NOTE 6 – MINERAL PROPERTIES AND INTERESTS; RECLAMATION BONDS

Mineral properties and interests as of June 30, 2017 and December 31, 2016 are as follows:

	June 30, 2017			December 31, 2016
Initial lease fee
Kiewit and Cactus Mill	$	600,000		$	600,000

Asset retirement obligation
Kiewit Site		789,026			789,026
Kiewit Exploration		10,780			10,780
Cactus Mill		16,133			16,133
Total		815,939			815,939
Accumulated amortization		(301,264	)		(319,457	)
		514,675			496,482

Total	$	1,114,675		$	1,096,482

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, the Company 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. The bond amount includes bonding for the Yellow Hammer Small Mine and the Yellow Hammer Exploration sites along with the Herat Exploration site. Funds of $92,705 were received in April 2014, by the Company, for these refunded reclamation bonds.

On July 7, 2016, the Company replaced the $1,348,000 cash reclamation bond with a surety bond for the same amount. A condition of the surety bond was the deposit of 50% of the bond amount into an escrow account with the bonding company. An escrow account was established with the bonding company and $674,000 (50% of the original cash bond) was deposited by the Company. The surety bond carries an annual bonding fee of $40,400. Total reclamation bonds posted are $752,778 and $752,754 at June 30, 2017 and December 31, 2016, respectively.

On September 12, 2016, the Yellow Hammer mineral property was returned to the lessor, Moeller Family Trust, and the Company recognized a loss on abandonment in the amount of $175,000 less the accumulated amortization of $37,234, for a net loss of $137,766.