10-Q

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 June 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 August 1, 2021, 142,959,713 shares of the registrant’s common stock were outstanding.

1

NEW JERSEY MINING COMPANY 

QUARTERLY REPORT ON FORM 10-Q 

FOR THE QUARTERLY PERIOD  

ENDED JUNE 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 16 

ITEM 3: Quantitative and Qualitative Disclosures about Market Risk 19 

ITEM 4: Controls and Procedures 19 

PART II - OTHER INFORMATION 19 

ITEM 1. Legal Proceedings 19 

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds. 19 

ITEM 3. Defaults upon Senior Securities 19 

ITEM 4. Mine Safety Disclosures 19 

ITEM 5. Other Information 19 

ITEM 6. Exhibits 20 

2

PART I - FINANCIAL INFORMATION

ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS

New Jersey Mining Company Consolidated Balance Sheets (Unaudited)
		June 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	994,681	$	2,539,945
Gold sales receivable		263,585		264,779
Inventories		293,640		402,537
Joint venture receivable		2,465		4,177
Other current assets		259,107		224,063
Total current assets		1,813,478		3,435,501
Property, plant and equipment, net of accumulated depreciation		8,235,389		7,227,144
Mineral properties, net of accumulated amortization		5,512,026		3,455,233
Investment in joint venture		435,000		435,000
Reclamation bond		103,320		103,320
Deposits		34,692		12,863
Total assets	$	16,133,905	$	14,669,061
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	634,387	$	687,331
Accrued payroll and related payroll expenses		153,040		143,485
Notes payable related parties, current portion		38,205		37,078
Notes payable, current portion		645,390		339,704
Small Business Administration loan, current portion		2,588		1,741
Total current liabilities		1,473,610		1,209,339
Asset retirement obligation		178,036		173,001
Notes payable related parties, long term		97,845		117,234
Convertible debt		2,050,000		1,010,000
Convertible debt-related party		-		25,000
Notes payable, long term		1,284,079		709,072
Small Business Administration loan, long term		163,484		161,251
Total long-term liabilities		3,773,444		2,195,558
Total liabilities		5,247,054		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; June 30, 2021–142,404,157 and December 31, 2020- 137,573,309 shares issued and outstanding		22,391,993		20,986,062
Accumulated deficit		(14,428,461)		(12,672,786)
Total New Jersey Mining Company stockholders’ equity		7,963,532		8,313,276
Non-controlling interest		2,923,319		2,950,888
Total stockholders' equity		10,886,851		11,264,164
Total liabilities and stockholders’ equity	$	16,133,905	$	14,669,061

The accompanying notes are an integral part of these consolidated financial statements.

3

New Jersey Mining Company Consolidated Statements of Operations (Unaudited) For the Three and Six Month Periods Ended June 30, 2021 and 2020
	June 30, 2021				June 30, 2020
		Three Months		Six Months		Three Months		Six Months
Revenue:
Sales of products	$	2,180,232	$	3,766,859	$	1,324,498	$	2,725,331
Total revenue		2,180,232		3,766,859		1,324,498		2,725,331
Costs of Sales:
Cost of sales and other direct production costs		1,622,606		3,097,841		1,157,356		2,324,745
Depreciation and amortization		195,377		378,173		133,783		269,317
Total costs of sales		1,817,983		3,476,014		1,291,139		2,594,062
Gross profit		362,249		290,845		33,359		131,269
Other operating expenses:
Exploration		208,170		925,877		47,237		88,916
Loss on write off equipment		-		-		-		9,537
Management		55,331		256,391		36,094		73,424
Professional services		43,430		166,081		40,797		113,208
General and administrative		136,007		649,842		103,982		190,470
Total other operating expenses		442,938		1,998,191		228,110		475,555
Operating income (loss)		(80,689)		(1,707,346)		(194,751)		(344,286)
Other income (expense):
Small Business Administration grant income		-		-		10,000		10,000
Timber revenue net of costs		735		4,338		13,345		31,652
Interest income		32		123		11		1,589
Interest expense		(60,846)		(100,287)		(41,117)		(73,656)
Total other income (expense)		(60,079)		(95,826)		(17,761)		(30,415)
Net income (loss)		(140,768)		(1,803,172)		(212,512)		(374,701)
Net income (loss) attributable to non-controlling interest		(31,580)		(47,497)		(32,299)		(48,220)
Net income (loss) attributable to New Jersey Mining Company	$	(109,188)	$	(1,755,675)	$	(180,213)	$	(326,481)
Net income (loss) per common share-basic and diluted	$	(0.00)	$	(0.01)	$	(0.00)	$	(0.00)
Weighted average common shares outstanding-basic and diluted		139,016,013		138,345,689		124,935,465		124,373,804

The accompanying notes are an integral part of these consolidated financial statements.

4

New Jersey Mining Company Consolidated Statement of Changes in Stockholders' Equity (Unaudited) For the Six Month Periods Ended June 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		2,659
Net income (loss)	-		-		(146,268)		(15,921)		(162,189)
Balance, March 31, 2020	123,812,144	$	17,682,999	$	(12,176,178)	$	2,990,626	$	8,497,447
Contribution from non-controlling interest in Mill JV	-		-		-		19,403		19,403
Issuance of common stock and warrants for cash	1,481,481		200,000		-		-		200,000
Net income (loss)	-		-		(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
Balance January 1, 2021	137,573,309	$	20,986,062	$	(12,672,786)	$	2,950,888	$	11,264,164
Contribution from non-controlling interest in Mill JV	-		-		-		2,469		2,469
Issuance of common stock for services	10,000		2,300		-		-		2,300
Options issued to management, directors, and employees	-		604,571		-		-		604,571
Options issued for services	-		9,860		-		-		9,860
Issuance of common stock for cashless option exercise	394,737		-		-		-		-
Net income (loss)	-		-		(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
Contribution from non-controlling interest in Mill JV	-		-		-		17,459		17,459
Issuance of common stock for services	15,000		4,200		-		-		4,200
Issuance of common stock for warrants exercised	277,778		50,000		-		-		50,000
Issuance of common stock for cashless option exercise	50,000		-		-		-		-
Conversion of convertible debt to common stock	4,083,333		735,000		-		-		735,000
Net income (loss)	-		-		(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

The accompanying notes are an integral part of these consolidated financial statements.

5

New Jersey Mining Company Consolidated Statements of Cash Flows (Unaudited) For the Six Month Periods Ended June 30, 2021 and 2020
	June 30,
		2021		2020
Cash flows from operating activities:
Net income (loss)	$	(1,803,172)	$	(374,701)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Depreciation and amortization		378,173		269,317
Loss on write off of equipment		-		9,537
Accretion of asset retirement obligation		5,035		4,745
Stock based compensation		614,431		-
Issuance of common stock for services		6,500		-
Change in operating assets and liabilities:
Gold sales receivable		1,194		(68,957)
Inventories		108,896		(49,694)
Joint venture receivable		1,712		(2,717)
Other current assets		(35,042)		53,690
Accounts payable and other accrued liabilities		(49,864)		(190,246)
Accrued payroll and related payroll expenses		9,555		3,156
Net cash provided (used) by operating activities		(762,582)		(345,870)
Cash flows from investing activities:
Purchases of property, plant and equipment		(249,328)		(12,689
Deposits on equipment		(21,829)		-
Purchase of mineral property		(2,063,742)		(747,193)
Net cash used by investing activities		(2,334,899)		(759,882)
Cash flows from financing activities:
Proceeds from sale of common stock and warrants net of issuance cost		-		200,000
Exercise of common stock warrants		50,000		-
Principal payments on notes payable		(249,449)		(288,026)
Principal payments on notes payable, related parties		(18,262)		(44,639)
Issuance of convertible debt		1,750,000		885,000
Proceeds from Small Business Administration loans				509,717
Contributions from non-controlling interest		19,928		22,062
Net cash provided by financing activities		1,552,217		1,284,114
Net change in cash and cash equivalents		(1,545,264)		178,362
Cash and cash equivalents, beginning of period		2,539,945		217,796
Cash and cash equivalents, end of period	$	994,681	$	396,158
Non-cash investing and financing activities:
Deposit on property applied to purchase of mineral property		-	$	25,000
Notes payable for equipment purchase	$	1,130,143		-
Conversion of convertible debt to common stock	$	735,000		-

The accompanying notes are an integral part of these consolidated financial statements.

