UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2018
OR
o	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: 001-06412

GOLDRICH MINING COMPANY

 (Exact Name of Registrant as Specified in its Charter)

ALASKA	91-0742812
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2607 Southeast Blvd, Ste. B211
Spokane, Washington	99223-4942
(Address of Principal Executive Offices)	(Zip Code)

(509) 535-7367

(Registrant’s Telephone Number, including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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.   x   Yes  o  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).    x   Yes  o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.

Large accelerated filer     o		Accelerated filer	o
Non-accelerated filer       o	(Do not check if a smaller reporting company)	Smaller reporting company	x
		Emerging Growth Company	o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) o  Yes  x   No

Number of shares of issuer’s common stock outstanding at November 16, 2018:    139,573,798

1

TABLE OF CONTENTS

2

PART I – FINANCIAL INFORMATION

Item 1.  Financial Statements

Goldrich Mining Company
Consolidated Balance Sheets
(Unaudited)	September 30,	December 31,
	2018	2017
ASSETS
Current assets:
Cash and cash equivalents	$                       2,836	$             486,211
Prepaid expenses	267,697	88,002
Other current assets	27,353	27,788
Total current assets	297,886	602,001
Property, equipment, and mining claims:
Equipment, net of accumulated depreciation	2,405	6,869
Mining properties, claims, and royalty option	868,516	868,516
Total property, equipment and mining claims	870,921	875,385
Total assets	$                    1,168,807	$           1,477,386
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$                   1,247,733	$           235,399
Related parties payables	442,397	368,900
Notes payable, net of discount    Notes payable – related party, net of discount	951,693 1,872,803	626,107 887,883
Notes payable in gold	328,017	355,950
Dividends payable on preferred stock	30,618	30,618
Total current liabilities	4,873,261	2,504,857
Long-term liabilities:
Remediation and asset retirement obligation	394,434	384,402
Total long-term liabilities	394,434	384,402
Total liabilities	5,267,695	2,889,259
Commitments and contingencies (Notes 3,6 and7)
Stockholders' deficit:
Preferred stock; no par value, 8,998,950
shares authorized; no shares issued or outstanding	-	-
Convertible preferred stock series A; 5% cumulative dividends,
no par value, 1,000,000 shares authorized; 150,000 shares issued       and outstanding, respectively, $300,000 liquidation preferences	150,000	150,000
Convertible preferred stock series B; no par value, 300 shares authorized,       200 shares issued and outstanding, $200,000 liquidation preference	57,758	57,758
Convertible preferred stock series C; no par value, 250 shares       authorized, issued and outstanding, $250,000 liquidation preference	52,588	52,588
Convertible preferred stock series D; no par value, 150 shares
authorized, issued and outstanding, $150,000 liquidation preference	-	-
Convertible preferred stock series E; no par value, 300 shares       authorized, issued and outstanding, $300,000 liquidation preference	10,829	10,829
Convertible preferred stock series F; no par value, 153 shares       authorized, issued and outstanding, $50,000 liquidation preference	-	-
Common stock; $0.10 par value, 250,000,000 shares authorized;      139,573,798 and 134,107,809 issued and outstanding, respectively	13,957,380	13,410,781
Additional paid-in capital	13,802,206	14,016,932
Accumulated deficit	(32,129,649)	(29,110,761)
Total stockholders’ deficit	(4,098,888)	(1,411,873)
Total liabilities and stockholders' deficit	$                    1,168,807	$           1,477,386

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

3

Goldrich Mining Company Consolidated Statements of Operations (Unaudited)
	Three months Ended		Nine Months Ended
	September 30,		September 30,
	2018	2017	2018	2017
Operating expenses:
Exploration	$               105,264	$               49,341	$         144,951	$           89,153
Depreciation and amortization	430	2,491	4,464	10,288
Management fees and salaries	66,250	58,469	258,502	172,281
Professional services	29,839	4,475	72,613	48,529
General and administrative	81,065	67,122	224,319	166,822
Office supplies and other	1,463	2,590	5,711	9,121
Directors' fees	-	10,500	12,900	24,900
Arbitration costs (Note 3)	871,324	-	1,600,687	-
Mineral property maintenance	22,651	21,676	67,936	64,061
Total operating expenses	1,178,286	216,664	2,392,083	585,155
Other (income) expense:
Change in fair value of notes payable in gold	4,322	2,382	(27,933)	24,932
Royalty expense	-	-	-	8,109
Interest expense and finance costs	307,188	40,197	654,738	110,190
Total other expense	311,510	42,579	626,805	143,231
Net loss	(1,489,796)	(259,243)	(3,018,888)	(728,386)
Deemed dividends	-	-	-	(52,900)
Preferred dividends	(1,917)	(1,917)	(5,688)	(5,688)
Net loss available to common stockholders	$         (1,466,194)	$           (261,160)	$   (3,024,576)	$       (786,974)
Net loss per common share – basic and diluted	$                  (0.01)	$                  (Nil)	$            (0.02)	$              (Nil)
Weighted average common
shares outstanding-basic and diluted	139,573,798	131,232,809	136,189,131	131,232,809

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

4

Goldrich Mining Company Consolidated Statements of Cash Flows (Unaudited)
	Nine Months Ended
	September 30,
	2018	2017
Cash flows from operating activities:
Net loss	$          (3,018,888)	$             (728,386)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization	4,464	10,288
Change in fair value of notes payable in gold	(27,933)	24,932
Share-based compensation	64,565	-
Amortization of discount on note payable and notes payable in gold	390,929	2,492
Accretion of asset retirement obligation	10,032	9,646
Change in:
Other current assets	435	(16,787)
Prepaid expenses	(179,695)	(55,000)
Accounts payable and accrued liabilities	1,062,334	149,060
Related parties payables	164,795	126,973
Net cash used - operating activities	(1,528,962)	(476,782)
Cash flows from financing activities:
Proceeds from issuance of preferred stock and warrants	-	103,000
Proceeds from note payable, net	189,473	-
Proceeds from note payable - related party, net	856,114	650,000
Payment of note payable	-	(300,000)
Net cash provided - financing activities	1,045,587	453,000
Net (decrease) in cash and cash equivalents	(483,375)	(23,782)
Cash and cash equivalents, beginning of period	486,211	30,080
Cash and cash equivalents, end of period	$                2,836	$                   6,298
Non-Cash Investing and Financing Activities:
Beneficial conversion feature on preferred stock	-	$                52,900
Warrants issued with preferred stock	-	$                50,100
Warrants issued with notes payable	$             126,010	-
Accounts payable satisfied with common stock	$               50,000	-
Related party payables satisfied with common stock	$               91,298

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

5

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

1.

BASIS OF PRESENTATION

The unaudited financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, as well as the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim financial statements have been included.  Operating results for the nine-month period ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018.  

For further information refer to the financial statements and footnotes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

Going Concern

The accompanying consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. The Company has incurred losses since its inception and does not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and/or raising additional funds.

