9. Mining and Milling Venture Agreements	12 Months Ended
Dec. 31, 2015
Notes
9. Mining and Milling Venture Agreements	9. Mining and Milling Venture Agreements Golden Chest LLC (“GCJV”) In December of 2010, a limited liability company was formed between the Company and Marathon Gold USA (MUSA). MUSA’s contribution to GCJV was $4,000,000 paid in installments ending on November 30, 2011. The Company contributed to GCJV all of its interests in the Golden Chest Mine, including unpatented claims and some mining equipment with a carrying value of $553,205. At inception, GCJV purchased the patented mining claims for $3.75 million with $500,000 paid at closing in December 2010 and the remainder due under a Promissory Note and Mortgage at the rate of $500,000 per year with quarterly payments and the $250,000 balance due in the seventh and final year. The note is collateralized by a first mortgage on the claims. Funding in 2012 and future funding for the venture is being paid by each partner at a percentage equal to their ownership, which in 2012 and through June of 2013 was 50 percent per partner. In May and June of 2013, the Company elected not to participate in some funding calls resulting in dilution of its ownership interest in GCJV. During the year ended December 31, 2012 the Company began accounting for the GCJV using the equity method because significant influence was obtained during the year. After dilution of its share in 2013, significant influence was no longer possessed and accounting for the Joint Venture reverted back to the cost method. On September 3, 2013, GCJV signed a lease agreement with Juniper Resources, LLC (Juniper) of Boise, Idaho for a defined portion of the Golden Chest mine property. The lease with Juniper called for an initial payment of $50,000 to GCJV, which was received, and a work requirement of 1,500 to 3,000 meters of core drilling which was completed during 2014. Juniper signed the lease and made a payment of $200,000 to GCJV at the end of November 2013. Juniper was required to make land payments of $125,000 per quarter on the promissory note on behalf of GCJV. Additionally, Juniper paid a 2% net smelter royalty to GCJV on all gold production from the leased area with the $250,000 initial payments treated as an advance on this royalty. The lease was assigned to Gold Hill Reclamation and Mining Inc. (“Gold Hill”), a company affiliated with Juniper, on September 3, 2013. The lease had a term of 39 months. A Milling advance of $200,000 was received from Gold Hill November 7, 2014 to facilitate the start-up of the mill. The advance was to be paid back to Gold Hill as a reduction in future invoices for milling services once full production was achieved. Payments totaling $75,000 were made in the second and third quarter of 2015. Gold Hill began shipping ore in the 4^th quarter of 2014 and continued with shipments through the 3^rd quarter of 2015. In September of 2015 Gold Hill terminated the lease after shipping 40,843 tonnes which were processed at the New Jersey Mill. Upon termination of the lease in September 2015, the remaining unpaid milling advance of $125,000 was recognized as gain. In December of 2015 the Company became the 100% owner of the Golden Chest property after purchasing the 52.22% share of GCJV held by MUSA (Note 15). Prior to the purchase of the remaining interest in GCJV accounts receivable from GCJV were a part of normal operations which include operating costs, payroll, drilling costs, and drilling income; GCJV had contracted drilling services with NJMC as needed. As of December 31, 2014 an account receivable existed with GCJV for $21,175. New Jersey Mill Venture Agreement In January 2011, the New Jersey Mill Venture agreement was signed by the Company and United Mine Services, Inc. (UMS) relating to the New Jersey mineral processing plant. To earn a 35 percent interest in the venture, UMS provided $3.2 million funding to expand the processing plant to 15 tonnes/hr. The Company is the operator of the venture and charges operating costs to UMS for milling its ore up to 7,000 tonnes/month, retain a milling capacity of 3,000 tonnes/month, and as the operator of the venture receive a fee of $2.50/tonne milled. UMS subsequently dissolved and its interest in the mill was transferred to Crescent Silver, LLC (Crescent). As of December 31, 2015 and 2014, an account receivable existed with the Mill Joint Venture from Crescent for $3,109 and $33,846 respectively.