6

New Jersey Mining Company

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 of 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 six-month period ended June 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

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) 

7

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

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 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 June 30, 2021, and December 31, 2020, the Company had no assets or liabilities that required measurement at fair value on a recurring basis.

Reclassifications

Certain prior period amounts have been reclassified to conform to the 2021 financial statement presentation. Reclassifications had no effect on net 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.

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.

8

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

3. Inventories 

At June 30, 2021 and December 31, 2020, the Company’s inventories consisted of the following:

		June 30, 2021		December 31, 2020
Concentrate inventory
In process	$	64,699	$	90,743
Finished goods		142,715		230,318
Total concentrate inventory		207,414		321,061
Supplies inventory
Mine parts and supplies		52,358		52,600
Mill parts and supplies		33,868		28,876
Total supplies inventory		86,226		81,476
Total	$	293,640	$	402,537

The carrying value of inventory is determined each period based on the lower of cost or net realizable value. At June 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 June 30, 2021, metals that had been sold but not final settled thus exposed to future price changes totaled 1,833 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 for the three and six-month periods ended June 30, 2021 and 2020 were as follows:

	June 30, 2021				June 30, 2020
	Three Months		Six Months		Three Months		Six Months
Gold	$	2,296,378	$	4,010,102	$	1,461,249	$	2,980,560
Silver		9,103		13,424		2,905		5,946
Less: Smelter and refining charges		(125,249)		(256,667)		(139,656)		(261,175)
Total	$	2,180,232		3,766,859	$	1,324,498	$	2,725,331

Sales by significant product type for the three and six-month periods ended June 30, 2021 and 2020 were as follows:

	June 30, 2021				June 30, 2020
	Three Months		Six Months		Three Months		Six Months
Concentrate sales to H&H Metal	$	2,180,232	$	3,690,351	$	1,267,355	$	2,668,188
Dore sales to refinery		-		76,508		57,143		57,143
Total	$	2,180,232	$	3,766,859	$	1,324,498	$	2,725,331

At June 30, 2021 and December 31, 2020, our gold sales receivable balance related to contracts with customers of $263,585 and $264,779, respectively, consist only of amounts due from H&H Metal. There is no allowance for doubtful accounts.

9

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

5.Related Party Transactions 

At June 30, 2021 and December 31, 2020, the Company had the following note and interest payable to related parties:

		June 30, 2021		December 31, 2020
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	$	136,050	$	154,312
Total		136,050		154,312
Current portion		(38,205)		(37,078)
Long term portion	$	97,845	$	117,234

As of June 30, 2021 and December 31, 2020, there was no accrued interest payable to related parties. Related party interest expense for the three and six-months ended June 30, 2021 and 2020 is as follows.

2021				2020
Three Months		Six Months		Three Months		Six Months
$	2,133	$	4,402	$	2,870	$	6,051

In February 2020, the Company’s corporate secretary, Monique Hayes, participated in the Company’s convertible debt offering for $25,000. During the six-month periods ended June 30, 2021 and 2020, interest expense on her note was $975 and $734, respectively. She converted her note in May 2021 as provided in the agreement. See Note 15.

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:

2021				2020
Three Months		Six Months		Three Months		Six Months
$	6,210	$	12,427	$	6,210	$	12,420

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 June 30, 2021 and December 31, 2020, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (“Crescent”), for $2,465 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

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

7.Earnings per Share 

For the three and six-month periods ended June 30, 2021 and 2020, potentially dilutive shares including outstanding stock options (Note 13) and warrants (Note 12) and convertible debt (Note 15) were excluded from the computation of diluted loss per share because they were anti-dilutive due to net losses in those periods. For the three and six-month periods ended June 30, 2021 and 2020, potentially dilutive common stock equivalents excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive are as follows:

	June 30, 2021	June 30, 2020
Stock options	5,525,000	4,612,500
Stock purchase warrants	5,697,249	2,824,075
Convertible debt	6,055,556	4,916,667
Total	17,277,805	12,353,242

8.Property, Plant, and Equipment 

Property, plant and equipment at June 30, 2021 and December 31, 2020 consisted of the following:

		June 30, 2021		December 31, 2020
Mill
Land	$	225,289	$	225,289
Building		536,193		536,193
Equipment		4,192,940		4,192,940
		4,954,422		4,954,422
Less accumulated depreciation		(994,446)		(914,095)
Total mill		3,959,976		4,040,327
Building and equipment
Buildings		324,075		297,932
Equipment		4,595,193		3,250,551
		4,919,268		3,548,483
Less accumulated depreciation		(1,511,325)		(1,229,136)
Total building and equipment		3,407,943		2,319,347
Land
Bear Creek		266,934		266,934
BOW		230,449		230,449
Eastern Star		250,817		250,817
Gillig		79,137		79,137
Highwater		40,133		40,133
Total land		867,470		867,470
Total	$	8,235,389	$	7,227,144

11

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

9.Mineral Properties 

Mineral properties at June 30, 2021 and December 31, 2020 consisted of the following:

		June 30, 2021		December 31, 2020
Golden Chest
Mineral Property	$	1,565,518	$	1,539,001
Infrastructure		805,930		468,669
Total Golden Chest		2,371,448		2,007,670
New Jersey		248,289		248,289
McKinley-Monarch		200,000		200,000
Butte Potosi		274,440		274,440
Alder Gulch		2,473,066		773,101
Less accumulated amortization		(55,217)		(48,267)
Total	$	5,512,026	$	3,455,233

For the three and six-months periods ended June 30, 2021 $16,330 and $26,516, 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.

