UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File No. 000-28837
NEW JERSEY MINING COMPANY
(Name of small business issuer in its charter)
Idaho
82-0490295
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer identification No.)
201 N. Third Street, Coeur d’Alene, ID 83814
(Address of principal executive offices) (zip code)
(208) 625-9001
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, no par value
NJMC
OTCQB
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer ¨
Accelerated Filer ¨
Non-Accelerated Filer x
Small Reporting Company ☒
Emerging Growth Company ☐
Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes ☐ No x
APPLICABLE ONLY TO CORPORATE ISSUERS:
At November 1, 2021, 150,202,866 shares of the registrant’s common stock were outstanding.
1
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION 3
ITEM 1: Consolidated Financial Statements 3
ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 18
ITEM 3: Quantitative and Qualitative Disclosures about Market Risk 21
ITEM 4: Controls and Procedures 21
PART II - OTHER INFORMATION 21
ITEM 1. Legal Proceedings 21
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds. 21
ITEM 3. Defaults upon Senior Securities 21
ITEM 4. Mine Safety Disclosures 21
ITEM 5. Other Information 22
ITEM 6. Exhibits 23
2
PART I - FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
New Jersey Mining Company
Consolidated Balance Sheets (Unaudited)
September 30,
2021
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents
$
481,187
2,539,945
Gold sales receivable
212,125
264,779
Inventories
256,106
402,537
Joint venture receivable
1,641
4,177
Other current assets
331,833
224,063
Total current assets
1,282,892
3,435,501
Property, plant and equipment, net of accumulated depreciation
8,155,555
7,227,144
Mineral properties, net of accumulated amortization
5,768,471
3,455,233
Investment in Buckskin
192,946
-
Investment in joint venture
435,000
Reclamation bond
103,320
Deposits
12,863
Total assets
15,938,184
14,669,061
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities
633,787
687,331
Accrued payroll and related payroll expenses
157,632
143,485
Notes payable related parties, current portion
38,781
37,078
Notes payable, current portion
657,738
339,704
Small Business Administration loan, current portion
2,529
1,741
Total current liabilities
1,490,467
1,209,339
Asset retirement obligation
169,871
173,001
Notes payable related parties, long term
87,932
117,234
Convertible debt
1,950,000
1,010,000
Convertible debt-related party
25,000
Notes payable, long term
1,131,042
709,072
Small Business Administration loan, long term
165,105
161,251
Total long-term liabilities
3,503,950
2,195,558
Total liabilities
4,994,417
3,404,897
Commitments (Note 10)
Stockholders’ equity:
Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding
Common stock, no par value, 200,000,000 shares authorized; September 30, 2021–143,602,866 and December 31, 2020- 137,573,309 shares issued and outstanding
22,684,939
20,986,062
Accumulated deficit
(14,647,806)
(12,672,786)
Total New Jersey Mining Company stockholders’ equity
8,037,133
8,313,276
Non-controlling interest
2,906,634
2,950,888
Total stockholders' equity
10,943,767
11,264,164
Total liabilities and stockholders’ equity
The accompanying notes are an integral part of these consolidated financial statements.
3
Consolidated Statements of Operations (Unaudited)
For the Three and Nine Month Periods Ended September 30, 2021 and 2020
September 30, 2021
September 30, 2020
Three
Months
Nine
Revenue:
Sales of products
2,098,849
5,865,708
1,556,070
4,281,401
Total revenue
Costs of Sales:
Cost of sales and other direct production costs
1,603,785
4,701,626
1,506,982
3,831,727
Depreciation and amortization
217,054
595,227
156,325
425,641
Total costs of sales
1,820,839
5,296,853
1,663,307
4,257,368
Gross profit
278,010
568,855
(107,237)
24,033
Other operating expenses:
Exploration
267,644
1,193,520
44,613
133,529
Loss on write off equipment
9,537
Management
56,272
312,663
38,812
112,236
Professional services
39,974
206,056
33,709
146,917
General and administrative
101,430
751,272
117,762
308,232
Total other operating expenses
465,320
2,463,511
234,896
710,451
Operating income (loss)
(187,310)
(1,894,656)
(342,133)
(686,418)
Other income (expense):
Small Business Administration grant income
360,054
370,054
Timber revenue net of costs
4,338
14,961
46,613
Interest income
7
131
38
1,626
Interest expense
(50,368)
(150,656)
(40,247)
(113,903)
Total other income (expense)
(50,361)
(146,187)
334,806
304,390
Net income (loss)
(237,671)
(2,040,843)
(7,327)
(382,028)
Net income (loss) attributable to non-controlling interest
(18,326)
(65,823)
(18,034)
(66,254)
Net income (loss) attributable to New Jersey Mining Company
(219,345)
(1,975,020)
10,707
(315,774)
Net income (loss) per common share-basic and diluted
(0.00)
(0.01)
0.00
Weighted average common shares outstanding-basic
143,194,844
139,979,837
129,394,027
126,059,427
Weighted average common shares outstanding-diluted
133,092,547
4
Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
For the Nine Month Periods Ended September 30, 2021 and 2020
Common Stock Shares
Common Stock Amount
Accumulated Deficit Attributable to New Jersey Mining Company
Non-Controlling Interest
Stockholders’ Equity
Balance January 1, 2020
123,812,144
17,682,999
(12,029,910)
3,003,888
8,656,977
Contribution from non-controlling interest in Mill JV
2,659
(146,268)
(15,921)
(162,189)
Balance, March 31, 2020
(12,176,178)
2,990,626
8,497,447
19,403
Issuance of common stock and warrants for cash
1,481,481
200,000
(180,213)
(32,299)
(212,512)
Balance June 30, 2020
125,293,625
17,882,999
(12,356,391)
2,997,730
8,504,338
2,830
9,718,572
2,706,896
Exercise of common stock warrants for cash
1,041,667
208,334
Conversion of convertible debt to common stock
277,778
50,000
Balance September 30, 2020
136,331,642
20,848,229
(12,345,684)
2,962,526
11,465,071
Balance January 1, 2021
137,573,309
2,469
Issuance of common stock for services
10,000
2,300
Options issued to management, directors, and employees
604,571
Options issued for services
9,860
Issuance of common stock for cashless option exercise
394,737
(1,646,487)
(15,917)
(1,662,404)
Balance March 31, 2021
137,978,046
21,602,793
(14,319,273)
2,937,440
10,220,960
17,459
15,000
4,200
Issuance of common stock for warrants exercised
4,083,333
735,000
(109,188)
(31,580)
(140,768)
Balance June 30, 2021
142,404,157
22,391,993
(14,428,461)
2,923,319
10,886,851