The Company currently has no historical recurring source of revenue and in 2016 received its first cash distribution from the joint venture (Note 3). With the anticipated dissolution of the joint venture, these distributions are expected to decrease or cease after 2018. The Company may profitably execute a production business plan, and thereby, its ability to continue as a going concern may improve and become less dependent on the Company’s ability to raise capital to fund its future exploration and working capital requirements. The Company’s plans for the long-term return to and continuation as a going concern include the profitable exploitation of its mining properties and financing the Company’s future operations through sales of its common stock and/or debt.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassifications

Certain reclassifications have been made to conform prior year’s data to the current presentation. During the three months ended September 30, 2018, management reclassified Arbitration expenses of approximately $1.6M from Professional services, General and administrative, and Office supplies and other line items on previously reported Consolidated Statements of Operations captions to a separate line item because of its significance to the Company’s operations during the period. The reclassification has no impact of total net loss for the three or nine months periods ended September 30, 2018.

Earnings (Loss) Per Share

We are authorized to issue 250,000,000 shares of common stock, $0.10 par value per share. At September 30, 2018, there were 139,573,798 shares of our common stock issued and outstanding.

6

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Earnings (Loss) Per Share, continued:

For the periods ended September 30, 2018 and 2017, the effect of the Company’s outstanding preferred shares, options and warrants, totaling 108,490,017 and 93,963,714, respectively, would have been anti-dilutive.

Accounting for Investments in Joint Ventures

For joint ventures in which the Company does not have joint control or significant influence, the cost method is used. Under the cost method, these investments are carried at the lower of cost or fair value. For those joint ventures in which there is joint control between the parties and in which the Company has significant influence, the equity method is utilized whereby the Company’s share of the venture’s earnings and losses is included in the statement of operations as earnings in joint ventures and its investments therein are adjusted by a similar amount.

Goldrich has no significant influence over its joint venture described in Note 3 Joint Venture, and therefore accounts for its investment using the cost method. The Company recognizes as income, funds received that are distributed from net accumulated earnings of the joint venture.

For joint ventures where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of a non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee. Goldrich currently has no joint venture of this nature.

The Company periodically assesses its investments in joint ventures for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09 Revenue Recognition. The new ASU establishes a new five step principles-based framework in an effort to significantly enhance comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. ASU No. 2015-14 deferred the effective date of ASU No. 2014-09 until annual and interim reporting periods beginning after December 15, 2017. We adopted ASU No. 2014-09 as of January 1, 2018 using the modified-retrospective transition approach.

We performed an assessment of the impact of implementation of ASU No. 2014-09, and concluded it did not change the timing of revenue recognition or amounts of revenue recognized compared to how we recognized revenue under our previous policies. Adoption of ASU No. 2014-09 requires additional disclosures, where applicable, on (i) contracts with customers, (ii) significant judgments and changes in judgments in determining the timing of satisfaction of performance obligations and the transaction price, and (iii) assets recognized for costs to obtain or fulfill contracts. See Note 3 for information on our sales of products.

7

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Recent Accounting Pronouncements, continued:

In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842). The update modifies the classification criteria and requires lessees to recognize the assets and liabilities on the balance sheet for most leases. The update is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the potential impact of implementing this update on the consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Adoption of the update on January 1, 2018 had no impact on the consolidated financial statements

In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash. The update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. Adoption of the update on January 1, 2018 had no impact on the consolidated financial statements

In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Cash and Cash Equivalents

For the purposes of the statement of cash flows, we consider all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Significant estimates used in preparing these financial statements include those assumed in estimating the recoverability of the cost of mining claims, accrued remediation costs, asset retirement obligations, stock-based compensation, and deferred tax assets and related valuation allowances. Actual results could differ from those estimates.

8

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Property, Equipment, and Accumulated Depreciation

Property and equipment are stated at cost, which is determined by cash paid or fair value of the shares of the Company’s common stock issued. The Company’s property and equipment are located on the Company’s unpatented state mining claims located in the Chandalar mining district of Alaska, with only a minor portion located in Spokane, WA, consisting of office equipment.

All property and equipment purchased prior to 2009 are fully depreciated. The Company’s equipment is located at the Chandalar property in Alaska, with a small amount of office equipment located at Company offices in Spokane, Washington. Assets are depreciated on a straight-line basis.

Improvements, which significantly increase an asset’s value or significantly extend its useful life are capitalized and depreciated over the asset’s remaining useful life.

When a fixed asset is sold at a price either higher or lower than its carrying amount, or undepreciated cost at the date of disposal, the difference between the sale proceeds over the carrying amount is recognized as gain, while a loss is recognized when the carrying amount exceeds the sale proceeds. The gain or loss is recognized in the Consolidated Statements of Operations.

Mining Properties, Claims, and Royalty Option

The Company capitalizes costs for acquiring mineral properties, claims and royalty option and expenses, costs to maintain mineral rights and leases as incurred. Should a property reach the production stage, these capitalized costs would be amortized using the units-of-production method on the basis of periodic estimates of ore reserves. 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.

Income Taxes

Income taxes are recognized in accordance with Accounting Standards Codification (“ASC”) 740 Income Taxes, whereby deferred income tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. A valuation allowance is recognized on deferred tax assets when it is more likely than not that some or all of these deferred tax assets will not be realized. ASC 740 prescribes a recognition threshold and measurement attribute for the recognition and measurement of a tax position taken or expected to be taken in a tax return.

Revenue Recognition

The Company does not have joint control or significant influence over the joint venture; therefore, distributions from our joint venture are recognized using the cost method. In accordance with ASU No. 2014-09, the Company has determined that our revenue does not arise from contracts with customers, does not involve satisfaction of any performance obligations on the part of the Company, or require Company assets to be recognized or applied to determine costs to obtain or fulfill any contract generating revenue.

The Company’s revenue is generating through profit percentage split through its non-controlling ownership of the joint venture. Revenues are derived as a percentage of joint venture profits, which are not reasonably estimable and cannot be determined by the joint venture until after the completion of the accounting for each annual mining season, which occurs in the fourth quarter of each year.

9

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Stock-Based Compensation

The Company periodically issues common shares or options to purchase shares of the Company’s common shares to its officers, directors or other parties. These issuances are recorded at fair value. The Company uses a Black Scholes valuation model for determining fair value of options to purchase shares, and compensation expense is recognized ratably over the vesting periods on a straight-line basis. Compensation expense for grants that vest immediately are recognized in the period of grant.

Exploration Costs

Exploration costs are expensed in the period in which they occur.

Derivatives

The Company measures derivative contracts as assets or liabilities based on their fair value. Gains or losses resulting from changes in the fair value of derivatives in each period are recorded in current operating results. None of the Company’s derivative contracts qualify for hedge accounting. The Company does not hold or issue derivative financial instruments for speculative trading purposes.

Remediation and Asset Retirement Obligation

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 long-lived asset using a units of production method. 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 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.

Fair Value Measurements

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.

10

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:

Fair Value Measurements, continued:

During 2018 and 2017, the Company determined fair value on a recurring basis and non-recurring basis as follows:

	Balance September 30, 2018	Balance December 31, 2017	Fair Value Hierarchy level
Liabilities
Recurring: Notes payable in gold (Note 6)	$   328,017	$   355,950	2

The carrying amounts of financial instruments, including notes payable and related party notes payable, approximate fair value at September 30, 2018 and December 31, 2017.

3.

