangesInTheReclamationLiabilityTbl MINERAL PROPERTIES AND INTERESTS (Tables) INVENTORIES {1} INVENTORIES Net cash (used) by investing activities Net cash (used) by investing activities Refund of reclamation bonds Common stock issued for services Change in fair value of derivatives Common Stock, shares issued Total Stockholders' (Deficit) Total Stockholders' (Deficit) Additional paid-in capital 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. Amendment Flag Amount owed by the company to the CEO as accrued consulting payable Amount owed by the company to the CEO as accrued consulting payable Annual payments to Clifton Mining per each of the three locations Annual payments to Clifton Mining per each of the three locations Conversion Shares Due based on $1,000 Gold Price Statement Note payable to Komatsu D275 dozer Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer. Note payable to Komatsu Telehandler lift Note payable to Komatsu Telehandler lift DMRJ Group 2015 Activity Interest payable - current Interest payable - current DMRJ beneficially owns approximately of the Company (Percentage) DMRJ beneficially owns value of stock in percentage the Company Convertible common stock shares Convertible common stock shares Cactus Mill Mineral properties ans interest on Cactus Mill Electronic and computerized equipment Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Havenstrite agreed to forgive accrued but unpaid wages as a part of the agreement Havenstrite agreed to forgive accrued but unpaid wages as a part of the agreement NOTE PAYABLE - RELATED PARTY (TABLES) New Accounting Pronouncement RELATED PARTY TRANSACTIONS STOCK REDEEMABLE WITH GOLD PROCEEDS {1} STOCK REDEEMABLE WITH GOLD PROCEEDS Entire disclosure for Stock Redeemabke with Gold Proceeds PROPERTY AND EQUIPMENT INVENTORIES Common stock issued for interest expense Depreciation and amortization {1} Depreciation and amortization Common Stock, shares outstanding Note payable - related party (Note 8) {1} Note payable - related party (Note 8) Total Current Liabilities Total Current Liabilities Stock redeemable with gold proceeds (Note 11) Stock redeemable with gold proceeds (Note 12) Accrued liabilities-officer wages (Note 12) Entity Filer Category Company recognized wage expense in the amount of for office and accounting services performed by Marianne Havenstrite Company recognized wage expense in the amount of for office and accounting services performed by Marianne Havenstrite Amount paid to RMH Overhead, LLC as expense Amount paid to RMH Overhead, LLC as expense Total Due to Shareholders An equity financing was initiated in September 2012 for the sale of shares of our common stock An equity financing was initiated in September 2012 for the sale of shares of our common stock Komatsu D275 dozer, due per month in 47 monthly installments Komatsu D275 dozer, due per month in 47 monthly installments CAT Financial due per month in 36 monthly installments CAT Financial due per month in 36 monthly installments The interest rate on the loan balance was reduced from 24% to The interest rate on the loan balance was reduced from 24% to New minimum payments as per Investment Agreement Net Kiewit property facilities The decrease in accumulated depreciation, depletion and amortization (relating to property, plant and equipment) as a result of sales or disposals of property, plant and equipment during the period. Capital Stock Preferred Stock Per share value of additional shares issued Face amount or stated value per share of common stock. NOTE PAYABLE - EQUIPMENT (TABLES): CAPITAL STOCK Equipment acquired with notes payable - equipment Equipment acquired with note payable. CASH FLOWS FROM INVESTING ACTIVITIES: Inventories Asset retirement obligation (Note 10) CURRENT LIABILITIES Document Fiscal Year Focus Entity Common Stock, Shares Outstanding The unpaid amounts are reflected in accrued liabilities for office and accounting services The unpaid amounts are reflected in accrued liabilities for office and accounting services Percentage of option to convert their shares for cash from gold sales Percentage of option to convert their shares for cash from gold sales Balance of accounts payable relating to lease costs Balance of accounts payable relating to lease costs Komatsu PC400 Excavator interest rate Komatsu PC400 Excavator, due per month in 24 monthly installments First Monthly Term Loan, used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit First Monthly Term Loan, used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit Current Principal amount Current Principal amount Accrued interest payable Accrued interest payable Monthly interest payable Monthly interest payable Asset retirement obligation Property And Equipment The conversion rate of common stock for each share of Series B Preferred Stock Face amount per share of no-par value preferred stock nonredeemable or redeemable solely at the option of the issuer. Company issued shares to its president, Rick Havenstrite as a management incentive Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury The Company is authorized to issue shares of common stock Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Inventories {1} Inventories MINERAL PROPERTIES AND LEASES CASH, BEGINNING OF PERIOD CASH, BEGINNING OF PERIOD CASH, END OF PERIOD Preferred Stock Series B, 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. TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) LIABILITIES AND STOCKHOLDERS' (DEFICIT) Entity Well-known Seasoned Issuer Equity Component [Domain] Accrued compensation due to Rick Havenstrite The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method Present value of the asset retirement obligation calculated using the credit adjusted risk free interest rate from 8% to Present value of the asset retirement obligation calculated using the credit adjusted risk free interest rate from 8% to Reclamation and remediation liability, end of year Reclamation and remediation liability, end of year Reclamation and remediation liability, end of year Equipment notes payable for the twelve months ended 6/30/2016 Equipment notes payable for the twelve months ended 6/30/2016 Komatsu Telehandler lift interest rate Komatsu Telehandler lift interest rate Long Term portion Long term portion of notes payable Minimum payments due on February 28, 2016 Minimum payments due on February 28, 2016 Reclamation and bond details Gross Property and Equipment Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Preferred Stock NOTES PAYABLE - EQUIPMENT NOTES PAYABLE - EQUIPMENT SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Addition to redemption of gold proceeds payable Addition to redemption of gold proceeds payable Adjustments to reconcile net loss to net cash used by operating activities: 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. Balance sheet parentheticals Carrying amount of redeemable stock. [Abstract] LONG-TERM LIABILITIES Interest payable (Notes 7 and 8) Shares of common stock as a management incentive to Rick Havenstrite Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Original Conversion Liability Original Conversion Liability Percentage of theproceeds of gold produced during the first year of production will be allocated to fund this option Percentage of theproceeds of gold produced during the first year of production will be allocated to fund this option Komatsu D275 dozer interest rate The amount of cash paid for interest during the period. HCE Funding, due per month in 22 monthly installments HCE Funding, due per month in 22 monthly installments Pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount Pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount Total Minimum payments due The net cash paid (received) associated with the acquisition or disposal of all investments, including securities and other assets. Mineral Properties And Interests Carbon column in process Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Shares of common stock DMRJ beneficially owns approximately Shares of common stock DMRJ beneficially owns approximately Mineral Properties and Interests Tabular disclosure of Mineral Properties and interest of the entity during the period. MINERAL PROPERTIES AND LEASES {1} MINERAL PROPERTIES AND LEASES Net cash provided (used) by financing activities Net cash provided (used) by financing activities CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS Interest expense Series A-2: 180,000 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. STOCKHOLDERS' (DEFICIT) (Note 3) Entity Trading Symbol Statement {1} Statement Changes in the reclamation liability for the years as follows Note payable to Komatsu PC400 Excavator Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer. Note payable to CAT Financial Note payable to CAT Financial Additional funding amount Additional funding amount Total due to DMRJ Total due to DMRJ Convertible promissoy notes to two minority shareholders Convertible promissoy notes to two minority shareholders Total 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. Vehicles Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Fair value of the shares issued to its president, Rick Havenstrite Fair value of the shares issued to its president, Rick Havenstrite Percentage of holders of common stock who have option to elect all of the directors of the Company Percentage of holders of common stock who have option to elect all of the directors of the Company SUMMARY OF PROPERTY,EQUIPMENT AND ACCUMLATED DEPRECIATION (TABLES) NOTE PAYABLE - RELATED PARTY Increase in reclamation bonds The cash outflow from the repayment of a long-term debt instrument issued, secured by a first mortgage deed of trust, containing a pledge of real property. The lender has the highest claim on the property in case of default. Interest payable, net of amount capitalized Net gain on disposal of asset Net loss Financing expense Redemption of gold proceeds payable (Note 11) Redemption of gold proceeds payable (Note 12) Note payable - related party (Note 8) TOTAL ASSETS TOTAL ASSETS Entity Public Float Company recognized exploration expense for geological services provided by Stuart Havenstrite Company recognized exploration expense for geological services provided by Stuart Havenstrite Havenstrite agreed to forgive in accrued compensation The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method Base salary or fees to CEO and President BaseSalaryOrFeesToCEOAndPresident1 Amounts Due To Shareholders Shares of the Company's common stock issued under the terms of this offering Shares of the Company's common stock issued under the terms of this offering Reclamation and remediation liability, beginning of year Reclamation and remediation liability, beginning of year Equipment notes payable for the twelve months ended 6/30/2017 Equipment notes payable for the twelve months ended 6/30/2017 Total reclamation bonds posted amounted Total reclamation bonds posted amounted Total Property and Equipment Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Company revised the estimated fair value of the equivalent common shares Company revised the estimated fair value of the equivalent common shares NOTE PAYABLE - EQUIPMENT (TABLES) NOTE PAYABLE - EQUIPMENT (TABLES) Common Stock Equivalents Outstanding CONVERTIBLE DEBT NET INCREASE (DECREASE) IN CASH CASH FLOWS FROM FINANCING ACTIVITIES: LOSS BEFORE INCOME TAXES Exploration expense Preferred Stock, shares authorized Common stock, $0.001 par value, 100,000,000 shares authorized;13,056,603 shares issued and outstanding TOTAL LIABILITIES TOTAL LIABILITIES Total Current Assets Total Current Assets ASSETS Document Fiscal Period Focus Payments were made to other family members for accounting and engineering services Payments were made to other family members for accounting and engineering services Summary of the equipment notes payable Total amount drawn in connection with the Tenth Amendment Monthly Term Loan Advances Total amount drawn in connection with the Tenth Amendment Monthly Term Loan Advances Minimum payments due on December 31, 2015 Minimum payments due on December 31, 2015 Long-term Principal amount Long-term Principal amount Conversion price per share Conversion price per share Kiewit Site Mineral properties ans interest on Kiewit Site Equipment Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Series of monthly term loan advances totaling a maximum of amount over five months Including the current and noncurrent portions, aggregate carrying value as of the balance sheet date of loans payable (with maturities initially due after one year or beyond the operating cycle if longer). Fair value of shares of stock issued to the note holders of the convertible debt for interest expense Company was required to issue an additional shares of common stock to these debt holders Common Stock Equivalents Outstanding {1} Common Stock Equivalents Outstanding Going Concern Policy PROPERTY AND EQUIPMENT: ORGANIZATION AND DESCRIPTION OF BUSINESS {1} ORGANIZATION AND DESCRIPTION OF BUSINESS Proceeds from note payable-related party Prepaid expenses and other current assets {1} Prepaid expenses and other current assets Preferred stock issued for financing expense 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. 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NOTE PAYABLE - RELATED PARTY link:presentationLink link:definitionLink link:calculationLink 000020 - Statement - CONSOLIDATED BALANCE SHEETS link:presentationLink link:definitionLink link:calculationLink 000040 - Statement - CONSOLIDATED STATEMENTS OF OPERATIONS link:presentationLink link:definitionLink link:calculationLink 000500 - Statement - Amounts Due To Shareholders (Details) {Stockholder Equity} link:presentationLink link:definitionLink link:calculationLink 000010 - Document - Document and Entity Information link:presentationLink link:definitionLink link:calculationLink 000410 - Statement - Investment Agreement with DMRJ Group (Details) link:presentationLink link:definitionLink link:calculationLink 000100 - Disclosure - PROPERTY AND EQUIPMENT link:presentationLink link:definitionLink link:calculationLink 000090 - Disclosure - INVENTORIES link:presentationLink link:definitionLink link:calculationLink 000320 - Statement - Preferred Stock (Details) link:presentationLink link:definitionLink link:calculationLink 000310 - Statement - Capital Stock Preferred Stock (Details) link:presentationLink link:definitionLink link:calculationLink 000080 - Disclosure - CAPITAL STOCK link:presentationLink link:definitionLink link:calculationLink 000250 - Disclosure - NOTE PAYABLE - EQUIPMENT (TABLES) link:presentationLink link:definitionLink link:calculationLink 000240 - Disclosure - NOTE PAYABLE - RELATED PARTY (TABLES) link:presentationLink link:definitionLink link:calculationLink 000060 - Disclosure - ORGANIZATION AND DESCRIPTION OF BUSINESS link:presentationLink link:definitionLink link:calculationLink 000340 - Statement - Property And Equipment (Details) link:presentationLink link:definitionLink link:calculationLink 000210 - Disclosure - INVENTORIES (TABLES) link:presentationLink link:definitionLink link:calculationLink 000450 - Statement - NOTES PAYABLE EQUIPMENT (Details) link:presentationLink link:definitionLink link:calculationLink 000180 - Disclosure - RELATED PARTY TRANSACTIONS link:presentationLink link:definitionLink link:calculationLink 000030 - Statement - BALANCE SHEETS PARENTHETICALS link:presentationLink link:definitionLink link:calculationLink 000370 - Statement - Reclamation (Details) link:presentationLink link:definitionLink link:calculationLink 000170 - Disclosure - COMMITMENTS link:presentationLink link:definitionLink link:calculationLink 000160 - Disclosure - STOCK REDEEMABLE WITH GOLD PROCEEDS link:presentationLink link:definitionLink link:calculationLink 000270 - Disclosure - STOCK REDEEMABLE WITH GOLD PROCEEDS (Tables) link:presentationLink link:definitionLink link:calculationLink XML 13 R39.htm IDEA: XBRL DOCUMENT v3.2.0.727
Summary of total dues to DMRJ (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
Summary of total dues to DMRJ    
Current Principal amount $ 3,481,357 $ 2,124,348
Long-term Principal amount 8,559,135 9,665,144
Total Principal amount 12,040,492 11,789,492
Interest payable - current 4,268,643 3,375,652
Total due to DMRJ $ 16,309,135 $ 15,165,144
XML 14 R48.htm IDEA: XBRL DOCUMENT v3.2.0.727
Amounts Due To Shareholders (Details) {Stockholder Equity} - 6 months ended Jun. 30, 2015 - USD ($)
Total
Conversion Shares Due based on $1,000 Gold Price  
Opening balance to be redeemed 0
Original Conversion Liability $ 130,000
Less Conversion as of December 31, 2014 48,000
Less Conversion as of June 30, 2015 82,000
Total convertiable liability $ 130,000
Remaining balance to be redeemed 0
Additional Amount Based on Actual Gold Sales Price  
Opening balance to be redeemed 0
Original Conversion Liability $ 0
Less Conversion as of December 31, 2014 8,609
Less Conversion as of June 30, 2015 12,797
Total convertiable liability $ 21,406
Remaining balance to be redeemed 0
Total Due to Shareholders  
Opening balance to be redeemed 0
Original Conversion Liability $ 0
Less Conversion as of December 31, 2014 56,609
Less Conversion as of June 30, 2015 94,797
Total convertiable liability $ 151,406
Remaining balance to be redeemed 0
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M1^>IDJM"10``G!$!`!0``````````````(`!LHT``'AL+W-H87)E9%-T&UL4$L%!@`````\`#P`5A```";3```````` ` end XML 16 R46.htm IDEA: XBRL DOCUMENT v3.2.0.727
Changes in the reclamation liability for the years as follows (Details) - USD ($)
6 Months Ended 12 Months Ended
Jun. 30, 2015
Dec. 31, 2014
Changes in the reclamation liability for the years as follows    
Reclamation and remediation liability, beginning of year $ 740,268 $ 69,920
Obligation incurred 0 656,567
Accretion expense 29,966 13,781
Reclamation and remediation liability, end of year $ 770,234 $ 740,268
Present value of the asset retirement obligation calculated using the credit adjusted risk free interest rate from 8% to 10.00% 0.00%
Projected mine lives from 5 years to 12 0