Issuance of common stock for investment in Buckskin
643,153
555,556
100,000
Balance September 30, 2021
143,602,866
5
Consolidated Statements of Cash Flows (Unaudited)
Cash flows from operating activities:
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Loss on write off of equipment
Adjustment of inventory to net realizable value
32,098
Accretion of asset retirement obligation
7,476
7,170
Stock based compensation
614,431
6,500
Change in operating assets and liabilities:
52,654
13,762
146,431
(27,019)
2,536
(420)
(107,770)
19,401
(48,902)
(7,738)
14,147
31,333
Net cash provided (used) by operating activities
(758,113)
121,737
Cash flows from investing activities:
Purchases of property, plant and equipment
(351,618)
(286,889)
Deposits on equipment
Purchase of mineral property
(2,346,181)
(798,088)
Additions to mineral property
(64,692)
Net cash used by investing activities
(2,684,936)
(1,149,669)
Cash flows from financing activities:
Proceeds from sale of common stock and warrants net of issuance cost
2,906,896
Exercise of common stock warrants
Principal payments on notes payable
(409,679)
(360,640)
Principal payments on notes payable, related parties
(27,599)
(53,434)
Issuance of convertible debt
1,750,000
1,085,000
Proceeds from Small Business Administration loans
149,900
Contributions from non-controlling interest
21,569
24,892
Net cash provided by financing activities
1,384,291
3,960,948
Net change in cash and cash equivalents
(2,058,758)
2,933,016
Cash and cash equivalents, beginning of period
217,796
Cash and cash equivalents, end of period
3,150,812
Non-cash investing and financing activities:
Deposit on property applied to purchase of mineral property
Notes payable for equipment purchase
1,149,683
217,000
835,000
Investment in Buckskin acquired with issuance of common stock
6
Notes to Consolidated Financial Statements (Unaudited)
1. The Company and Significant Accounting Policies
These unaudited interim consolidated financial statements have been prepared by the management of New Jersey Mining Company (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair presentation of the interim consolidated financial statements have been included.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's financial position and results of operations. Operating results for the three and nine-month period ended September 30, 2021 is not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.
For further information refer to the financial statements and footnotes thereto in the Company’s audited consolidated financial statements for the year ended December 31, 2020 as filed with the Securities and Exchange Commission.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the consolidated balance sheets and statements of operations.
Revenue Recognition
Gold Revenue Recognition and Receivables-Sales of gold sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of our concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. For sales of dore’ and metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner.
Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. Costs charged by customers include fixed costs per ton of concentrate and price escalators. Refining, selling and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred. See Note 4 for more information on our sales of products.
Other Revenue Recognition-Revenue from harvest of raw timber is recognized when the performance obligation under a contract and transfer of control of the timber have both been completed. Sales of timber found on the Company’s mineral properties are not a part of normal operations.
Inventories are stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Supplies inventory is stated at the lower of cost or estimated net realizable value.
1. The Company and Significant Accounting Policies (continued)
Mine Exploration and Development Costs
The Company expenses exploration costs as such in the period they occur. The mine development stage begins once the Company identifies ore reserves which is based on a determination whether an ore body can be economically developed. Expenditures incurred during the development stage are capitalized as deferred development costs and include such costs for drift, ramps and infrastructure. Costs to improve, alter, or rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency or safety of such assets are also capitalized. The development stage ends when the production stage of ore reserves (as defined by the SEC) begins. Amortization of deferred development costs is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable mineral ounces.
Fair Value Measurements
When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At September 30, 2021, and December 31, 2020, the Company had no assets or liabilities that required measurement at fair value on a recurring basis.
Investments in Equity Securities
Investments in equity securities are generally measured at fair value. Unrealized gains and losses for equity securities resulting from changes in fair value are recognized in current earnings. If an equity security does not have a readily determinable fair value, we may elect to measure the security at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. At the end of each reporting period, we reassess whether an equity investment security without a readily determinable fair value qualifies to be measured at cost less impairment, consider whether impairment indicators exist to evaluate if an equity investment security is impaired and, if so, record an impairment loss. At the end of each reporting period, unrealized gains and losses resulting from changes in fair value are recognized in current earnings. Upon sale of an equity security, the realized gain or loss is recognized in current earnings.
Reclassifications
Certain prior period amounts have been reclassified to conform to the 2021 financial statement presentation. Reclassifications had no effect on net income (loss), stockholders’ equity, or cash flows as previously reported.
New Accounting Pronouncement
Accounting Standards Updates Adopted
In December 2019, the FASB issued ASU No. 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update contains a number of provisions intended to simplify the accounting for income taxes. The update is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The update was adopted as of January 1, 2021, and its adoption did not have a material impact on the Company’s consolidated financial statements.