JOINT VENTURE

On May 7, 2012, the Company entered into a joint venture with NyacAU, LLC (“NyacAU”), an Alaskan private company, to bring Goldrich’s Chandalar placer gold properties into production as defined in the joint venture agreement. In each case as used herein in reference to the JV, ‘production’ is as defined by the JV agreement. As part of the agreement, Goldrich Placer, LLC (“Goldrich Placer”), a wholly-owned subsidiary of Goldrich and NyacAU (together the “Members”) formed a 50:50 joint venture company, Goldrich NyacAU Placer, LLC (“GNP”), to operate the Chandalar placer mines, with NyacAU acting as managing partner. Goldrich has no significant control or influence over the JV, and therefore accounts for its investment using the cost method.

On June 23, 2015, the Company raised net proceeds of $1.1 million through the sale of 12.5% of the cash flows Goldrich Placer receives in the future from its interest in GNP (“Distribution Interest”), paid in cash under items #2 and #5, to Chandalar Gold, LLC (“CGL”) and GVC Capital, LLC, (“GVC”), both of which are non-related entities. Goldrich Placer retained its ownership of its 50% interest in GNP but, after the transaction, subject to the terms of the GNP operating agreement, Goldrich Placer will effectively receive approximately 43.75%, CGL will effectively receive 6% (12% of Goldrich Placer’s 50% of GNP = 6%) and GVC will effectively receive 0.25% (0.5% of Goldrich Placer’s 50% of GNP = 0.25%) of any distributions produced by GNP. As of December 31, 2017 and September 30, 2018, an amount of $35,794 has been accrued for this 12.5% and is included in accrued liabilities.

Under the terms of the joint venture agreement (the “Agreement”), NyacAU provided funding to the JV. The loans are to be repaid from future production. According to the Agreement, on at least an annual basis, the JV shall allocate and distribute all revenue (whether in cash or as gold) generated from the JV’s placer operation in the following order:

1.

Operating Expenses. GNP will first pay all Operating Expenses as defined in the Operating Agreement for placer mining operations at the Claims for the current mining year. Until Commercial Production is achieved, GNP will drawdown or use a line of credit from NyacAU (“LOC1”) to fund payment of the Operating Expenses and repay LOC1 to the extent of the current year's Operating Expenses.

11

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

3.

JOINT VENTURE, CONTINUED:

2.

Members' Distribution - Ten Percent (10%) Portion. After payment of Operating Expenses, GNP will distribute in kind twenty percent (20%) of the remaining gold produced, equally, ten percent (10%) to NyacAU as a Member of GNP and ten percent (10%) to Goldrich as a Member of GNP; provided, however, that, for so long as any secondary line of credit from NyacAU to GNP (“LOC2”) or loan from NyacAU to GNP to purchase the Jumbo Basin royalty (“Loan3”) are not paid in full, GNP shall retain one hundred percent (100%) of this distribution to Goldrich and shall apply such funds as payment to reduce the balance of LOC2 and Loan3 until they are paid in full. LOC2 has never been funded or utilized. At December 31, 2107 and at September 30, 2018, $95,239 of Loan3 remains unpaid.

3.

LOC1 Payments. After payment of Operating Expenses and the Members' distribution, GNP will apply any remaining revenue to reduce the remaining balance of LOC1, if any, until it is paid in full.

4.

Reserves. After payment of Operating Expenses, the Members' distribution, and payment of LOC1, the Company may fund Reserves in an amount that is consistent with the annual budget.

5.

Member Distributions, LOC2 Payments and Loan3 Recovery. After payment of Operating Expenses, the Members', payment of LOC1, and funding of any Reserves, from any remaining gold production or revenue, the Company will distribute fifty percent (50%) to NyacAU as a Member of GNP and fifty percent (50%) to Goldrich as a Member of GNP; provided, however, that, for so long as LOC2 or Loan3 are not paid in full, GNP shall retain one hundred percent (100%) of the distribution to Goldrich and shall apply such funds as payment to reduce the balance of LOC2 and Loan3 until they are paid in full.

Substantially all required allocations and distributions are made no later than October 31st of each year. At the time of distribution and the proceeds are identifiable and the likelihood of collection is determined, the Company recognizes joint venture revenue. As of November 19, 2018, a dissolution of the JV is likely, and no distributions under item 2 above for the production season have either been calculated or made. NyacAU has challenged its responsibility to declare or pay any distributions of this type due to the pending dissolution of the JV. The Company has refuted the challenge. The arbitration panel has communicated that the ruling on these issues is deferred until issuance of the Interim Award.

The Company and NyacAU are currently in arbitration. The Company challenged certain accounting treatment of capital leases, allocations of tax losses, charges to the JV for funding costs related to the JV manager’s financing, related-party transactions, and other items of dispute in a mediation that was unsuccessful in reaching an agreement. As a result, the Company filed for arbitration before a panel of three independent arbitrators to address these items. A successful arbitration may result in increases to the 2017 and 2016 distributions and revise the computation of these distributions in 2018. The arbitration proceedings are in progress as of November 19, 2018; no assurance can be given that the arbitration will be successful and the financial statements contain no adjustment for the outcome of the arbitration. The arbitration is proceeding on the basis that GNP will be dissolved. During the three-month period ended September 30, 2018, we made certain reclassifications from professional services expense, general and administrative expense and office supplies expense into GNP arbitration expense. The Company incurred $871,324, $1,600,687 and $40,000 in arbitration expenses during the three and nine-month period ended September 30, 2018 and year ended December 31, 2017, respectively.

12

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

3.

JOINT VENTURE, CONTINUED:

In addition, GNP was required to meet the Minimum Production Requirements as defined by the operating agreement. The Minimum Production Requirement for each year is determined by the price of gold on December 1 in the preceding year. The Minimum Production Requirements for 2016, 2017 and 2018 are 1,100, 1,200 and 1,300 ounces of fine gold, respectively, distributable to each of Goldrich and NyacAU. The Minimum Production Requirements for 2016, 2017 and 2018 must substantially be paid by October 31, 2018. The value of the combined 2016, 2017 and 2018 Minimum Production Requirements has been calculated at $4,428,000 using the price of gold at $1,230 per ounce at September 30, 2018. However, no receivable has been recorded for this amount due to the failure of the JV to meet the Minimum Production Requirements by October 2018, which will force the dissolution of the JV and makes the collection of this amount unlikely. NyacAU, the managing partner of GNP, has announced its intended dissolution of the GNP Joint Venture. Subsequent to any dissolution, NyacAU is entitled to a secured interest in all placer gold production from certain claims owned by Goldrich as collateral for repayment of fifty percent (50%) of LOC1. Arbitration proceedings may significantly affect the balance of LOC1, the magnitude of which cannot be estimated at November 19, 2018.

4.

RELATED PARTY TRANSACTIONS

Beginning in January 2016 and through September 30, 2018, the salary of the Company’s Chief Executive Officer (“CEO”) has not been paid in full. Fees due to the Company’s Chief Financial Officer (“CFO”) have been accrued and remain unpaid:

CEO	Nine months ended 9/30/18	Year ended 12/31/17
Beginning Balance	$192,500	$127,500
Deferred During Period	135,000	180,000
Cash Paid During Period	(57,500)	(115,000)
Ending Balance	$270,000	$192,500

CFO	Nine months ended 9/30/18	Year ended 12/31/17
Beginning Balance	$35,202	$35,093
Deferred During Period	58,938	46,145
Cash Paid During Period	(29,515)	(46,036)
Ending Balance	$64,625	$35,202

During the nine months ended September 30, 2018 the Company also awarded 1,850,000 shares of common stock to officers and director as compensation. The value of the shares awarded was $64,566 based upon the quoted value of the stock at the time of the grant.