10. Notes Payable 

At June 30, 2021 and December 31, 2020, notes payable are as follows:

		June 30, 2021		December 31, 2020
Paus 2 yrd. LHD, 48 month note payable, 4.78% interest rate payable through September 2024, monthly payments of $5,181	$	191,204	$	217,354
Paus 2 yrd. LHD, 60 month note payable, 3.45% interest rate payable through July 2024, monthly payments of $4,847		169,883		195,768
Compressor, 48 month note payable, 5.25% interest rate payable monthly through November 2021, monthly payments of $813		5,247		9,958
CarryAll transport, 36 month note payable, 4.5% interest rate payable monthly through June 2024, monthly payments of $627		21,070
CarryAll transport, 36 month note payable, 4.5% interest rate payable monthly through February 2024, monthly payments of $303		9,131		-
Atlas Copco loader, 60 month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550		76,517		93,265
Sandvik LH203 LHD, 36 month  note payable, 4.5% interest payable monthly through May 2027, monthly payments of $10,352		338,953
Caterpillar 306 excavator, 48 month note payable, 4.6% interest payable monthly through November 2024, monthly payments of $1,512		57,246		64,896
Caterpillar 938 loader, 60 month note payable, 6.8% interest rate payable monthly through August 2023, monthly payments of $3,751		90,441		109,492
Caterpillar R1600 LHD, 48 month note payable, 4.5% interest rate payable through January 2025, monthly payments of $17,125		678,812		-
Caterpillar AD22 underground truck, 48 month note payable, 6.45% interest rate payable through June 2023, monthly payments of $12,979		290,965		358,043
Total notes payable		1,929,469		1,048,776
Due within one year		645,390		339,704
Due after one year	$	1,284,079	$	709,072

12

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

10. Notes Payable (continued) 

All notes are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at June 30, 2021 are as follows:

12 months ended June 30,
2022	$	645,390
2023		675,368
2024		457,814
2025		150,897
Total	$	1,929,469

11. 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 July 2021. At June 30, 2021, total accrued interest on the remaining loan is $6,172 of which $3,080 was accrued in 2021 and is included in the Small Business Administration loan balance on the consolidated balance sheet.

12. Stockholders’ Equity 

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 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 15) 

13

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

12. Stockholders’ Equity (continued) 

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	$0.18-0.40
Exercised	277,778	$0.18
Balance June 30, 2021	5,697,249	$0.18-0.40

These warrants expire as follows:

Shares	Exercise Price	Expiration Date
375,000	$0.18	December 14, 2023
462,963	$0.18	April 21, 2022
4,859,286	$0.40	August 28, 2022
5,697,249

13. Stock Options 

No options were granted in the second quarter of 2020 or 2021. In February 2021, the board granted 4,150,000 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, no options were granted in the second quarter of 2021. In the three and six-month periods ending June 30, 2021 100,000 and 725,000, respectively, options were exercised in cashless exercises.

Activity in the Company’s stock options is as follows:

	Number of Options		Exercise Prices
Balance December 31, 2019	5,262,500	$	0.10-0.18
Exercised	(1,150,000)		0.10-0.18
Expired	(2,012,500)		0.10-0.18
Balance December 31, 2020	2,100,000		0.10-0.14
Exercised	(725,000)		0.14
Issued	4,150,000		0.40
Balance June 30, 2021	5,525,000		0.10-0.40
Exercisable at June 30, 2021	5,525,000	$	0.10-0.40

At June 30, 2021, outstanding stock options have a weighted average remaining term of approximately 2.16 years and an intrinsic value of approximately $226,250. Intrinsic value of the options exercised for the three and six-month period ended June 30, 2021 were $14,000 and $164,000, respectively.

14

New Jersey Mining Company

Notes to Consolidated Financial Statements (Unaudited)

14. 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 six months ended June 30, 2021 and 2020 is as follows:

	Six Months Ended June 30,
		2021		2020
Balance at beginning of period	$	175,499	$	165,724
Accretion expense		2,537		2,390
Balance at end of period	$	178,036	$	168,114

15. 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. One remaining participant has yet to convert $100,000 in debt as of June 30, 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.

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.

16.Subsequent Event 

In July of 2021 the remaining participant in the first convertible promissory note issuance converted their $100,000 note for 555,556 shares of the Company’s common stock as provided in the agreement.

15

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 Companies 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. Recently, the Company added two rare earth element properties in Idaho to its portfolio of exploration properties in an effort to diversify its holdings towards the anticipated demand for these elements in the electrification of motorized vehicles.

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 second quarter of 2021 include:

·At the Golden Chest, ore mined from underground stopes totaled approximately 4,600 tonnes of which about one-half was from the new stopes 833 and 824. The Main Access Ramp (MAR) advanced to the 821 elevation by the end of the quarter for a total of 60 meters of new ramp for the quarter. A new ventilation and escapeway raise was completed by the Company’s in-house mining crews during the quarter as well. 

·Open pit mining progressed from the 1023 bench to the 1017 bench as production averaged 1,190 tonnes per day. Mining continued through the Klondike area as historic stopes were encountered that reduced the ore tonnage modeled. The Company also completed concurrent reclamation of its Rock Storage Site (RSS) on the lower lifts of the site with recontouring, application of topsoil, and seeding with a grass seed mixture.  

·For the quarter ended June 30, 2021 a total of 10,623 dry metric tonnes (dmt) were processed at the Company’s New Jersey mill with a flotation feed head grade of 4.08 gpt with gold recovery of 90.2%. 

·NJMC’s diamond core rig produced 1,097.2 meters of drilling during the 2nd quarter of 2021. Five core holes, numbered GC 21-185 through GC 21-189, were completed in the Paymaster target area. Two of the core holes (GC21-186 & GC21-187) were collared and completed at the oversize corner drill pad (N 5274225 m), before moving 120 meters northwest, to collar and complete three more holes (GC21-185, GC21-188, GC21-189). Drilling rates dramatically increased 350 meters per month from approximately 250 meters to over 600 meters; due to the addition of a night shift. The core rig is now running 22 hours a day, with a 10 hour day shift and a 12 hour night shift. 

·The Company released the results of core hole GC 21-187 which drilled through two veins in the Paymaster area. The hole intercepted 1.8 meters of 10.9 gpt gold (including 0.6 meters of 29.2 gpt gold) in the upper vein and 2.1 meters of 4.2 gpt gold (including 1.2 meters of 7.2 gpt gold) in the lower vein. 

·The Company completed the acquisition of 508 additional acres of private patented mining claims near Murray, Idaho for $1,699,965. This claim group consists of 28 patented mining claims and is contiguous with other lands  

16

owned by the Company, bringing NJMC’s private land holdings in the Murray Gold Belt to over 1,500 acres. The Company has named this property Alder Gulch.

·NJMC discovered two quartz veins, the Badger and the Argus, on its Alder Gulch property with encouraging gold assays from surface sampling. The Badger quartz vein was uncovered during road construction. All Badger vein samples contained anomalous gold with values up to 18 gpt Au. The Argus vein has been tracked for 130 meters along strike through 8 trenches, each 15 meters long. Of the 34 samples taken to date on the newly uncovered Argus vein system, 25 have anomalous gold and eight have values greater than 1 gpt Au. One sampled trench has a 45 cm banded vein interval that assayed 8.57 gpt Au 

·As part of its dual-pronged approach, the Company continued to work toward expanding its Rare Earth Element footprint during the quarter along with advancing its knowledge base of Roberts and Diamond Creek. Furthermore, the Company is working on tentative drill plans for Diamond Creek and participated in preliminary discussions with the Idaho Geologic Survey (IGS) as part of a United States Geologic Survey (USGS) program focused on advancing the future potential of Critical Minerals in this area of Idaho. 

Results of Operations

Our financial performance during the quarter is summarized below:

·The Company had a gross profit of $362,249 and $290,359 for the three and six-month periods ended June 30, 2021 compared to a gross profit of $33,359 and $131,269 for the comparable periods in 2020. Gross profit increased primarily because of improved grade of mineralized material being mined and processed. 

