10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

þ      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

OR

☐     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission file number 000-14319

STANDARD METALS PROCESSING, INC.

(Exact Name of Small Business Issuer as Specified in its Charter)

Nevada	84-0991764
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification Number)

611 Walnut Street, Gadsden, Alabama 35901 

(Address of Principal Executive Offices)

(888) 960-7347

(Issuer’s Telephone Number, Including Area Code)

N/A 

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock $0.001 par value	SMPR	OTC

Indicate by check mark whether the Registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☐    No þ

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☐    No þ

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	þ
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act: ☐

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

As of October 23, 2020, there were 138,630,343 shares of Registrant’s common stock, par value $.001 issued, and 133,630,343 outstanding. 

STANDARD METALS PROCESSING, INC. 

FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
ITEM 1	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019	2
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30,2020 and 2019	3
	Condensed Statement of Changes in Shareholders’ Deficit for the Nine Months Ended September 30, 2020 and the Year Ended December 31, 2019	4
	Notes to Condensed Consolidated Financial Statements	5
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	17
ITEM 4.	Controls and Procedures	17
PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	18
ITEM 1A.	Risk Factors	18
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
ITEM 3.	Defaults Upon Senior Securities	18
ITEM 4.	Mine Safety Disclosures	18
ITEM 5.	Other Information	18
ITEM 6.	Exhibits	18
SIGNATURES		19

i

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain statements which are forward-looking in nature and are based on the current beliefs of our management as well as assumptions made by and information currently available to management, general trends in our operations or financial results, plans, expectations, estimates and beliefs. In addition, when used in this Form 10-Q, the words “may,” “could,” “should,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict” and similar expressions and their variants, as they relate to us or our management, may identify forward-looking statements. These statements reflect our judgment as of the date of this Form 10-Q with respect to future events, the outcome of which is subject to risks. We have attempted to identify, in context, certain of the factors that we believe may cause actual future experience and results to differ materially from our current expectations, which may have a significant impact on our business, operating results, financial condition or your investment in our common stock, as described in Part II, Item 1A entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the Securities and Exchange Commission (“SEC”) on April 2, 2020.

Readers are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent periodic reports filed with the SEC on Forms 10-K, 10-Q and 8-K.

ii

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

STANDARD METALS PROCESSING, INC. 

CONDENSED Consolidated Balance Sheets

	September 30, 2020			December 31, 2019
	(unaudited)
Assets
Current assets:
Cash	$	2,316		$	1,945
Prepaid expenses		35,448			-0-
Total current assets		37,764			1,945
Mining and mineral rights		3,883,524			3,883,524
Total Assets	$	3,921,288		$	3,885,469
Liabilities and Shareholders’ Deficit
Current liabilities:
Senior secured promissory note payable, related party	$	2,229,187		$	2,229,187
Promissory notes payable - related party		477,500			477,500
Convertible notes payable, including $204,240 from related parties		304,240			113,575
Accrual for settlement of lawsuits		3,314,128			3,164,309
Accounts payable		1,660,478			1,820,741
Accrued interest - Related party $1,501,249 and $1,325,558 at September 30, 2020 and December 31, 2019		2,313,131			2,100,592
Total current liabilities		10,298,664			9,905,904
Preferred stock, 50,000,000 shares authorized:
Series A, $.001 par value, 10,000,000 and 10,000,000 shares issued and outstanding at September 30, 2020 and December 31, 2019		10,000,000			10,000,000
Commitments and Contingencies (Note 6)
Shareholders’ deficit:
Common stock, $0.001 par value, 500,000,000 shares authorized: 138,630,343 and 133,630,343 issued and 129,497,423 and 128,997,423 outstanding at September 30, 2020 and December 31, 2019, respectively		133,630			128,997
Additional paid-in capital		87,930,342			87,712,695
Accumulated deficit		(104,441,348	)		(103,862,127	)
Total shareholders’ deficit		(16,377,376	)		(16,020,435	)
Total Liabilities and Shareholders’ deficit	$	3,921,288		$	3,885,469

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

1

STANDARD METALS PROCESSING, INC.

CONDENSED Consolidated STATEMENTS OF OPERATIONS

(Unaudited)  

	Three Months Ended						Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Revenues	$	---		$	---		$	—		$	—
Operating expenses:
General and administrative		106,058			826			222,862			13,163
Total operating expenses		106,058			826			222,862			13,163
Loss from operations		(106,058	)		(826	)		(222,862	)		(13,163	)
Other income (expense):
Other income		2,099			1,825			6,296			6,083
Derecognition of debt		----			----			115,424			---
Loss on modification of options and warrants		(115,722	)		---			(115,722	)		---
Interest expense, including related party of $175,681		(157,493	)		(153,340	)		(362,357	)		(475,825	)
Total other income (expense)		(271,116	)		(151,515	)		(356,359	)		(469,742	)
Loss before income tax provision		(377,174	)		(152,341	)		(579,221	)		(482,905	)
Income tax provision		---			---			—			—
Net loss	$	(377,174	)	$	(152,341	)	$	(579,221	)	$	(482,905	)
Basic net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic weighted average common shares outstanding		131,698,652			124,497,423			129,995,646			124,497,423

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

2

STANDARD METALS PROCESSING, INC.

CONDENSED Consolidated STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	September 30, 2020			September 30, 2019
Cash flows from operating activities:
Net loss	$	(579,221	)	$	(482,905	)
Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:
Gain on derecognition of certain accounts payable and accrued expenses		(115,424	)		---
Expenses paid directly by related party		190,665			---
Expenses paid directly by exercise of options and warrants		59,611			---
Loss on modification of options and warrants		115,722			---
Changes in operating assets and liabilities
Prepaid expenses		---			---
Accounts payable		(44,840	)		---
Accrued interest		212,539			340,357
Accrual for settlement of lawsuits		149,819			144,192
Net cash provided by (used in) operating activities		(11,129	)		1,644
Cash flows from investing activities:		—			—
Cash flows from financing activities:		---			---
Proceeds from exercise of stock options		11,500			---
Net cash provided by financing activities		11,500
Increase in Cash	$	371		$	1,644
Cash, beginning of period		1,945			1,001
Cash, end of period	$	2,316		$	2,645
Supplemental cash flow disclosures
Cash paid for interest cost
Income taxes paid	$	---		$	---
	$	—		$	—
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Settlement of liabilities through direct payment by related party	$	190,665		$	109,055
Debt discount on through direct payment of convertible notes payable	$			$	---
Conversions of convertible debt and accrued interest into common stock	$			$	---
Expenses paid by exercise of options and warrants	$	95,058		$	---
Expenses prepaid by exercise of options and warrants	$	35,448		$	---

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

3

STANDARD METALS PROCESSING, INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 AND

THE YEAR ENDED DECEMBER 31, 2019 

	Common Stock						Accumulated
	Shares		Amount		APIC		Deficit			Total
Balance at December 31, 2018		124,497,423		124,497		87,525,115		(103,184,962	)		(15,535,350	)
Shares issued upon exercise of stock option		4,500,000		4,500		187,580		-			192,080
Net loss		---		-		-		(677,165	)		(677,165	)
Balance at December 31, 2019		128,997,423	$	128,997	$	87,712,695	$	(103,862,127	)	$	(16,020,435	)
Shares issued upon exercise of stock options and warrants including $115,722 modification loss		4,632,920		4,633		217,647		--			222,280
Net loss		---		---		---		(579,221	)		(579,221	)
Balance at September 30,2020		133,630,343	$	133,630	$	87,930,342	$	(104,441,348	)	$	(16,377,376	)

The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

4

STANDARD METALS PROCESSING, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(unaudited)

NOTE 1 – NATURE OF BUSINESS

Standard Metals Processing, Inc. (“we,” “us,” “our,” “Standard Metals” or the “Company”) is an exploration stage company, incorporated in Nevada having offices in Gadsden, Alabama and through its subsidiary, a property in Tonopah, Nevada. The business plan is to purchase and install the equipment necessary to complete a facility on the Tonopah property to serve as a permitted custom processing toll milling facility (which includes an analytical lab, pyrometallurgical plant, and hydrometallurgical recovery plant).

The Company plans to perform permitted custom processing toll milling which is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as minerals in the gold, silver and platinum metal groups. Custom milling and refining can include many different processes that are designed specifically for each ore load and to maximize the extraction of precious metals from carbon or concentrates. These toll-processing services also distill, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies, which lack the expertise, capacity, or regulatory permits for in-house production.

We are required to obtain several permits before we can begin construction of a small-scale mineral processing facility to conduct permitted processing toll milling activities and construction of the required additional buildings and well relocation necessary for us to commence operations.

Going Concern 

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the nine months ended September 30, 2020, the Company had a net loss of $579,221. At September 30, 2020, the Company had an accumulated deficit of $104,441,348 and a working capital deficit of $10,260,900. Additionally, all of the Company’s assets are under lien pursuant to the First Deed of Trust, UCC filings and the pledge of 100% of the common stock of the Company’s subsidiary Tonopah Milling and Metals Group, Inc. and that of its wholly owned subsidiaries Tonopah Custom Processing, Inc., (“TCP”) and Tonopah Resources, Inc. (“TR”). Held by GPR, a related party. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on their ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the nine months ended September 30, 2020, a related party advanced $190,665 on the Company’s behalf to pay certain operating expenses directly. As the related party intends to apply its advance toward a convertible note, it has been classified as such at September 30, 2020.

Management believes that private placements of equity capital and/or additional debt financing will be needed to fund our long-term operating requirements. The Company may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

5

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Standard Metals Processing, Inc., and its wholly owned subsidiary Tonopah Milling and Metals Group, Inc. and its wholly owned subsidiaries Tonopah Custom Processing, Inc., (“TCP”) and Tonopah Resources, Inc. (“TR”) All significant intercompany transactions, accounts and balances have been eliminated in consolidation.  

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2019 filed April 2, 2020. In the opinion of management, all adjustments (consisting of normal recurring adjustments unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year as a whole.

Mineral Properties

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. No properties have produced operating revenues at this time. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under an option agreement, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When reserves are determined for a property and a bankable feasibility study is completed, subsequent exploration and development costs on the property would be capitalized. If a project were to be put into production, capitalized costs would be depleted on the unit of production basis.

Management reviews the net carrying value of each mineral property as changes may materialize with a property or at a minimum, on an annual basis. Where information and conditions suggest impairment, estimated future net cash flows from each property are calculated using estimated future prices, proven and probable reserves and value beyond proven and probable reserves, and operating, capital and reclamation costs on an undiscounted basis. If it is determined that the future cash flows are less than the carrying value, a write-down to the estimated fair value is made with a charge to loss for the period. Where estimates of future net cash flows are not available and where other conditions suggest impairment, management assesses if the carrying value can be recovered.