13

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

5.

NOTES PAYABLE & NOTES PAYABLE – RELATED PARTY

During the year ended December 31, 2017, the Company received the first tranche of Notes payable for gross proceeds of $1,794,737, discounted at 5%, resulting in net proceeds of $1,705,000, of which $1,000,000 was from a major shareholder and director. The note agreement has been amended to accommodate total net proceeds of up, first to $2,750,000 and then to $3,250,000 subsequent to September 30, 2018. During the nine months ended September 30, 2018, the Company received the second tranche of the notes and recorded a liability of $1,100,000, discounted at 5%, or $55,000, resulting in net proceeds of $1,045,000, of which $845,000 was from a related party.

At September 30, 2018, the Company had outstanding Notes payable – related party of $1,942,105 less remaining unamortized discounts of $69,302 for a net liability of $1,872,803. At December 31, 2017, the Company had outstanding Notes payable – related party of $1,052,632 less remaining unamortized discounts of $164,749 for a net liability of $887,883.

The senior secured notes mature on October 31, 2018, have an interest rate of 15% per annum, calculated on a 360-day year and payable monthly, and were issued net of a 5% original issue discount. A total of 15,197,356 five-year Class T warrants have been issued to the lenders, including 10,196,047 to a related party in connection with the current and prior-period note issuances. The warrants have an exercise price of $0.03 and expire on various dates from November 30, 2022 through September 30, 2023. During the nine months ended September 30, 2018 the Company issued 5,774,997 warrants in connection with the notes payable. The warrants were valued at $151,145 and had an allocated fair value of $126,010. The Company paid finder fees totaling $30,000 to related party entities, and incurred $46,520 of other finance and placement costs. Interest of $102,436 and $243,400 was expensed during the three and nine month periods ended September 30, 2018, respectively, of which $137,991 is accrued at September 30, 2018 and is included in accounts payable and accrued liabilities. Interest due at September 30, 2018 was timely paid. As of November 19, 2018, the senior secured notes have not been paid, and the note holders have indicated willingness to work with the Company to extend the due date.

The total fair value of the warrants was estimated on the issue dates at $344,523 using the following weighted average assumptions: 

	12/31/2017 through 09/13/2018
Market price of common stock on date of issuance	$0.025 - $0.035
Risk-free interest rate	2.26% - 2.94%
Expected dividend yield	0
Expected term (in years)	5
Expected volatility	156.6% - 162.4%

The senior secured notes are secured by distributions from the GNP joint venture. The notes rank junior to:

(i)

Any GNP Distributions that are only deemed to be made by GNP to Goldrich Placer pursuant to the Operating Agreement but are then withheld pursuant to Section 10.1 of the GNP Operating Agreement; and

(ii)

Any GNP Distributions that are made by the GNP to Goldrich Placer pursuant to the GNP Operating Agreement but are then withheld to pay Loan 3 and 2012 reclamation expenses; and 

(iii)

Any GNP Distributions that are made by the GNP to Goldrich Placer pursuant to the Operating Agreement but are then used to pay legal fees relating to mediation/arbitration concerning distributions due to Goldrich Placer from GNP; and

(iv)

Any GNP Distributions that are part of the Chandalar Sale, described below; and 

(v)

Any GNP Distributions that are part of the GVC Sale, described below; and

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Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

5.

NOTES PAYABLE & NOTES PAYABLE – RELATED PARTY, CONTINUED:

(vi)

Any GNP Distributions which are secured by the Company’s outstanding Senior Gold Forward Sales Contracts.

The Chandalar Sale relates to a purchase agreement, dated as of June 19, 2015, whereby the Company, through its subsidiary Goldrich Placer, sold and assigned to CGL 12% of any and all GNP Distributions to Goldrich Placer, subject to the limitations set forth in the purchase agreement and the related assignment. See Note 3 Joint Venture. The GVC Sale relates to a purchase agreement, dated as of May 22, 2015, whereby the Company, through its subsidiary Goldrich Placer, sold and assigned to GVC 0.50% of any and all GNP Distributions to Goldrich Placer, subject to the limitations set forth in the purchase agreement and the related assignment. See Note 3 Joint Venture.

Repayment of all amounts owed under the notes are guaranteed by Goldrich Placer, which in turn owns a 50% interest in Goldrich NyacAU Placer LLC. See Note 3 Joint Venture. The notes contain standard default provisions, including failure to pay interest and principal when due. Under the terms of the notes, any additional loans will be issued at a 5% discount and, for each loan, the Company will issue 5.25 Class T warrants, not to exceed warrants representing the Company’s maximum authorized shares available, for each dollar loaned under this agreement.

At September 30, 2018, the Company had outstanding notes payable of $952,633 less remaining unamortized discounts of $940 for a net liability of $951,693. At December 31, 2017, the Company had outstanding total notes payable of $742,105 less remaining unamortized discounts of $115,998 for a net liability of $626,107.

6.

NOTES PAYABLE IN GOLD

During 2013, the Company issued notes payable in gold totaling $820,000, less a discount of $205,000, for proceeds of $615,000. Under the terms of the notes, the Company agreed to deliver gold to the holders at the lesser of $1,350 per ounce of fine gold or a 25% discount to market price as calculated on the contract date and specify delivery of gold in November 2014.

On November 30, 2017, the Company renegotiated terms with the holders. A default condition arising from the non-delivery of the gold in 2017 was alleviated by agreements with the three note holders to extend the delivery date of gold to November 30, 2018, with the following terms:

·

Fifteen percent (15%), or 76 ounces, of the required quantity of gold under the contract, prior to amendment one in 2014, amendment two in 2015, and amendment three in 2016, which was originally due on the Delivery Date of November 30, 2014, was delivered on November 30, 2017. In lieu of gold, the Company could elect to satisfy the delivery of the deliverable required quantity by paying, an amount equal to the deliverable required quantity times the greater of the original purchase price or the index price for the day preceding the date of payment. The Company paid a total of $97,295 in cash to satisfy this renegotiated term.

·

The Company agreed to pay interest on the value of the delayed delivery required quantity of $341,543, at an annual non-compounding percentage rate of 10% payable quarterly with any remaining interest due and payable on the delivery date.

·

If the delivery date index price on November 30, 2018 is less than the original purchase price, an additional adjusted required amount shall be delivered by December 31, 2018.

15

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

6.

NOTES PAYABLE IN GOLD, CONTINUED:

For the nine months ended September 30, 2018, using a forward gold price of $1,230, the Company recognized a change in fair value of $4,322 in accounting for these notes as derivatives. The fair value was calculated using the market approach with Level 2 inputs. At September 30, 2018 and December 31, 2017, the Company had outstanding total notes payable in gold of $328,017 and $355,950, respectively, representing 266.788 ounces of fine gold deliverable at November 30, 2018.

7.

COMMITMENTS AND CONTINGENCIES

The Company has 426.5 acres of patented claims and 22,432 acres of non-patented claims. We are subject to annual claims rental fees in order to maintain our non-patented claims. In addition to the annual claims rental fees due November 30 of each year, we are also required to meet annual labor requirements due November 30 of each year. The Company is able to carry forward costs for annual labor that exceed the required yearly totals for four years. Following are the annual claims and labor requirements for 2018.

