4. Related Party Notes Payable

9 Months Ended

Sep. 30, 2018

4. Related Party Notes Payable

At September 30, 2018 and December 31, 2017, the Company had the following notes and interest payable to related parties:

		September 30, 2018		December 31, 2017
Mine Systems Design (“MSD”), a company in which our Company’s Vice President owns 10.4%, 12% interest, monthly payments of $4,910 through March 2019	$	28,702	$	68,299
John Swallow, Company president, 5% interest, monthly payments of $5,834 with balloon payment of $322,367 in February 2020; paid in full in May 2018		-		441,163
John Swallow, Company president, 5% interest, principal and interest due February 2020; paid in full in May 2018		-		192,677
Ophir Holdings LLC, a company owned by three of the Company’s Officers, 6% interest, monthly payments of $3,777 with a balloon payment of $183,559 in February 2020		230,052		-
Margaret Bathgate, shareholder, 5% interest, principal and interest due January 2019; paid in full in May 2018		-		100,000
		258,754		802,139
Accrued interest payable		-		10,772
Total		258,754		812,911
Current portion		(61,109)		(211,829)
Long term portion	$	197,645	$	601,082

Related party interest expense for the three and nine month periods ended September 30, 2018 and 2017 is as follows:

2018				2017
Three Months		Nine Months		Three Months		Nine Months
$	4,663	$	36,491	$	13,001	$	41,970

Future principal payments of related party notes payable at September 30, 2018 are as follows:

12 months ended September 30,
2019	$	61,109
2020		197,645
Total	$	258,754

On January 1, 2018 Ophir Holdings agreed to convert their Forward Gold Contract (Note 12) which at that time had an outstanding balance of 419.5 ounces with a fair value of $492,783 to a conventional note payable for the same amount. The note bears interest at 6% and has monthly principal and interest payments of $3,777 with a balloon payment of $454,733 in February 2020. In May 2018 an additional payment of $244,208 of the principal outstanding was paid to Ophir Holdings reducing the balloon payment to $183,559.

On January 1, 2018, notes with Mr. Swallow were amended to extend the balloon payments on both notes to February 2020. In May 2018, both of these notes as well as accrued interest were paid in full.

In May 2018, the note payable to Margaret Bathgate and its associated accrued interest was paid in full.