·Cash costs decreased for the three-month periods ended June 30, 2021, to $1,190.49 per ounce compared to $1,221.03 per ounce in 2020 because of increased grade of mineralized material being mined and processed in the period. Cash costs of $1,320.19 for the six-month period ended June 30, 2021, compared to $1,149.02 for 2020 increased as improved grade in the second quarter combined with lost production time due to the windstorm and crusher downtime in the first quarter of 2021. AISC per ounce increased to $1,603.01 for the three-month period ended June 30, 2021 compared to $1,387.29 for the comparable period in 2020 as a result of increased spending for exploration and sustaining capital expenditures. AISC per ounce increased to $1,825.69 per ounce for the six-month period ended June 30, 2021 compared to $1,294.13 for the comparable period in 2020 for the above reasons, but the largest increase in AISC costs for the six-month period was due to the successful core drilling completed in in the first quarter of 2021. 

·Revenue was $2,180,232 and $3,766,859 for the three and six-month periods ended June 30, 2021 compared to $1,324,498 and $2,725,331 for the comparable periods of 2020. The increase was a result of a higher average gold grade in 2021 compared to 2020. 

·An operating loss of $80,689 for the three-month period ended June 30, 2021 compared to operating loss of $194,751 in the comparable period of 2020. This was a result of improved gold grade for the three months ended June 30, 2021. An operating loss of $1,707,346 for the six-month period ended June 30, 2021 compared to operating loss of $344,286 in the comparable period of 2020. The increased loss for the six-month period in 2021 was mostly a result of increased core drilling and options granted in the first quarter of 2021. 

·Net loss of $140,768 and $1,803,172 for the three and six-month periods ended June 30, 2021 compared to net loss of $212,512 and $374,701 for the three and six-month periods ended June 30, 2020. the reasons for these changes are the same as those for the operating loss described above. 

·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 six-month period ended June 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 six-months ended June 30, 2021 and 2020 included non-cash charges as follows: depreciation and amortization of $378,173 ($269,317 in 2020), write off of equipment of $0 in 2021 ($9,537 in 2020), accretion of asset retirement obligation of $5,035 ($4,745 in 2020), stock-based compensation of $614,432 in 2021 ($0 in 2020) and issuance of common stock for services $6,500 (none in 2020). 

17

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 six-month periods ended June 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.

	2021				2020
	Three Months		Six Months		Three Months		Six Months
Cost of sales and other direct production costs and depreciation and amortization	$	1,817,983	$	3,476,014	$	1,291,139	$	2,594,062
Depreciation and amortization		(195,377)		(378,173		(133,783)		(269,317)
Change in concentrate inventory		11,936		108,896		(55,986)		(49,694)
Cash Cost	$	1,634,542	$	3,206,737	$	1,101,370	$	2,275,051
Exploration		208,170		925,877		47,237		88,916
Sustaining capital		228,948		278,106		1,140		12,690
General and administrative		136,007		649,842		103,982		190,470
Less stock-based compensation and other non-cash items		(6,736)		(625,967)		(2,390)		(4,745)
All in sustaining costs	$	2,200,931	$	4,434,595	$	1,251,339	$	2,562,382
Divided by ounces produced		1,373		2,429		902		1,980
Cash cost per ounce	$	1,190.49	$	1,320.19	$	1,221.03	$	1,149.02
All in sustaining cost (AISC) per ounce	$	1,603,.01	$	1,825.69	$	1,387.29	$	1,294.13

Financial Condition and Liquidity

	For the Six Months Ended June 30,
Net cash provided (used) by:		2021		2020
Operating activities	$	(762,582)	$	(345,870)
Investing activities		(2,334,899)		(759,882)
Financing activities		1,552,217		1,284,114
Net change in cash and cash equivalents		(1,545,264)		178,362
Cash and cash equivalents, beginning of period		2,539,945		217,796
Cash and cash equivalents, end of period	$	994,681	$	396,158

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.

18

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 June 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 June 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 June 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.

In April and June of 2020 the Company issued 1,481,481 shares of common stock at $0.135 per share for cash.

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.

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 violations, orders and citations, related assessments and legal actions, and mining-related fatalities. During the quarter ended June 30, 2021, the Company had no 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 

None.

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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. 

NEW JERSEY MINING COMPANY 

By:   /s/ John Swallow 

John Swallow, 

its: President and Chief Executive Officer 

Date August 16, 2021 

By:   /s/ Grant Brackebusch 

Grant Brackebusch, 

its: Vice President and Chief Financial Officer 

Date: August 16, 2021 

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EX-31.1

Exhibit 31.1

Certification

I, John Swallow, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of New Jersey Mining Company.

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 16, 2021

By /s/     John Swallow        

John Swallow

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Grant Brackebusch, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of New Jersey Mining Company.

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:

August 16. 2021

By /s/    Grant Brackebusch        

Grant Brackebusch

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of New Jersey Mining Company, (the "Company") on Form 10-Q for the period ending June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John Swallow, Chief Executive Officer and Director of New Jersey Mining Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

Date:

August 16, 2021

By /s/  John Swallow

John Swallow

Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to New Jersey Mining Company and will be retained by New Jersey Mining Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of New Jersey Mining Company, (the "Company") on Form 10-Q for the period ending June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Grant Brackebusch, Chief Financial Officer and Director of New Jersey Mining Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. 

Date: August 16, 2021

By /s/  Grant Brackebusch

Grant Brackebusch

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to New Jersey Mining Company and will be retained by New Jersey Mining Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished in accordance with Securities and Exchange Commission Release No. 34-47551 and shall not be considered filed as part of the Form 10-Q

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2021	Aug. 01, 2021
Registrant CIK	0001030192
Fiscal Year End	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	000-28837
Entity Registrant Name	NEW JERSEY MINING CO
Entity Incorporation, State or Country Code	ID
Entity Tax Identification Number	82-0490295
Entity Address, Address Line One	201 N. Third Street
Entity Address, City or Town	Coeur d’Alene
Entity Address, State or Province	ID
Entity Address, Postal Zip Code	83814
City Area Code	208
Local Phone Number	625-9001
Title of 12(g) Security	Common Stock, no par value
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		142,959,713
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
OTCQB
Trading Symbol	NJMC
Security Exchange Name	NONE

XML

New Jersey Mining Company Consolidated Balance Sheets (Unaudited) - USD ($)		Jun. 30, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents		$ 994,681	$ 2,539,945
Gold sales receivable		263,585	264,779
Inventories		293,640	402,537
Joint venture receivable		2,465	4,177
Other current assets		259,107	224,063
Total current assets		1,813,478	3,435,501
Property, plant and equipment, net of accumulated depreciation		8,235,389	7,227,144
Mineral properties, net of accumulated amortization		5,512,026	3,455,233
Investment in joint venture		435,000	435,000
Reclamation bond		103,320	103,320
Deposits		34,692	12,863
Total assets		16,133,905	14,669,061
LIABILITIES AND STOCKHOLDERS' EQUITY
Asset retirement obligation		178,036	173,001
Notes payable related parties, long term		97,845	117,234
Convertible debt		2,050,000	1,010,000
Convertible debt-related party		0	25,000
Notes payable, long term		1,284,079	709,072
Small Business Administration loan, long term		163,484	161,251
Total long-term liabilities		3,773,444	2,195,558
Total liabilities		5,247,054	3,404,897
Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding		0	0
Common stock, no par value, 200,000,000 shares authorized; June 30, 2021-142,404,157 and December 31, 2020- 137,573,309 shares issued and outstanding		22,391,993	20,986,062
Accumulated deficit		(14,428,461)	(12,672,786)
Total New Jersey Mining Company stockholders' equity		7,963,532	8,313,276
Non-controlling interest		2,923,319	2,950,888
Total stockholders' equity		10,886,851	11,264,164
Total liabilities and stockholders' equity		16,133,905	14,669,061
Current liabilities:
Accounts payable and other accrued liabilities		634,387	687,331
Accrued payroll and related payroll expenses		153,040	143,485
Notes payable related parties, current portion		38,205	37,078
Notes payable, current portion		645,390	339,704
Small Business Administration loan, current portion		2,588	1,741
Total current liabilities		1,473,610	1,209,339
Commitments (Note 10)	[1]	$ 0	$ 0