Accounting Standards Updates to Become Effective in Future Periods
In August 2020, the FASB issued ASU No. 2020-06 Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with characteristics of liabilities and equity. The update is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years and with early adoption permitted. Management is evaluating the impact of this update on the Company’s consolidated financial statements.
8
2.Going Concern
The Company is currently producing from both the open-pit and underground at the Golden Chest Mine. In the past, the Company has been successful in raising required capital from sale of common stock, forward gold contracts, and debt. As a result of its planned production, equity sales and potential debt borrowings or restructurings, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.
3. Inventories
At September 30, 2021 and December 31, 2020, the Company’s inventories consisted of the following:
December 31, 2020
Concentrate inventory
In process
58,847
90,743
Finished goods
104,803
230,318
Total concentrate inventory
163,650
321,061
Supplies inventory
Mine parts and supplies
56,648
52,600
Mill parts and supplies
35,808
28,876
Total supplies inventory
92,456
81,476
Total
The carrying value of inventory is determined each period based on the lower of cost or net realizable value. At September 30, 2021 and December 31, 2020 gold concentrate is carried at cost.
4. Sales of Products
Our products consist of both gold flotation concentrates which we sell to a single broker (H&H Metal), and an unrefined gold-silver product known as doré which we sell to a precious metal refinery. At September 30, 2021, metals that had been sold but not final settled thus exposed to future price changes totaled 1,711 ounces of gold. The Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable.
Sales of products by metal type for the three and nine-month periods ended September 30, 2021 and 2020 were as follows:
Three Months
Nine Months
Gold
2,253,431
6,256,461
1,654,334
4,629,816
Silver
5,756
20,078
2,593
6,881
Less: Smelter and refining charges
(160,338)
(410,831)
(100,857)
(355,296)
Sales by significant product type for the three and nine-month periods ended September 30, 2021 and 2020 were as follows:
Concentrate sales to H&H Metal
1,845,547
5,535,899
1,476,395
4,144,583
Dore sales to refinery
253,302
329,809
79,675
136,818
At September 30, 2021 and December 31, 2020, our gold sales receivable balance related to contracts with customers of $212,125 and $264,779, respectively, consist only of amounts due from H&H Metal. There is no allowance for doubtful accounts.
9
5.Related Party Transactions
At September 30, 2021 and December 31, 2020, the Company had the following note and interest payable to related parties:
Ophir Holdings LLC, a company owned by two officers of the Company, 6% interest, monthly payments of $3,777 with a balloon payment of $71,075 in February 2023
126,713
154,312
Current portion
(38,781)
(37,078)
Long term portion
As of September 30, 2021 and December 31, 2020, there was no accrued interest payable to related parties. Related party interest expense for the three and nine-months ended September 30, 2021 and 2020 is as follows.
1,994
6,397
2,537
8,588
In February 2020, the Company’s corporate secretary, Monique Hayes, participated in the Company’s convertible debt offering for $25,000. During the three and nine-month periods ended September 30, 2021 and 2020, interest expense on her note was as follows:
975
504
1,238
She converted her note in May 2021 as provided in the agreement. See Note 16.
The Company leases office space from certain related parties on a month-to-month basis. $1,500 per month is paid to NP Depot, a company owned by the Company’s president, John Swallow. Payments under these short-term lease arrangements are included in general and administrative expenses on the Consolidated Statement of Operations and are as follows:
6,364
18,791
6,210
18,630
6. Joint Ventures
New Jersey Mill Joint Venture Agreement
The Company owns 65% of the New Jersey Mill Joint Venture (JV) and has significant influence in its operations. Thus, the venture is included in the consolidated financial statements along with presentation of the non-controlling interest. At September 30, 2021 and December 31, 2020, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (“Crescent”), for $1,641 and $4,177, respectively, for shared operating costs as defined in the JV agreement.
Butte Highlands JV, LLC (“BHJV”)
On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) from Timberline Resources Corporation for $225,000 in cash and 3,000,000 restricted shares of the Company’s common stock valued at $210,000 for a total consideration of $435,000. Highland Mining, LLC (“Highland”) is the other 50% owner and manager of the joint venture. Under the agreement, Highland will fund all future project exploration and mine development costs. The agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the joint venture’s activities, it accounts for its investment on a cost basis.
10
7.Earnings per Share
Net income (loss) per share is computed by dividing the net amount excluding net income (loss) attributable to a non-controlling interest by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. Such common stock equivalents are included or excluded from the calculation of diluted net income (loss) per share for each period as follows:
Incremental shares included in diluted net income (loss) per share
Stock options
2,669,034
Stock purchase warrants
1,029,486
3,698,520
Excluded in diluted net income (loss) per share as inclusion would have an antidilutive effect:
5,500,000
5,138,889
5,525,000
1,943,466
4,612,500
5,697,249
4,859,286
6,641,694
16,722,249
11,941,641
16,393,083
8.Property, Plant, and Equipment
Property, plant and equipment at September 30, 2021 and December 31, 2020 consisted of the following:
December
31, 2020
Mill
Land
225,289
Building
536,193
Equipment
4,192,940
4,954,422
Less accumulated depreciation
(1,043,078)
(914,095)
Total mill
3,911,344
4,040,327
Building and equipment
Buildings
324,075
297,932
4,727,631
3,250,551
5,051,706
3,548,483
(1,674,965)
(1,229,136)
Total building and equipment
3,376,741
2,319,347
Bear Creek
266,934
BOW
230,449
Eastern Star
250,817
Gillig
79,137
Highwater
40,133
Total land
867,470
11
9.Mineral Properties
Mineral properties at September 30, 2021 and December 31, 2020 consisted of the following:
Golden Chest
Mineral Property
1,575,832
1,539,001
Infrastructure
978,842
468,669
Total Golden Chest
2,554,674
2,007,670
New Jersey
248,289
McKinley-Monarch
Butte Potosi
274,440
Alder Gulch
2,473,066
773,101
Park Copper
78,000
Less accumulated amortization
(59,998)
(48,267)
For the three and nine-months periods ended September 30, 2021 $16,029 and $42,545, respectively of interest expense was capitalized in association with the ramp access project at the Golden Chest. No interest was capitalized in 2020.