	November 30, 2018
Claims Rental	$                   90,670
Annual Labor	61,100
Yearly Totals	$                 151,770

The Company has a carryover to 2018 of approximately $22.3 million to satisfy its annual labor requirements. This carryover expires in the years 2018 through 2023 if unneeded to satisfy requirements in those years.

The Company and NyacAU are currently in arbitration. The Company challenged certain accounting treatment of capital leases, allocations of tax losses, charges to the JV for funding costs related to the JV manager’s financing, related-party transactions, and other items of dispute in a mediation that was unsuccessful in reaching an agreement. As a result, the Company filed for arbitration before a panel of three independent arbitrators to address these items.

A successful arbitration may result in increases to the 2017 and 2016 distributions and revise the computation of these distributions in 2018. The arbitration proceedings are in progress as of November 19, 2018; no assurance can be given that the arbitration will be successful.

In addition, GNP was required to meet the Minimum Production Requirements as defined by the operating agreement. The Minimum Production Requirement for each year was determined by the price of gold on December 1 in the preceding year. The Minimum Production Requirements for 2016, 2017 and 2018 was 1,100, 1,200 and 1,300 ounces of fine gold, respectively, distributable to each of Goldrich and NyacAU. The Minimum Production Requirements for 2016, 2017 and 2018 were required to be substantially paid by October 31, 2018. GNP did not meet the Minimum Production Requirements by October 31, 2018 which will cause the dissolution of the JV. The arbitration is proceeding on the basis that GNP will be dissolved. Subsequent to any dissolution, NyacAU is entitled to a secured interest in all placer gold production from certain claims owned by Goldrich as collateral for repayment of fifty percent (50%) of LOC1. Arbitration proceedings may significantly affect the balance of LOC1, the magnitude of which cannot be estimated at November 19, 2018.

The Company is required to make accruals for estimated reclamation costs for exploration and mining activities it undertakes. The Company has made sufficient accruals to cover such estimates, including an agreed reclamation cost of approximately $49,000 that may be paid to the JV partner under the arbitration ruling. These costs are related to the JV’s expenses incurred for remediation of the Company’s reclamation issues occurring prior to the JV’s activities. Reclamation obligations and accruals for the JV activities are the responsibility of the JV.

16

Goldrich Mining Company

Notes to the Consolidated Financial Statements (unaudited)

8.

SUBSEQUENT EVENTS

On October 5, 2018, the Company closed on additional borrowings for net proceeds of $150,000 under the Senior Secured Notes previously announced on February 13, 2018, bringing the net proceeds of the Notes to $2,900,000. The Note has been increased to accommodate total net proceeds of up to $3,250,000. Of the additional net proceeds, a total of $150,000 was received from a major shareholder and director of the Company.

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Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation

As used in herein, the terms “Goldrich,” the “Company,” “we,” “us,” and “our” refer to Goldrich Mining Company.

This discussion and analysis contains forward-looking statements that involve known or unknown risks, uncertainties and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Except for historical information, the matters set forth herein, which are forward-looking statements, involve certain risks and uncertainties that could cause actual results to differ. Potential risks and uncertainties include, but are not limited to, unexpected changes in business and economic conditions; significant increases or decreases in gold prices; changes in interest and currency exchange rates; unanticipated grade changes; metallurgy, processing, access, availability of materials, equipment, supplies and water; results of current and future exploration and production activities; local and community impacts and issues; timing of receipt and maintenance of government approvals; accidents and labor disputes; environmental costs and risks; competitive factors, including competition for property acquisitions; and availability of external financing at reasonable rates or at all, and those set forth under the heading “Risk Factors” in our Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on April 16, 2018. Forward- looking statements can be identified by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continues” or the negative of these terms or other comparable terminology. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements.Forward-looking statements are made based on management’s beliefs, estimates, and opinions on the date the statements are made, and the Company undertakes no obligation to update such forward-looking statements if these beliefs, estimates, and opinions should change, except as required by law.

This discussion and analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes. The discussion and analysis of the financial condition and results of operations are based upon the unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis the Company reviews its estimates and assumptions. The estimates were based on historical experience and other assumptions that the Company believes to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but the Company does not believe such differences will materially affect our consolidated financial position or results of operations. Critical accounting policies, the policies the Company believes are most important to the presentation of its consolidated financial statements and require the most difficult, subjective and complex judgments are outlined below in “Critical Accounting Policies” and have not changed significantly.

General

Overview

Our Chandalar, Alaska gold mining property has seen over a hundred years of intermittent mining exploration and extraction history. There has been small extraction of gold from several alluvial, or placer gold streams, and from an array of small quartz veins that dot the property. However, only in very recent times is the primary source of the gold becoming evident. As a result of our exploration we have discovered gold in prolific micro-fractures within schist in many places and have petrographic and geochemical evidence linking these and larger vein-hosted gold occurrences to an intrusive source. We are currently defining drilling targets for a hard-rock (lode) gold deposit in an area of interest approximately 1,800 feet wide and over five miles long, possibly underlain by a granitic, mineralized intrusion. Exploration therefore has taken on two directions; one toward

18

defining a low-grade, large tonnage body of mineralization running beneath the headwaters of Little Squaw Creek, the other a deeper, larger mineralized body from which mineralizing fluids have migrated through Chandalar country rock. Our main focus continues to be the exploration of these hard-rock targets; however, weak financial markets prevented us from obtaining funds for any significant exploration in recent years.

Because of the weak financial markets suffered by the mining industry in recent years, we endeavored to develop our placer properties as a source of internal cash to protect us from future market fluctuations and to provide funds for future exploration. In 2012, Goldrich and NyacAU LLC (“NyacAU”) formed Goldrich NyacAU Placer LLC (“GNP”), a 50/50 joint-venture company, managed by NyacAU, to mine Goldrich’s various placer properties at Chandalar.

On October 9, 2018, we announced GNP’s production results for the 2018 mining season. Production at the Chandalar mine began on May 31, 2018. Total mine production was approximately 20,900 ounces of raw placer gold, equivalent to approximately 17,100 ounces of fine gold. This compares to approximately 12,340 oz. of fine gold in 2017, 8,227 fine oz. in 2016 and approximately 3,857 oz. of fine gold in 2015.

GNP showed a profit of $2,410,873 and $683,765 in 2017 and 2016, respectively; however, these amounts may change subject to the results of the arbitration in which Goldrich and NyacAU are currently involved. Total profit for 2018 will be calculated at the end of the calendar year. All costs up to commercial production (as defined in the joint venture agreement) were required to be funded by NyacAU and will be paid back from cash flow from gold production (as defined in the joint venture agreement).

During 2017, GNP also completed a sonic drill program and drilled 231 holes totaling 14,271 feet. Goldrich is in the process of reviewing the drilling results.

In addition to the drilling completed by GNP, we have completed approximately 15,000 feet of drilling to date on the upper half of the Little Squaw Creek placer project and outlined 10.5 million cubic yards of mineralized material, at an average head grade of 0.025 ounces of gold per cubic yard for an estimated total of approximately 250,000 contained ounces. The mineralized material at Chandalar is not a mineral reserve as defined in SEC Industry Guide 7. Based on a targeted extraction rate of 20,000 ounces of gold per year and the mineralized material drilled out to date, the Little Squaw Creek mine would have a mine life of approximately 12 years. Little Squaw Creek is one of seven potential placer targets on the Chandalar property and is open to expansion. Mining operations at the Chandalar mine utilize conventional gravity technologies for gold recovery. All plants will employ a recirculating closed-loop water system to minimize water usage and protect the environment.