[1] BS1

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New Jersey Mining Company Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares	Jun. 30, 2021	Dec. 31, 2020
Details
Preferred Stock, Par or Stated Value Per Share	$ 0	$ 0
Preferred Stock, Shares Authorized	1,000,000	1,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0	$ 0
Common Stock, Shares Authorized	200,000,000	200,000,000
Common Stock, Shares, Issued	142,404,157	137,573,309
Common Stock, Shares, Outstanding	142,404,157	137,573,309

XML

New Jersey Mining Company Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue:
Sales of products	$ 2,180,232	$ 1,324,498	$ 3,766,859	$ 2,725,331
Total revenue	2,180,232	1,324,498	3,766,859	2,725,331
Costs of Sales:
Cost of sales and other direct production costs	1,622,606	1,157,356	3,097,841	2,324,745
Depreciation and amortization	195,377	133,783	378,173	269,317
Total costs of sales	1,817,983	1,291,139	3,476,014	2,594,062
Gross profit	362,249	33,359	290,845	131,269
Other operating expenses:
Exploration	208,170	47,237	925,877	88,916
Loss on write off equipment	0	0	0	9,537
Management	55,331	36,094	256,391	73,424
Professional services	43,430	40,797	166,081	113,208
General and administrative	136,007	103,982	649,842	190,470
Total other operating expenses	442,938	228,110	1,998,191	475,555
Operating income (loss)	(80,689)	(194,751)	(1,707,346)	(344,286)
Other income (expense):
Small Business Administration grant income	0	10,000	0	10,000
Timber revenue net of costs	735	13,345	4,338	31,652
Interest income	32	11	123	1,589
Interest expense	(60,846)	(41,117)	(100,287)	(73,656)
Total other income (expense)	(60,079)	(17,761)	(95,826)	(30,415)
Net income (loss)	(140,768)	(212,512)	(1,803,172)	(374,701)
Net income (loss) attributable to non-controlling interest	(31,580)	(32,299)	(47,497)	(48,220)
Net income (loss) attributable to New Jersey Mining Company	$ (109,188)	$ (180,213)	$ (1,755,675)	$ (326,481)
Net income (loss) per common share-basic and diluted	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.00)
Weighted average common shares outstanding-basic and diluted	139,016,013	124,935,465	138,345,689	124,373,804

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New Jersey Mining Company Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Retained Earnings	Noncontrolling Interest	Total
Equity Balance, shares at Dec. 31, 2019	123,812,144
Equity balance at Dec. 31, 2019	$ 17,682,999	$ (12,029,910)	$ 3,003,888	$ 8,656,977
Contribution from non-controlling interest	0	0	2,659	2,659
Net income (loss)	$ 0	(146,268)	(15,921)	(162,189)
Equity Balance, shares at Mar. 31, 2020	123,812,144
Equity balance at Mar. 31, 2020	$ 17,682,999	(12,176,178)	2,990,626	8,497,447
Issuance of common stock and warrants for cash	1,481,481
Issuance of common stock and warrants for cash	$ 200,000	0	0	200,000
Equity Balance, shares at Dec. 31, 2019	123,812,144
Equity balance at Dec. 31, 2019	$ 17,682,999	(12,029,910)	3,003,888	8,656,977
Conversion of convertible debt to common stock				0
Equity Balance, shares at Jun. 30, 2020	125,293,625
Equity balance at Jun. 30, 2020	$ 17,882,999	(12,356,391)	2,997,730	8,504,338
Equity Balance, shares at Mar. 31, 2020	123,812,144
Equity balance at Mar. 31, 2020	$ 17,682,999	(12,176,178)	2,990,626	8,497,447
Contribution from non-controlling interest	0	0	19,403	19,403
Net income (loss)	$ 0	(180,213)	(32,299)	(212,512)
Equity Balance, shares at Jun. 30, 2020	125,293,625
Equity balance at Jun. 30, 2020	$ 17,882,999	(12,356,391)	2,997,730	8,504,338
Equity Balance, shares at Dec. 31, 2020	137,573,309
Equity balance at Dec. 31, 2020	$ 20,986,062	(12,672,786)	2,950,888	11,264,164
Options issued to management, directors, and employees, shares	0
Options issued to management, directors, and employees, value	$ 604,571	0	0	604,571
Options issued for services, shares	0
Options issued for services, value	$ 9,860	0	0	9,860
Issuance of common stock for cashless warrant exercise	394,737
Issuance of common stock for cashless warrant exercise	$ 0	0	0	0
Contribution from non-controlling interest	$ 0	0	2,469	2,469
Issuance of common stock for services	10,000
Issuance of common stock for services	$ 2,300	0	0	2,300
Net income (loss)	$ 0	(1,646,487)	(15,917)	(1,662,404)
Equity Balance, shares at Mar. 31, 2021	137,978,046
Equity balance at Mar. 31, 2021	$ 21,602,793	(14,319,273)	2,937,440	10,220,960
Equity Balance, shares at Dec. 31, 2020	137,573,309
Equity balance at Dec. 31, 2020	$ 20,986,062	(12,672,786)	2,950,888	11,264,164
Conversion of convertible debt to common stock				735,000
Equity Balance, shares at Jun. 30, 2021	142,404,157
Equity balance at Jun. 30, 2021	$ 22,391,993	(14,428,461)	2,923,319	10,886,851
Equity Balance, shares at Mar. 31, 2021	137,978,046
Equity balance at Mar. 31, 2021	$ 21,602,793	(14,319,273)	2,937,440	10,220,960
Contribution from non-controlling interest	$ 0	0	17,459	17,459
Issuance of common stock for services	15,000
Issuance of common stock for services	$ 4,200	0	0	4,200
Exercise of common stock warrants for cash, shares	277,778
Exercise of common stock warrants for cash	$ 50,000	0	0	50,000
Issuance of common stock for cashless option exercise	50,000
Issuance of common stock for cashless option exercise	$ 0	0	0	0
Conversion of convertible debt to common stock, shares	4,083,333
Conversion of convertible debt to common stock	$ 735,000	0	0	735,000
Net income (loss)	$ 0	(109,188)	(31,580)	(140,768)
Equity Balance, shares at Jun. 30, 2021	142,404,157
Equity balance at Jun. 30, 2021	$ 22,391,993	$ (14,428,461)	$ 2,923,319	$ 10,886,851