XML 17 R33.htm IDEA: XBRL DOCUMENT v3.2.0.727
Property And Equipment (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
Property And Equipment    
Equipment $ 3,090,105 $ 1,465,827
Furniture and fixtures, temporary housing 10,781 10,781
Electronic and computerized equipment 52,874 19,011
Vehicles 56,830 65,330
Net Property and Equipment 3,210,590 1,560,949
Less accumulated depreciation (548,670) (357,983)
Gross Property and Equipment 2,661,920 1,202,966
Kiewit property facilities 2,331,520 2,153,411
Less accumulated amortization (290,548) (166,221)
Net Kiewit property facilities 2,040,972 1,987,190
Total Property and Equipment $ 4,702,892 $ 3,190,156
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NOTE PAYABLE - EQUIPMENT (TABLES)
6 Months Ended
Jun. 30, 2015
NOTE PAYABLE - EQUIPMENT (TABLES):  
NOTE PAYABLE - EQUIPMENT (TABLES)

The following is a summary of the equipment notes payable:

 

 

 

June 30,

2015

 

December 31, 2014

Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,424 including interest at 4.99%.

$

101,305

$

-

 

 

 

 

 

Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%.

 

1,521,998

 

-

 

 

 

 

 

Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%.

 

8,412

 

-

 

 

 

 

 

Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,594 including interest at 2.99%.

 

430,398

 

492,955

 

 

 

 

 

Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,629 including interest at 1.75%.

 

16,105

 

25,604

 

 

2,078,218

 

518,559

Current portion

 

(705,633)

 

(146,171)

Long Term portion

$

1,372,585

$

372,388

 

 

 

 

 

Principal payments are as follows for the twelve months ended June 30,

 

 

 

 

2016

 

 

$

705,633

2017

 

 

 

716,548

2018

 

 

 

597,706

2019

 

 

 

58,331

    Total

 

 

