Revision of Previously Issued Financial Statements for Immaterial Misstatements

12 Months Ended

Dec. 31, 2018

Accounting Changes and Error Corrections [Abstract]

REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS FOR IMMATERIAL MISSTATEMENTS

NOTE 2 – REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS FOR IMMATERIAL MISSTATEMENTS

In November 2018, the Company determined inventory was overstated since the beginning of production in 2014 based on an error in estimating the gold ounces contained in the ore on the leach pad. The valuation of inventory requires management to develop estimates of recoverable gold on the leach pad. Factors considered in this estimate include 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 miscalculation was primarily due to usage of an incorrect bench height measurement which resulted in an overstatement of tonnage contained in the pit. The accumulated overstatement of inventory was $1,263,566 through December 31, 2017. In addition, as a result of the change in estimated gold ounces, amortization of mineral properties was also miscalculated because it is based on units of production. Mineral properties were understated by $90,712 at December 31, 2017.

Management assessed the materiality of the effect of the errors on the Company’s prior annual financial statements, both quantitatively and qualitatively, in accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 99, “Materiality” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” Management concluded the error was not material to any previously issued financial statements. Consequently, the Company will correct this error prospectively and revise its financial statements when the balance sheets, statements of operations and comprehensive income and cash flows for such prior periods are included in future filings (“the Revisions”). The Revisions have no net impact on revenue or net cash provided by operating activities as previously reported.

The adjustments at December 31, 2017 to record the cumulative amounts related to this overstatement for prior periods through December 31, 2017 were:

	As of and for the year ended December 31, 2017
	As Previously Reported			Adjustment			As Revised
Balance Sheet
Inventories, current	$	600,000		$	(228,222	)	$	371,778
Total current assets		706,463			(228,222	)		478,241
Inventories, non-current		2,721,936			(1,035,844	)		1,686,592
Mineral properties		1,114,675			90,712			1,205,387
Total Assets		8,917,564			(1,172,854	)		7,744,710
Accumulated deficit		(29,915,289	)		(1,172,854	)		(31,088,143	)
Total shareholders’ equity		(20,756,461	)		(1,172,854	)		(21,929,315	)
Total Liabilities and Shareholders’ equity		8,917,564			(1,172,854	)		7,744,710
Statement of Operations
General production costs		591,725			(73,521	)		518,204
Operating Loss		(1,426,290	)		73,521			(1,352,769	)
Net Income (Loss)		(3,960,634	)		73,521			(3,887,113	)
Basic and Diluted Income (loss) per share		(0.29	)		(0.01	)		(0.30	)
Statement of Cash Flows
Net Income (Loss)	$	(3,960,634	)	$	73,521		$	(3,887,113	)
Change in inventory		(228,004	)		(73,521	)		(301,525	)
Cash flow from operating activities		(1,074,118	)		-			(1,074,118	)