XML

New Jersey Mining Company Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operating activities:
Net income (loss)	$ (1,803,172)	$ (374,701)
Depreciation and amortization	378,173	269,317
Loss on write off of equipment	0	9,537
Accretion of asset retirement obligation	5,035	4,745
Stock based compensation	614,431	0
Issuance of common stock for services	6,500	0
Change in operating assets and liabilities:
Gold sales receivable	1,194	(68,957)
Inventories	108,896	(49,694)
Joint venture receivable	1,712	(2,717)
Other current assets	(35,042)	53,690
Accounts payable and other accrued liabilities	(49,864)	(190,246)
Accrued payroll and related payroll expenses	9,555	3,156
Net cash provided (used) by operating activities	(762,582)	(345,870)
Cash flows from investing activities:
Purchases of property, plant and equipment	(249,328)	(12,689)
Deposits on equipment	(21,829)	0
Purchase of mineral property	(2,063,742)	(747,193)
Net cash used by investing activities	(2,334,899)	(759,882)
Cash flows from financing activities:
Proceeds from sale of common stock and warrants net of issuance cost	0	200,000
Exercise of common stock warrants	50,000	0
Principal payments on notes payable	(249,449)	(288,026)
Principal payments on notes payable, related parties	(18,262)	(44,639)
Issuance of convertible debt	1,750,000	885,000
Proceeds from Small Business Administration loans		509,717
Contributions from non-controlling interest	19,928	22,062
Net cash provided by financing activities	1,552,217	1,284,114
Net change in cash and cash equivalents	(1,545,264)	178,362
Cash and cash equivalents, beginning of period	2,539,945	217,796
Cash and cash equivalents, end of period	994,681	396,158
Deposit on property applied to purchase of mineral property	0	25,000
Note payable for equipment purchase	1,130,143	0
Note payable for equipment purchase	$ 735,000	$ 0

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1. The Company and Significant Accounting Policies

6 Months Ended

Jun. 30, 2021

Notes

1. The Company and Significant Accounting Policies

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 of 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 six-month period ended June 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

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 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 June 30, 2021, and December 31, 2020, the Company had no assets or liabilities that required measurement at fair value on a recurring basis.

Reclassifications

Certain prior period amounts have been reclassified to conform to the 2021 financial statement presentation. Reclassifications had no effect on net 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.

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2. Going Concern

6 Months Ended

Jun. 30, 2021

Notes

2. Going Concern

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.

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3. Inventories

6 Months Ended

Jun. 30, 2021

Notes

3. Inventories

3. Inventories 

At June 30, 2021 and December 31, 2020, the Company’s inventories consisted of the following:

		June 30, 2021		December 31, 2020
Concentrate inventory
In process	$	64,699	$	90,743
Finished goods		142,715		230,318
Total concentrate inventory		207,414		321,061
Supplies inventory
Mine parts and supplies		52,358		52,600
Mill parts and supplies		33,868		28,876
Total supplies inventory		86,226		81,476
Total	$	293,640	$	402,537

The carrying value of inventory is determined each period based on the lower of cost or net realizable value. At June 30, 2021 and December 31, 2020 gold concentrate is carried at cost.

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4. Sales of Products

6 Months Ended

Jun. 30, 2021

Notes

4. Sales of Products

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 June 30, 2021, metals that had been sold but not final settled thus exposed to future price changes totaled 1,833 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 for the three and six-month periods ended June 30, 2021 and 2020 were as follows:

	June 30, 2021				June 30, 2020
	Three Months		Six Months		Three Months		Six Months
Gold	$	2,296,378	$	4,010,102	$	1,461,249	$	2,980,560
Silver		9,103		13,424		2,905		5,946
Less: Smelter and refining charges		(125,249)		(256,667)		(139,656)		(261,175)
Total	$	2,180,232		3,766,859	$	1,324,498	$	2,725,331

Sales by significant product type for the three and six-month periods ended June 30, 2021 and 2020 were as follows:

	June 30, 2021				June 30, 2020
	Three Months		Six Months		Three Months		Six Months
Concentrate sales to H&H Metal	$	2,180,232	$	3,690,351	$	1,267,355	$	2,668,188
Dore sales to refinery		-		76,508		57,143		57,143
Total	$	2,180,232	$	3,766,859	$	1,324,498	$	2,725,331

At June 30, 2021 and December 31, 2020, our gold sales receivable balance related to contracts with customers of $263,585 and $264,779, respectively, consist only of amounts due from H&H Metal. There is no allowance for doubtful accounts.

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5. Related Party Transactions

6 Months Ended

Jun. 30, 2021

Notes

5. Related Party Transactions

5.Related Party Transactions 

At June 30, 2021 and December 31, 2020, the Company had the following note and interest payable to related parties:

		June 30, 2021		December 31, 2020
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	$	136,050	$	154,312
Total		136,050		154,312
Current portion		(38,205)		(37,078)
Long term portion	$	97,845	$	117,234

As of June 30, 2021 and December 31, 2020, there was no accrued interest payable to related parties. Related party interest expense for the three and six-months ended June 30, 2021 and 2020 is as follows.

2021				2020
Three Months		Six Months		Three Months		Six Months
$	2,133	$	4,402	$	2,870	$	6,051

In February 2020, the Company’s corporate secretary, Monique Hayes, participated in the Company’s convertible debt offering for $25,000. During the six-month periods ended June 30, 2021 and 2020, interest expense on her note was $975 and $734, respectively. She converted her note in May 2021 as provided in the agreement. See Note 15.

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:

2021				2020
Three Months		Six Months		Three Months		Six Months
$	6,210	$	12,427	$	6,210	$	12,420

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6. Joint Ventures

6 Months Ended

Jun. 30, 2021

Notes

6. Joint Ventures

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 June 30, 2021 and December 31, 2020, an account receivable existed with Crescent Silver, LLC, the other joint venture participant (“Crescent”), for $2,465 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.

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7. Earnings per Share

6 Months Ended

Jun. 30, 2021

Notes

7. Earnings per Share

7.Earnings per Share 

For the three and six-month periods ended June 30, 2021 and 2020, potentially dilutive shares including outstanding stock options (Note 13) and warrants (Note 12) and convertible debt (Note 15) were excluded from the computation of diluted loss per share because they were anti-dilutive due to net losses in those periods. For the three and six-month periods ended June 30, 2021 and 2020, potentially dilutive common stock equivalents excluded from the calculation of diluted earnings per share as their effect would have been anti-dilutive are as follows:

	June 30, 2021	June 30, 2020
Stock options	5,525,000	4,612,500
Stock purchase warrants	5,697,249	2,824,075
Convertible debt	6,055,556	4,916,667
Total	17,277,805	12,353,242

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8. Property, Plant and Equipment

6 Months Ended

Jun. 30, 2021

Notes

8. Property, Plant and Equipment

8.Property, Plant, and Equipment 

Property, plant and equipment at June 30, 2021 and December 31, 2020 consisted of the following:

		June 30, 2021		December 31, 2020
Mill
Land	$	225,289	$	225,289
Building		536,193		536,193
Equipment		4,192,940		4,192,940
		4,954,422		4,954,422
Less accumulated depreciation		(994,446)		(914,095)
Total mill		3,959,976		4,040,327
Building and equipment
Buildings		324,075		297,932
Equipment		4,595,193		3,250,551
		4,919,268		3,548,483
Less accumulated depreciation		(1,511,325)		(1,229,136)
Total building and equipment		3,407,943		2,319,347
Land
Bear Creek		266,934		266,934
BOW		230,449		230,449
Eastern Star		250,817		250,817
Gillig		79,137		79,137
Highwater		40,133		40,133
Total land		867,470		867,470
Total	$	8,235,389	$	7,227,144

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9. Mineral Properties

6 Months Ended

Jun. 30, 2021

Notes

9. Mineral Properties

9.Mineral Properties 

Mineral properties at June 30, 2021 and December 31, 2020 consisted of the following:

		June 30, 2021		December 31, 2020
Golden Chest
Mineral Property	$	1,565,518	$	1,539,001
Infrastructure		805,930		468,669
Total Golden Chest		2,371,448		2,007,670
New Jersey		248,289		248,289
McKinley-Monarch		200,000		200,000
Butte Potosi		274,440		274,440
Alder Gulch		2,473,066		773,101
Less accumulated amortization		(55,217)		(48,267)
Total	$	5,512,026	$	3,455,233

For the three and six-months periods ended June 30, 2021 $16,330 and $26,516, 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.