Management’s estimates of gold prices, recoverable reserves, probable outcomes, operating capital and reclamation costs are subject to risks and uncertainties that may affect the recoverability of mineral property costs. The Company does not own any mining claims. It owns tailings located on the Tonopah property and some tailings located in Manhattan, Nevada. The Company has not disturbed or processed any of this material and does not intend to do so in the foreseeable future.

Impairment of Long-Lived Assets and Long-Lived Assets

The Company will periodically evaluate the carrying value of long-lived assets to be held and used, including but not limited to, mineral properties, mine tailings, mine dumps, capital assets and intangible assets, when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

Use of Estimates

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

6

Revenue Recognition and Deferred Revenue

As of September 30, 2020, the Company has not recognized any revenues from custom permitted processing toll milling. If we achieve revenue generation, the Company plans to report such revenues consistent with ASC Topic 606.

Income Taxes

Income taxes are accounted for based upon an asset and liability approach. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

Accounting guidance requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company believes its income tax filing positions and deductions will be sustained upon examination and accordingly, no reserves, or related accruals for interest and penalties have been recorded at September 30, 2020 and December 31, 2019. The Company recognizes interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense.

On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform Law”). The Tax Reform Law, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that are expected to impact the Company. The Tax Reform Law reduces the federal corporate tax rate from 34% to 21% effective January 1, 2018. Management believes the provisions of the Tax Reform Law will have a favorable impact on the Company’s consolidated financial statements should it attain a level of profitable operations.

Recent Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the standard during 2018, but as the Company does not have any significant leases, it does not expect it to have a material impact on its financial position or results of operations.

During the nine months ended September 30, 2020 and through the date of this filing, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

7

NOTE 3 – MINING AND MINERAL RIGHTS

The Company is preparing the Tonopah property site for the construction of a permitted custom processing toll milling facility including grading the land, installing fencing and working with contractors for our planned 21,875 square foot building and servicing and drilling various wells for our future operations.

The Company has continued to assess the realizability of its mining and mineral rights. Based on an assessment the Company conducted in January 2020. The Company decided its land, mineral rights and water rights are inseparable and depend upon each other in value creation. Accordingly, during the year ended December 31, 2018, the Company combined the carrying value of the assets to present more clearly their intended use together.

NOTE 4 – CONVERTIBLE NOTES PAYABLE

On March 16, 2020 the Company executed a Line of Credit (“LOC”) with Granite Peak Resources, LLC (“GPR”), a related party, evidenced by a convertible promissory note. The LOC is for up to $2,500,000, provides that all requests for funds may be approved or disapproved in GPR’s sole discretion, matures over three years, bears interest at 10% per annum, is convertible into shares of the Company’s common stock at a per share price of $0.04, and will be secured by the real and personal property GPR already has under lien or in pledge. See Note 7. The LOC is for funding operating expenses critical to the Company’s redirection including the resolution, on terms and conditions satisfactory to GPR, of the Company’s claims. However, GPR and the Company make no representation that the Company’s claims can be satisfactorily resolved voluntarily. Accordingly, GPR and the Company reserve all rights to employ every means legally available to seek the Company’s recapitalization.

At December 31, 2019, GPR had advanced $13,575 in contemplation of the LOC. During the nine months ended September 30, 2020 GPR advanced an additional $190,665 which it used to pay directly certain operating expenses on the Company’s behalf. Both advances, amounting to $204,230 in total, have been included in the convertible promissory note issued by the Company in connection with the LOC and classified accordingly at September 30, 2020.

Including the foregoing advances under the LOC, there was $304,240 of principal and $114,069  of accrued interest outstanding on convertible debentures at September 30, 2020. With exception of the $204,240 of principal advanced under the LOI to date, the pre-existing convertible note is in default.

NOTE 5 – SHAREHOLDERS’ DEFICIT

Common Stock

Common Stock issued on conversion of notes payable

On December 21, 2019 a promissory note payable totaling $192,080 was exchanged as consideration for exercising a stock option for 4,500,000 restricted common shares at a Board approved reduced exercise price of $0.0426, which was the market price on exercise.

Option Grants 

Option Grants

The Company recorded no compensation expense for the nine months ended September 30, 2020 and 2019. As of September 30, 2020, there was $0 in unrecognized compensation expense.

During the nine months ended September 30, 2020, the Company did not grant any options, 826,223 options expired, and none were cancelled. In addition, 2,750,000 options were exercised at the reduced price of $0.023 per share based upon market conditions. Of the options exercised 2,250,000 were modified as to exercise date resulting in a loss on modification of $63,000.

8

The following tables summarize information about stock options outstanding and exercisable:  

	Options Outstanding and Exercisable at September 30, 2020
Range of Exercise Prices	Number  Exercisable		Weighted  Remaining  Contractual  Life	Weighted  Average  Exercise  Price		Aggregate  Intrinsic Value (1)
$0.40 to $0.60		250,000	.04 years	$	0.60	$	—
$0.61 to $1.00		9,000,000	.04 years	$	0.66	$	—
$1.01 to $1.50		13,000,000	.06 years	$	1.25	$	—
$1.51 to $2.25		2,250,000	.51 years	$	1.93	$	—
$0.40 to $2.25		24,500,000	.09 years	$	1.07	$	—

(1) The aggregate intrinsic value in the table represents the difference between the closing stock price on September 30, 2020 and December 31, 2019, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on September 30, 2020 and December 31, 2019.

Common Stock Purchase Warrants

For warrants granted to non-employees in exchange for services, the Company recorded the fair value of the equity instrument using the Black-Scholes pricing model unless the value of the services is more reliably measurable.

The Company did not grant any warrants during the nine months ended September 30, 2020, 1,882,290 warrants were exercised, 2,732,720 expired, and none were cancelled. The 1,882,290 warrants were exercised at the reduced price of $0.023 per share and modified as to exercise date resulting in a loss on modification of $52,722. At September 30, 2020 there were 307,500 more warrants outstanding

 The aggregate intrinsic value of the outstanding and exercisable warrants at September 30, 2020, was $0. The intrinsic value is the difference between the closing stock price on September 30, 2020 and the exercise price, multiplied by the number of in-the-money warrants had all warrant holders exercised their warrants on September 30, 2020.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Stephen E. Flechner v. Standard Metals Processing, Inc.

On April 29, 2014, Stephen E. Flechner filed suit in the United States District Court for the District of Colorado against Standard Metals Processing, Inc. alleging that Standard Metals had refused to allow him to exercise stock options granted to him pursuant to a Stock Option Agreement, dated April 1, 2010, and a second Stock Option Agreement, dated January 21, 2011. On June 12, 2014, Standard Metals filed an Answer and a Motion to Dismiss or, Alternatively, to Stay or Transfer the action to the United States District Court for the Northern District of Alabama, Middle Division. On January 16, 2015, Standard Metals filed a Motion for Summary Judgment. On January 23, 2015, the Court issued an Order granting in part and denying in part Standard Metals’ Motion to Dismiss or, Alternatively, to Stay or Transfer the action to the United States District Court for the Northern District of Alabama, Middle Division. The Court in its Order stayed further proceedings in Colorado pending the issuance of orders by the Alabama court. Thereafter, on January 26, 2015, the Court issued an Order vacating the February 20, 2015 Trial Preparation Conference and the March 9, 2015 Bench Trial. On March 23, 2015, the Court issued an Order denying Standard Metals’ Motion for Summary Judgment. On March 30, 2015, Flechner filed a Motion to Lift the Stay. On March 31, 2015, the Court issued an Order granting Flechner’s Motion to Lift the Stay. On April 6, 2015, the Court issued an Order scheduling a Bench Trial for July 29, 2015. On April 9, 2015, Flechner filed a Motion for Reconsideration of the Court’s March 23, 2015 Order Denying Flechner’s Motion to Enforce the Confidential Settlement Agreement to Settle Certain Issues. On May 1, 2015, the Court issued an Order Granting Flechner’s Motion to Enforce the Confidential Settlement Agreement to Settle Certain Issues. On August 12, 2015 the United Stated District Court for the District of Colorado issued a judgment in favor of Stephen E. Flechner for $2,157,000. An amended final judgment was ordered in adjudication of the Complaint by the U.S. District Court for the District of Colorado (the “Court”) on August 28, 2015 in favor of Flechner in the amount of $2,157,000, plus interest through the date of judgment of $235,246, plus interest of $472.76/day from August 28, 2015 until paid in full. The Company, in good faith anticipation of a settlement did not appeal the judgment and therefore, the Company’s notice of appeal was dismissed on November 17, 2015. This judgment is now non-appealable. The Company has recognized the daily interest due from the date of the August 28, 2015 judgment through September 30, 2020, totaling $921,882, resulting in a total amount of $3,314,128 being included in the Accrual for settlement of lawsuits relating to this matter in the accompanying September 30, 2020 condensed consolidated balance sheet.

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NOTE 7 – RELATED PARTY TRANSACTIONS

During March 2019, the Company was informed that a change of control of the Company had occurred. Granite Peak Resources, LLC (“GPR”) through its members (including Pure Path Capital Management LLC) acquired 69,464,434 shares of common stock (including 4,500,000 warrants to purchase common stock). The members transferred their shares of common stock of the Company in exchange for a pro-rata ownership interest in GPR. GPR also acquired the senior secured creditor position previously held by Pure Path Capital Group LLC, which includes a $2,500,000 First Deed of Trust on the Tonopah property and an outstanding promissory note with a principal balance of $2,229,187 and accrued interest of $1,283,644 as of September 30, 2020. The members of Granite Peak Resources LLC are listed in the Schedule 13D filed by GPR on March 29, 2019. GPR has not communicated to the Company any plans to change any of the current officers or directors or governing documents and has expressed the purpose of its acquisition is to assist the Company execute on its business plan and resolve its current obligations and other claims. Neither GPR nor the Company, however, can give any assurances that such creditors or claimants will be amicably resolved. As of the date of this filing, GPR is the beneficial owner of 56.4% of the Company’s common stock and the Company’s largest secured creditor. The background regarding Pure Path’s Senior Secured Note is described below.