In February 2021 the Company paid $10,000 and in April of 2021 the Company paid an additional $1,689,965 to complete the purchase of approximately 508 acres of land adjacent to the Alder Gulch property for a total of $1,699,965 in cash.
In August 2021 the Company paid $78,000 in cash for 100 acres of patented mineral property in Shoshone County referred to as Park Copper.
10.Investment in Buckskin
In August 2021 the Company exchanged 643,153 shares of the Company’s common stock for 22% of Buckskin Gold and Silver Inc. The Company’s closing share price on the date of the agreement (August 18, 2021) was recorded as the cost basis for the property.
12
11. Notes Payable
At September 30, 2021 and December 31, 2020, notes payable are as follows:
Paus 2 yrd. LHD, 48-month note payable, 4.78% interest rate payable through September 2024, monthly payments of $5,181
177,893
217,354
Paus 2 yrd. LHD, 60-month note payable, 3.45% interest rate payable through July 2024, monthly payments of $4,847
156,772
195,768
Compressor, 48-month note payable, 5.25% interest rate payable monthly through November 2021, monthly payments of $813
2,844
9,958
CarryAll transport, 36-month note payable, 4.5% interest rate payable monthly through June 2024, monthly payments of $627
19,421
CarryAll transport, 36-month note payable, 4.5% interest rate payable monthly through February 2024, monthly payments of $303
8,321
Atlas Copco loader, 60-month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550
67,807
93,265
Sandvik LH203 LHD, 36-month note payable, 4.5% interest payable monthly through May 2027, monthly payments of $10,352
311,608
Doosan Compressor, 36-month note payable, 6.99% interest payable monthly through July 2024, monthly payments of $602
18,558
Caterpillar 306 excavator, 48-month note payable, 4.6% interest payable monthly through November 2024, monthly payments of $1,512
53,355
64,896
Caterpillar 938 loader, 60-month note payable, 6.8% interest rate payable monthly through August 2023, monthly payments of $3,751
80,671
109,492
Caterpillar R1600 LHD, 48-month note payable, 4.5% interest rate payable through January 2025, monthly payments of $17,125
634,922
Caterpillar AD22 underground truck, 48-month note payable, 6.45% interest rate payable through June 2023, monthly payments of $12,979
256,608
358,043
Total notes payable
1,788,780
1,048,776
Due within one year
Due after one year
All notes are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at September 30, 2021 are as follows:
12 months ended September 30,
2022
2023
637,511
2024
417,524
2025
76,007
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12. Small Business Administration Loans and Grant
On April 10, 2020, the Company received a loan of $358,346 pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The loan, which was in the form of a Note dated April 10, 2020 matures on April 9, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on October 9, 2020. The Note could be prepaid by the Company at any time prior to maturity with no prepayment penalties. This loan was forgiven after being used for qualifying expenses under the provisions of the CARES Act prior to the filing of this quarterly financial statement. Qualifying expenses included payroll costs, costs used to continue group health care benefits, rent, and utilities. The amount of the PPP loan was recognized as gain on forgiveness of the CARES Act loan in the Company’s consolidated income statement for the year ended December 31, 2020.
In April 2020, the Company received $10,000 under Division A, Title I, Section 1110 of the CARES Act. Additionally, in May 2020, the Company received a loan of $149,900 pursuant to the Small Business Act Section 7(b). The May loan which was in the form of a Note dated May 16, 2020, matures May 16, 2050 and bears interest at a rate of 3.75% per annum. Payments of $731 are due monthly and will begin in October 2021. At September 30, 2021, total accrued interest on the remaining loan is $7,734 of which $4,642 was accrued in 2021 and is included in the Small Business Administration loan balance on the consolidated balance sheet.
13. Stockholders’ Equity
Common stock activity in the second quarter of 2020 consists of the following:
·The Company closed a private placement in April 2020. Under the private placement, the Company sold 1,481,481 units at $0.135 per unit for net proceeds of $200,000. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.18 for 24 months.
Common stock activity in the third quarter of 2020 consists of the following:
·In July 2020, a holder of convertible debt converted $50,000 of debt to 277,778 shares of common stock.
·The Company closed a private placement in August 2020. Under the private placement, the Company sold 9,718,573 units at $0.28 per unit for net proceeds of $2,706,896. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.40 for 24 months.
·In the third quarter of 2020 warrants were exercised whereby 1,041,667 shares of common stock were issued for net proceeds of $208,334.
Common stock activity in the first quarter of 2021 consists of the following:
·The Company issued 10,000 shares of the Company’s common stock valued at $0.23 per share for services received of $2,300.
·Common shares of 394,737 were issued upon exercise of 625,000 options on a cashless basis. The intrinsic value of these shares was $150,000 on the date of exercise.
Common stock activity in the second quarter of 2021 consists of the following:
·The Company issued 15,000 shares of the Company’s common stock valued at $0.28 per share for services received of $4,200.
·Common shares of 50,000 were issued upon exercise of 100,000 options on a cashless basis. The intrinsic value of these shares was $14,000 on the date of exercise.
