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2. Commitments
 12 Months Ended
Dec. 31, 2017
Notes  
2. Commitments

2.  Commitments

 

The Company has three lease arrangements with land owners that own land parcels adjacent to the Company’s South Mountain patented and unpatented mining claims.  The leases were originally for a seven-year period, with annual payments of $20 per acre.  The leases were renewed for an additional 10 years at $30 per acre paid annually; committed payments are listed in the table below. The lease payments have no work requirements.

 

 

 

Annual Payment

Acree Lease (June)

$  3,390

Lowry Lease (October)

11,280

Idaho South Mountain LLC Lease (April)

1,680

      Total

$16,350

 

 

On March 21, 2011, the Company signed an exploration agreement with Newmont Mining Corporation (“Newmont”) on the Trout Creek Project that significantly expands the Trout Creek target area. Newmont’s private mineral package added to the Project surrounds the Company’s South Mountain claim group and consists of about 9,565 acres within a thirty-square mile Area of Influence defined in the agreement.  Under the terms of the agreement, the Company is responsible for conducting the exploration program and is obligated to expend a minimum of $150,000 over the ensuing two years, with additional expenditures possible in future years. 

 

On October 1, 2015, the Company signed an Amendment with Newmont USA Limited that modifies and extends the original Trout Creek Joint Exploration Agreement. The extension allows the Company modified work commitments on the project reducing the annual amount to $150,000 of work obligations by October 31, 2016. On October 27, 2016, the Company decided to terminate the exploration agreement with Newmont. The Company still retains 78 unpatented claims (1,600 acres) in Trout Creek of the target area.  The Company pays annual fees to BLM of $3,255 and Lander County $940 fees in maintaining the property.

 

In accordance with the Settlement Agreement in 2016 (see Note 3), the Company is required to pay $5,000 per year in advanced royalties on the South Mountain Project.