During the Company’s acquisition of the Shea assets in 2011, Pure Path purchased the Loan Modification Agreement and the NJB Forbearance Agreement directly from NJB Mining, Inc. In connection with the assignment of a forbearance agreement the Company and Pure Path executed an Agreement in Principle setting forth terms of the forbearance agreement which were subsequently further revised pursuant to Settlement and Release Agreement executed October 10, 2013 with the Company (collectively the “Pure Path Agreements”).The Pure Path Agreements provided for Pure Path’s forbearance of collection remedies and legal proceedings against the Company including foreclosure on the Deed of Trust, and, in connection with the settlement and release of various debts of approximately $1,500,000 and the consulting fees owed by the Company, the Company issued 27,000,000 restricted shares and a Promissory Note (the “Pure Path Note”) for an amount of up to $2,500,000 with a beginning principal balance of $1,933,345 bearing interest of 8% per year for the current balance of the amounts owed under the Pure Path Agreements. The forbearance period has long since expired and the Pure Path Note has retained all of its original remedies under its First Deed of Trust. In addition, pursuant to a Forbearance Agreement with GPR dated December 20, 2019, the Company pledged of 100% of its stock in Tonopah Milling and Metals Group, Inc. and that of its subsidiaries TCP and TR, in exchange for GPR’s agreement to forbear foreclosure proceedings for six months further securing GPR’s combined Pure Path Note and LOC positions. The outstanding principal balance on the Pure Path Note was $2,229,187 as of both September 30, 2020 and December 31, 2019, with related accrued interest of $1,283,644 and $1,143,474, respectively. This Senior Secured Note is in default. GPR’s LOC position is described in Note 4.

On February 11, 2015, the Company issued an unsecured promissory note (the “Note”) to Tina Gregerson Family Properties, LLC, an entity controlled by a former director of the Company. The Note for up to $750,000 was provided in tranches. Maturity of each tranche is one year from the date of receipt. Interest accrues at 8% per annum on each tranche. Under the terms of the Note, the Company received $477,500. At September 30, 2020 and December 31, 2019, there is $210,761 and $182,084 interest accrued. This Note is in default.

On April 17, 2020, the Company and Sustainable Metal Solutions, LLC (“SMS”), an affiliate of GPR, agreed to form a joint venture styled Esmeralda Renewal Energy Zone (“EREZ”). The Company has agreed to contribute the solar energy rights attributable to its 1,083 acres to EREZ in exchange for SMS’s agreement to develop, manage and underwrite the EREZ venture. 

NOTE 8 – EARNINGS (LOSS) PER SHARE

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the periods presented. Diluted net loss per common share is determined using the weighted average number of common shares outstanding during the periods presented, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of options, warrants and conversion of convertible debt. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

At September 30, 2020 the weighted average shares from stock options of 24,500,000, warrants of 250,000, and Convertible Promissory note shares of 5,306,000 , and at December 31, 2019 the weighted average shares from stock options of 32,576,223 warrants of 4,865,640 and Convertible Promissory note shares of 650,869 were excluded from the diluted weighted average common share calculation due to the antidilutive effect such shares would have on net loss per common share.  

 NOTE 9 – SUBSEQUENT EVENTS

On October 15, 2020, options to purchase 21,750,000 common shares expired reducing the 24,500,000 options outstanding at September 30, 2020 to 2,750,000.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management discussion and analysis of financial condition and results of operations should be read in connection with the accompanying unaudited condensed financial statements and related notes thereto included elsewhere in this report and the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on April 2, 2020.

Cautionary Notice Regarding Forward Looking Statements

Readers are cautioned that the following discussion contains certain forward-looking statements and should be read in conjunction with the “Special Note Regarding Forward-Looking Statements” appearing at the beginning of this Quarterly Report.

The information contained in this Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

As used in this Quarterly Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our” refer to Standard Metals Processing, Inc. and our wholly-owned subsidiary, Tonopah Milling and Metals Group, Inc. (“TMMG”), and TMMG’s wholly-owned subsidiaries Tonopah Custom Processing, Inc. (“TCP”) and Tonopah Resources, Inc. (“TR”). Unless otherwise specified, all dollar amounts are expressed in United States dollars.  

Corporate History

We were incorporated in the State of Colorado on July 10, 1985 and re-domiciled in Nevada in March 2013. In 2011, we closed a series of transactions, whereby we acquired certain assets of Shea Mining & Milling, LLC, which assets include land, buildings, a dormant milling facility, abandoned milling equipment, water permits, mine tailings, mine dumps and the assignment of a note payable, a lease and a contract agreement with permits. We completed the Shea Exchange Agreement in order to offer toll milling services of precious minerals. Toll milling is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as gold, silver, and platinum group metals. Custom milling and refining can include many different processes to extract precious metals from carbon or concentrates. These toll-processing services also distill, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies which lack the expertise, capacity, or regulatory permits for in-house production.

Overview of the Company

We have an office in Gadsden, Alabama and, through a subsidiary, a property in Tonopah, Nevada. Our business plan is to purchase equipment and build a facility on the Tonopah property to serve as a permitted custom processing toll milling facility which includes an analytical lab, pyrometallurgical plant, and hydrometallurgical recovery plant. We are required to obtain several permits before we can begin construction of a small-scale mineral processing facility and the required additional buildings to conduct permitted processing toll milling activities and commence operations.

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Water Pollution Control Permit with Nevada Department of Environmental Protection

Through the Company’s wholly owned subsidiaries, a Water Pollution Control Permit (“WPCP”) Application was filed with the Nevada Department of Environmental Protection (“NDEP”) Bureau of Mines and Mining Reclamation (“BMMR”) for the approval of the permits necessary for a small-scale mineral processing facility planned for the Tonopah property. The plant will perform laboratory testing, pilot testing, and custom processing of precious metal ores and concentrates from mining industry clients. Processing of ore materials will employ standard mineral processing techniques including gravity concentration, froth flotation and chemical leaching and carbon stripping.

The WPCP must be approved prior to commencing the planned construction of our processing plant in Tonopah, Nevada.  

In connection with our WPCP application, NDEP suggested that we take the following actions: (i) retain a Nevada Certified Environmental Manager (“CEM”), (ii) perform Meteoric Profile II water testing on ground water directly below the mill as well as surrounding wells located off site, and (iii) determine baseline values of water using the Meteoric Profile II results. NDEP regulations require that the Company delay any new construction planned for “metal extraction” until after the permits are in place.

Advanced Surveying & Professional Services, a Professional Land Surveyor (“PLS”), completed surveys and testing of the Tonopah property required for the application of our required permits. After completion of the survey, it was determined the property is 1,186 acres. The scope of work the PLS completed includes: (i) setting a total of 19 permanent monuments at angle points along lines, (ii) setting eight permanent monuments locating US Hwy 95, (iii) recording a professional map indicating longitude and latitude for all corners, and (iv) providing a digital map accessible in Auto Cad software.

Site Preparation

We have completed the initial grading of specific designated areas on the 40 undisturbed acres of land including clearing all vegetation, removing of all scrap metal, and the excavation of the building pad for preparation of the our planned new 21,875 square foot processing plant and have completed the removal of all the extra and unnecessary materials and old equipment that has accumulated on the land. We have also refurbished a trailer that will act as our construction office.

Business Plan

The Company is reexamining its next steps for developing a processing facility.  In an effort to move the Company’s business plan forward, the Company may evaluate opportunities to acquire, license, or joint venture with other parties involved in toll milling, processing, or mining related activities, which may include Granite Peak Resources, LLC and its affiliated entities including, but not limited to, Sustainable Metal Solutions LLC, NovaMetallix, Inc, and Black Bear Natural Resources, LTD.

On March 27, 2020 GPR engaged NovaMetallix, Inc. (“NMX”), a member of the Sustainable Metal Solutions LLC, and a GPR affiliate, to conduct a study of the quantity and quality of the Company’s historic mine tailings which are subject to GPR’s First Deed of Trust, and the economic feasibility of processing them to reclaim their residual content of gold, silver, and other valuable metals.  NMX, a firm comprised of world class mining, geological and metallurgical engineering professionals, is the leading force in the rapidly developing field of sustainable metals.  NMX has agreed to conduct the study of the Company’s tailings in exchange for GPR’s agreement to underwrite its cost and expense, and the exclusive right to process the tailings should their economic assessment prove positive. The terms of such processing to be mutually agreed upon between GPR, NMX and the Company in the future based on the results of the assessment. It was previously erroneously disclosed the Company had engaged NMX.

On April 17, 2020, the Company and Sustainable Metal Solutions, LLC (“SMS”), an affiliate of GPR, agreed to form a joint venture styled Esmeralda Renewal Energy Zone, LLC (“EREZ”). The Company has agreed to contribute the solar energy rights attributable to its 1,083 acres to EREZ in exchange for SMS’s agreement to develop, manage and underwrite the EREZ venture.

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Products and Services

We plan to establish ourselves as a custom processing and permitted toll milling service provider. Our business plan is to build a facility on our Tonopah property, which includes an analytical lab, pyrometallurgical, and hydrometallurgical recovery plant.

The Company’s intention is to become a full service permitted custom toll milling and processing company that facilitates the extraction of precious and strategic minerals from mined material. The Company is in the process of obtaining the permits needed for construction and operation of our permitted custom processing toll milling facility with state of the art equipment capable of processing gold, silver and platinum metal groups. Many junior miners do not have the capital or the ability to permit a processing facility, yet they have a large supply of mined material that requires milling be performed. It is often cost prohibitive or impractical for these mine operators to send their materials to processing mills owned by the large mining companies, or to other customers with badly needed milling and processing services.

While Nevada has a historic role as a mining center with good proximate geology and ample mined product, very little custom processing toll milling capacity remains in the state. During the last several decades, other processing facilities have been shuttered due to high costs of regulations and the vertical integration of milling within large mining companies leaving junior miners with few options for local milling services. As a result, we are in a unique position among processing facilities because we are capable of true permitted custom processing. We have the only ball mill located within a custom toll milling facility within 300 miles allowing us to serve miners in the western United States, Canada, Mexico, and Central America.

Many junior miners are undercapitalized, have limited access to capital markets and have a large supply of mined material that requires milling be performed. Many large mining companies reserve their milling capacity for their inventory, which does not make providing third party services worthwhile. This provides the Company with an opportunity to provide these potential customers with badly needed milling and processing services. Some of our mining customers will be able to take their tailings (the material left over after the desired minerals have been extracted) from the material they deposited with the Company and put it back in the exact same mines those particular tailings came from. This eliminates the need for the Company to dispose of those tailings.

Results of Operation

Comparison of Three Months and Nine Months Ended September 30, 2020 to Three Months and Nine Months Ended September 30, 2019

Revenues

We had no revenues from any operations for the three months and nine months ended September 30, 2020 and 2019. Furthermore, we do not anticipate any significant future revenue until we have sufficiently funded construction and begin operations.

General and Administrative Expenses

General and administrative expenses were $106,058 for the three months ended September 30, 2020, as compared to $862 for the same period in 2019. For the three months ended September 30, 2019, general and administrative expenses declined materially due to reduced office costs consistent with lack of funding. In the three months ended September 30, 2020, the $106,058 total related principally to resumption of normal accounting and legal costs plus the additional cost of the combined loss on modification of options and warrants. We anticipate that that operating expenses will increase during the remainder of 2020 as we continue to access more funding support.  