$

2,078,218

XML 20 R50.htm IDEA: XBRL DOCUMENT v3.2.0.727
Commitments Employment Agreements (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
Sep. 30, 2010
Commitments Employment Agreements      
Base salary or fees to CEO and President $ 0 $ 0 $ 120,000
Amount owed by the company to the CEO as accrued compensation 253,000 247,500 0
Amount owed by the company to the CEO as accrued consulting payable 0 15,000 0
Accrued compensation due to Rick Havenstrite 15,000 0 0
Accrued compensation due to Marianne Havenstrite 42,300 0 0
Compensation to be paid pursuant to the termination agreements $ 18,000 $ 0 $ 0
Shares of common stock as a management incentive to Rick Havenstrite 3,137,066 0 0
Havenstrite agreed to forgive in accrued compensation $ 40,000 $ 0 $ 0
XML 21 R42.htm IDEA: XBRL DOCUMENT v3.2.0.727
DMRJ Group 2014 Activity (Details) - USD ($)
Feb. 19, 2014
Jan. 31, 2014
DMRJ Group 2014 Activity    
Pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount   $ 25,000
The Tenth Amendment provides for funding of mining operations through a series of advances totaling a maximum $ 5,700,000  
Total of amount drawn through a series of advances $ 5,500,000  
The interest rate on the loan balance was reduced from 24% to 15.00%  
First Monthly Term Loan, used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit $ 2,000,000  
Total amount drawn in connection with the Tenth Amendment Monthly Term Loan Advances $ 5,525,000  
In addition, Company issued to DMRJ Group shares of Series B Preferred Stock 249,603  
XML 22 R37.htm IDEA: XBRL DOCUMENT v3.2.0.727
Convertible Debt Agreement (Details) - USD ($)
Jun. 30, 2015
Nov. 30, 2014
Jun. 30, 2014
Nov. 30, 2013
Nov. 30, 2012
Convertible Debt Agreement          
Additional shares of common stock issued to the debt holders 0 300,000 0 300,000 300,000
Accrued interest payable $ 52,500 $ 0 $ 0 $ 0 $ 0
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Shares redeemed for cash generated from the sale of gold (Details) - USD ($)
Dec. 31, 2012
Sep. 30, 2012
Shares redeemed for cash generated from the sale of gold    
An equity financing was initiated in September 2012 for the sale of shares of our common stock 0 1,150,000
Shares of the Company's common stock issued under the terms of this offering 130,000 0
Proceeds of common stock issued under the terms of this offering $ 130,000 $ 0
Percentage of theproceeds of gold produced during the first year of production will be allocated to fund this option 5.00% 0.00%
Base price per ounce used for conversion $ 1,000 $ 0
Percentage of option to convert their shares for cash from gold sales 5.00% 0.00%
XML 25 R9.htm IDEA: XBRL DOCUMENT v3.2.0.727
INVENTORIES
6 Months Ended
Jun. 30, 2015
INVENTORIES  
INVENTORIES

NOTE 4 – INVENTORIES

 

The following table provides the components of inventories:

 

 

June 30,

2015

 

December 31,

2014

Ore on leach pad

$

1,951,547

$

1,508,761

Carbon column in process

169,905

 

211,115

Dore finished goods

8,640

 

25,501

     Total

$

2,130,092

$

1,745,377

 

Inventories are valued at the lower of cost or net realizable value, which at June 30, 2015 is cost. 

XML 26 R43.htm IDEA: XBRL DOCUMENT v3.2.0.727
NOTES PAYABLE EQUIPMENT (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
NOTES PAYABLE EQUIPMENT Details    
Note payable to Komatsu Telehandler lift $ 101,305 $ 0
Note payable to CAT Financial 1,521,998 0
Note payable to HCE Funding 8,412 0
Note payable to Komatsu D275 dozer 430,398 492,955
Note payable to Komatsu PC400 Excavator 16,105 25,604
Total note payable Komatsu Financial 2,078,218 518,559
Less: Current portion (705,633) (146,171)
Long Term portion $ 1,372,585 $ 372,388
XML 27 R29.htm IDEA: XBRL DOCUMENT v3.2.0.727
Capital Stock 2014 Activity (Details) - Dec. 31, 2014 - USD ($)
Total
Capital Stock 2014 Activity  
Company issued a total of shares of stock to the note holders of the convertible debt for interest expense 117,854
Fair value of shares of stock issued to the note holders of the convertible debt for interest expense $ 82,500
Company was required to issue an additional shares of common stock to these debt holders 300,000
Fair value of additional shares of common stock issued to these debt holders $ 12,000
Per share value of additional shares issued $ 0.04
Fair value of common shares per share $ 0.04
Company issued shares to its president, Rick Havenstrite as a management incentive 3,137,066
Havenstrite agreed to forgive accrued but unpaid wages as a part of the agreement $ 40,000
Fair value of the shares issued to its president, Rick Havenstrite 125,483
Amount recognized as officers and directors fees during the year 85,483
Amount recognized as a reduction of accrued officer wages. $ 40,000
XML 28 R28.htm IDEA: XBRL DOCUMENT v3.2.0.727
Capital Stock Common Stock (Details) - Jun. 30, 2015 - shares
Total
Capital Stock Common Stock  
The Company is authorized to issue shares of common stock 100,000,000
Percentage of holders of common stock who have option to elect all of the directors of the Company 50.00%
XML 29 R44.htm IDEA: XBRL DOCUMENT v3.2.0.727
Komatsu Financial Parentheticals (Details) - Jun. 30, 2015 - USD ($)
Total
Komatsu Financial Parentheticals  
Komatsu Telehandler lift, due per month in 48 monthly installments $ 2,424
Komatsu Telehandler lift interest rate 4.99%
CAT Financial due per month in 36 monthly installments $ 49,242
CAT Financial interest rate 4.68%
HCE Funding, due in one monthly installment $ 7,600
HCE Funding, due per month in 22 monthly installments $ 520
HCE Funding interest rate 5.00%
Komatsu D275 dozer, due in one monthly installment $ 21,000
Komatsu D275 dozer, due per month in 47 monthly installments $ 11,594
Komatsu D275 dozer interest rate 2.99%
Komatsu PC400 Excavator, due per month in 24 monthly installments $ 1,629
Komatsu PC400 Excavator interest rate 1.75%
XML 30 R30.htm IDEA: XBRL DOCUMENT v3.2.0.727
Capital Stock Preferred Stock (Details) - Feb. 19, 2014 - USD ($)
Total
Capital Stock Preferred Stock  
Series of monthly term loan advances totaling a maximum of amount over five months $ 5,700,000
Company issued to DMRJ Group shares of Series B Preferred Stock 249,603
The conversion rate of common stock for each share of Series B Preferred Stock $ 100
XML 31 R31.htm IDEA: XBRL DOCUMENT v3.2.0.727
Preferred Stock (Details) - shares
3 Months Ended
Jun. 30, 2014
Mar. 31, 2014
Preferred Stock    
Financing expense in the amount recorded in association with this share issuance 0 1,248,015
Estimated per share fair value of the equivalent common shares 0.04 0.05
Company revised the estimated fair value of the equivalent common shares 998,412 0
Reduction to financing expense 249,603 0
DMRJ beneficially owns approximately with this share issuance of the Company 67.00% 0.00%
Shares of common stock DMRJ beneficially owns approximately 27,718,333 0
XML 32 R8.htm IDEA: XBRL DOCUMENT v3.2.0.727
CAPITAL STOCK
6 Months Ended
Jun. 30, 2015
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.

 

No shares of stock have been issued during the first six months of 2015.

 

The Company issued a total of 117,854 shares of stock to the note holders of the convertible debt for interest expense through November 30, 2014.  These shares were valued at a fair value of $82,500 based upon the stated interest rate contained in the debt agreements.  The Company failed to repay the loan in full on the November 30, 2014 maturity date, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders.  This issuance was valued at $0.04 per share ($12,000) which was determined by management to be the fair value of a share of common stock based on a 2014 valuation analysis performed by a consultant.  The consultant determined that the fair value of the common stock of the Company on a non-controlling, non-marketable basis to be $0.04 per share. Management assessed the consultant’s valuation and found the methodology to be appropriate for the Company and concluded that the fair value of common shares is $0.04.  The issuance was accounted for as financing expense during the fourth quarter 2014.  As part of this agreement, the due date of the notes was extended to November 30, 2015, with interest to be paid in cash after November 30, 2014.  See Note 7.

 

On May 1, 2014, the Company issued 3,137,066 shares to its president, Rick Havenstrite, as a management incentive.  Also, as a part of this agreement, Mr. Havenstrite agreed to forgive $40,000 of accrued but unpaid wages.  The issued shares were valued at $0.04 per share as determined by the consultant (see above).  Based on this rate, the fair value of the shares issued to Mr. Havenstrite was determined to be $125,483.  Of this amount, $85,483 was recognized as officers and directors fees during the year ended December 31, 2014 and $40,000 was recognized as a reduction of accrued officer wages.

 

Preferred Stock

 

On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group.  The Tenth Amendment provides for funding of construction of the heap leach pad and process facility, mining development, and operations through a series of monthly term loan advances totaling a maximum of $5,700,000 over five months.  As a part of this amendment, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock.  The conversion rate of the Series B Preferred Stock is 100 shares of common stock for each share of Series B Preferred Stock. During the quarter ended March 31, 2014, financing expense in the amount of $1,248,015 was recorded in association with this share issuance, using an estimated fair value of the equivalent common shares of $0.05.  During the quarter ended June 30, 2014, the Company revised the estimated fair value of the equivalent common shares to be $998,412 based upon a fair value of $0.04 per share.  Thus a reduction to financing expense of $249,603 was recorded in the second quarter 2014.

 

As a result of this issuance, DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible into 27,718,333 shares of common stock.  DMRJ is considered a related party.

 

In connection with this amendment, the Company amended the Certificates of Designation for the Series A Preferred Stock and the Series A-1 and A-2 Preferred Stock to eliminate the mandatory dividends payable to the holders of the Series A Preferred Stock and to exclude from the definition of convertible securities the shares of all preferred stock previously issued to DMRJ Group and any future issuances of any shares of Series A, Series, B, and Series A-1 and A-2 to DMRJ Group or any of its affiliates.