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10. Notes Payable

6 Months Ended

Jun. 30, 2021

Notes

10. Notes Payable

10. Notes Payable 

At June 30, 2021 and December 31, 2020, notes payable are as follows:

		June 30, 2021		December 31, 2020
Paus 2 yrd. LHD, 48 month note payable, 4.78% interest rate payable through September 2024, monthly payments of $5,181	$	191,204	$	217,354
Paus 2 yrd. LHD, 60 month note payable, 3.45% interest rate payable through July 2024, monthly payments of $4,847		169,883		195,768
Compressor, 48 month note payable, 5.25% interest rate payable monthly through November 2021, monthly payments of $813		5,247		9,958
CarryAll transport, 36 month note payable, 4.5% interest rate payable monthly through June 2024, monthly payments of $627		21,070
CarryAll transport, 36 month note payable, 4.5% interest rate payable monthly through February 2024, monthly payments of $303		9,131		-
Atlas Copco loader, 60 month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550		76,517		93,265
Sandvik LH203 LHD, 36 month  note payable, 4.5% interest payable monthly through May 2027, monthly payments of $10,352		338,953
Caterpillar 306 excavator, 48 month note payable, 4.6% interest payable monthly through November 2024, monthly payments of $1,512		57,246		64,896
Caterpillar 938 loader, 60 month note payable, 6.8% interest rate payable monthly through August 2023, monthly payments of $3,751		90,441		109,492
Caterpillar R1600 LHD, 48 month note payable, 4.5% interest rate payable through January 2025, monthly payments of $17,125		678,812		-
Caterpillar AD22 underground truck, 48 month note payable, 6.45% interest rate payable through June 2023, monthly payments of $12,979		290,965		358,043
Total notes payable		1,929,469		1,048,776
Due within one year		645,390		339,704
Due after one year	$	1,284,079	$	709,072

10. Notes Payable (continued) 

All notes are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at June 30, 2021 are as follows:

12 months ended June 30,
2022	$	645,390
2023		675,368
2024		457,814
2025		150,897
Total	$	1,929,469

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11. Small Business Administration Loans and Grant

6 Months Ended

Jun. 30, 2021

Notes

11. Small Business Administration Loans and Grant

11. 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 July 2021. At June 30, 2021, total accrued interest on the remaining loan is $6,172 of which $3,080 was accrued in 2021 and is included in the Small Business Administration loan balance on the consolidated balance sheet.

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12. Stockholders' Equity

6 Months Ended

Jun. 30, 2021

Notes

12. Stockholders' Equity

12. Stockholders’ Equity 

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 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 15) 

12. Stockholders’ Equity (continued) 

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	$0.18-0.40
Exercised	277,778	$0.18
Balance June 30, 2021	5,697,249	$0.18-0.40

These warrants expire as follows:

Shares	Exercise Price	Expiration Date
375,000	$0.18	December 14, 2023
462,963	$0.18	April 21, 2022
4,859,286	$0.40	August 28, 2022
5,697,249

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13. Stock Options

6 Months Ended

Jun. 30, 2021

Notes

13. Stock Options

13. Stock Options 

No options were granted in the second quarter of 2020 or 2021. In February 2021, the board granted 4,150,000 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, no options were granted in the second quarter of 2021. In the three and six-month periods ending June 30, 2021 100,000 and 725,000, respectively, options were exercised in cashless exercises.

Activity in the Company’s stock options is as follows:

	Number of Options		Exercise Prices
Balance December 31, 2019	5,262,500	$	0.10-0.18
Exercised	(1,150,000)		0.10-0.18
Expired	(2,012,500)		0.10-0.18
Balance December 31, 2020	2,100,000		0.10-0.14
Exercised	(725,000)		0.14
Issued	4,150,000		0.40
Balance June 30, 2021	5,525,000		0.10-0.40
Exercisable at June 30, 2021	5,525,000	$	0.10-0.40

At June 30, 2021, outstanding stock options have a weighted average remaining term of approximately 2.16 years and an intrinsic value of approximately $226,250. Intrinsic value of the options exercised for the three and six-month period ended June 30, 2021 were $14,000 and $164,000, respectively.

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14. Asset Retirement Obligation

6 Months Ended

Jun. 30, 2021

Notes

14. Asset Retirement Obligation

14. 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 six months ended June 30, 2021 and 2020 is as follows:

	Six Months Ended June 30,
		2021		2020
Balance at beginning of period	$	175,499	$	165,724
Accretion expense		2,537		2,390
Balance at end of period	$	178,036	$	168,114

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15. Convertible Debt

6 Months Ended

Jun. 30, 2021

Notes

15. Convertible Debt

15. 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. One remaining participant has yet to convert $100,000 in debt as of June 30, 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.

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.

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16. Subsequent Events

6 Months Ended

Jun. 30, 2021

Notes

16. Subsequent Events

16.Subsequent Event 

In July of 2021 the remaining participant in the first convertible promissory note issuance converted their $100,000 note for 555,556 shares of the Company’s common stock as provided in the agreement.

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1. The Company and Significant Accounting Policies: Principles of Consolidation (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Principles of Consolidation

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.

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1. The Company and Significant Accounting Policies: Revenue Recognition (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Revenue Recognition

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.

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1. The Company and Significant Accounting Policies: Inventories (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Inventories

Inventories

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.

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1. The Company and Significant Accounting Policies: Mine Exploration and Development Costs (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Mine Exploration and Development Costs

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 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.

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1. The Company and Significant Accounting Policies: Fair Value Measurements (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Fair Value Measurements

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 June 30, 2021, and December 31, 2020, the Company had no assets or liabilities that required measurement at fair value on a recurring basis.

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1. The Company and Significant Accounting Policies: Reclassifications (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the 2021 financial statement presentation. Reclassifications had no effect on net loss, stockholders’ equity, or cash flows as previously reported.

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1. The Company and Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2021

Policies

Recent Accounting Pronouncements

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.