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Other Income and Expenses

We receive monthly lease payments of from American Tower Corporation for a cellular tower located on our Tonopah land. As such Other Income for the three months ended September 30, 2020 was $2,099 compared to $1,825 for the respective period in 2019.

Periodically the Company reviews the outstanding claims that have not been satisfactorily resolved. In some instances, these claims remain outstanding beyond their statutory limit on collection in which case they are written off. The gain on derecognition of claims during the nine months ended September 30, 2020 amounted to $115,424 resulting in a $579,221 net loss for the period.

Interest expense for the nine months ended September 30, 2020 was $362,357, compared to $475,825 for the same period in 2019. During the nine months ended September 30, 2020 the rate of interest being accrued on certain delinquent vendor claims was reexamined and reduced to a rate more likely to apply to the claims upon resolution. This interest accrual reduction of approximately 25% resulted in a cumulative savings of $143,312 in the nine months ended September 30, 2020.

Liquidity and Capital Resources

Liquidity is a measure of an entity’s ability to secure enough cash to meet its contractual and operating needs as they arise. We have funded our operations and satisfied our capital requirements through the issuance of convertible debt during the nine months ended September 30, 2020 and 2019. We do not anticipate generating sufficient net positive cash flows from our operations to fund the next twelve months. We had a working capital deficit of $10,260,900 at September 30, 2020. Cash was $2,316 at September 30, 2020, as compared to cash of $1,945 at December 31, 2019.

Our cash reserves will not be sufficient to meet our operational needs and thus, we need to raise additional capital to pay for our operational expenses and provide for capital expenditures. Our basic operational expenses are currently estimated at approximately $20,000 per month. Above the basic operational expenses, we estimate that we need approximately $10,000,000 to begin limited toll milling operations. If we are not able to raise additional working capital, we may have to cease operations altogether.

Recent Financings

During the nine months ended September 30, 2020, a related party advanced $190,665 which it used to pay directly, on the Company’s behalf, to reduce certain accounts payable and assist with operating expenses. The advance was made by Granite Peak Resources, LLC (“GPR”), a related party which intends to convert the advance into a convertible promissory note. Additionally, $106,558 was provided by the exercise of options and warrants in May and August, 2020 at a reduced price of $0.023 per share providing $106,558 for operations. As the options and warrants exercised in August 2020 were modified as to exercise date, their modification resulted in a combined loss of $115,722 .

 On March 16, 2020 the Company executed a Line of Credit (“LOC”) with GPR, a related party, evidenced by a convertible promissory note. The LOC is for up to $2,500,000, matures over three years, bears interest at 10% per annum, is convertible into shares of the Company’s common stock at a per share price of $0.04, and will be secured by the real and personal property GPR already has under lien and pledge. The LOC is for funding operating expenses critical to the Company’s redirection and all requests for funds may be approved or disapproved in GPR’s sole discretion.

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Going Concern

The condensed consolidated financial statements contained in this quarterly report on Form 10-Q have been prepared assuming that the Company will continue as a going concern. The Company has accumulated losses from inception through the period ended September 30, 2020 of $104,441,348 and a working capital deficit of $10,260,900 as well as negative cash flows from operating activities. Presently, the Company does not have sufficient cash resources to meet its debt obligations in the twelve months following the date of this filing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is in the process of evaluating various financing alternatives to finance its capital requirements, as well as for general and administrative expenses. These alternatives include raising funds through public or private equity markets and either through institutional or retail investors. Although there is no assurance that the Company will be successful with its fund-raising initiatives, management believes that the Company will be able to secure the necessary financing as a result of ongoing financing discussions with third party investors and existing shareholders.

The consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to obtain additional financing as may be required and ultimately to attain profitability. If the Company raises additional funds through the issuance of equity, the percentage ownership of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to the rights, preferences and privileges of the Company’s common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict its future plans for developing its business and achieving commercial revenues. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

Working Capital Deficiency

	September 30, 2020			December 31, 2019
Current assets	$	37,764		$	1,945
Current liabilities		10,298,664			9,905,904
Working capital deficiency	$	(10,260,900	)	$	(9,903,959	)

The balance and components of current assets are fairly consistent between periods. The increase in current liabilities is primarily due to accrual of interest on settlement of lawsuits and notes due related parties.

Cash Flows 

	Nine Months Ended September 30,
	2020			2019
Net cash provided by (used in) operating activities	$	(106,187	)	$	1,644
Net cash provided by financing activities		106,558			---
Increase (Decrease) in cash	$	371		$	1,644

Operating Activities

Net cash (used in) provided by operating activities was $(106,187) and $1,644, during the nine months ended September 30, 2020 and 2019, respectively. During the nine months ended September 30, 2019 cash was provided by operating activities primarily due to the significant reductions in legal and accounting services and normal office expenses as a result of lack of funding.

Financing Activities

For the nine months ended September 30, 2020, net cash provided by financing activities was $106,558, primarily due to the exercise of stock options and warrants. For the nine months ended September 30, 2019, net cash provided by financing activities was $-0-.

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Off-Balance Sheet Arrangements

During the nine months ended September 30, 2020, we did not engage in any off-balance sheet arrangements as defined in item 303(a)(4) of the SEC’s Regulation S-K.

Effects of Inflation

We do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in the notes to our financial statements included herein for the nine months ended September 30, 2020 and in the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.

Impairment of Long-lived Assets

We review our property and mining and mineral rights subject to amortization and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset class may not be recoverable. Indicators of potential impairment include: an adverse change in legal factors or in the business climate that could affect the value of the asset; an adverse change in the extent or manner in which the asset is used or is expected to be used, or in its physical condition; and current or forecasted operating or cash flow losses that demonstrate continuing losses associated with the use of the asset. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted cash flows. During the three months ended September 30, 2019, the company evaluated that the carrying value of our mining and mineral assets, while not impaired, should be combined as they are inseparable and depend upon each other in value creation. See Note 3. There were no impairment charges in the nine months ended September 30, 2020.

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for annual reporting periods for public business entities beginning after December 15, 2017, including interim periods within that reporting period. The new standard permits the use of either the retrospective or cumulative effect transition method. The Company adopted ASU 2014-09 January 1, 2018, and as there have been no revenues to date, the adoption did not have a material impact on the Company’s financial position or results of operations, and no transition method was necessary upon adoption.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company adopted this standard during 2018, but as the Company does not have any significant leases, it does not expect it to have a material impact on its financial position or results of operations.

During the nine months ended September 30, 2020 and through the date of this filing, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (who is our Principal Executive Officer) and our Chief Financial Officer and Treasurer (who is our Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of June 30, 2020 pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2020 in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. This conclusion is based on findings that constituted material weaknesses. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis.

In performing the above-referenced assessment, management identified the following deficiencies in the design or operation of our internal controls and procedures, which management considers to be material weaknesses:

(i) Lack of Formal Policies and Procedures. We utilize a third party independent contractor for the preparation of our financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions.

(ii) Audit Committee and Financial Expert. We do not have a formal audit committee with a financial expert, and thus we lack the board oversight role within the financial reporting process.

(iii) Insufficient Resources. We have insufficient quantity of dedicated resources and experienced personnel involved in reviewing and designing internal controls. As a result, a material misstatement of the interim and annual financial statements could occur and not be prevented or detected on a timely basis.

(iv) Entity Level Risk Assessment. We did not perform an entity level risk assessment to evaluate the implication of relevant risks on financial reporting, including the impact of potential fraud related risks and the risks related to non-routine transactions, if any, on internal control over financial reporting. Lack of an entity-level risk assessment constituted an internal control design deficiency which resulted in more than a remote likelihood that a material error would not have been prevented or detected and constituted a material weakness.

Our management feels the weaknesses identified above have not had any material effect on our financial results. However, we are currently reviewing our disclosure controls and procedures related to these material weaknesses, and expect to implement changes in the near term, as resources permit, in order to address these material weaknesses. Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds permit.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the nine months ended September 30, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Stephen E. Flechner v. Standard Metals Processing, Inc. 

On April 29, 2014, Stephen E. Flechner filed suit in the United States District Court for the District of Colorado against Standard Metals Processing, Inc. alleging that Standard Metals had refused to allow him to exercise stock options granted to him pursuant to a Stock Option Agreement, dated April 1, 2010, and a second Stock Option Agreement, dated January 21, 2011. On June 12, 2014, Standard Metals filed an Answer and a Motion to Dismiss or, Alternatively, to Stay or Transfer the action to the United States District Court for the Northern District of Alabama, Middle Division. On January 16, 2015, Standard Metals filed a Motion for Summary Judgment. On January 23, 2015, the Court issued an Order granting in part and denying in part Standard Metals’ Motion to Dismiss or, Alternatively, to Stay or Transfer the action to the United States District Court for the Northern District of Alabama, Middle Division. The Court in its Order stayed further proceedings in Colorado pending the issuance of orders by the Alabama court. Thereafter, on January 26, 2015, the Court issued an Order vacating the February 20, 2015 Trial Preparation Conference and the March 9, 2015 Bench Trial. On March 23, 2015, the Court issued an Order denying Standard Metals’ Motion for Summary Judgment. On March 30, 2015, Flechner filed a Motion to Lift the Stay. On March 31, 2015, the Court issued an Order granting Flechner’s Motion to Lift the Stay. On April 6, 2015, the Court issued an Order scheduling a Bench Trial for July 29, 2015. On April 9, 2015, Flechner filed a Motion for Reconsideration of the Court’s March 23, 2015 Order Denying Flechner’s Motion to Enforce the Confidential Settlement Agreement to Settle Certain Issues. On May 1, 2015, the Court issued an Order Granting Flechner’s Motion to Enforce the Confidential Settlement Agreement to Settle Certain Issues. Standard Metals Processing, Inc. intends to continue to vigorously defend against claims by Steven E. Flechner. On August 12, 2015 the United Stated District Court for the District of Colorado issued a judgment in favor of Stephen E. Flechner for $2,157,000. An amended final judgment was ordered in adjudication of the Complaint by the U.S. District Court for the District of Colorado (the “Court”) on August 28, 2015 in favor of Flechner in the amount of $2,157,000, plus interest through the date of judgment of $235,246, plus interest of $472.76/day from August 28, 2015 until paid in full. The Company, in good faith anticipation of a settlement did not appeal the judgment and therefore, the Company’s notice of appeal was dismissed on November 17, 2015. This judgment is now non-appealable. The Company has recognized the daily interest due from the date of the August 28, 2015 judgement through September 30, 2020 totaling $921,882, resulting in a total amount of $3,314,128 being included in the Accrual for settlement of lawsuits relating to this matter in the accompanying September 30, 2020 condensed consolidated balance sheet.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to provide the information required by this Item. We note, however, that an investment in our common stock involves a number of very significant risks. Investors should carefully consider the risk factors included in the “Risk Factors” section of our Annual Report on Form 10-K for our fiscal year ended December 31, 2019 as filed with SEC on April 2, 2020, in addition to other information contained in such Annual Report and in this Quarterly Report on Form 10-Q, in evaluating the Company and our business before purchasing shares of our common stock. The Company’s business, operating results and financial condition could be adversely affected due to any of those risks.

