15. Forward Gold Contracts	12 Months Ended
Dec. 31, 2016
Notes
15. Forward Gold Contracts	15. Forward Gold Contracts On July 13, 2016, the Company entered into a forward gold contract with Ophir Holdings LLC, a company owned by three of the Company’s officers, for net proceeds of $467,500 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 500 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. Ophir Holdings agreed to delay receipt of its December 1, 2016 payment until 2017. At December 31, 2016, future gold deliveries are 312.5 ounces in 2017 and 187.5 ounces in 2018. On July 29, 2016, the Company entered into a forward gold contract through GVC Capital LLC for net proceeds of $772,806 to fund startup costs at the Golden Chest. The agreement calls for the Company to deliver a total of 904 ounces of gold to the purchasers in quarterly payments starting December 1, 2016 for a period of two years as gold is produced from the Golden Chest Mine and New Jersey Mill. The December 1, 2016 payment, was paid with an ounce equivalent of 114.5 ounces. At December 31, 2016, future gold deliveries are 450.5 ounces in 2017 and 339 ounces in 2018. The gold to be delivered does not need to be produced from the Golden Chest property. In addition, the counterparties can request cash payment instead of gold ounces for each quarterly payment. The cash payments are on average gold prices for the applicable quarter. Due to these provisions, the contracts are accounted for as derivatives requiring their value to be adjusted to fair value each period end. For year ended December 31, 2016, the Company recognized a change in fair value of $296,098. The fair value was calculated using the market approach with Level 2 inputs for forward gold contract rates and a discount rate of 10%.

- Definition

The entire disclosure for freestanding option contracts issued by an entity that are indexed to, and potentially settled in, an entity's own stock. Includes disclosure on the strike price and the number of shares to which the contract is indexed, the settlement date or dates of the contract, and the issuer's accounting for the contract. If the terms of the contract provide settlement alternatives, those settlement alternatives are disclosed, including who controls the settlement alternatives, and the maximum number of shares that could be required to be issued, to net share settle the contract, if applicable. If a contract does not have a fixed or determinable maximum number of shares that could be required to be issued, the fact that a potentially infinite number of shares that may be required to be issued to settle the contract is disclosed. Disclosure also includes the contract's current fair value for each settlement alternative and how changes in the price of the issuer's equity instruments affect those settlement amounts.

+ References + Details