Chandalar Mine

Intended Dissolution of the GNP Joint Venture:

On August 20, 2018, we announced the intended dissolution of the GNP joint venture. According to the terms of the joint venture operating agreement, GNP was required to pay a Minimum Production Requirement of 1,100 ounces for 2016, 1,200 ounces for 2017, and 1,300 ounces for 2018 to both Goldrich and NyacAU by October 31, 2018. This payment was not made. The Minimum Production Requirement for each year was determined based on the spot price of gold on December 1 of the preceding year.

Under the joint venture Operating Agreement, GNP will be dissolved if GNP fails to meet the Minimum Production Requirement. GNP’s lease to mine the placer properties will terminate upon dissolution of GNP and GNP will have no further rights to mine the placer properties located on Goldrich’s mining claims.

Goldrich and NyacAU are currently in arbitration. The arbitration is proceeding on the basis that GNP will be dissolved. The first arbitration hearings were from July 19th through July 31st and the second arbitration hearings were from August 20^th to August 28^th. Goldrich and NyacAU are now awaiting the rulings of the arbitration panel. Under the terms of the Operating Agreement, rulings from the three-person arbitration panel are final. The outcome of the arbitration is not yet determined and cannot be estimated or assured.

19

Liquidity and Capital Resources

We are an exploration stage company and have incurred losses since our inception. We currently do not have sufficient cash to support the Company through 2018 and beyond. We anticipate that we will incur approximately $650,000 for general operating expenses and property maintenance, $456,475 for interest, $328,017 for payment of the gold notes, $1,872,803 for payment of notes payable to related party, and $951,693 for the payment of a senior secured loans over the next 12 months as of September 30, 2018. Additional funds will be needed for any exploration expenditures, should any be undertaken. We also anticipate $1.8 million in costs for arbitration but a significant portion of this would be recouped if we are successful in the arbitration. We plan to raise the financing through a combination of debt and/or equity placements, sale of mining property interests, and revenue from placer operation.

We have filed an arbitration claim against our joint venture operating partner to challenge certain accounting treatment of capital leases, allocations of tax losses, charges to the JV for funding costs related to the JV manager’s financing, related-party transactions, and other items of dispute. In 2018, our joint venture partners filed a counter-claim against us. Favorable rulings at arbitration could provide significant cash flows to us and unfavorable rulings could have a significant negative impact on our cash flows. We have filed for arbitration before a panel of 3 independent arbitrators to address each of the disputed claims. A successful arbitration may result in significant increases to the 2017 and 2016 distributions and revise the computation of these distributions in 2018. The arbitration proceedings are in progress as of the date of this report; no assurance can be given that the arbitration will be successful.

Failure in receiving distributions under our damage claims at arbitration or in our efforts to raise needed financing could result in us having to scale back or discontinue exploration activities or some or all of our business operations. Under the joint venture operating agreement, revenue is allocated in accordance with the 5-point schedule outlined in the section Joint Venture Agreement in the Notes to our financial statements and in our annual report as filed on Form 10-K for 2017. The arbitration is proceeding on the basis that GNP will be dissolved. Subsequent to any dissolution, NyacAU is entitled to a secured interest in all placer gold production from certain claims owned by Goldrich as collateral for repayment of fifty percent (50%) of LOC1. Arbitration proceedings may significantly affect the balance of LOC1, the magnitude of which cannot be estimated at November 19, 2018.

The audit opinion and notes that accompany our consolidated financial statements for the year ended December 31, 2017, disclose a ‘going concern’ qualification to our ability to continue in business. The accompanying consolidated financial statements have been prepared under the assumption that we will continue as a going concern. We are an exploration stage company and we have incurred losses since our inception. We do not have sufficient cash to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities and raising additional funds. We believe that the going concern condition cannot be removed with confidence until the Company has entered into a business climate where funding of its activities is more assured.

We currently have only a brief recent history of a recurring source of revenue and in 2016 received our first cash distribution from the joint venture. If we profitably execute a production business plan, our ability to continue as a going concern may improve and become less dependent on our ability to raise capital to fund our future exploration and working capital requirements. Our plans for the long-term include the profitable exploitation of our mining properties and financing our future operations through sales of our common stock and/or debt. Additionally, the current capital markets and general economic conditions in the United States are significant obstacles to raising the required funds. These factors raise substantial doubt about our ability to continue as a going concern.

During the nine-month period ended September 30, 2018, we completed financings of $1,045,587, compared to $453,000 net cash for note financings and placements of our securities during the nine-month period ended September 30, 2017. Subsequent to the close of the September 30, 2018 quarter, we borrowed an additional

20

$150,000 of notes payable, bringing the total notes payable obligation as of November 19, 2018, to $2,900,000 which are due October 31, 2018. If we are unable to timely satisfy our obligations under these secured senior notes payable, the notes payable in gold due November 2018, and the interest on both the secured senior note due quarterly and the notes payable in gold, and we are not able to re-negotiate the terms of such agreements, the holders will have rights against us, including potentially seizing or selling our assets. The notes payable in gold are secured against our right to future distributions of gold extracted by our joint venture with NyacAU or subsequent gold production. At September 30, 2018, we had outstanding total notes payable in gold of $328,017, representing 266.789 ounces of fine gold deliverable at November 30, 2018.

We believe we will be able to secure sufficient financing for further operations and exploration activities of our Company but we cannot give assurance we will be successful in attracting financing on terms acceptable to us, if at all. Additionally, as the placer mine continues its increasing trend of gold extraction, as continued by a successor mining organization after dissolution of GNP, we look forward to internal cash flow and additional options for financing appear to be coming available. To increase its access to financial markets, Goldrich intends to also seek a listing of its shares on a recognized stock exchange in Canada in addition to its listing on the OTCBB in the United States.

On October 9, 2018, we announced GNP’s production results for the 2018 mining season. Production at the Chandalar mine began on May 31, 2018. Total 2018 mine production was approximately 20,900 ounces of raw placer gold, equivalent to approximately 17,100 ounces of fine gold. This compares to approximately 12,340 oz. of fine gold in 2017, approximately 8,227 fine oz. in 2016 and approximately 3,857 oz. of fine gold in 2015.

A successful mining operation may provide the long-term financial strength for the Company to remove the going concern condition in future years. For more information see Joint Venture Agreement above.

The consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. If the going concern basis were not appropriate for these financial statements, adjustments would be necessary in the carrying value of assets and liabilities, the reported expenses and the balance sheet classifications used.