 

XML 33 R32.htm IDEA: XBRL DOCUMENT v3.2.0.727
Inventory (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
Inventory Details    
Ore on leach pad $ 1,951,547 $ 1,508,761
Carbon column in process 169,905 211,115
Dore finished goods 8,640 25,501
Total Inventories $ 2,130,092 $ 1,745,377
XML 34 R40.htm IDEA: XBRL DOCUMENT v3.2.0.727
New minimum payments as per Investment Agreement (Details)
Jun. 30, 2015
USD ($)
New minimum payments as per Investment Agreement  
Minimum payments due on August 31, 2015 $ 500,000
Minimum payments due on November 30, 2015 1,000,000
Minimum payments due on December 31, 2015 4,000,000
Minimum payments due on February 28, 2016 1,500,000
Minimum payments due on May 31, 2016 750,000
Minimum payments due on August 31, 2016 3,000,000
Minimum payments due on November 30, 2016 3,000,000
Total Minimum payments due $ 13,750,000
XML 35 R2.htm IDEA: XBRL DOCUMENT v3.2.0.727
BALANCE SHEETS - USD ($)
Jun. 30, 2015
Dec. 31, 2014
CURRENT ASSETS    
Cash $ 98,052 $ 161,645
Inventories (Note 4) 2,130,092 1,745,377
Prepaid expenses and other current assets 39,978 142,825
Total Current Assets 2,268,122 2,049,847
PROPERTY AND EQUIPMENT, net (Note 5) 4,702,892 3,190,156
MINERAL PROPERTIES AND INTERESTS, net (Note 6) 1,269,592 1,372,887
RECLAMATION BONDS 1,416,862 1,412,804
TOTAL ASSETS 9,657,468 8,025,694
CURRENT LIABILITIES    
Accounts payable and accrued expenses 793,356 813,559
Accrued liabilities-officer wages (Note 12) 253,000 247,500
Interest payable (Notes 7 and 8) 4,321,143 3,382,152
Convertible debt (Note 7) 600,000 600,000
Notes payable - equipment (Note 9) 705,633 146,171
Note payable - related party (Note 8) 3,481,357 2,125,348
Redemption of gold proceeds payable (Note 11) 151,406 56,609
Stock redeemable with gold proceeds (Note 11) 0 82,000
Total Current Liabilities 10,305,895 7,453,339
LONG-TERM LIABILITIES    
Asset retirement obligation (Note 10) 770,234 740,268
Notes payable - equipment (Note 9) 1,372,585 372,388
Note payable - related party (Note 8) 8,559,135 9,665,144
Total Long-Term Liabilities 10,701,954 10,777,800
TOTAL LIABILITIES $ 21,007,849 $ 18,231,139
COMMITMENTS (Note 10,11 and 12)    
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 $ 0 $ 0
Series A-2: 180,000 shares issued and outstanding 180 180
Series B: 249,603 shares issued and outstanding 250 250
Common stock, $0.001 par value, 100,000,000 shares authorized;13,056,603 shares issued and outstanding 12,928 12,928
Additional paid-in capital 8,328,806 8,328,806
Accumulated deficit (19,693,503) (18,548,567)
Total Stockholders' (Deficit) (11,350,381) (10,205,445)
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) $ 9,657,468 $ 8,025,694
XML 36 R45.htm IDEA: XBRL DOCUMENT v3.2.0.727
Summary of the equipment notes payable (Details)
Jun. 30, 2015
USD ($)
Summary of the equipment notes payable  
Equipment notes payable for the twelve months ended 6/30/2016 $ 705,633
Equipment notes payable for the twelve months ended 6/30/2017 716,548
Equipment notes payable for the twelve months ended 6/30/2018 597,706
Equipment notes payable for the twelve months ended 6/30/2019 58,331
Total Equipment notes payable 2,078,218
Balance of accounts payable relating to lease costs $ 150,375
XML 37 R6.htm IDEA: XBRL DOCUMENT v3.2.0.727
ORGANIZATION AND DESCRIPTION OF BUSINESS
6 Months Ended
Jun. 30, 2015
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.  On June 30, 2014, the Company dissolved its sole subsidiary, Blue Fin Capital, Inc.  As a result the Company has no subsidiaries.

 

During the year ended December 31, 2009, the Company entered into Joint Venture Agreements with the Clifton Mining Company, the Woodman Mining Company and the Moeller Family Trust for the lease of certain of their property interests in the Gold Hill Mining District of Utah.  In 2011 the Company entered into an agreement with DMRJ group which allowed for long term funding of the Kiewit project and helped to provide cash flow for operations during the period from 2009 until 2014 while the permitting process was ongoing. The final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.  Construction at the site was substantially complete at September 30, 2014.  Revenue from the Kiewit heap leach operation began in October 2014 with the first sales of gold and silver.

 

XML 38 R35.htm IDEA: XBRL DOCUMENT v3.2.0.727
Reclamation (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
Apr. 30, 2014
Feb. 20, 2014
Reclamation and bond details        
Annual claims fees $ 155 $ 0 $ 0 $ 0
Kiewit reclamation bond in the amount 0 0 0 1,348,000
Asset retirement obligation will be removed and funds received 0 0 92,705 0
Total reclamation bonds posted amounted $ 1,416,862 $ 1,412,804 $ 0 $ 0
XML 39 R22.htm IDEA: XBRL DOCUMENT v3.2.0.727
SUMMARY OF PROPERTY,EQUIPMENT AND ACCUMLATED DEPRECIATION (TABLES)
6 Months Ended
Jun. 30, 2015
SUMMARY OF PROPERTY,EQUIPMENT AND ACCUMLATED DEPRECIATION (TABLES)  
SUMMARY OF PROPERTY,EQUIPMENT AND ACCUMLATED DEPRECIATION (TABLES)

The following is a summary of property, equipment, and accumulated depreciation at June 30, 2015 and December 31, 2014:

 

 

June 30,

 

December 31,

 

2015

 

2014

Equipment

$

3,090,105

 

$

1,465,827

Furniture and fixtures, temporary housing

 

10,781

 

 

10,781

Electronic and computerized equipment

 

52,874

 

 

19,011

Vehicles

 

56,830

 

 

65,330

 

 

3,210,590

 

 

1,560,949

   Less accumulated depreciation

 

(548,670)

 

 

(357,983)

 

 

2,661,920

 

 

1,202,966

 

 

 

 

 

 

Kiewit property facilities

 

2,331,520

 

 

2,153,411

   Less accumulated amortization

 

(290,548)

 

 

(166,221)

 

 

2,040,972

 

 

1,987,190

 

 

 

 

 

 

     Total

$

4,702,892

 

$

3,190,156

XML 40 R36.htm IDEA: XBRL DOCUMENT v3.2.0.727
Convertible Debt Promissoy Notes (Details) - Nov. 18, 2009 - USD ($)
Total
Convertible Debt Promissoy Notes  
Convertible promissoy notes to two minority shareholders $ 600,000
Interest rate of convertible promissoy notes 15.00%
Monthly interest payable $ 7,500
Conversion price per share $ 1.50
Reduced conversion price $ 0.70
Convertible common stock shares 857,143
XML 41 R24.htm IDEA: XBRL DOCUMENT v3.2.0.727
NOTE PAYABLE - RELATED PARTY (TABLES)
6 Months Ended
Jun. 30, 2015
NOTE PAYABLE - RELATED PARTY (TABLES):  
NOTE PAYABLE DUE TO DMRJ

The total due to DMRJ at June 30, 2015 and December 31, 2014 is as follows:

 

 

 

June 30,

 

December 31,

 

 

2015

2014

Principal

 

 

 

 

       Current

$

3,481,357

$

2,124,348

       Long-term

 

8,559,135

 

9,665,144

                Total

12,040,492

11,789,492

Interest payable - current

4,268,643

3,375,652

 

$

16,309,135

$

15,165,144

NOTE PAYABLE - RELATED PARTY (TABLES)

The Twelfth Amendment was entered into on June 5, 2015 and allowed for additional funding in the amount of $250,000 which was received by the Company in May and June 2015 and also established new minimum principal and interest payment dates beginning in August 2015 as follows:

 

 

 

August 31, 2015            

$

500,000

November 30, 2015

 

1,000,000

December 31, 2015

 

4,000,000

February 28, 2016

 

1,500,000

May 31, 2016

 

750,000

August 31, 2016

 

3,000,000

November 30, 2016

 

3,000,000

 

 

 

Total

$

13,750,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2015
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

In the opinion of management, the accompanying unaudited interim balance sheets and statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of June 30, 2015, and the results of its operations and its cash flows for the three and six months ended June 30, 2015 and 2014. The operating and financial results for the Company for the three and six months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015.

 

These unaudited interim financial statements have been prepared by management in accordance with generally accepted accounting principles used in the United States of America (“U.S. GAAP”) and are presented in U.S. dollars. These unaudited interim financial statements do not include all note disclosures required by U.S. GAAP on an annual basis, and therefore should be read in conjunction with the annual audited financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 31, 2015.

 

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 bodies of mineralized material, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves.

 

Inventories

 

The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered.  The Company records ore on leach pad, ore in carbon column in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value.  Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses.  Revenue from the sale of silver is accounted for as by-product and is deducted from production costs.  Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad.

 

Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type).  The nature of the leaching process inherently limits the ability to precisely monitor inventory levels.  As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time.  As of June 30, 2015, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements.

 

Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months.

 

Property and Equipment

 

Property and equipment are stated at cost.  Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years, or units of production over estimated ounces to be produced.  The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired.  The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts.  Maintenance and repairs are charged to operations as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.  

 

Mineral Properties and Leases

 

The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights.  Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ounces to be produced.  Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.  If a property is abandoned or sold, its capitalized costs are charged to operations.  Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing.  These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility.  Additionally, interest is capitalized to mine development until such assets are ready for their intended use.  The Company does not have proven and probable reserves at this time.  See Note 6.