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

During the nine months ended September 30, 2020 options to purchase 2,750,000 shares and warrants to purchase 1,882,920 were exercised at a reduced price of $0.023 per share consistent with the market price for the Company’s common stock. This exercise generated $106,558 to be used in operations.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1*	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer
31.2*	Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer
(32)	Section 1350 Certifications
32.1*	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer
32.2*	Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Accounting Officer
(101)*	Interactive Data Files
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

* Filed herewith.

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

STANDARD METALS PROCESSING, INC.
By:	/s/ J. Bryan Read
	J. Bryan Read
	Chief Executive Officer
	(Principal Executive Officer)
	Date: October 23, 2020
By:	/s/ Sharon Ullman
	Sharon Ullman
	Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)
	Date: October 23, 2020

19

EX-31.1

Exhibit 31.1

STANDARD METALS PROCESSING, INC.

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, J. Bryan Read, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Standard Metals Processing, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ J. Bryan Read
	J. Bryan Read, Chief Executive Officer
	(Principal Executive Officer)
	Date: October 23, 2020

EX-31.2

Exhibit 31.2

STANDARD METALS PROCESSING, INC.

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sharon Ullman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Standard Metals Processing, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
	(a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Sharon Ullman
	Sharon Ullman, Chief Financial Officer
	(Principal Accounting Officer)
	Date: October 23, 2020

EX-32.1

Exhibit 32.1

STANDARD METALS PROCESSING, INC.

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Standard Metals Processing, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

By:	/s/ J. Bryan Read
	J. Bryan Read
	Chief Executive Officer
	(Principal Executive Officer)
	Date: October 23, 2020

EX-32.2

Exhibit 32.2

STANDARD METALS PROCESSING, INC.

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q of Standard Metals Processing, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to her knowledge:

1.          The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

By:	/s/ Sharon Ullman
	Sharon Ullman
	Principal Accounting Officer
	Date: October 23, 2020

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Oct. 23, 2020
Document Information Line Items
Entity Registrant Name	Standard Metals Processing, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		133,630,343
Amendment Flag	false
Entity Central Index Key	0000773717
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity File Number	000-14319
Entity Incorporation, State or Country Code	NV
Entity Interactive Data Current	No

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash	$ 2,316	$ 1,945
Prepaid expenses	35,448	0
Total current assets	37,764	1,945
Mining and mineral rights	3,883,524	3,883,524
Total Assets	3,921,288	3,885,469
Liabilities and Shareholders’ Deficit
Senior secured promissory note payable, related party	2,229,187	2,229,187
Promissory notes payable - related party	477,500	477,500
Convertible notes payable, including $204,240 from related parties	304,240	113,575
Accrual for settlement of lawsuits	3,314,128	3,164,309
Accounts payable	1,660,478	1,820,741
Accrued interest - Related party $1,501,249 and $1,325,558 at September 30, 2020 and December 31, 2019	2,313,131	2,100,592
Total current liabilities	10,298,664	9,905,904
Preferred stock, 50,000,000 shares authorized:
Series A, $.001 par value, 10,000,000 and 10,000,000 shares issued and outstanding at September 30, 2020 and December 31, 2019	10,000,000	10,000,000
Commitments and Contingencies (Note 6)
Shareholders’ deficit:
Common stock, $0.001 par value, 500,000,000 shares authorized: 138,630,343 and 133,630,343 issued and 129,497,423 and 128,997,423 outstanding at September 30, 2020 and December 31, 2019, respectively	133,630	128,997
Additional paid-in capital	87,930,342	87,712,695
Accumulated deficit	(104,441,348)	(103,862,127)
Total shareholders’ deficit	(16,377,376)	(16,020,435)
Total Liabilities and Shareholders’ deficit	$ 3,921,288	$ 3,885,469

XML

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Convertible notes payable from related party (in Dollars)	$ 204,240	$ 204,240
Accrued interest - related party (in Dollars)	$ 1,501,249	$ 1,325,558
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	138,630,343	138,630,343
Common stock, shares outstanding	129,497,423	128,997,423
Preferred Stock
Preferred stock authorized, shares	50,000,000	50,000,000
Series A Preferred Stock
Preferred stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, issued	10,000,000	10,000,000
Preferred stock, outstanding	10,000,000	10,000,000

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Revenues
Operating expenses:
General and administrative	106,058	826	222,862	13,163
Total operating expenses	106,058	826	222,862	13,163
Loss from operations	(106,058)	(826)	(222,862)	(13,163)
Other income (expense):
Other income	2,099	1,825	6,296	6,083
Derecognition of debt			115,424
Loss on modification of options and warrants	(115,722)		(115,722)
Interest expense, including related party of $175,681	(157,493)	(153,340)	(362,357)	(475,825)
Total other income (expense)	(271,116)	(151,515)	(356,359)	(469,742)
Loss before income tax provision	(377,174)	(152,341)	(579,221)	(482,905)
Income tax provision
Net loss	$ (377,174)	$ (152,341)	$ (579,221)	$ (482,905)
Basic net loss per common share (in Dollars per share)	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Basic weighted average common shares outstanding (in Shares)	131,698,652	124,497,423	129,995,646	124,497,423

XML

Condensed Consolidated Statements of Operations (Unaudited) (Parentheticals) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Statement of Comprehensive Income [Abstract]
Interest expense, related party	$ 175,681

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Statement of Cash Flows [Abstract]
Net loss	$ (579,221)	$ (482,905)
Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:
Gain on derecognition of certain accounts payable and accrued expenses	(115,424)
Expenses paid directly by related party	190,665
Expenses paid directly by exercise of options and warrants	59,611
Loss on modification of options and warrants	115,722
Changes in operating assets and liabilities
Prepaid expenses
Accounts payable	(44,840)
Accrued interest	212,539	340,357
Accrual for settlement of lawsuits	149,819	144,192
Net cash provided by (used in) operating activities	(11,129)	1,644
Cash flows from financing activities:
Proceeds from exercise of stock options	11,500
Net cash provided by financing activities	11,500
Increase in Cash	371	1,644
Cash, beginning of period	1,945	1,001
Cash, end of period	2,316	2,645
Supplemental cash flow disclosures
Cash paid for interest cost
Income taxes paid
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Settlement of liabilities through direct payment by related party	190,665	109,055
Debt discount on through direct payment of convertible notes payable
Conversions of convertible debt and accrued interest into common stock
Expenses paid by exercise of options and warrants	95,058
Expenses prepaid by exercise of options and warrants	$ 35,448

XML

Condensed Consolidated Statement of Changes in Shareholders' Deficit - USD ($)	Common Stock	APIC	Accumulated Deficit	Total
Balance at Dec. 31, 2018	$ 124,497	$ 87,525,115	$ (103,184,962)	$ (15,535,350)
Balance (in Shares) at Dec. 31, 2018	124,497,423
Shares issued upon exercise of stock option	$ 4,500	187,580		192,080
Shares issued upon exercise of stock option (in Shares)	4,500,000
Net loss			(677,165)	(677,165)
Balance at Dec. 31, 2019	$ 128,997	87,712,695	(103,862,127)	(16,020,435)
Balance (in Shares) at Dec. 31, 2019	128,997,423
Shares issued upon exercise of stock options and warrants including $115,722 modification loss	$ 4,633	217,647		222,280
Shares issued upon exercise of stock options and warrants including $115,722 modification loss (in Shares)	4,632,920
Net loss			(579,221)	(579,221)
Balance at Sep. 30, 2020	$ 133,630	$ 87,930,342	$ (104,441,348)	$ (16,377,376)
Balance (in Shares) at Sep. 30, 2020	133,630,343

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Condensed Consolidated Statement of Changes in Shareholders' Deficit (Parentheticals) $ in Millions	9 Months Ended
	Sep. 30, 2020 USD ($)
Common Stock
Stock options and warrants modification loss	$ 115,722

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Nature of Business

9 Months Ended

Sep. 30, 2020

Nature Of Business [Abstract]

NATURE OF BUSINESS

NOTE 1 – NATURE OF BUSINESS

Standard Metals Processing, Inc. (“we,” “us,” “our,” “Standard Metals” or the “Company”) is an exploration stage company, incorporated in Nevada having offices in Gadsden, Alabama and through its subsidiary, a property in Tonopah, Nevada. The business plan is to purchase and install the equipment necessary to complete a facility on the Tonopah property to serve as a permitted custom processing toll milling facility (which includes an analytical lab, pyrometallurgical plant, and hydrometallurgical recovery plant).

The Company plans to perform permitted custom processing toll milling which is a process whereby mined material is crushed and ground into fine particles to ease the extraction of any precious minerals contained therein, such as minerals in the gold, silver and platinum metal groups. Custom milling and refining can include many different processes that are designed specifically for each ore load and to maximize the extraction of precious metals from carbon or concentrates. These toll-processing services also distill, dry, mix, or mill chemicals and bulk materials on a contractual basis and provide a chemical production outsourcing option for industrial companies, which lack the expertise, capacity, or regulatory permits for in-house production.

We are required to obtain several permits before we can begin construction of a small-scale mineral processing facility to conduct permitted processing toll milling activities and construction of the required additional buildings and well relocation necessary for us to commence operations.

Going Concern 

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the nine months ended September 30, 2020, the Company had a net loss of $579,221. At September 30, 2020, the Company had an accumulated deficit of $104,441,348 and a working capital deficit of $10,260,900. Additionally, all of the Company’s assets are under lien pursuant to the First Deed of Trust, UCC filings and the pledge of 100% of the common stock of the Company’s subsidiary Tonopah Milling and Metals Group, Inc. and that of its wholly owned subsidiaries Tonopah Custom Processing, Inc., (“TCP”) and Tonopah Resources, Inc. (“TR”). Held by GPR, a related party. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on their ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the nine months ended September 30, 2020, a related party advanced $190,665 on the Company’s behalf to pay certain operating expenses directly. As the related party intends to apply its advance toward a convertible note, it has been classified as such at September 30, 2020.

Management believes that private placements of equity capital and/or additional debt financing will be needed to fund our long-term operating requirements. The Company may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. We are continuing to pursue external financing alternatives to improve our working capital position. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Standard Metals Processing, Inc., and its wholly owned subsidiary Tonopah Milling and Metals Group, Inc. and its wholly owned subsidiaries Tonopah Custom Processing, Inc., (“TCP”) and Tonopah Resources, Inc. (“TR”) All significant intercompany transactions, accounts and balances have been eliminated in consolidation.  