·277,778 warrants to purchase shares of the Company’s stock were exercised at $0.18 for $50,000 in cash.
·4,083,333 shares were issued at $0.18 per share in exchange for $735,000 of convertible debt. (Note 16)
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13. Stockholders’ Equity (continued)
Common stock activity in the third quarter of 2021 consists of the following:
·555,556 shares were issued at $0.18 per share in exchange for $100,000 of convertible debt. (Note 16)
·The Company issued 643,153 shares of the Company’s common stock for 22% of Buckskin Gold and Silver in August 2021.
Stock Purchase Warrants Outstanding
The activity in stock purchase warrants is as follows:
Number of
Warrants
Exercise Prices
Balance December 31, 2019
12,900,123
$0.18-0.22
Issued
5,600,027
$0.18-0.40
Expired
(10,816,789)
$0.20-0.22
Exercised
(1,708,334)
$0.20
Balance December 31, 2020
5,975,027
(277,778)
$0.18
These warrants expire as follows:
Shares
Exercise Price
Expiration Date
375,000
December 14, 2023
462,963
April 21, 2022
$0.40
August 28, 2022
14. Stock Options
No options were granted in the second quarter of 2020 or 2021. In February 2021, the board granted 4,100,000 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $0.40 for 3 years. Total stock-based compensation recognized on these options during the three-month period ended March 31, 2021 was $604,571. The weighted average fair value of stock option awards granted and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows: volatility of 97.9%, risk-free interest rate of 0.19%, an expected term of three years, dividend rate of 0.00% and forfeiture rate of 0.00%. In March 2021, the Company granted 50,000 stock options to an individual for services rendered to the Company. These options vested immediately and are exercisable at $0.40 for 3 years. Total stock-based compensation recognized on these options was $9,860 during the three-month period ended March 31, 2021. The weighted average fair value of stock option awards granted and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows: volatility of 99.3%, risk-free interest rate of 0.33%, expected term of three years, dividend rate of 0.00% and forfeiture rate of 0.00%. In the three and nine-month periods ending September 30, 2021 $0 and 725,000, respectively, options were exercised in cashless exercises for 444,737 shares of the Company’s common stock.
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14. Stock Options (continued)
Activity in the Company’s stock options is as follows:
Number of Options
5,262,500
0.10-0.18
(1,150,000)
(2,012,500)
2,100,000
0.10-0.14
(725,000)
0.14
4,150,000
0.40
0.10-0.40
Exercisable at September 30, 2021
At September 30, 2021, outstanding stock options have a weighted average remaining term of approximately 1.91 years and an intrinsic value of approximately $253,750. Intrinsic value of the options exercised for the nine-month period ended September 30, 2021 was $164,000.
15. Asset Retirement Obligation
The Company has established asset retirement obligations associated with the ultimate closing of its mineral properties where there has been or currently are operations. Activity for the nine months ended September 30, 2021 and 2020 is as follows:
Nine Months Ended
Balance at beginning of period
163,369
Accretion expense
Change in asset retirement obligation estimate
(10,606)
Balance at end of period
170,539
The change in the asset retirement obligation estimate during the current quarter related to a revision to the estimated start of the reclamation process to a later date at our Golden Chest properties.
16. Convertible Debt
In February 2020, the Company issued convertible promissory notes with an aggregate principal value of $885,000 from which funds were utilized for the purchase of the Alder Gulch property (Note 9). The notes are collateralized by the Alder Gulch property as well as other unencumbered real property that the Company currently owns. The outstanding principal amount of the notes bears interest at an annual rate of 8.0% with interest payments due monthly and the principal due in February 2023. The principal amount of the notes is convertible at the option of the note holders into shares of the Company’s common stock at a price of $0.18 per share (4,916,667 shares) prior to the maturity date of the notes. In July 2020, one of the participants converted $50,000 in debt for 277,778 shares of the Company’s common stock. In the second quarter of 2021, an additional 7 participants converted $735,000 in debt for 4,083,333 shares of the Company’s common stock. The one remaining participant converted $100,000 in debt for 555,556 shares of the Company’s common stock in July 2021.
In July 2020, a current participant was issued a convertible promissory note for a principal balance of $200,000 which funds were utilized for the purchase of a new jumbo underground drill. The note is collateralized by the drill. The outstanding principal amount of the note bears interest at an annual rate of 6.0% with interest payments due monthly and the unpaid principal due in June 2023. The principal amount of the note is convertible at the option of the note holder into shares of the Company’s common stock at a price of $0.40 per share (500,000 shares) prior to the maturity date of the note.
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16. Convertible Debt (continued)
The Company issued convertible promissory notes with an aggregate principal value of $1,600,000 in February 2021 and an additional $150,000 in May 2021 for a total of $1,750,000 from which funds were utilized for the purchase of an addition to the Alder Gulch property (Note 9). The notes are collateralized by the Alder Gulch property as well as other unencumbered real property that the Company currently owns. The outstanding principal amount of the notes bears interest at an annual rate of 8.0% with interest payments due monthly and the principal due in March 2024. The principal amount of the notes is convertible at the option of the note holders into shares of the Company’s common stock at a price of $0.35 per share (5,000,000 shares) prior to the maturity date of the notes.
17.Subsequent Events
The Company closed a private placement in October 2021. Under the private placement, the Company sold 6,600,000 units at $0.30 per unit for net proceeds of $1,980,000. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.40 for 24 months.
A special meeting of the Company’s shareholders was held October 6, 2021, at which two proposals were presented. The first proposal was for an amendment and restatement of the Company’s Articles of Incorporation to effect a reverse stock split of outstanding Common Stock at a ratio of one for fourteen. The second proposal was for an amendment and restatement of the Company’s Articles of Incorporation to change the Company’s name from New Jersey Mining Company to Idaho Strategic Resources, Inc. Both proposals were approved by shareholders and are awaiting Financial Industry Regulatory Authority “FINRA” approval.