 

Reclamation and Remediation

 

The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies.  The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets.  A corresponding asset is also recorded and depreciated over the life of the asset.  After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation.  Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.

 

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.

 

Earnings (loss) Per Share

 

Basic earnings (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company.  At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows:

 

 

 

June 30, 2015

 

June 30, 2014

 

 

 

 

 

Convertible debt

 

857,143

 

857,143

Convertible preferred stock

 

27,718,333

 

27,718,333

 

 

 

 

 

Total

 

28,575,476

 

28,575,476

 

However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses.

 

Going Concern

 

As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through June 30, 2015, 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 final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.  Construction at the site was substantially complete at September 30, 2014.  The Company will need significant funding to continue operations and increase development through the next fiscal year.  This funding is expected to come via sales revenues, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships. 

 

If the going concern assumption were not appropriate for these 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 data from prior periods to the current presentation.  These reclassifications have no effect on the results of operations or stockholders’ deficit.

 

New Accounting Pronouncement

 

In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market.  Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. The new guidance will be effective for in fiscal years beginning after December 15, 2016, including interim periods within those years.  Management believes that this new standard will have minimal impact on its financial statements.

 

XML 44 R3.htm IDEA: XBRL DOCUMENT v3.2.0.727
BALANCE SHEETS PARENTHETICALS - $ / shares
Jun. 30, 2015
Dec. 31, 2014
Balance sheet parentheticals    
Preferred Stock, par value $ 0.001 $ 0.001
Preferred Stock, 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 180,000 180,000
Preferred Stock Series A-2, shares outstanding 180,000 180,000
Preferred Stock Series B, shares issued 249,603 249,603
Preferred Stock Series B, shares outstanding 249,603 249,603
Common Stock, par value $ 0.001 $ 0.001
Common Stock, shares authorized 100,000,000 100,000,000
Common Stock, shares issued 13,056,603 13,056,603
Common Stock, shares outstanding 13,056,603 13,056,603
XML 45 R17.htm IDEA: XBRL DOCUMENT v3.2.0.727
COMMITMENTS
6 Months Ended
Jun. 30, 2015
COMMITMENTS  
COMMITMENTS

NOTE 12– 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 lease of the Trust’s Yellow Hammer property in the Gold Hill Mining District of Utah.  Pursuant to the agreement, 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 payments to the Trust of $50,000.  The Yellow Hammer operated for several months in 2011.  Under the terms of the Joint Venture Agreement, the Company is 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.  There were no sales and no royalty expense to date for the Yellow Hammer in 2015 or in 2014.  No payment has been made on this property and no official forfeiture notice has been received regarding this nonpayment.

 

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 lease of their property interests in the Gold Hill Mining District of Utah.  Under the terms of the Joint Venture Agreement, the Company is 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 is also required to pay a 6% net smelter return on any production from the Kiewit gold property. Additionally, if the Company does not place the Kiewit property, the Clifton Shears-Smelter Tunnel property, and the Cane Springs property into commercial production within a three year period, it will be required to make annual payments to Clifton Mining in the amount of $50,000 per location. The annual payments due on July 24, 2014 were made on July 22, 2014 and accepted by Clifton Mining for the Clifton Shears and Kiewit properties. The Cane Springs property payment was not made in 2013 and this claim was released back to Clifton Mining at that time.  Production at the Kiewit property began in the fourth quarter 2014.

 

Royalties of 6% are due to Clifton Mining on sales of gold and silver.  Royalties due to Clifton Mining at June 30, 2015 and December 31, 2014 from production at the Kiewit property are $87,980 and $ -0-, respectively. Royalty payments are past due and are expected to be paid in 2015.  Royalty expense for the quarter and six months ended June 30, 2015 is $50,276 and $123,289, respectively.

 

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 was for an initial term of between three months and four years and provides for base salary or fees of $120,000 per year.  Termination agreements have been reached with the former CEO and one director, providing for payment of accrued compensation and consulting payable over several months commencing with the funding of the Kiewit project.  These payments began in February 2014.  As of June 30, 2015 and December 31, 2014 accrued compensation of $253,000 and $247,500, and consulting fees payable of $-0- and $15,000, respectively, were due to directors and officers.  Of the $253,000 due at June 30, 2015, accrued compensation of $192,700 is due to Rick Havenstrite, President, $42,300 to Marianne Havenstrite, Treasurer, and $18,000 remains to be paid pursuant to the termination agreements.  In addition, as part of a management incentive award on May 1, 2014, Rick Havenstrite was awarded 3,137,066 shares of common stock.  As part of this award, Mr. Havenstrite agreed to forgive $40,000 in accrued compensation.  See Note 3.

XML 46 R1.htm IDEA: XBRL DOCUMENT v3.2.0.727
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2015
Aug. 14, 2015
Document and Entity Information    
Entity Registrant Name Desert Hawk Gold Corp.  
Entity Trading Symbol DHGC  
Document Type 10-Q  
Document Period End Date Jun. 30, 2015  
Amendment Flag false  
Entity Central Index Key 0001168081  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   13,056,603
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 2015  
Document Fiscal Period Focus Q2  
XML 47 R18.htm IDEA: XBRL DOCUMENT v3.2.0.727
RELATED PARTY TRANSACTIONS
6 Months Ended
Jun. 30, 2015
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

NOTE 13 – RELATED PARTY TRANSACTIONS

 

The Company recognized rent expense for rental of office space of $3,000 for the six months ending June 30, 2015 and 2014, respectively, paid to RMH Overhead, LLC, a company owned by Rick Havenstrite, the Company’s president and a director.  Of the amounts recognized as expense, RMH Overhead, LLC was paid $6,000 and $5,000 in the first six months of 2015 and 2014, respectively, leaving a balance of $13,850 remaining in accounts payable at June 30, 2015 and 2014.  In addition, the Company purchased equipment for $3,500 and $16,500 from Overhead Door Co. of SNR, another company owned by Rick Havenstrite, during the periods ended June 30, 2015 and December 31, 2014.

 

During the six months ended June 30, 2015 and June 30, 2014, the Company recognized wage expense of $13,846 and $5,538, respectively, for office and accounting services performed by Marianne Havenstrite, wife of Rick Havenstrite, who became an officer of the Company during 2013. $42,300 and $28,500 of accrued wages remains unpaid at June 30, 2015 and December 31, 2014 and is reflected in accrued liabilities.  

 

During the six months ended June 30, 2015 and 2014, the Company recognized general project cost expense of $3,105 and $12,827, respectively, for geological services provided by Stuart Havenstrite, the father of Rick Havenstrite.  $18,276 and $21,649 remain unpaid to Mr. Havenstrite at June 30, 2015 and December 31, 2014. These amounts are included in accounts payable at those dates. Payments were also made to other family members for the six months ended June 30, 2015 and 2014 for accounting and engineering services in the amount of $42,001 and $22,892.

 

 

XML 48 R4.htm IDEA: XBRL DOCUMENT v3.2.0.727
STATEMENTS OF OPERATIONS (unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
REVENUE:        
Concentrate sales $ 854,772 $ 0 $ 2,094,641 $ 0
General project costs 558,734 360,316 1,585,327 423,711
Exploration expense 3,366 15,206 9,270 31,736
Consulting 1,343 8,100 1,343 20,927
Officers and directors fees 48,423 144,286 89,961 178,671
Legal and professional 19,946 35,545 45,871 77,729
General and administrative 96,873 89,093 233,683 144,984
Depreciation and amortization 158,812 20,373 300,148 20,772
Total Expenses 887,497 672,919 2,265,603 898,530
OPERATING LOSS (32,725) (672,919) (170,962) (898,530)
OTHER INCOME (EXPENSE)        
Interest and other income 477 1,191 857 1,191
Change in fair value of derivatives 0 0 0 6,673
Financing expense 0 249,603 0 (998,412)
Interest expense (500,297) (350,599) (974,831) (718,165)
Total Other Income (Expense) (499,820) (99,805) (973,974) (1,708,713)
LOSS BEFORE INCOME TAXES (532,545) (772,724) (1,144,936) (2,607,243)
INCOME TAXES 0 0 0 0
NET LOSS $ (532,545) $ (772,724) $ (1,144,936) $ (2,607,243)
BASIC AND DILUTED NET LOSS PER SHARE $ (0.04) $ (0.07) $ (0.09) $ (0.25)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED 13,056,603 11,637,047 13,056,603 10,575,441
XML 49 R12.htm IDEA: XBRL DOCUMENT v3.2.0.727
CONVERTIBLE DEBT
6 Months Ended
Jun. 30, 2015
CONVERTIBLE DEBT  
CONVERTIBLE DEBT

NOTE 7 – 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 $0.70 due to the note holders’ agreement to subordinate their debt to DMRJ Group (see Note 10).  The notes are convertible into potentially 857,143 shares of common stock and principal and interest were initially due November 30, 2012.

 

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 Company failed to repay the loan in full on the November 30, 2012, November 30, 2013 and November 30, 2014 maturity dates, so the Company was required to issue an additional 300,000 shares of common stock to these debt holders in each of those years. As part of this agreement, the due date of the note was extended each year and has now been extended to November 30, 2015. Interest was paid with stock through November 30, 2014 and will be paid in cash thereafter.  Accrued interest payable at June 30, 2015 and 2014 includes $52,500 and $-0-, respectively, for these notes.