9. Mining and Milling Venture Agreements

12 Months Ended

Dec. 31, 2015

9. Mining and Milling Venture Agreements

Golden Chest LLC (“GCJV”)

In December of 2010, a limited liability company was formed between the Company and Marathon Gold USA (MUSA). MUSA’s contribution to GCJV was $4,000,000 paid in installments ending on November 30, 2011. The Company contributed to GCJV all of its interests in the Golden Chest Mine, including unpatented claims and some mining equipment with a carrying value of $553,205. At inception, GCJV purchased the patented mining claims for $3.75 million with $500,000 paid at closing in December 2010 and the remainder due under a Promissory Note and Mortgage at the rate of $500,000 per year with quarterly payments and the $250,000 balance due in the seventh and final year. The note is collateralized by a first mortgage on the claims. Funding in 2012 and future funding for the venture is being paid by each partner at a percentage equal to their ownership, which in 2012 and through June of 2013 was 50 percent per partner. In May and June of 2013, the Company elected not to participate in some funding calls resulting in dilution of its ownership interest in GCJV. During the year ended December 31, 2012 the Company began accounting for the GCJV using the equity method because

significant influence was obtained during the year. After dilution of its share in 2013, significant influence was no longer possessed and accounting for the Joint Venture reverted back to the cost method.

On September 3, 2013, GCJV signed a lease agreement with Juniper Resources, LLC (Juniper) of Boise, Idaho for a defined portion of the Golden Chest mine property. The lease with Juniper called for an initial payment of $50,000 to GCJV, which was received, and a work requirement of 1,500 to 3,000 meters of core drilling which was completed during 2014. Juniper signed the lease and made a payment of $200,000 to GCJV at the end of November 2013. Juniper was required to make land payments of $125,000 per quarter on the promissory note on behalf of GCJV. Additionally, Juniper paid a 2% net smelter royalty to GCJV on all gold production from the leased area with the $250,000 initial payments treated as an advance on this royalty. The lease was assigned to Gold Hill Reclamation and Mining Inc. (“Gold Hill”), a company affiliated with Juniper, on September 3, 2013. The lease had a term of 39 months. A Milling advance of $200,000 was received from Gold Hill November 7, 2014 to facilitate the start-up of the mill. The advance was to be paid back to Gold Hill as a reduction in future invoices for milling services once full production was achieved. Payments totaling $75,000 were made in the second and third quarter of 2015. Gold Hill began shipping ore in the 4^th quarter of 2014 and continued with shipments through the 3^rd quarter of 2015. In September of 2015 Gold Hill terminated the lease after shipping 40,843 tonnes which were processed at the New Jersey Mill. Upon termination of the lease in September 2015, the remaining unpaid milling advance of $125,000 was recognized as gain.

In December of 2015 the Company became the 100% owner of the Golden Chest property after purchasing the 52.22% share of GCJV held by MUSA (Note 15).

Prior to the purchase of the remaining interest in GCJV accounts receivable from GCJV were a part of normal operations which include operating costs, payroll, drilling costs, and drilling income; GCJV had contracted drilling services with NJMC as needed. As of December 31, 2014 an account receivable existed with GCJV for $21,175.

New Jersey Mill Venture Agreement

In January 2011, the New Jersey Mill Venture agreement was signed by the Company and United Mine Services, Inc. (UMS) relating to the New Jersey mineral processing plant. To earn a 35 percent interest in the venture, UMS provided $3.2 million funding to expand the processing plant to 15 tonnes/hr. The Company is the operator of the venture and charges operating costs to UMS for milling its ore up to 7,000 tonnes/month, retain a milling capacity of 3,000 tonnes/month, and as the operator of the venture receive a fee of $2.50/tonne milled.

UMS subsequently dissolved and its interest in the mill was transferred to Crescent Silver, LLC (Crescent).

As of December 31, 2015 and 2014, an account receivable existed with the Mill Joint Venture from Crescent for $3,109 and $33,846 respectively.