Mineral Properties and Interests

12 Months Ended

Dec. 31, 2019

Mineral Industries Disclosures [Abstract]

MINERAL PROPERTIES AND INTERESTS

NOTE 7 – MINERAL PROPERTIES AND INTERESTS

Mineral properties and interests as of December 31, 2019 and 2018 are as follows:

	December 31, 2019			December 31, 2018
Kiewit and surrounding claims	$	3,700,000		$	600,000
JJS property		250,000			-
Total		3,950,000			600,000
Less Accumulated amortization		(475,401	)		(36,948	)
		3,474,599			563,052
Asset retirement obligation
Kiewit Site		452,193			452,193
Kiewit Exploration		11,126			11,126
Cactus Mill		-			26,234
Total		463,319			489,553
Less accumulated amortization		(208,281	)		(173,604	)
		255,038			315,949
Total	$	3,729,637		$	879,001

On June 13, 2019, the Company entered into an agreement whereby the Company acquired 20 claims adjacent to the Kiewit property from Ben Julian, LLC for $250,000, known as the JJS Property.

In 2009, the Company entered into a Joint Venture Agreement with the Clifton Mining Company ("Clifton") and the Woodman Mining Company for the lease of their property interests in the Gold Hill Mining District of Utah. In March 2019, the Company and Clifton entered into a Second Amended and Restated Lease Agreement (the "Amended Lease").   Under the terms of this Amended Lease, the Company relinquished its leasehold interest in all but 10 of the patented mining claims, for which it retained only the surface rights, and 66 of the unpatented lode mining claims previously held by the Company. The Cactus Mill property was returned to Clifton Mining Company as part of this agreement.

As consideration for entering into the Amended Lease, the Company issued 5,500,000 shares of its common stock with a fair value of $2,200,000 which increased the carrying value of the mineral properties and interests. In addition, the Company and Clifton entered into a Registration Rights Agreement to register for resale the shares issued to Clifton which requires the Company to register the shares within 18 months (which is September 7, 2020) following the initial funding received under the Purchase Agreement (Note 3). In the event the Company does not register the shares within the 18-month period, the Company is obligated to pay Clifton a royalty equal to 2.5% of the net smelter returns from the minerals generated from the Company's mining claims.

Under the terms of the initial 2009 Joint Venture Agreement, the Company was required to pay a 4% net smelter royalty ("NSR") on base metals in all other areas except for production from the Kiewit gold property and a NSR 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 was also required to pay Clifton a 6% NSR on any production from the Kiewit gold property.  

As part of the Purchase Agreement (Note 3) finalized in March 2019, these NSRs were bought out by the Company from Clifton and two other minority royalty holders at a cost of $900,000 which increased the carrying value of the mineral properties and interests. The buyer of the Purchase Agreement (Note 3), PDK, acquired a 4% NSR, previously held by Clifton, on the Kiewit property for $2,200,000. PDK remitted the funds for the NSR directly to Clifton. PDK will receive a 4% net NSR on proceeds from the sale of gold and silver from the Kiewit and JJS properties.

Amortization of the mineral properties and interests based on total units of production was $475,682 for the year ended December 31, 2019. There was no amortization in the year ended December 31, 2018 due to lack of production.