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3. Joint Ventures

9 Months Ended

Sep. 30, 2014

3. Joint Ventures

For joint ventures where the Company holds more than 50% of the voting interest and has significant influence, the joint venture is consolidated with the presentation of non-controlling interest. For joint ventures in which the Company does not have joint control or significant influence, the cost method is used. For those joint ventures in which there is joint control between the parties, and the Company has significant influence, the equity method is utilized.

At September 30, 2014 and December 31, 2013, the Company’s percentage ownership and method of accounting for each joint venture is as follows:

	September 30, 2014			December 31, 2013
Joint Venture	% Ownership	Significant Influence?	Accounting Method	% Ownership	Significant Influence?	Accounting Method
New Jersey Mill Joint Venture(“NJMJV”)	66%	Yes	Consolidated	66%	Yes	Consolidated
Golden Chest LLC Joint Venture (“GC”)	48%	No	Cost	48%	No	Cost
GF&H Company (“GF&H”)	66.66%	Yes	Consolidated

New Jersey Mill Joint Venture Agreement

In June of 2012 Crescent Silver (holds noncontrolling interest in NJMJV) completed its buy-in for 35% of the Mill JV with a cumulative $3.2 million contribution to bring the capacity of the mill to 15 tonnes/hr. As of September 30, 2014, an account receivable existed with Crescent for $68,591 for monthly operating costs and lease payments.

GF&H Company

In July the Company purchased 66 2/3% of the outstanding stock in GF&H Company which owns 347 acres in the vicinity of the Company’s Golden Chest property in Murray.

Golden Chest LLC Joint Venture

On September 3, 2013 the GC signed a lease agreement with Juniper Resources, LLC (Juniper) of Boise, Idaho for a defined portion of the Golden Chest mine property known as the Skookum Shoot (a 400 meter strike length along the Idaho vein below the No. 3 Level). The lease with Juniper calls for an initial payment of $50,000 to GC, which was received in 2013, and a work requirement of 1,500 to 3,000 meters of core drilling which has also been completed. Juniper signed the lease and made a payment of $200,000 to GC at the end of November 2013. Juniper is required to make land payments of $125,000 per quarter on the promissory note on behalf of GC which it also has done. Additionally, Juniper will pay a 2% net smelter royalty to GC on all gold production from the leased area with the $250,000 initial payments treated as an advance on this royalty. The lease has a term of 39 months.