On October 20, 2021 the Board of Directors granted 2,550,000 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $0.40 for 3 years.
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ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
New Jersey Mining Company is a gold producer focused on diversifying and building its asset base and cash flows through a portfolio of mineral properties located in historic producing gold districts in Idaho and Montana.
The Company’s plan of operation is to generate positive cash flow, while reducing debt and growing its production and asset base over time while being mindful of corporate overhead. The Company’s management is focused on utilizing its in-house skills to build a portfolio of producing mines and milling operations with a primary focus on gold and secondary focus on silver and base metals.
The Company’s properties include: the Golden Chest Mine (currently in production), the New Jersey Mill (majority ownership interest), and a 50% carried to production interest in the past producing Butte Highlands Mine located in Montana. In addition to its producing and near-term production projects, New Jersey Mining Company has additional exploration prospects, including the McKinley-Monarch and Eastern Star located in Central Idaho, and additional holdings near the Golden Chest in the Murray Gold Belt including the 876 acres of patented claims in Alder Gulch purchased in the first quarter of 2020 and 2021. In early 2020, the Company added the Roberts and Diamond Creek rare earth element properties in Idaho. Both properties are listed as belonging to the national inventory as recognized by the USGS and other agency reports. If a large economic deposit of rare earth elements becomes a reality on either of these properties, they could become an important source of critical minerals for the United States. The Company added these projects to its portfolio of exploration properties to diversify its holdings and build potential shareholder value from the anticipated demand for these elements in the electrification of motorized vehicles, permanent magnets, and other products focused on a low-carbon and “green” future.
COVID-19 Coronavirus Pandemic Response and Impact
Following the outbreak of the COVID-19 coronavirus global pandemic ("COVID-19") in early 2020, in March 2020 the U.S. Centers for Disease Control issued guidelines to mitigate the spread and health consequences of COVID-19. The Company implemented changes to its operations and business practices to follow the guidelines and minimize physical interaction, including using technology to allow employees to work from home when possible and altering production procedures and schedules, asset maintenance, and limiting discretionary spending. As long as they are required, the operational practices implemented could have an adverse impact on our operating results due to deferred production and revenues or additional costs. The negative impact of COVID-19 remains uncertain, including on overall business and market conditions. There is uncertainty related to the potential additional impacts COVID-19 could have on our operations and financial results for the year.
Highlights during the third quarter of 2021 include:
·At the Golden Chest, ore mined from underground stopes totaled approximately 6,310 tonnes of which about one-half was from the 833 stope and the remainder from the 824 stope. Development waste tonnage totaled 3,160 tonnes as the Main Access Ramp (MAR) was extended at depth. A second ventilation and escapeway raise was partially completed by the Company’s in-house mining crews during the quarter. During the quarter, operations were temporarily halted due to a rock fall and injury to one miner working in the 833N stope. Access to the 833N stope was restricted for two weeks, but access to the rest of the mine was permitted. This and a temporary road closure due to area forest fires also impacted operations during the 3rd quarter.
·Open pit mining progressed from the 1017 bench to the 1011 bench as production averaged 1,180 tonnes per day. Mining continued through the Klondike area as historic stopes were encountered that reduced the ore tonnage modeled.
·For the quarter ended September 30, 2021 a total of 12,554 dry metric tonnes (dmt) were processed at the Company’s New Jersey mill with a flotation feed head grade of 3.22 gpt with gold recovery of 87.8%
·The Company drilled 1,416 meters during the quarter and released core drilling results from the Joe Dandy area of the Golden Chest mine which is on the southern end of the property. The intercepts are summarized below:
oGC 21-194 intercepted 0.5 meters of 7.8 gpt gold in the upper vein and 0.4 meters of 4.6 gpt gold in the lower vein.
oGC 21-195 intercepted 0.5 meters of 3.8 gpt gold in the upper vein and 0.4 meters of 2.9 gpt gold in the lower vein.
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oGC 21-196 intercepted 0.6 meters of 8.3 gpt gold in the upper vein and 1.7 meters of 2.7 gpt gold in the lower vein.
oGC 21-197 intercepted 2.56 meters of 10.98 gpt gold (including 0.94 meters of 28.7 gpt gold) in the upper vein and 0.53 meters of 2.60 gpt gold in the lower vein.
·The Company released core drilling results from the Klondike area of the Golden Chest mine which is located on the northern end of the property, and the intercepts are summarized below.
oGC 21-203 intercepted 1.8 meters of 14.4 gpt gold (including 0.8 meters of 31.8 gpt gold).
oGC 21-204 intercepted 7.5 meters of 5.2 gpt gold (including 3.3 meters of 9.4 gpt gold) in the upper vein and 3.4 meters of 12.2 gpt gold (including 1.1 meters of 34.1 gpt gold) in the lower vein.
oGC 21-205 intercepted multiple zones of gold mineralization summarized below:
o1.4 meters of 12.2 gpt gold from 117.9 to 118.9 m.
o1.1 meters of 6.4 gpt gold from 126.4 to 127.5 m.
o2.3 meters of 15.5 gpt gold from 165.0 to 167.3 m (including 0.5 meters of 35.4 gpt gold and 0.1 meter of 138 gpt gold).
o7.6 meters of 1.9 gpt gold from 175.2 to 186.3 m (including 1.3 meters of 6.9 gpt gold).
o1.8 meters of 3.8 gpt gold from 207.9 to 209.7 m.
o6.0 meters of 3.1 gpt gold from 225.21 to 231.2 m (including 3.1 meters of 5.4 gpt gold).
o1.5 meters of 3.3 gpt gold from 233.5 to 235.0 m.
o3 meters of 7.8 gpt gold from 246.6 to 247.9 m.