Results of Operations

On September 30, 2018 we had total liabilities of $5,267,695 and total assets of $1,168,807. This compares to total liabilities of $2,889,259 and total assets of $1,477,386 on December 31, 2017. As of September 30, 2018, our liabilities consist of $394,434 for remediation and asset retirement obligations, $328,017 of notes payable in gold, $1,872,803 of notes payable to a related party, $951,693 of notes payable, $1,089,905 of trade payables and accrued liabilities, $157,828 of accrued interest payable, $442,397 due to related parties, and $30,618 for dividends payable. Of these liabilities, $4,873,261 is due within 12 months. The increase in liabilities compared to December 31, 2017 is due to an increase in notes payable, trade and related party payables, and amortization of the discount and warrants of the notes payable. The decrease in total assets was due to a decrease in cash due to significant professional fees and expenses related to the arbitration, offset by an increase in prepaid expenses during the nine months ended September 30, 2018. We incurred $871,324, $1,600,687 and $40,000 in arbitration expenses during the three and nine-month periods ended September 30, 2018 and year ended December 31, 2017, respectively.

On September 30, 2018, we had negative working capital of $4,575,375 and a stockholders’ deficit of $4,098,888 compared to negative working capital of $1,902,856 and stockholders’ deficit of $1,411,873 for the year ended December 31, 2017. Working capital decreased during the nine months ended September 30, 2018 due to significant short term borrowing under the notes payable, and accruals of accounts and trade payables that exceeded payments made against those same types of liabilities. Stockholders’ equity decreased due to an operating loss for the period ended September 30, 2018, offset by increases in Common stock and Additional paid in capital for shares issued to satisfy certain related party and professional fee liabilities.

21

During the nine months ended September 30, 2018, we used cash from operating activities of $1,503,442 compared to $476,782 for the nine months ended September 30, 2017. Net losses increased year over year due largely to professional services, management and general and administrative costs in relation to the arbitration, with all other expense categories being relatively stable compared to the same period of 2017.  Net operating losses were $3,018,888 and $728,386 for the nine months ended September 30, 2018 and 2017, respectively, including depreciation of $4,464 and $10,288 for the respective periods.

During the nine months ended September 30, 2018, and 2017 respectively, we used no cash in investing activities.

During the nine months ended September 30, 2018, cash of $1,045,587 was provided by financing activities, compared to cash of $453,000 provided during the same period of 2017. Cash was provided by borrowings under notes payable for both periods presented, with an additional $103,000 provided by issuance of preferred Stock and warrants during the nine months ended September 30, 2017.  

Private Placement Offerings

Notes Payable

On February 13, 2018, we announced a senior secured notes financing for a possible total net proceeds of $2,200,000. During the year ended December 31, 2017, we received the first tranche of the notes for gross proceeds of $1,794,737, discounted at 5%, resulting in net proceeds of $1,705,000, of which $1,000,000 was from a related party. The note has been increased to accommodate total net proceeds of up to $3,250,000. During the nine months ended September 30, 2018, we received additional tranches of the notes for gross proceeds of $1,100,000, discounted at 5%, or $55,000, resulting in net proceeds of $1,045,000, of which $845,000 was from a related party.

The secured senior notes matured on October 31, 2018, have an interest rate of 15% per annum, calculated on a 360-day year and payable monthly, and were issued net of a 5% original issue discount. A total of 15,197,356 five-year Class T warrants were issued to the lenders. The warrants have an exercise price of $0.03 and expire on various dates from November 30, 2022 through June 18, 2023. We paid finder fees totaling $30,000 to related party entities. Interest of $102,436 and $243,400 was expensed during the three and nine-month periods ended September 30, 2018, of which $137,991 is accrued at September 30, 2018 and is included in accounts payable and accrued liabilities. Interest due at September 30, 2018 was timely paid. Interest due at October 31, 2018 has not yet been paid as of November 19, 2018

The senior secured notes are secured by distributions from the GNP joint venture. The notes rank junior to:

(i)

Any GNP Distributions that are only deemed to be made by GNP to Goldrich Placer pursuant to the Operating Agreement but are then withheld pursuant to Section 10.1 of the GNP Operating Agreement; and

(ii)

Any GNP Distributions that are made by the GNP to Goldrich Placer pursuant to the GNP Operating Agreement but are then withheld to pay Loan 3 and 2012 reclamation expenses; and 

(iii)

Any GNP Distributions that are made by the GNP to Goldrich Placer pursuant to the Operating Agreement but are then used to pay legal fees relating to mediation/arbitration concerning distributions due to Goldrich Placer from GNP; and

(iv)

Any GNP Distributions that are part of the Chandalar Sale, described below; and 

(v)

Any GNP Distributions that are part of the GVC Sale, described below; and

(vi)

Any GNP Distributions which are secured by the Company’s outstanding Senior Gold Forward Sales Contracts.

The Chandalar Sale relates to a purchase agreement, dated as of June 19, 2015, whereby we, through our subsidiary Goldrich Placer, sold and assigned to CGL 12% of any and all GNP Distributions to Goldrich Placer, subject to the limitations set forth in the purchase agreement and the related assignment.

22

The GVC Sale relates to a purchase agreement, dated as of May 22, 2015, whereby we, through our subsidiary Goldrich Placer, sold and assigned to GVC 0.50% of any and all GNP Distributions to Goldrich Placer, subject to the limitations set forth in the purchase agreement and the related assignment.

Repayment of all amounts owed under the notes are guaranteed by Goldrich Placer, LLC, our wholly owned subsidiary, which in turn owns a 50% interest in Goldrich NyacAU Placer LLC. The notes contain standard default provisions, including failure to pay interest and principal when due. Under the terms of the notes, any additional loans will be issued at a 5% discount and, for each loan, we will issue 5.25 Class T warrants for each dollar loaned under this agreement.

The fair value of warrants issued with the notes payable was estimated at the date of issuance using the Black-Scholes fair value model, which requires the use of highly subjective assumptions, including the expected volatility of the stock price, which may be difficult to estimate for small reporting companies traded on micro-cap stock exchanges.

The total fair value of the warrants was estimated on the issue dates at $344,523 using the following weighted average assumptions: 

	12/31/2017 through 09/13/2018
Market price of common stock on date of issuance	$0.025 - $0.035
Risk-free interest rate	2.26% - 2.94%
Expected dividend yield	0
Expected term (in years)	5
Expected volatility	156.6% - 162.4%

The risk-free interest rate is based on the U.S. Treasury yield curve at the time of the grant. The expected term of warrants issued is from the date of issuance. The expected volatility is based on historical volatility. The Company has evaluated previous low occurrences of warrant forfeitures and believes that current holders of the warrants will hold them to maturity as has been experienced historically; therefore, no variable for forfeiture was used in the calculation of fair value. The Notes payable are discounted by the fair value of the warrants, which is being amortized over the term of the notes.

At September 30, 2018, we had outstanding notes payable of $952,633 less remaining unamortized discounts of $940 for a net liability of $951,693. At December 31, 2017, the Company had outstanding total notes payable of $742,105 less remaining unamortized discounts of $115,998 for a net liability of $626,107.

At September 30, 2018, we had outstanding Notes payable – related party of $1,942,105 less remaining unamortized discounts of $69,302 for a net liability of $1,872,803. At December 31, 2017, the Company had outstanding Notes payable – related party of $1,052,632 less remaining unamortized discounts of $164,749 for a net liability of $887,883.

Notes Payable in Gold

During 2013, we issued notes in principal amounts totaling $820,000, less a discount of $205,000, for proceeds of $615,000. Under the terms of the notes, we agreed to deliver gold to the holders at the lesser of $1,350 per ounce of fine gold or a 25% discount to market price as calculated on the contract date and specify delivery of gold in November 2014.