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2019 filed April 2, 2020. In the opinion of management, all adjustments (consisting of normal recurring adjustments unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year as a whole.

Mineral Properties

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. No properties have produced operating revenues at this time. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under an option agreement, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When reserves are determined for a property and a bankable feasibility study is completed, subsequent exploration and development costs on the property would be capitalized. If a project were to be put into production, capitalized costs would be depleted on the unit of production basis.

Management reviews the net carrying value of each mineral property as changes may materialize with a property or at a minimum, on an annual basis. Where information and conditions suggest impairment, estimated future net cash flows from each property are calculated using estimated future prices, proven and probable reserves and value beyond proven and probable reserves, and operating, capital and reclamation costs on an undiscounted basis. If it is determined that the future cash flows are less than the carrying value, a write-down to the estimated fair value is made with a charge to loss for the period. Where estimates of future net cash flows are not available and where other conditions suggest impairment, management assesses if the carrying value can be recovered.

Management’s estimates of gold prices, recoverable reserves, probable outcomes, operating capital and reclamation costs are subject to risks and uncertainties that may affect the recoverability of mineral property costs. The Company does not own any mining claims. It owns tailings located on the Tonopah property and some tailings located in Manhattan, Nevada. The Company has not disturbed or processed any of this material and does not intend to do so in the foreseeable future.

Impairment of Long-Lived Assets and Long-Lived Assets

The Company will periodically evaluate the carrying value of long-lived assets to be held and used, including but not limited to, mineral properties, mine tailings, mine dumps, capital assets and intangible assets, when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

Use of Estimates

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition and Deferred Revenue

As of September 30, 2020, the Company has not recognized any revenues from custom permitted processing toll milling. If we achieve revenue generation, the Company plans to report such revenues consistent with ASC Topic 606.

Income Taxes

Income taxes are accounted for based upon an asset and liability approach. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

Accounting guidance requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company believes its income tax filing positions and deductions will be sustained upon examination and accordingly, no reserves, or related accruals for interest and penalties have been recorded at September 30, 2020 and December 31, 2019. The Company recognizes interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense.

On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform Law”). The Tax Reform Law, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that are expected to impact the Company. The Tax Reform Law reduces the federal corporate tax rate from 34% to 21% effective January 1, 2018. Management believes the provisions of the Tax Reform Law will have a favorable impact on the Company’s consolidated financial statements should it attain a level of profitable operations.

Recent Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the standard during 2018, but as the Company does not have any significant leases, it does not expect it to have a material impact on its financial position or results of operations.

During the nine months ended September 30, 2020 and through the date of this filing, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

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Mining and Mineral Rights

9 Months Ended

Sep. 30, 2020

Mineral Industries Disclosures [Abstract]

MINING AND MINERAL RIGHTS

NOTE 3 – MINING AND MINERAL RIGHTS

The Company is preparing the Tonopah property site for the construction of a permitted custom processing toll milling facility including grading the land, installing fencing and working with contractors for our planned 21,875 square foot building and servicing and drilling various wells for our future operations.

The Company has continued to assess the realizability of its mining and mineral rights. Based on an assessment the Company conducted in January 2020. The Company decided its land, mineral rights and water rights are inseparable and depend upon each other in value creation. Accordingly, during the year ended December 31, 2018, the Company combined the carrying value of the assets to present more clearly their intended use together.

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Convertible Notes Payable

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 4 – CONVERTIBLE NOTES PAYABLE

On March 16, 2020 the Company executed a Line of Credit (“LOC”) with Granite Peak Resources, LLC (“GPR”), a related party, evidenced by a convertible promissory note. The LOC is for up to $2,500,000, provides that all requests for funds may be approved or disapproved in GPR’s sole discretion, matures over three years, bears interest at 10% per annum, is convertible into shares of the Company’s common stock at a per share price of $0.04, and will be secured by the real and personal property GPR already has under lien or in pledge. See Note 7. The LOC is for funding operating expenses critical to the Company’s redirection including the resolution, on terms and conditions satisfactory to GPR, of the Company’s claims. However, GPR and the Company make no representation that the Company’s claims can be satisfactorily resolved voluntarily. Accordingly, GPR and the Company reserve all rights to employ every means legally available to seek the Company’s recapitalization.

At December 31, 2019, GPR had advanced $13,575 in contemplation of the LOC. During the nine months ended September 30, 2020 GPR advanced an additional $190,665 which it used to pay directly certain operating expenses on the Company’s behalf. Both advances, amounting to $204,230 in total, have been included in the convertible promissory note issued by the Company in connection with the LOC and classified accordingly at September 30, 2020.

Including the foregoing advances under the LOC, there was $304,240 of principal and $114,069  of accrued interest outstanding on convertible debentures at September 30, 2020. With exception of the $204,240 of principal advanced under the LOI to date, the pre-existing convertible note is in default.

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Shareholders' Deficit

9 Months Ended

Sep. 30, 2020

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' DEFICIT

NOTE 5 – SHAREHOLDERS’ DEFICIT

Common Stock

Common Stock issued on conversion of notes payable

On December 21, 2019 a promissory note payable totaling $192,080 was exchanged as consideration for exercising a stock option for 4,500,000 restricted common shares at a Board approved reduced exercise price of $0.0426, which was the market price on exercise.

Option Grants 

Option Grants

The Company recorded no compensation expense for the nine months ended September 30, 2020 and 2019. As of September 30, 2020, there was $0 in unrecognized compensation expense.

During the nine months ended September 30, 2020, the Company did not grant any options, 826,223 options expired, and none were cancelled. In addition, 2,750,000 options were exercised at the reduced price of $0.023 per share based upon market conditions. Of the options exercised 2,250,000 were modified as to exercise date resulting in a loss on modification of $63,000.

The following tables summarize information about stock options outstanding and exercisable:  

	Options Outstanding and Exercisable at September 30, 2020
Range of Exercise Prices	Number  Exercisable		Weighted  Remaining  Contractual  Life	Weighted  Average  Exercise  Price		Aggregate  Intrinsic Value (1)
$0.40 to $0.60		250,000	.04 years	$	0.60	$	—
$0.61 to $1.00		9,000,000	.04 years	$	0.66	$	—
$1.01 to $1.50		13,000,000	.06 years	$	1.25	$	—
$1.51 to $2.25		2,250,000	.51 years	$	1.93	$	—
$0.40 to $2.25		24,500,000	.09 years	$	1.07	$	—

(1) The aggregate intrinsic value in the table represents the difference between the closing stock price on September 30, 2020 and December 31, 2019, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on September 30, 2020 and December 31, 2019.

Common Stock Purchase Warrants

For warrants granted to non-employees in exchange for services, the Company recorded the fair value of the equity instrument using the Black-Scholes pricing model unless the value of the services is more reliably measurable.

The Company did not grant any warrants during the nine months ended September 30, 2020, 1,882,290 warrants were exercised, 2,732,720 expired, and none were cancelled. The 1,882,290 warrants were exercised at the reduced price of $0.023 per share and modified as to exercise date resulting in a loss on modification of $52,722. At September 30, 2020 there were 307,500 more warrants outstanding

 The aggregate intrinsic value of the outstanding and exercisable warrants at September 30, 2020, was $0. The intrinsic value is the difference between the closing stock price on September 30, 2020 and the exercise price, multiplied by the number of in-the-money warrants had all warrant holders exercised their warrants on September 30, 2020.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 6 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Stephen E. Flechner v. Standard Metals Processing, Inc.

On April 29, 2014, Stephen E. Flechner filed suit in the United States District Court for the District of Colorado against Standard Metals Processing, Inc. alleging that Standard Metals had refused to allow him to exercise stock options granted to him pursuant to a Stock Option Agreement, dated April 1, 2010, and a second Stock Option Agreement, dated January 21, 2011. On June 12, 2014, Standard Metals filed an Answer and a Motion to Dismiss or, Alternatively, to Stay or Transfer the action to the United States District Court for the Northern District of Alabama, Middle Division. On January 16, 2015, Standard Metals filed a Motion for Summary Judgment. On January 23, 2015, the Court issued an Order granting in part and denying in part Standard Metals’ Motion to Dismiss or, Alternatively, to Stay or Transfer the action to the United States District Court for the Northern District of Alabama, Middle Division. The Court in its Order stayed further proceedings in Colorado pending the issuance of orders by the Alabama court. Thereafter, on January 26, 2015, the Court issued an Order vacating the February 20, 2015 Trial Preparation Conference and the March 9, 2015 Bench Trial. On March 23, 2015, the Court issued an Order denying Standard Metals’ Motion for Summary Judgment. On March 30, 2015, Flechner filed a Motion to Lift the Stay. On March 31, 2015, the Court issued an Order granting Flechner’s Motion to Lift the Stay. On April 6, 2015, the Court issued an Order scheduling a Bench Trial for July 29, 2015. On April 9, 2015, Flechner filed a Motion for Reconsideration of the Court’s March 23, 2015 Order Denying Flechner’s Motion to Enforce the Confidential Settlement Agreement to Settle Certain Issues. On May 1, 2015, the Court issued an Order Granting Flechner’s Motion to Enforce the Confidential Settlement Agreement to Settle Certain Issues. On August 12, 2015 the United Stated District Court for the District of Colorado issued a judgment in favor of Stephen E. Flechner for $2,157,000. An amended final judgment was ordered in adjudication of the Complaint by the U.S. District Court for the District of Colorado (the “Court”) on August 28, 2015 in favor of Flechner in the amount of $2,157,000, plus interest through the date of judgment of $235,246, plus interest of $472.76/day from August 28, 2015 until paid in full. The Company, in good faith anticipation of a settlement did not appeal the judgment and therefore, the Company’s notice of appeal was dismissed on November 17, 2015. This judgment is now non-appealable. The Company has recognized the daily interest due from the date of the August 28, 2015 judgment through September 30, 2020, totaling $921,882, resulting in a total amount of $3,314,128 being included in the Accrual for settlement of lawsuits relating to this matter in the accompanying September 30, 2020 condensed consolidated balance sheet.

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Related Party Transactions

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

During March 2019, the Company was informed that a change of control of the Company had occurred. Granite Peak Resources, LLC (“GPR”) through its members (including Pure Path Capital Management LLC) acquired 69,464,434 shares of common stock (including 4,500,000 warrants to purchase common stock). The members transferred their shares of common stock of the Company in exchange for a pro-rata ownership interest in GPR. GPR also acquired the senior secured creditor position previously held by Pure Path Capital Group LLC, which includes a $2,500,000 First Deed of Trust on the Tonopah property and an outstanding promissory note with a principal balance of $2,229,187 and accrued interest of $1,283,644 as of September 30, 2020. The members of Granite Peak Resources LLC are listed in the Schedule 13D filed by GPR on March 29, 2019. GPR has not communicated to the Company any plans to change any of the current officers or directors or governing documents and has expressed the purpose of its acquisition is to assist the Company execute on its business plan and resolve its current obligations and other claims. Neither GPR nor the Company, however, can give any assurances that such creditors or claimants will be amicably resolved. As of the date of this filing, GPR is the beneficial owner of 56.4% of the Company’s common stock and the Company’s largest secured creditor. The background regarding Pure Path’s Senior Secured Note is described below.

