TRANSACTIONS WITH LODE-STAR GOLD INC. (“LSG”)

6 Months Ended

Jun. 30, 2023

Extractive Industries [Abstract]

TRANSACTIONS WITH LODE-STAR GOLD INC. (“LSG”)

3. TRANSACTIONS WITH LODE-STAR GOLD INC. (“LSG”)

The Company’s mineral property interest was in a group of thirty-one claims known as the “Goldfield Bonanza Project” (the “Property”), in the State of Nevada. Pursuant to an option agreement dated October 14, 2014, as amended October 31, 2019 (“Option Agreement”), with LSG, the Company acquired an initial 20% undivided interest in and to the mineral claims owned by LSG and an option to earn a further 60% interest in the claims. LSG received 35,000,000 shares of the Company’s common stock and is its controlling shareholder.

Termination of the Option Agreement

On January 14, 2022, in connection with the Sapir Agreements (note 4),   the Company executed a settlement and termination agreement (the “Settlement Agreement”) with LSG to terminate the Option Agreement between the parties. Pursuant to the Settlement Agreement, the Company and LSG have agreed to the immediate termination of the Option Agreement (other than certain standard provisions that will survive according to their terms), with the result that the Company will return its 20% undivided interest in and to the Property to LSG. The carrying value of the 20% undivided interest was $230,179 at the date of the Settlement Agreement. In exchange, LSG has agreed to forgive all amounts owing by the Company to LSG under the Option Agreement, which included $2,246,145 in accrued, unpaid penalties and other payments. The Settlement Agreement also includes a broad mutual release.

The full terms of the Settlement Agreement were agreed to between the parties prior to December 31, 2021, with the formal execution to be completed as soon as the documentation was prepared. Therefore, the impact of the Settlement Agreement has been reflected in the financial statements for the year ended December 31, 2021, to most accurately report the Company’s financial position on December 31, 2021, resulting in a gain on settlement of shareholder debt of $2,015,966 recognized in stockholders’ deficiency.

On June 8, 2022, and in connection with the rescission of the Sapir Agreements (note 4), we entered into a debt reinstatement agreement (the “Reinstatement Agreement”) with LSG pursuant to which we agreed to reinstate the Debt. Also on June 8, 2022, we entered into debt conversion agreements with three related parties, including LSG, pursuant to which the creditors converted an aggregate of $2,601,207 in accrued, unpaid debt into 70,302,906 shares of our common stock at a price of $0.037 per share.