On November 30^th of each year from 2014 through 2017, we renegotiated terms with the holders. A default condition arising from the non-delivery of the gold was alleviated each year by agreements with the note holders to extend the delivery dates. The last amendment of the note extended the delivery date of gold to November 30, 2018 with the following terms:

·

Fifteen percent (15%), or 76 ounces, of the required quantity of gold under the contract, prior to amendment one in 2014, amendment two in 2015, and amendment three in 2016, which was originally due on the Delivery Date of November 30, 2014, was delivered on November 30, 2017. In lieu of gold, we could elect to satisfy the delivery of the deliverable required quantity by paying, an amount equal to the deliverable required quantity times the greater of the original purchase price or the index price for

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the day preceding the date of payment. We paid a total of $97,295 in cash to satisfy this renegotiated term.

·

We agreed to pay interest on the value of the delayed delivery required quantity of $341,543, at an annual non-compounding percentage rate of 10% payable quarterly with any remaining interest due and payable on the delivery date.

·

If the delivery date index price on November 30, 2018 is less than the original purchase price, an additional adjusted required amount shall be delivered by December 31, 2018.

For the nine months ended September 30, 2018, using a forward gold price of $1,230, we recognized a change in fair value of $4,322 in accounting for these notes as derivatives. The fair value was calculated using the market approach with Level 2 inputs. At September 30, 2018, we had outstanding total notes payable in gold of $328,017, representing 266.788 ounces of fine gold deliverable at November 30, 2018. Interest due at September 30, 2018 was timely paid.

Subsequent Events

On October 5, 2018, the Company closed on additional borrowings for net proceeds of $150,000 under the Senior Secured Notes previously announced on February 13, 2018, bringing the net proceeds of the Notes to $2,900,000. The Note has been increased to accommodate total net proceeds of up to $3,250,000. Of the additional net proceeds, a total of $150,000 was received from a major shareholder and director of the Company.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Inflation

We do not believe that inflation has had a significant impact on our consolidated results of operations or financial condition.

Contractual Obligations

See Subsequent Events above.

Critical Accounting Policies

We have identified our critical accounting policies, the application of which may materially affect the financial statements, either because of the significance of the financials statement item to which they relate, or because they require management’s judgment in making estimates and assumptions in measuring, at a specific point in time, events which will be settled in the future. The critical accounting policies, judgments and estimates which management believes have the most significant effect on the financial statements are set forth below:

·

Estimates of the recoverability of the carrying value of our mining and mineral property assets. We use publicly available pricing or valuation estimates of comparable property and equipment to assess the carrying value of our mining and mineral property assets. However, if future results vary materially from the assumptions and estimates used by us, we may be required to recognize an impairment in the assets’ carrying value.

·

Expenses and disclosures associated with accounting for stock-based compensation. We used the Black-Scholes option pricing model to estimate the fair market value of stock options issued under our stock-based compensation plan, which determines the recognition of associated compensation expense. This valuation model requires the use of judgment in applying assumptions of risk-free interest rate, stock price volatility and the expected life of the options. While we believe we have applied

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appropriate judgment in the assumptions and estimates, variations in judgment in applying assumptions and estimates used in this valuation could have a material effect upon the reported operating results.

·

Estimates of our environmental liabilities. Our potential obligations in environmental remediation, asset retirement obligations or reclamation activities are considered critical due to the assumptions and estimates inherent in accruals of such liabilities, including uncertainties relating to specific reclamation and remediation methods and costs, the application and changing of environmental laws, regulations and interpretations by regulatory authorities.

·

Accounting for Investments in Joint Ventures. For joint ventures in which we do not have joint control or significant influence, the cost method is used. Under the cost method, these investments are carried at the lower of cost or fair value. For those joint ventures in which there is joint control between the parties and in which we have significant influence, the equity method is utilized whereby our share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint ventures and our investments therein are adjusted by a similar amount. We have no significant influence over our joint venture described in Note 5 Joint Ventures to the financial statements, and therefore account for our investment using the cost method. For joint ventures where we hold more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of a non-controlling interest. In determining whether significant influence exists, we consider our participation in policy-making decisions and our representation on the venture’s management committee. We currently have no joint venture of this nature.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision of, and with the participation of, our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective, and that information required to be disclosed by the Company in its reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time period specified in applicable rules and forms.

Our Chief Executive Officer and Chief Financial Officer have also determined that the disclosure controls and procedures are effective, and that material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow for accurate required disclosure to be made on a timely basis.

Changes in internal controls over financial reporting

During the period covered by this Quarterly Report on Form 10-Q, there were no changes in our internal control over financial reporting that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As identified in our Annual Report on Form 10-K for the year ended December 31, 2017, we made commitments for the CFO to more fully review the results of the reported period to remedy a material weakness identified during the audit of our financial results for the 2017 year. That plan was carried out beginning with the review of the results of the June 30, 2018 quarter.

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PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

In 2017, the Company, its subsidiary and the joint venture, as claimants, filed an arbitration statement of claim against NyacAU, LLC (“NyacAU”), BEAR Leasing, LLC, and Dr. J. Michael James, as respondents. In 2018, the respondents filed a counter-claim against us, the claimants. The arbitration claim alleges, among other things, claims concerning related-party transactions, accounting issues, interpretation of the joint venture operating agreement, allocation of tax losses between the joint venture partners, and unpaid amounts due Goldrich relating to the Chandalar Mine. In response to Goldrich’s arbitration claim, the respondents filed a counter-demand alleging various matters against Goldrich. Goldrich considers the alleged matters noted in the respondent’s counter-demand to be without merit. The arbitration is proceeding on the basis that GNP will be dissolved. The first arbitration hearings were from July 19th through July 31st and the second arbitration hearings were from August 20^th to August 28^th. Goldrich and NyacAU are now awaiting the rulings of the arbitration panel. Under the terms of the Operating Agreement, rulings from the three-person arbitration panel are final. The outcome of the arbitration is not yet determined and cannot be estimated or assured.

Item 1A.  Risk Factors

There have been no changes to our risk factors as reported in our annual report on Form 10-K for the year ended December 31, 2017.

Item 2.  Unregistered Sales of Equity Securities and Use Of Proceeds

See full disclosure in section entitled “Sale of Unregistered Securities” above, which is incorporated by reference to this Item 2.

Item 3.  Defaults upon Senior Securities

None.

Item 4.  Mine Safety Disclosure

Our exploration properties are subject to regulation by the Federal Mine Safety and Health Administration ("MSHA") under the Federal Mine Safety and Health Act of 1977 (the "Mine Act"). Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (The "Dodd-Frank Act"), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities.

During the quarter ended September 30, 2018, at our joint venture, GNP, we had three such specified health and safety violations, orders or citations, related assessments or legal actions, mining-related fatalities, or similar events in relation to our United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act. The two citations are currently under appeal.

Item 5.  Other Information

None.

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Item 6.  Exhibits

Exhibit No.	Document
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Exchange Act
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Exchange Act
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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

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SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  November 19, 2018

GOLDRICH MINING COMPANY

By   /s/ William Schara                                                     

William Schara, Chief Executive Officer and President

In accordance with Section 12 of the Securities Exchange Act of 1934, the Registrant has caused Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:  November 19, 2018

GOLDRICH MINING COMPANY

By    /s/ Ted R. Sharp                                          

Ted R. Sharp, Chief Financial Officer

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