During the Company’s acquisition of the Shea assets in 2011, Pure Path purchased the Loan Modification Agreement and the NJB Forbearance Agreement directly from NJB Mining, Inc. In connection with the assignment of a forbearance agreement the Company and Pure Path executed an Agreement in Principle setting forth terms of the forbearance agreement which were subsequently further revised pursuant to Settlement and Release Agreement executed October 10, 2013 with the Company (collectively the “Pure Path Agreements”).The Pure Path Agreements provided for Pure Path’s forbearance of collection remedies and legal proceedings against the Company including foreclosure on the Deed of Trust, and, in connection with the settlement and release of various debts of approximately $1,500,000 and the consulting fees owed by the Company, the Company issued 27,000,000 restricted shares and a Promissory Note (the “Pure Path Note”) for an amount of up to $2,500,000 with a beginning principal balance of $1,933,345 bearing interest of 8% per year for the current balance of the amounts owed under the Pure Path Agreements. The forbearance period has long since expired and the Pure Path Note has retained all of its original remedies under its First Deed of Trust. In addition, pursuant to a Forbearance Agreement with GPR dated December 20, 2019, the Company pledged of 100% of its stock in Tonopah Milling and Metals Group, Inc. and that of its subsidiaries TCP and TR, in exchange for GPR’s agreement to forbear foreclosure proceedings for six months further securing GPR’s combined Pure Path Note and LOC positions. The outstanding principal balance on the Pure Path Note was $2,229,187 as of both September 30, 2020 and December 31, 2019, with related accrued interest of $1,283,644 and $1,143,474, respectively. This Senior Secured Note is in default. GPR’s LOC position is described in Note 4.

On February 11, 2015, the Company issued an unsecured promissory note (the “Note”) to Tina Gregerson Family Properties, LLC, an entity controlled by a former director of the Company. The Note for up to $750,000 was provided in tranches. Maturity of each tranche is one year from the date of receipt. Interest accrues at 8% per annum on each tranche. Under the terms of the Note, the Company received $477,500. At September 30, 2020 and December 31, 2019, there is $210,761 and $182,084 interest accrued. This Note is in default.

On April 17, 2020, the Company and Sustainable Metal Solutions, LLC (“SMS”), an affiliate of GPR, agreed to form a joint venture styled Esmeralda Renewal Energy Zone (“EREZ”). The Company has agreed to contribute the solar energy rights attributable to its 1,083 acres to EREZ in exchange for SMS’s agreement to develop, manage and underwrite the EREZ venture. 

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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

NOTE 8 – EARNINGS (LOSS) PER SHARE

Basic net loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the periods presented. Diluted net loss per common share is determined using the weighted average number of common shares outstanding during the periods presented, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of options, warrants and conversion of convertible debt. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

At September 30, 2020 the weighted average shares from stock options of 24,500,000, warrants of 250,000, and Convertible Promissory note shares of 5,306,000 , and at December 31, 2019 the weighted average shares from stock options of 32,576,223 warrants of 4,865,640 and Convertible Promissory note shares of 650,869 were excluded from the diluted weighted average common share calculation due to the antidilutive effect such shares would have on net loss per common share.  

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Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

 NOTE 9 – SUBSEQUENT EVENTS

On October 15, 2020, options to purchase 21,750,000 common shares expired reducing the 24,500,000 options outstanding at September 30, 2020 to 2,750,000.

The balance and components of current assets are fairly consistent between periods. The increase in current liabilities is primarily due to accrual of interest on settlement of lawsuits and notes due related parties.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Standard Metals Processing, Inc., and its wholly owned subsidiary Tonopah Milling and Metals Group, Inc. and its wholly owned subsidiaries Tonopah Custom Processing, Inc., (“TCP”) and Tonopah Resources, Inc. (“TR”) All significant intercompany transactions, accounts and balances have been eliminated in consolidation.

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Form 10-K for the year ended December 31, 2019 filed April 2, 2020. In the opinion of management, all adjustments (consisting of normal recurring adjustments unless otherwise indicated) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the year as a whole.

Mineral Properties

Mineral Properties

Mineral property acquisition costs are recorded at cost and are deferred until the viability of the property is determined. No properties have produced operating revenues at this time. Exploration, mineral property evaluation, option payments, related acquisition costs for mineral properties acquired under an option agreement, general overhead, administrative and holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. When reserves are determined for a property and a bankable feasibility study is completed, subsequent exploration and development costs on the property would be capitalized. If a project were to be put into production, capitalized costs would be depleted on the unit of production basis.

Management reviews the net carrying value of each mineral property as changes may materialize with a property or at a minimum, on an annual basis. Where information and conditions suggest impairment, estimated future net cash flows from each property are calculated using estimated future prices, proven and probable reserves and value beyond proven and probable reserves, and operating, capital and reclamation costs on an undiscounted basis. If it is determined that the future cash flows are less than the carrying value, a write-down to the estimated fair value is made with a charge to loss for the period. Where estimates of future net cash flows are not available and where other conditions suggest impairment, management assesses if the carrying value can be recovered.

Management’s estimates of gold prices, recoverable reserves, probable outcomes, operating capital and reclamation costs are subject to risks and uncertainties that may affect the recoverability of mineral property costs. The Company does not own any mining claims. It owns tailings located on the Tonopah property and some tailings located in Manhattan, Nevada. The Company has not disturbed or processed any of this material and does not intend to do so in the foreseeable future.

Impairment of Long-Lived Assets and Long-Lived Assets

Impairment of Long-Lived Assets and Long-Lived Assets

The Company will periodically evaluate the carrying value of long-lived assets to be held and used, including but not limited to, mineral properties, mine tailings, mine dumps, capital assets and intangible assets, when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

Use of Estimates

Use of Estimates

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition and Deferred Revenue

Revenue Recognition and Deferred Revenue

As of September 30, 2020, the Company has not recognized any revenues from custom permitted processing toll milling. If we achieve revenue generation, the Company plans to report such revenues consistent with ASC Topic 606.

Income Taxes

Income Taxes

Income taxes are accounted for based upon an asset and liability approach. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.

Accounting guidance requires the recognition of a financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company believes its income tax filing positions and deductions will be sustained upon examination and accordingly, no reserves, or related accruals for interest and penalties have been recorded at September 30, 2020 and December 31, 2019. The Company recognizes interest and penalties on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense.

On December 22, 2017, the President of the United States signed and enacted into law H.R. 1 (the “Tax Reform Law”). The Tax Reform Law, effective for tax years beginning on or after January 1, 2018, except for certain provisions, resulted in significant changes to existing United States tax law, including various provisions that are expected to impact the Company. The Tax Reform Law reduces the federal corporate tax rate from 34% to 21% effective January 1, 2018. Management believes the provisions of the Tax Reform Law will have a favorable impact on the Company’s consolidated financial statements should it attain a level of profitable operations.

Recent Accounting Standards

Recent Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term. Recognition of the costs of these leases on the income statement will be dependent upon their classification as either an operating or a financing lease. Costs of an operating lease will continue to be recognized as a single operating expense on a straight-line basis over the lease term. Costs for a financing lease will be disaggregated and recognized as both an operating expense (for the amortization of the right-of-use asset) and interest expense (for interest on the lease liability). This standard will be effective for our interim and annual periods beginning January 1, 2019 and must be applied on a modified retrospective basis to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Company has adopted the standard during 2018, but as the Company does not have any significant leases, it does not expect it to have a material impact on its financial position or results of operations.

During the nine months ended September 30, 2020 and through the date of this filing, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

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Shareholders' Deficit (Tables)

9 Months Ended

Sep. 30, 2020

Stockholders' Equity Note [Abstract]

Schedule of stock options by exercise price range

	Options Outstanding and Exercisable at September 30, 2020
Range of Exercise Prices	Number  Exercisable		Weighted  Remaining  Contractual  Life	Weighted  Average  Exercise  Price		Aggregate  Intrinsic Value (1)
$0.40 to $0.60		250,000	.04 years	$	0.60	$	—
$0.61 to $1.00		9,000,000	.04 years	$	0.66	$	—
$1.01 to $1.50		13,000,000	.06 years	$	1.25	$	—
$1.51 to $2.25		2,250,000	.51 years	$	1.93	$	—
$0.40 to $2.25		24,500,000	.09 years	$	1.07	$	—

(1) The aggregate intrinsic value in the table represents the difference between the closing stock price on September 30, 2020 and December 31, 2019, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on September 30, 2020 and December 31, 2019.

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Nature of Business (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Nature of Business (Details) [Line Items]
Net loss	$ (377,174)	$ (152,341)	$ (579,221)	$ (482,905)	$ (677,165)
Accumulated deficit	(104,441,348)		(104,441,348)		$ (103,862,127)
Working capital deficit	$ 10,260,900		$ 10,260,900
Pledge of common stock			100.00%
Related party advanced			$ 190,665

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Summary of Significant Accounting Policies (Details)		9 Months Ended
	Dec. 22, 2017	Sep. 30, 2020
Summary of Significant Accounting Policies (Details) [Line Items]
Summary of significant accounting policies, description		In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard requires all leases that have a term of over 12 months to be recognized on the balance sheet with the liability for lease payments and the corresponding right-of-use asset initially measured at the present value of amounts expected to be paid over the term.
Maximum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Federal corporate tax rate	34.00%
Minimum [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Federal corporate tax rate	21.00%

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Mining and Mineral Rights (Details)	Sep. 30, 2020 m²
Mineral Industries Disclosurees (Details) [Line Items]
Area of building	21,875