·The Company’s Roberts and Diamond Creek Rare Earth Element projects were included in the Earth MRI program overseen by the United States Geologic Survey (USGS) and conducted by the Idaho Geologic Survey (IGS). Additional groundwork was completed at Diamond Creek, including advancing the plan of operations for a 10-hole drill program. Furthermore, it is anticipated that core samples from this drill program are to be included in future partnership discussions with the IGS and University of Idaho, with an eye toward further drilling, extraction, separation, and processing of REE’s in Idaho.
Results of Operations
Our financial performance during the quarter is summarized below:
·The Company had a gross profit of $278,010 and $568,855 for the three and nine-month periods ended September 30, 2021 compared to a gross loss of $107,237 and gross profit of $24,033 for the comparable periods in 2020. Gross profit increased primarily because of improved grade of mineralized material being mined and processed and increased production.
·Cash costs per ounce decreased for the three and nine-month periods ended September 30, 2021, to $1,256.75 and $1,296.27 per ounce compared to $1,855.58 and $1,372.68, respectively, per ounce in 2020 because of increased grade of mineralized material being mined and processed in the periods and increased production. AISC per ounce decreased to $1,592.34 for the three-month period ended September 30, 2021 compared to $2,368.21 for the comparable period in 2020 as a result of increased grade of mineralized material being mined and processed in the periods and increased production. AISC per ounce increased to $1,741.66 per ounce for the nine-month period ended September 30, 2021 compared to $1,628.91 for the comparable period in 2020 due to additional exploration core drilling completed by an outside drill contractor in the first quarter of 2021.
·Revenue was $2,098,849 and $5,865,708 for the three and nine-month periods ended September 30, 2021 compared to $1,556,070 and $4,281,401 for the comparable periods of 2020. The increase was a result of a higher average gold grade and increased production in 2021 compared to 2020.
·An operating loss of $219,345 for the three-month period ended September 30, 2021 compared to operating income of $10,707 in the comparable period of 2020. This was a result of increased exploration spending for the three months ended September 30, 2021. An operating loss of $1,975,020 for the nine-month period ended September 30, 2021 compared to operating loss of $315,774 in the comparable period of 2020. The increased loss for the nine-month period in 2021 was mostly a result of increased core drilling and expense for stock options granted in the first quarter of 2021.
·Net loss of $237,671 and $2,040,843 for the three and nine-month periods ended September 30, 2021 compared to net loss of $7,327 and $382,028 for the three and nine-month periods ended September 30, 2020. the reasons for these changes are the same as those for the operating loss described above.
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·Exploration costs increased in 2021 compared to 2020 as a result of contract core drilling that the Company had done in the first quarter of 2021 and additional core drilling completed by the Company’s drill in 2021. A total of 3,500 meters of core drilling was completed by a contractor in the first quarter of 2021.
·Management, professional services, and general and administrative expenses increased in the nine-month period ended September 21, 2021 compared to 2020 as a result of options being granted to management, directors, and employees for a total cost of $604,572.
·Timber revenue decreased in 2021. In 2020 more sales of timber at the Company’s Potosi property were realized.
·The consolidated net loss for the nine-months ended September 30, 2021 and 2020 included non-cash charges as follows: depreciation and amortization of $595,227 ($425,641 in 2020), write off of equipment of $0 in 2021 ($9,537 in 2020), adjustment on inventory to net realizable value of $0 in 2021 ($32,098 in 2020), accretion of asset retirement obligation of $7,476 ($7,170 in 2020), stock-based compensation of $614,431 in 2021 ($0 in 2020) , and the issuance of common stock for services $6,500 in 2021 ($0 in 2020).
Cash Costs and All-In Sustaining Costs Reconciliation to GAAP-Reconciliation of cost of sales and other direct production costs and depreciation, depletion and amortization (GAAP) to cash cost per ounce and all-in sustaining costs (AISC) per ounce (non-GAAP).
The table below presents reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion and amortization to the non-GAAP measures of cash cost per ounce and all in sustaining costs per ounce for the Company’s gold production in the three and nine-month periods ended September 30, 2021 and 2020.
Cash cost per ounce is an important operating measure that we utilize to measure operating performance. AISC per ounce is an important measure that we utilize to assess net cash flow after costs for pre-development, exploration, reclamation, and sustaining capital. Current GAAP measures used in the mining industry, such as cost of goods sold do not capture all of the expenditures incurred to discover, develop, and sustain gold production.
Cost of sales and other direct production costs and depreciation and amortization
1,663,306
(217,054)
(595,227)
(156,324)
(425,641)
Change in concentrate inventory
37,535
64,526
33,407
Cash Cost
1,641,320
4,848,057
1,571,508
3,865,134
267,643
Sustaining capital
78,380
349,363
274,199
286,889
308,233
Less stock-based compensation and other non-cash items
(9,178)
(628,407)
(2,426)
(7,170)
All in sustaining costs
2,079,595
6,513,805
2,005,657
4,586,614
Divided by ounces produced
1,306
3,740
847
2,816
Cash cost per ounce
1,256.75
1,296.27
1,855.58
1,372.68
All in sustaining cost (AISC) per ounce
1,592,34
1,741.66
2,368.21
1,628.91
Financial Condition and Liquidity
For the Nine Months Ended September 30,
Net cash provided (used) by:
Operating activities
Investing activities
Financing activities
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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required for small reporting companies.