 

XML 50 R11.htm IDEA: XBRL DOCUMENT v3.2.0.727
MINERAL PROPERTIES AND LEASES
6 Months Ended
Jun. 30, 2015
MINERAL PROPERTIES AND LEASES  
MINERAL PROPERTIES AND LEASES

NOTE 6 – MINERAL PROPERTIES AND INTERESTS

 

Mineral properties and interests as of June 30, 2015 and December 31, 2014 are as follows:

 

 

 

 

June 30,

2015

 

December 31,

2014

          Initial lease fee

 

 

 

 

 

              Yellow Hammer Site

 

$

175,000

$

175,000

              Kiewit, Cactus Mill and all other sites

 

 

600,000

 

600,000

                    Total

 

 

775,000

 

775,000

 

 

 

 

 

 

          Asset retirement obligation

 

 

 

 

 

               Kiewit Site

 

 

687,475

 

687,475

               Kiewit Exploration

 

 

10,780

 

10,780

               Cactus Mill

 

 

16,133

 

16,133

       Total

 

 

714,388

 

714,388

    Accumulated amortization

 

 

(219,796)

 

(116,501)

Total

 

$

1,269,592

$

1,372,887

 

The Company holds operating interests within the Gold Hill Mining District in Tooele County, Utah, consisting of 247 unpatented claims, including the unpatented mill site claim, and two Utah state mineral leases located on state trust lands.  Annual claims fees are currently $155 per claim plus administrative fees.

 

On January 6, 2014, we obtained the final permit necessary to commence construction of the heap leach pad and process facility.  On February 20, 2014, the Kiewit reclamation bond in the amount of $1,348,000 was posted with the State of Utah, Division of Oil, Gas and Mining.  This newly calculated bond amount includes bonding for the Yellow Hammer Small Mine and the Yellow Hammer Exploration sites along with the Herat Exploration site.  As such, the asset retirement obligation for these sites was absorbed by the new bond. Funds of $92,705 were received in April 2014 by the Company for these refunded reclamation bonds.  Total reclamation bonds posted at June 30, 2015 and December 31, 2014 are $1,416,862 and $1,412,804, respectively.  

 

On March 20, 2013, the Confederated Tribes of the Goshute Reservation (“Tribes”) sent a letter to the Bureau of Land Management (“BLM”) outlining their review of the Kiewit Mine Project Draft Environmental Assessment.  The letter alleged the Environmental Assessment is flawed in the development and analysis of alternatives, conformance with applicable BLM land use plans, and disclosure, analysis and mitigation of impacts on cultural resources, Native American values, and many other environmental resources.  On February 6, 2014 the Tribes filed an appeal of the permit with the BLM.  On April 10, 2014, the BLM was granted an extension of time to May 7, 2014 to answer the appeal and on May 8, 2014 an additional extension of time was granted to the BLM to June 6, 2014 to answer the appeal.  On June 6, 2014 the BLM submitted their response to the appeal.  On August 14, 2014, the BLM rejected the Tribe’s request for a stay.

XML 51 R23.htm IDEA: XBRL DOCUMENT v3.2.0.727
MINERAL PROPERTIES AND INTERESTS (Tables)
6 Months Ended
Jun. 30, 2015
MINERAL PROPERTIES AND INTERESTS (Tables)  
Mineral Properties and Interests

Mineral properties and interests as of June 30, 2015 and December 31, 2014 are as follows:

 

 

 

 

June 30,

2015

 

December 31,

2014

          Initial lease fee

 

 

 

 

 

              Yellow Hammer Site

 

$

175,000

$

175,000

              Kiewit, Cactus Mill and all other sites

 

 

600,000

 

600,000

                    Total

 

 

775,000

 

775,000

 

 

 

 

 

 

          Asset retirement obligation

 

 

 

 

 

               Kiewit Site

 

 

687,475

 

687,475

               Kiewit Exploration

 

 

10,780

 

10,780

               Cactus Mill

 

 

16,133

 

16,133

       Total

 

 

714,388

 

714,388

    Accumulated amortization

 

 

(219,796)

 

(116,501)

Total

 

$

1,269,592

$

1,372,887

 

XML 52 R19.htm IDEA: XBRL DOCUMENT v3.2.0.727
ACCOUNTING POLICIES (POLICIES)
6 Months Ended
Jun. 30, 2015
ACCOUNTING 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 bodies of mineralized material, and to expand the capacity of operating mines are capitalized and will be amortized on units of production basis over proven and probable reserves.

Inventories

Inventories

 

The recovery of gold from certain oxide ores is achieved through the heap leaching process. Under this method, mineralized material is placed on a leach pad where it is treated with a chemical solution, which dissolves the gold contained in the material. The resulting “pregnant” solution is further processed in a plant where gold is recovered.  The Company records ore on leach pad, ore in carbon column in process and gold doré, at average production cost per gold ounce, less provisions required to reduce inventory to net realizable value.  Production costs include the cost of mineralized material processed; direct and indirect materials and consumables; direct labor; repairs and maintenance; utilities; depreciation and amortization of property, equipment, and mineral properties; and mine administrative expenses.  Revenue from the sale of silver is accounted for as by-product and is deducted from production costs.  Costs are removed from ore on leach pads as ounces are recovered based on the average cost per recoverable ounce of gold on the leach pad.

 

Estimates of recoverable gold on the leach pad are calculated from the quantities of material placed on the leach pad (measured tons added to the leach pad), the grade of material placed on the leach pad (based on assay data) and an estimated recovery percentage (based on ore type).  The nature of the leaching process inherently limits the ability to precisely monitor inventory levels.  As a result, actual gold ounces recovered are regularly monitored and estimates are refined based on actual results over time.  As of June 30, 2015, the Company had a limited operating history and actual results only over that short period of time. Due to this, estimates of recoverable gold are based primarily on initial tests and only limited refinements.

 

Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The ultimate recovery of gold from a leach pad will not be known until the leaching process is concluded. The quantification of material inventory on the leach pad is based on estimates of the quantities of gold at each balance sheet date that the Company expects to recover during the next 12-18 months.

Property and Equipment, Policy

Property and Equipment

 

Property and equipment are stated at cost.  Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from five to seven years, or units of production over estimated ounces to be produced.  The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired.  The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts.  Maintenance and repairs are charged to operations as incurred. Replacements and betterments that extend the useful life of the property and equipment are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations
Mineral Properties and Leases,Policy

Mineral Properties and Leases

 

The Company capitalizes costs for acquiring mineral properties and ongoing mineral lease payments and expenses costs to maintain mineral rights.  Upon reaching the production stage, the capitalized costs are amortized using the units-of-production method on the basis of periodic estimates of ounces to be produced.  Mineral properties are periodically assessed for impairment of value, and any subsequent losses are charged to operations at the time of impairment.  If a property is abandoned or sold, its capitalized costs are charged to operations.  Mine property costs include the building of infrastructure of the processing facility including the heap leach pad and the carbon in column process plant along with water wells, roads and fencing.  These costs are capitalized until ready for their intended use at which time they are amortized using the units of production method based on projected units of production which approximates the estimated life of the facility.  Additionally, interest is capitalized to mine development until such assets are ready for their intended use.  The Company does not have proven and probable reserves at this time.  See Note 6.

 

Reclamation and Remediation,Policy

Reclamation and Remediation

 

The Company’s operations have been, and are subject to, standards for mine reclamation that have been established by various governmental agencies.  The Company records the fair value of an asset retirement obligation as a liability in the period in which the Company incurs a legal obligation for the retirement of tangible long-lived assets.  A corresponding asset is also recorded and depreciated over the life of the asset.  After the initial measurement of the asset retirement obligation, the liability will be adjusted at the end of each reporting period to reflect changes in the estimated future cash flows underlying the obligation.  Determination of any amounts recognized upon adoption is based upon numerous estimates and assumptions, including future retirement costs, future inflation rates and the credit-adjusted risk-free interest rates.

 

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.

 

Earnings Per Share, Policy

Earnings (loss) Per Share

 

Basic earnings (loss) 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 (loss) per share reflect the potential dilution of securities that could share in the earnings of the Company.  At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows:

 

 

 

June 30, 2015

 

June 30, 2014

 

 

 

 

 

Convertible debt

 

857,143

 

857,143

Convertible preferred stock

 

27,718,333

 

27,718,333

 

 

 

 

 

Total

 

28,575,476

 

28,575,476

 

However, the diluted earnings (loss) per share are not presented because its effect would be anti-dilutive due to the Company’s recurring losses.

Going Concern Policy

Going Concern

 

As shown in the accompanying financial statements, the Company has an accumulated deficit incurred through June 30, 2015, 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 final permit needed to begin development of the Kiewit property was received in January 2014 and development began in February 2014.  Construction at the site was substantially complete at September 30, 2014.  The Company will need significant funding to continue operations and increase development through the next fiscal year.  This funding is expected to come via sales revenues, but the timing and amount of capital requirements will depend on a number of factors, including demand for products and services, metals pricing and the availability of opportunities for expansion through affiliations and other business relationships. 

 

If the going concern assumption were not appropriate for these 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
Reclassification, Policy

Reclassifications

 

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

 

New Accounting Pronouncement

New Accounting Pronouncement

 

In July 2015, the Financial Accounting Standards Board issued Accounting Standards Update 2015-11, Simplifying the Measurement of Inventory, which requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Prior to the issuance of the standard, inventory was measured at the lower of cost or market.  Replacing the concept of market with the single measurement of net realizable value is intended to create efficiencies for preparers. The new guidance will be effective for in fiscal years beginning after December 15, 2016, including interim periods within those years.  Management believes that this new standard will have minimal impact on its financial statements.

