NOTE 7 - LEASE OBLIGATION

12 Months Ended

Jun. 30, 2022

Notes

NOTE 7 - LEASE OBLIGATION

NOTE 7 – FINANCE LEASE OBLIGATION

We signed a finance lease purchase agreement effective January 1, 2020, for the acquisition of a non-mineral property for our processing plant site to house our crusher and related future milling operations.

The determination of whether an arrangement contains a lease and the classification of a lease, if applicable, is made at lease commencement, at which time the Company also measures and recognizes an right of use (“ROU”) asset, representing the Company’s right to use the underlying asset, and a lease liability, representing the Company’s obligation to make lease payments under the terms of the arrangement. For the purposes of recognizing ROU assets and lease liabilities associated with the Company’s leases, the Company has elected the practical expedient to not recognize a ROU asset or lease liability for short-term leases, which are leases with a term of twelve months or less. The lease term is defined as the noncancelable portion of the lease term plus any periods covered by an option to extend the lease if it is reasonably certain that the option will be exercised.

ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The rates implicit within the Company's lease is not determinable. The determination of the Company’s incremental borrowing rate requires judgment. The incremental borrowing rate is determined at lease commencement and the Company determined its incremental borrowing rate on the finance lease to be 12%. At the lease inception, the Company recorded a ROU asset of $44,505 and a corresponding lease liability of $29,505. The asset value is comprised of the present value of the lease payments at inception of $29,505 and the payment of the purchase option price of $15,000 at the lease inception for a total of $44,505.

The components of lease expense and supplemental cash flow information related to lease for the period are as follows:

	Year ended June 30, 2022		Year ended June 30, 2021
Lease Cost:
Financing lease cost included in exploration and mine costs for fiscal 2022 and 2021 is $6,090 and $18,272 and $97 and $1,933 in interest expense in Company’s audited consolidated statement of operations, respectively		$   6,187	$    20,205
Cash paid for amounts included in the measurement of lease liabilities for the year ended June 30, 2022 and 2021		$   4,500	$     18,000
Other Information:
Remaining lease term - operating lease (in years)		-	0.333
Discount rate - financing lease		12.0%	12.0%
Effective rate - financing lease		13.1%	13.1%

	As of June 30, 2022	As of June 30, 2021
Financing lease:
Right-of-use asset, net	$      -		$     17,098
Financing lease liability - current portion	$      -		$       4,403
Long-term portion	-		-
Total operating lease liabilities	$      -		$       4,403

	Financing	Financing
Fiscal Year Ending 6/30:	Lease	Lease
2021		6,000
2022	-	-
Total lease payments	-	$       6,000
Less: Present value discount	-	(1,597)
Present value of lease liabilities	-	$      4,403

Lease associated costs for fiscal June 30, 2022 and 2021 were $6,187 and $20,205, respectively.