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Convertible Notes Payable (Details) - USD ($)	1 Months Ended			9 Months Ended
	Apr. 17, 2020	Mar. 16, 2020	Feb. 11, 2015	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Convertible Notes Payable (Details) [Line Items]
Related party transactions, description	The Company has agreed to contribute the solar energy rights attributable to its 1,083 acres to EREZ in exchange for SMS’s agreement to develop, manage and underwrite the EREZ venture.		the Company issued an unsecured promissory note (the “Note”) to Tina Gregerson Family Properties, LLC, an entity controlled by a former director of the Company. The Note for up to $750,000 was provided in tranches. Maturity of each tranche is one year from the date of receipt. Interest accrues at 8% per annum on each tranche. Under the terms of the Note, the Company received $477,500. At September 30, 2020 and December 31, 2019, there is $210,761 and $182,084 interest accrued. This Note is in default.	In connection with the assignment of a forbearance agreement the Company and Pure Path executed an Agreement in Principle setting forth terms of the forbearance agreement which were subsequently further revised pursuant to Settlement and Release Agreement executed October 10, 2013 with the Company (collectively the “Pure Path Agreements”).The Pure Path Agreements provided for Pure Path’s forbearance of collection remedies and legal proceedings against the Company including foreclosure on the Deed of Trust, and, in connection with the settlement and release of various debts of approximately $1,500,000 and the consulting fees owed by the Company, the Company issued 27,000,000 restricted shares and a Promissory Note (the “Pure Path Note”) for an amount of up to $2,500,000 with a beginning principal balance of $1,933,345 bearing interest of 8% per year for the current balance of the amounts owed under the Pure Path Agreements. The forbearance period has long since expired and the Pure Path Note has retained all of its original remedies under its First Deed of Trust. In addition, pursuant to a Forbearance Agreement with GPR dated December 20, 2019, the Company pledged of 100% of its stock in Tonopah Milling and Metals Group, Inc. and that of its subsidiaries TCP and TR, in exchange for GPR’s agreement to forbear foreclosure proceedings for six months further securing GPR’s combined Pure Path Note and LOC positions. The outstanding principal balance on the Pure Path Note was $2,229,187 as of both September 30, 2020 and December 31, 2019, with related accrued interest of $1,283,644 and $1,143,474, respectively. This Senior Secured Note is in default. GPR’s LOC position is described in Note 4.
Amortization of debt issuance costs				$ 190,665
Other advances				204,230
Interest payable				1,283,644		$ 1,143,474
Granite Peak Resources [Member]
Convertible Notes Payable (Details) [Line Items]
Related party transactions, description		the Company executed a Line of Credit (“LOC”) with Granite Peak Resources, LLC (“GPR”), a related party, evidenced by a convertible promissory note. The LOC is for up to $2,500,000, provides that all requests for funds may be approved or disapproved in GPR’s sole discretion, matures over three years, bears interest at 10% per annum, is convertible into shares of the Company’s common stock at a per share price of $0.04, and will be secured by the real and personal property GPR already has under lien or in pledge. See Note 7.
Related party transaction, due from (to) related party						$ 13,575
Other advances				204,240
Principal advance				304,240
Interest payable				$ 114,069

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Shareholders' Deficit (Details) - USD ($)	1 Months Ended	9 Months Ended
	Dec. 21, 2019	Sep. 30, 2020
Shareholders' Deficit (Details) [Line Items]
Promissory note payable (in Dollars)	$ 192,080
Shares issued upon exercise of stock option	4,500,000
Exercise price, per share (in Dollars per share)	$ 0.0426
Warrants expired		0
Options expired		2,750,000
Options exercise price, per share (in Dollars per share)		$ 0.023
Exercisable warrants		1,882,290
Options [Member]
Shareholders' Deficit (Details) [Line Items]
Shares issued upon exercise of stock option		2,250,000
Options expired		826,223
Options exercise price, per share (in Dollars per share)		$ 0.023
Gain (Loss) on Sale of Derivatives (in Dollars)		$ 63,000
Warrant [Member]
Shareholders' Deficit (Details) [Line Items]
Warrants expired		2,732,720
Gain (Loss) on Sale of Derivatives (in Dollars)		$ 52,722
Exercisable warrants		1,882,290
Warrants outstanding		307,500
Aggregate intrinsic of warrant outstanding		0

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Shareholders' Deficit (Details) - Schedule of stock options outstanding and exercisable	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
$0.40 to $0.60 [Member]
Shareholders' Deficit (Details) - Schedule of stock options outstanding and exercisable [Line Items]
Range of Exercise Prices lower range limit, per share	$ 0.40
Range of Exercise Prices upper range limit, per share	$ 0.60
Number Exercisable | shares (in Shares) | shares	250,000
Weighted Remaining Contractual Life	14 days
Weighted Average Exercise Price	$ 0.60
Aggregate Intrinsic Value (in Dollars) | $		[1]
0.61 to $1.00 [Member]
Shareholders' Deficit (Details) - Schedule of stock options outstanding and exercisable [Line Items]
Range of Exercise Prices lower range limit, per share	$ 0.61
Range of Exercise Prices upper range limit, per share	$ 1.00
Number Exercisable | shares (in Shares) | shares	9,000,000
Weighted Remaining Contractual Life	14 days
Weighted Average Exercise Price	$ 0.66
Aggregate Intrinsic Value (in Dollars) | $		[1]
1.01 to $1.50 [Member]
Shareholders' Deficit (Details) - Schedule of stock options outstanding and exercisable [Line Items]
Range of Exercise Prices lower range limit, per share	$ 1.01
Range of Exercise Prices upper range limit, per share	$ 1.50
Number Exercisable | shares (in Shares) | shares	13,000,000
Weighted Remaining Contractual Life	21 days
Weighted Average Exercise Price	$ 1.25
Aggregate Intrinsic Value (in Dollars) | $		[1]
$1.51 to $2.25 [Member]
Shareholders' Deficit (Details) - Schedule of stock options outstanding and exercisable [Line Items]
Range of Exercise Prices lower range limit, per share	$ 1.51
Range of Exercise Prices upper range limit, per share	$ 2.25
Number Exercisable | shares (in Shares) | shares	2,250,000
Weighted Remaining Contractual Life	186 days
Weighted Average Exercise Price	$ 1.93
Aggregate Intrinsic Value (in Dollars) | $		[1]
$0.40 to $2.25 [Member]
Shareholders' Deficit (Details) - Schedule of stock options outstanding and exercisable [Line Items]
Range of Exercise Prices lower range limit, per share	$ 0.40
Range of Exercise Prices upper range limit, per share	$ 2.25
Number Exercisable | shares (in Shares) | shares	24,500,000
Weighted Remaining Contractual Life	32 days
Weighted Average Exercise Price	$ 1.07
Aggregate Intrinsic Value (in Dollars) | $		[1]

[1] The aggregate intrinsic value in the table represents the difference between the closing stock price on September 30, 2020 and December 31, 2019, and the exercise price, multiplied by the number of in-the-money options that would have been received by the option holders had all option holders exercised their options on September 30, 2020 and December 31, 2019.

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Commitments and Contingencies (Details) - USD ($)		1 Months Ended	9 Months Ended
	Aug. 12, 2015	Aug. 28, 2015	Sep. 30, 2020
Commitments and Contingencies (Details) [Line Items]
Interest expense			$ 921,882
Accrual settlement			$ 3,314,128
Stephen E. Flechner v. Standard Metals Processing, Inc [Member]
Commitments and Contingencies (Details) [Line Items]
Damages paid	$ 2,157,000	$ 2,157,000
Interest damages paid		$ 235,246
Interest damages paid, per day		$472.76

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Related Party Transactions (Details) - USD ($)	1 Months Ended			9 Months Ended
	Apr. 17, 2020	Mar. 31, 2019	Feb. 11, 2015	Sep. 30, 2020	Dec. 31, 2019
Related Party Transactions (Details) [Line Items]
Senior secured promissory note payable, related party				$ 2,229,187	$ 2,229,187
Accrued interest				$ 1,283,644	$ 1,143,474
Related party transactions, description	The Company has agreed to contribute the solar energy rights attributable to its 1,083 acres to EREZ in exchange for SMS’s agreement to develop, manage and underwrite the EREZ venture.		the Company issued an unsecured promissory note (the “Note”) to Tina Gregerson Family Properties, LLC, an entity controlled by a former director of the Company. The Note for up to $750,000 was provided in tranches. Maturity of each tranche is one year from the date of receipt. Interest accrues at 8% per annum on each tranche. Under the terms of the Note, the Company received $477,500. At September 30, 2020 and December 31, 2019, there is $210,761 and $182,084 interest accrued. This Note is in default.	In connection with the assignment of a forbearance agreement the Company and Pure Path executed an Agreement in Principle setting forth terms of the forbearance agreement which were subsequently further revised pursuant to Settlement and Release Agreement executed October 10, 2013 with the Company (collectively the “Pure Path Agreements”).The Pure Path Agreements provided for Pure Path’s forbearance of collection remedies and legal proceedings against the Company including foreclosure on the Deed of Trust, and, in connection with the settlement and release of various debts of approximately $1,500,000 and the consulting fees owed by the Company, the Company issued 27,000,000 restricted shares and a Promissory Note (the “Pure Path Note”) for an amount of up to $2,500,000 with a beginning principal balance of $1,933,345 bearing interest of 8% per year for the current balance of the amounts owed under the Pure Path Agreements. The forbearance period has long since expired and the Pure Path Note has retained all of its original remedies under its First Deed of Trust. In addition, pursuant to a Forbearance Agreement with GPR dated December 20, 2019, the Company pledged of 100% of its stock in Tonopah Milling and Metals Group, Inc. and that of its subsidiaries TCP and TR, in exchange for GPR’s agreement to forbear foreclosure proceedings for six months further securing GPR’s combined Pure Path Note and LOC positions. The outstanding principal balance on the Pure Path Note was $2,229,187 as of both September 30, 2020 and December 31, 2019, with related accrued interest of $1,283,644 and $1,143,474, respectively. This Senior Secured Note is in default. GPR’s LOC position is described in Note 4.
Common stock [Member] | Granite Peak Resources [Member]
Related Party Transactions (Details) [Line Items]
Noncontrolling interest, ownership percentage by parent				56.40%
Common stock [Member] | Pure Path Capital Management LLC [Member]
Related Party Transactions (Details) [Line Items]
Stock issued during period, shares, new issues (in Shares)		69,464,434
Stock and warrants issued during period, value, preferred stock and warrants		$ 4,500,000
Outstanding promissory note				$ 2,500,000
Senior secured promissory note payable, related party				2,229,187
Accrued interest				$ 1,283,644

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Earnings (Loss) Per Share (Details) - shares	9 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Convertible Promissory Note [Member]
Earnings (Loss) Per Share (Details) [Line Items]
Antidilutive securities excluded from computation of EPS	5,306,000	650,869
Stock Option [Member]
Earnings (Loss) Per Share (Details) [Line Items]
Antidilutive securities excluded from computation of EPS	24,500,000	32,576,223
Warrant [Member]
Earnings (Loss) Per Share (Details) [Line Items]
Antidilutive securities excluded from computation of EPS	250,000	4,865,640

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Subsequent Events (Details)	Oct. 15, 2020
Subsequent Event [Member]
Subsequent Events (Details) [Line Items]
Subsequent event, description	On October 15, 2020, options to purchase 21,750,000 common shares expired reducing the 24,500,000 options outstanding at September 30, 2020 to 2,750,000.