XML 53 R15.htm IDEA: XBRL DOCUMENT v3.2.0.727
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION
6 Months Ended
Jun. 30, 2015
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION  
REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION

NOTE 10 – REMEDIATION LIABILITY AND ASSET RETIREMENT OBLIGATION

 

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.  In calculating the present value of the asset retirement obligation the Company used a credit adjusted risk free interest rate of 8% to 10% and projected mine lives of five to 12 years, depending on the site.  On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions. 

 

Changes in the reclamation liability for the periods ended June 30, 2015 and December 31, 2014 are as follows:

 

 

 

Six months ended

 June 30,

2015

 

Year ended December 31,

2014

Reclamation and remediation liability, beginning of period

$

740,268

$

69,920

     Obligation incurred

 

-

 

656,567

     Accretion expense

 

29,966

 

13,781

Reclamation and remediation liability, end of period

$

770,234

$

740,268

XML 54 R13.htm IDEA: XBRL DOCUMENT v3.2.0.727
NOTE PAYABLE - RELATED PARTY
6 Months Ended
Jun. 30, 2015
NOTE PAYABLE - RELATED PARTY  
NOTE PAYABLE - RELATED PARTY

NOTE 8 – NOTE PAYABLE - RELATED PARTY

 

DMRJ beneficially owns approximately 67% of the Company (on a fully-diluted basis) with shares convertible to 27,718,333 shares of common stock (See Note 3).  They are considered a related party.  In July 2010, the Company entered into an Investment Agreement with DMRJ.  The Agreement has been modified numerous times and currently operates under the Twelfth Amendment to the Investment Agreement dated June 5, 2015.  The Amendments have provided for extensions of payment dates, increased funding capacity and other modifications to the debt agreement. 

 

The total due to DMRJ at June 30, 2015 and December 31, 2014 is as follows:

 

 

 

June 30,

 

December 31,

 

 

2015

2014

Principal

 

 

 

 

       Current

$

3,481,357

$

2,124,348

       Long-term

 

8,559,135

 

9,665,144

                Total

12,040,492

11,789,492

Interest payable - current

4,268,643

3,375,652

 

$

16,309,135

$

15,165,144

 

The Investment Agreement contains certain negative covenants which prohibit us from the following actions or activities:

 

  • Incurring any indebtedness except in limited circumstances;
  • Creating any significant liens on any of our properties or assets;
  • Enter into any sale and lease-back transaction involving any of our properties;
  • Make any investments in or loans or advances to other parties;
  • Engage in any merger, consolidation, sale of assets or acquisition transaction, except for the purchase or sale of inventory or certain limited investments;
  • Declare or pay any dividends, except for dividends to DMRJ Group;
  • Engage in any business transactions with affiliates;
  • Make capital expenditures except as permitted in the agreement pertaining to our current mining business;
  • Create any lease obligations;
  • Amend, supplement or modify any existing indebtedness;
  • Enter into any swap, forward, future or derivative transaction;
  • Make any change in our accounting policies or reporting practices;
  • Form additional subsidiaries; or
  • Modify or grant a waiver or release under or terminate any principal lease agreement or other material contract.

 

2015 Activity

 

An Eleventh Amendment to the Investment Agreement was entered into on March 17, 2015 which established new minimum principal and interest payment dates which were then revised with the Twelfth Amendment to the Investment Agreement. The Twelfth Amendment was entered into on June 5, 2015 and allowed for additional funding in the amount of $250,000 which was received by the Company in May and June 2015 and also established new minimum principal and interest payment dates beginning in August 2015 as follows:

 

 

 

August 31, 2015            

$

500,000

November 30, 2015

 

1,000,000

December 31, 2015

 

4,000,000

February 28, 2016

 

1,500,000

May 31, 2016

 

750,000

August 31, 2016

 

3,000,000

November 30, 2016

 

3,000,000

 

 

 

Total

$

13,750,000

 

Management anticipates that the August 31, 2015 payment will not be made.  Discussions are currently underway with DMRJ to provide additional funding to finance the purchase of crushing plant equipment to allow for in-house crushing, additional working capital and to finance the expansion into the east extension of the pit.  The equipment purchase is anticipated to reduce crushing costs by as much as $100,000 per month.  This funding will be provided through the use of the provisional funds established in the Twelfth Amendment to the Investment Agreement as well as additional funding to be provided for in a future amendment to the Investment Agreement.  New funding is expected to be approximately $675,000 during July and August 2015.

 

2014 Activity

 

In January 2014, pursuant to the Ninth Amendment to the Investment Agreement, a third term loan advance was taken in the amount of $25,000.  The January 31, 2014 loan payment that was due was not made.

 

On February 19, 2014, the Company agreed to the terms of a Tenth Amendment to the Investment Agreement with DMRJ Group. The Tenth Amendment provides for funding of mining operations through a series of advances (the “Monthly Term Loan Advances”) totaling a maximum of $5,700,000 over five months.  A total of $5,500,000 was drawn.  As a provision of this amendment, the maturity date for the entire loan was moved to October 31, 2016.  The interest rate on the loan balance was reduced from 24% to 15% and minimum principal and interest payment amounts were established.  The first minimum payment, due February 28, 2015, was not made.    Payment terms were changed in 2015 pursuant to the Eleventh and Twelfth Amendments (see 2015 Activity).

 

The Company’s ability to meet these minimum payments will be dependent upon a number of factors including production variables, metals market pricing, demand for products and services, and the availability of opportunities for expansion through affiliations and other business relationships.  

 

In 2014, the first Monthly Term Loan, in the amount of $2,000,000, was used in part to fund the posting of the reclamation bond associated with the Kiewit Project Large Mining Permit.  A total of $5,525,000 was drawn during the year ended December 31, 2014 in connection with the Tenth Amendment Monthly Term Loan Advances.  In addition, on February 19, 2014, the Company issued to DMRJ Group 249,603 shares of Series B Preferred Stock. See Note 3.  Onsite construction of the project is essentially complete at December 31, 2014.  If the Company is unable to repay the outstanding balances at maturity, DMRJ Group could foreclose on its security interest and would take control of or liquidate the Company’s mining leases and other assets.

XML 55 R14.htm IDEA: XBRL DOCUMENT v3.2.0.727
NOTES PAYABLE - EQUIPMENT
6 Months Ended
Jun. 30, 2015
NOTES PAYABLE - EQUIPMENT:  
NOTES PAYABLE - EQUIPMENT

NOTE 9 – NOTES PAYABLE – EQUIPMENT

 

The following is a summary of the equipment notes payable:

 

 

 

June 30,

2015

 

December 31, 2014

Note payable to Komatsu Financial, collateralized by a Komatsu Telehandler lift, due in 48 monthly installments of $2,424 including interest at 4.99%.

$

101,305

$

-

 

 

 

 

 

Note payable to CAT Financial, collateralized by five pieces of used mining equipment, including three haul trucks, a loader and a grader, due in 36 monthly installments of $49,242 including interest at 4.68%.

 

1,521,998

 

-

 

 

 

 

 

Note payable to HCE Funding, collateralized by a Perkins Elmer AA machine, due in one installment of $7,600 and 22 installments of $520, including interest at 5.00%.

 

8,412

 

-

 

 

 

 

 

Note payable to Komatsu Financial, collateralized by a Komatsu D275 dozer, due in one monthly installment of $21,000 and 47 monthly installments of $11,594 including interest at 2.99%.

 

430,398

 

492,955

 

 

 

 

 

Note payable to Komatsu Financial, collateralized by a Komatsu PC400 Excavator, due in 24 monthly installments of $1,629 including interest at 1.75%.

 

16,105

 

25,604

 

 

2,078,218

 

518,559

Current portion

 

(705,633)

 

(146,171)

Long Term portion

$

1,372,585

$

372,388

 

 

 

 

 

Principal payments are as follows for the twelve months ended June 30,

 

 

 

 

2016

 

 

$

705,633

2017

 

 

 

716,548

2018

 

 

 

597,706

2019

 

 

 

58,331

    Total

 

 

$

2,078,218

 

During the first quarter 2015, accounts payable balance of $150,375 relating to lease costs for equipment was converted to notes payable – equipment when the Company acquired the equipment.

XML 56 R16.htm IDEA: XBRL DOCUMENT v3.2.0.727
STOCK REDEEMABLE WITH GOLD PROCEEDS
6 Months Ended
Jun. 30, 2015
STOCK REDEEMABLE WITH GOLD PROCEEDS  
STOCK REDEEMABLE WITH GOLD PROCEEDS

NOTE 11 – STOCK REDEEMABLE WITH GOLD PROCEEDS

 

An equity financing was initiated in September 2012 for the sale of up to 1,150,000 shares of the Company’s common stock. This offering closed December 31, 2012 with proceeds of $130,000 raised through sales of 130,000 shares of the Company’s common stock.  Under the terms of this offering, the shares can be redeemed for 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. Shares will be converted on whole ounces only.   Each investor received 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.  Due to the redemption feature of these shares, management has concluded that the conversion shares should be recorded as a liability and not as equity. 

 

Once sales of concentrate began in 2014, all investors in this equity financing had the option to convert their shares for cash from 5% of the gold sales, and all parties chose to convert.  Amounts due to these shareholders are disclosed in the following table.  The share conversion is complete at June 30, 2015 and amounts due to shareholders are past due.  These amounts are expected to be paid to shareholders in 2015.