ITEM 4: CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
At September 30, 2021, our Vice President who also serves as our Chief Accounting Officer evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), which disclosure controls and procedures are designed to insure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within required time periods specified by the Securities & Exchange Commission rules and forms.
Based upon that evaluation, it was concluded that our disclosure controls were effective as of September 30, 2021, to ensure timely reporting with the Securities and Exchange Commission. Specifically, the Company’s corporate governance and disclosure controls and procedures provided reasonable assurance that required reports were timely and accurately reported in our periodic reports filed with the Securities and Exchange Commission.
Changes in internal control over financial reporting
There was no material change in internal control over financial reporting in the quarter ended September 30, 2021.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Neither the constituent instruments defining the rights of the Company’s securities filers nor the rights evidenced by the Company’s outstanding common stock have been modified, limited or qualified.
The Company closed a private placement in April 2020. Under the private placement, the Company sold 1,481,481 units at $0.135 per unit for net proceeds of $200,000. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.18 for 24 months. The Company closed a private placement in August 2020. Under the private placement, the Company sold 9,718,572 units at $0.28 per unit for net proceeds of $2,706,896. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.18 for 24 months. In July of 2020 277,778 shares of the Company’s stock were issued to a holder of convertible debt at a rate of $0.18 per share in exchange for $50,000 in debt. In the third quarter of 2020 1,041,667 shares were issued in exchange for outstanding warrants for net proceeds of $208,334.
In the first quarter of 2021 the Company issued 10,000 shares of common stock at $0.23 per share for services provided for a total value of $2,300. Also, in the first quarter of 2021 625,000 options were exercised in exchange for 394,737 shares at $0.38 per share in a cashless warrant exercise. In the second quarter of 2021 the Company issued 15,000 shares of common stock at $0.28 per share for services provided for a total value of $4,200. 277,778 warrants were exercised at $0.18 per share for $50,000. 4,083,333 options were exercised at $0.18 per share in exchange for $735,000 of convertible debt. Also, in the second quarter of 2021 100,000 options were exercised in exchange for 50,000 shares at $0.28 per share in a cashless warrant exercise. In the third quarter of 2021 555,556 options were exercised at $0.18 per share in exchange for $100,000 of convertible debt. Also, in August of 2021 the Company issued 643,153 shares of common stock $0.30 per share for 22.23% of Buckskin Gold and Silver company.
The Company relied on the transaction exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D Rule 506(b). The common shares are restricted securities which may not be publicly sold unless registered for resale with the Securities and Exchange Commission or exempt from the registration requirements of the Securities Act of 1933, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company has no outstanding senior securities.
ITEM 4. MINE SAFETY DISCLOSURES
Pursuant to Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety
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violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the quarter ended September 30, 2021, the Company had four citations for a violation of mandatory health or safety standards that could significantly and substantially (S&S citation) contribute to the cause and effect a mine safety or health hazard under section 104 of the Federal Mine Safety and Health Act of 1977. There were no legal actions, mining-related fatalities, or similar events in relation to the Company’s United States operations requiring disclosure pursuant to Section 1503(a) of the Dodd-Frank Act.
ITEM 5. OTHER INFORMATION
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ITEM 6. EXHIBITS
3.0*Articles of Incorporation of New Jersey Mining Company filed July 18, 1996
3.1*Articles of Amendment filed September 29, 2003
3.2*Articles of Amendment filed November 10, 2011
3.3*Bylaws of New Jersey Mining Company
10.1*Venture Agreement with United Mine Services, Inc. dated January 7, 2011.
10.2**Rupp Mining Lease dated May 3, 2013
10.3***Consent, Waiver and Assumption of Venture Agreement by Crescent dated February 14, 2014
10.4Form of Agreement to Purchase the “Four Square Property Group” of Patented and Un-Patented Mining Claims dated March 2, 2018, incorporated by reference to the Company’s Form 8-K as filed with the Securities and exchange Commission on March 7, 2018,
10.5Form of Convertible Note Purchase Agreement dated as of February 18, 2020, incorporated by reference to the Company’s 8-K as filed with the Securities and Exchange Commission on February 20, 2020.
10.6Form of Convertible Promissory Note dated as of February 18, 2020, incorporated by reference to the Company’s 8-K as filed with the Securities and Exchange Commission on February 20, 2020.
10.7Form of Convertible Note Purchase Agreement dated as of April 14, 2021, incorporated by reference to the Company’s 8-K as filed with the Securities and Exchange Commission on April 19, 2021.
10.8Form of Convertible Promissory Note dated as of April 14, 2021, incorporated by reference to the Company’s 8-K as filed with the Securities and Exchange Commission on April 19, 2021.
14*Code of Ethical Conduct.
21*Subsidiaries of the Registrant
31.1****Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2****Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1****Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2****Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99(i)Audit Committee Pre-Approval Policies-Filed as an exhibit to the registrant’s annual report on Form 10-KSB for the year ended December 31, 2003 and incorporated by reference herein.
101.INS****XBRL Instance Document
101.SCH****XBRL Taxonomy Extension Schema Document
101.CAL****XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF****XBRL Taxonomy Extension Definition Linkbase Document
101.LAB****XBRL Taxonomy Extension Label Linkbase Document
101.PRE****XBRL Taxonomy Extension Presentation Linkbase Document
* Filed with the Registrant’s Form 10 on June 4, 2014.
**Filed July 2, 2014
***Filed March 31, 2015.
****Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
By: /s/ John Swallow
John Swallow,
its: President and Chief Executive Officer
Date November 15, 2021
By: /s/ Grant Brackebusch
Grant Brackebusch,
its: Vice President and Chief Financial Officer
Date: November 15, 2021
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