 

 

 

Conversion Shares Due based on $1,000 Gold Price

 

Additional Amount Based on Actual Gold Sales Price

 

Total Due to Shareholders at June 30, 2015

Original Conversion Liability

 

130,000

 

 

 

 

Less Conversion:

 

 

 

 

 

 

     December 31, 2014

 

48,000

 

8,609

 

56,609

     June 30, 2015

 

82,000

 

12,797

 

94,797

          Total

$

130,000

$

21,406

$

151,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining balance to be redeemed at June 30, 2015

$

-

XML 57 R34.htm IDEA: XBRL DOCUMENT v3.2.0.727
Mineral Properties And Interests (Details) - USD ($)
Jun. 30, 2015
Dec. 31, 2014
Initial lease fee    
Yellow Hammer Site $ 175,000 $ 175,000
Kiewit, Cactus Mill and all other sites 600,000 600,000
Total Initial lease fee 775,000 775,000
Asset retirement obligation    
Kiewit Site 687,475 687,475
Kiewit Exploration 10,780 10,780
Cactus Mill 16,133 16,133
Total Asset retirement obligation 714,388 714,388
Accumulated amortization (219,796) (116,501)
Total Mineral Properties And Interests $ 1,269,592 $ 1,372,887
XML 58 R51.htm IDEA: XBRL DOCUMENT v3.2.0.727
Related party payments (Details) - USD ($)
6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Related party payments    
Company recognized rent expense for rental of office space and a vehicle to be paid to RMH Overhead, LLC $ 3,000 $ 3,000
Amount paid to RMH Overhead, LLC as expense 6,000 5,000
Total remaining in accounts payable 13,850 13,850
Company purchased equipment from RMH Overhead, LLC 3,500 16,500
Company recognized wage expense in the amount of for office and accounting services performed by Marianne Havenstrite 13,846 5,538
The unpaid amounts are reflected in accrued liabilities for office and accounting services 42,300 28,500
Company recognized exploration expense for geological services provided by Stuart Havenstrite 3,105 12,827
The unpaid amounts are reflected in accounts payable for geological services 18,276 21,649
Payments were made to other family members for accounting and engineering services $ 42,001 $ 22,892
XML 59 R21.htm IDEA: XBRL DOCUMENT v3.2.0.727
INVENTORIES (TABLES)
6 Months Ended
Jun. 30, 2015
INVENTORIES (TABLES):  
Schedule of Inventory, Current

The following table provides the components of inventories:

 

 

June 30,

2015

 

December 31,

2014

Ore on leach pad

$

1,951,547

$

1,508,761

Carbon column in process

169,905

 

211,115

Dore finished goods

8,640

 

25,501

     Total

$

2,130,092

$

1,745,377

XML 60 R26.htm IDEA: XBRL DOCUMENT v3.2.0.727
CHANGES IN RECLAMATION LIABILITY (TABLES)
6 Months Ended
Jun. 30, 2015
CHANGES IN RECLAMATION LIABILITY (TABLES)  
CHANGES IN RECLAMATION LIABILITY (TABLES)

Changes in the reclamation liability for the periods ended June 30, 2015 and December 31, 2014 are as follows:

 

 

 

Six months ended

 June 30,

2015

 

Year ended December 31,

2014

Reclamation and remediation liability, beginning of period

$

740,268

$

69,920

     Obligation incurred

 

-

 

656,567

     Accretion expense

 

29,966

 

13,781

Reclamation and remediation liability, end of period

$

770,234

$

740,268

XML 61 R49.htm IDEA: XBRL DOCUMENT v3.2.0.727
Commitments Mining Properties (Details) - USD ($)
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2015
Jun. 30, 2015
Dec. 31, 2009
Commitments Mining Properties      
Annual payments required to the Trust $ 0 $ 0 $ 50,000
Percentage of required to pay of net smelter royalty 0.00% 0.00% 6.00%
Percentage of net smelter royalty on gold and silver minimum 0.00% 0.00% 2.00%
Percentage of net smelter royalty on gold and silver maximum 0.00% 0.00% 15.00%
Percentage of required to pay of net smelter royalty on base metals 0.00% 0.00% 4.00%
Annual payments to Clifton Mining per each of the three locations $ 0 $ 0 $ 50,000
Royalty expense $ 50,276 $ 123,289 $ 0
XML 62 R41.htm IDEA: XBRL DOCUMENT v3.2.0.727
DMRJ Group 2015 Activity (Details)
Jun. 30, 2015
USD ($)
DMRJ Group 2015 Activity  
Additional funding amount $ 250,000
Equipment purchase is anticipated to reduce crushing costs per month 100,000
New funding $ 675,000
XML 63 R5.htm IDEA: XBRL DOCUMENT v3.2.0.727
STATEMENTS OF CASH FLOWS (unaudited) - USD ($)
6 Months Ended
Jun. 30, 2015
Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (1,144,936) $ (2,607,243)
Adjustments to reconcile net loss to net cash used by operating activities:    
Depreciation and amortization 430,309 20,772
Common stock issued for services 0 85,483
Common stock issued for interest expense 0 45,000
Preferred stock issued for financing expense 0 998,412
Accretion of asset retirement obligation 29,966 18,615
Change in fair value of derivatives 0 (6,673)
Net gain on disposal of asset 0 (3,370)
Loss on stock redeemed with gold proceeds 12,797 0
Changes in operating assets and liabilities:    
Inventories (384,715) 0
Prepaid expenses and other current assets 102,847 (131,854)
Accounts payable and accrued expenses 129,172 (32,715)
Accrued liabilities - officer wages 5,500 (14,500)
Interest payable, net of amount capitalized 938,991 719,431
Net cash provided (used) by operating activities 119,931 (908,642)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Additions to property and equipment (214,474) (1,540,953)
Refund of reclamation bonds 0 92,455
Increase in reclamation bonds (4,058) (1,348,796)
Net cash (used) by investing activities (218,532) (2,797,294)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from note payable-related party 250,000 4,125,000
Payment of note payable - equipment 214,992 3,066
Net cash provided (used) by financing activities 35,008 4,121,934
NET INCREASE (DECREASE) IN CASH (63,593) 415,998
CASH, BEGINNING OF PERIOD 161,645 8,523
CASH, END OF PERIOD 98,052 424,521
NON-CASH FINANCING AND INVESTING ACTIVITIES:    
Equipment acquired with notes payable - equipment 1,624,276 38,050
Accounts payable converted to notes payable - equipment 150,375 0
Addition to redemption of gold proceeds payable 94,797 0
Fair value of cancelled conversion option 0 164,140
Equipment acquired with accounts payable $ 0 $ 210,216
XML 64 R10.htm IDEA: XBRL DOCUMENT v3.2.0.727
PROPERTY AND EQUIPMENT
6 Months Ended
Jun. 30, 2015
PROPERTY AND EQUIPMENT:  
PROPERTY AND EQUIPMENT

NOTE 5 - PROPERTY AND EQUIPMENT

 

The following is a summary of property, equipment, and accumulated depreciation at June 30, 2015 and December 31, 2014:

 

 

June 30,

 

December 31,

 

2015

 

2014

Equipment

$

3,090,105

 

$

1,465,827

Furniture and fixtures, temporary housing

 

10,781

 

 

10,781

Electronic and computerized equipment

 

52,874

 

 

19,011

Vehicles

 

56,830

 

 

65,330

 

 

3,210,590

 

 

1,560,949

   Less accumulated depreciation

 

(548,670)

 

 

(357,983)

 

 

2,661,920

 

 

1,202,966

 

 

 

 

 

 

Kiewit property facilities

 

2,331,520

 

 

2,153,411

   Less accumulated amortization

 

(290,548)

 

 

(166,221)

 

 

2,040,972

 

 

1,987,190

 

 

 

 

 

 

     Total

$

4,702,892

 

$

3,190,156

XML 65 R27.htm IDEA: XBRL DOCUMENT v3.2.0.727
STOCK REDEEMABLE WITH GOLD PROCEEDS (Tables)
6 Months Ended
Jun. 30, 2015
STOCK REDEEMABLE WITH GOLD PROCEEDS {2}  
STOCK REDEEMABLE WITH GOLD PROCEEDS

These amounts are expected to be paid to shareholders in 2015.

 

 

 

Conversion Shares Due based on $1,000 Gold Price

 

Additional Amount Based on Actual Gold Sales Price

 

Total Due to Shareholders at June 30, 2015

Original Conversion Liability

 

130,000

 

 

 

 

Less Conversion:

 

 

 

 

 

 

     December 31, 2014

 

48,000

 

8,609

 

56,609

     June 30, 2015

 

82,000

 

12,797

 

94,797

          Total

$

130,000

$

21,406

$

151,406

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Remaining balance to be redeemed at June 30, 2015

$

-

 

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Investment Agreement with DMRJ Group (Details) - Jun. 30, 2015 - shares
Total
Investment Agreement with DMRJ Group  
DMRJ beneficially owns approximately of the Company (Percentage) 67.00%
DMRJ beneficially owns approximately of the Company (Shares) 27,718,333
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Common Stock Equivalents Outstanding (TABLE)
6 Months Ended
Jun. 30, 2015
Common Stock Equivalents Outstanding  
Common Stock Equivalents Outstanding

.  At June 30, 2015 and June 30, 2014, common stock equivalents outstanding are as follows:

 

 

 

June 30, 2015

 

June 30, 2014

 

 

 

 

 

Convertible debt

 

857,143

 

857,143

Convertible preferred stock

 

27,718,333

 

27,718,333

 

 

 

 

 

Total

 

28,575,476

 

28,575,476