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3. Inventories: Schedule of Inventory, Current (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Schedule of Inventory, Current

		June 30, 2021		December 31, 2020
Concentrate inventory
In process	$	64,699	$	90,743
Finished goods		142,715		230,318
Total concentrate inventory		207,414		321,061
Supplies inventory
Mine parts and supplies		52,358		52,600
Mill parts and supplies		33,868		28,876
Total supplies inventory		86,226		81,476
Total	$	293,640	$	402,537

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4. Sales of Products: Sales of products by metal (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Sales of products by metal

	June 30, 2021				June 30, 2020
	Three Months		Six Months		Three Months		Six Months
Gold	$	2,296,378	$	4,010,102	$	1,461,249	$	2,980,560
Silver		9,103		13,424		2,905		5,946
Less: Smelter and refining charges		(125,249)		(256,667)		(139,656)		(261,175)
Total	$	2,180,232		3,766,859	$	1,324,498	$	2,725,331

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4. Sales of Products: Sales by significant product type (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Sales by significant product type

	June 30, 2021				June 30, 2020
	Three Months		Six Months		Three Months		Six Months
Concentrate sales to H&H Metal	$	2,180,232	$	3,690,351	$	1,267,355	$	2,668,188
Dore sales to refinery		-		76,508		57,143		57,143
Total	$	2,180,232	$	3,766,859	$	1,324,498	$	2,725,331

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5. Related Party Transactions: Notes and interest payable to related parties (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Notes and interest payable to related parties

		June 30, 2021		December 31, 2020
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	$	136,050	$	154,312
Total		136,050		154,312
Current portion		(38,205)		(37,078)
Long term portion	$	97,845	$	117,234

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5. Related Party Transactions: Related party interest expense (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Related party interest expense

2021				2020
Three Months		Six Months		Three Months		Six Months
$	2,133	$	4,402	$	2,870	$	6,051

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5. Related Party Transactions: Related Party Lease Expense (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Related Party Lease Expense

2021				2020
Three Months		Six Months		Three Months		Six Months
$	6,210	$	12,427	$	6,210	$	12,420

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7. Earnings per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	June 30, 2021	June 30, 2020
Stock options	5,525,000	4,612,500
Stock purchase warrants	5,697,249	2,824,075
Convertible debt	6,055,556	4,916,667
Total	17,277,805	12,353,242

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8. Property, Plant and Equipment: Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Property, Plant and Equipment

		June 30, 2021		December 31, 2020
Mill
Land	$	225,289	$	225,289
Building		536,193		536,193
Equipment		4,192,940		4,192,940
		4,954,422		4,954,422
Less accumulated depreciation		(994,446)		(914,095)
Total mill		3,959,976		4,040,327
Building and equipment
Buildings		324,075		297,932
Equipment		4,595,193		3,250,551
		4,919,268		3,548,483
Less accumulated depreciation		(1,511,325)		(1,229,136)
Total building and equipment		3,407,943		2,319,347
Land
Bear Creek		266,934		266,934
BOW		230,449		230,449
Eastern Star		250,817		250,817
Gillig		79,137		79,137
Highwater		40,133		40,133
Total land		867,470		867,470
Total	$	8,235,389	$	7,227,144

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9. Mineral Properties: Schedule of mineral properties (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Schedule of mineral properties

		June 30, 2021		December 31, 2020
Golden Chest
Mineral Property	$	1,565,518	$	1,539,001
Infrastructure		805,930		468,669
Total Golden Chest		2,371,448		2,007,670
New Jersey		248,289		248,289
McKinley-Monarch		200,000		200,000
Butte Potosi		274,440		274,440
Alder Gulch		2,473,066		773,101
Less accumulated amortization		(55,217)		(48,267)
Total	$	5,512,026	$	3,455,233

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10. Notes Payable: Schedule of Debt (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Schedule of Debt

		June 30, 2021		December 31, 2020
Paus 2 yrd. LHD, 48 month note payable, 4.78% interest rate payable through September 2024, monthly payments of $5,181	$	191,204	$	217,354
Paus 2 yrd. LHD, 60 month note payable, 3.45% interest rate payable through July 2024, monthly payments of $4,847		169,883		195,768
Compressor, 48 month note payable, 5.25% interest rate payable monthly through November 2021, monthly payments of $813		5,247		9,958
CarryAll transport, 36 month note payable, 4.5% interest rate payable monthly through June 2024, monthly payments of $627		21,070
CarryAll transport, 36 month note payable, 4.5% interest rate payable monthly through February 2024, monthly payments of $303		9,131		-
Atlas Copco loader, 60 month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550		76,517		93,265
Sandvik LH203 LHD, 36 month  note payable, 4.5% interest payable monthly through May 2027, monthly payments of $10,352		338,953
Caterpillar 306 excavator, 48 month note payable, 4.6% interest payable monthly through November 2024, monthly payments of $1,512		57,246		64,896
Caterpillar 938 loader, 60 month note payable, 6.8% interest rate payable monthly through August 2023, monthly payments of $3,751		90,441		109,492
Caterpillar R1600 LHD, 48 month note payable, 4.5% interest rate payable through January 2025, monthly payments of $17,125		678,812		-
Caterpillar AD22 underground truck, 48 month note payable, 6.45% interest rate payable through June 2023, monthly payments of $12,979		290,965		358,043
Total notes payable		1,929,469		1,048,776
Due within one year		645,390		339,704
Due after one year	$	1,284,079	$	709,072

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10. Notes Payable: Schedule of Maturities of Long-term Debt (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Schedule of Maturities of Long-term Debt

12 months ended June 30,
2022	$	645,390
2023		675,368
2024		457,814
2025		150,897
Total	$	1,929,469

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12. Stockholders' Equity: Common Stock Purchase Warrant Transactions (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Common Stock Purchase Warrant Transactions

	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	$0.18-0.40
Exercised	277,778	$0.18
Balance June 30, 2021	5,697,249	$0.18-0.40

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12. Stockholders' Equity: Common Stock Purchase Warrant Expirations (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Common Stock Purchase Warrant Expirations

Shares	Exercise Price	Expiration Date
375,000	$0.18	December 14, 2023
462,963	$0.18	April 21, 2022
4,859,286	$0.40	August 28, 2022
5,697,249

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13. Stock Options: Share-based Compensation, Stock Options, Activity (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Share-based Compensation, Stock Options, Activity

	Number of Options		Exercise Prices
Balance December 31, 2019	5,262,500	$	0.10-0.18
Exercised	(1,150,000)		0.10-0.18
Expired	(2,012,500)		0.10-0.18
Balance December 31, 2020	2,100,000		0.10-0.14
Exercised	(725,000)		0.14
Issued	4,150,000		0.40
Balance June 30, 2021	5,525,000		0.10-0.40
Exercisable at June 30, 2021	5,525,000	$	0.10-0.40

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14. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2021

Tables/Schedules

Schedule of Asset Retirement Obligations

	Six Months Ended June 30,
		2021		2020
Balance at beginning of period	$	175,499	$	165,724
Accretion expense		2,537		2,390
Balance at end of period	$	178,036	$	168,114

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3. Inventories: Schedule of Inventory, Current (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Total	$ 293,640	$ 402,537
In process
Inventory, Parts and Components, Net of Reserves	64,699	90,743
Finished goods
Finished goods	142,715	230,318
Concentrate inventory
Total concentrate inventory	207,414	321,061
Mine parts and supplies
Inventory, Parts and Components, Net of Reserves	52,358	52,600
Mill parts and supplies
Inventory, Parts and Components, Net of Reserves	33,868	28,876
Supplies inventory
Total supplies inventory	$ 86,226	$ 81,476

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4. Sales of Products: Sales of products by metal (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Details
Gold sales	$ 2,296,378	$ 1,461,249	$ 4,010,102	$ 2,980,560
Silver sales	9,103	2,905	13,424	5,946
Smelter and refining charges	(125,249)	(139,656)	(256,667)	(261,175)
Total	$ 2,180,232	$ 1,324,498	$ 3,766,859	$ 2,725,331

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4. Sales of Products: Sales by significant product type (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Details
Concentrate sales	$ 2,180,232	$ 1,267,355	$ 3,690,351	$ 2,668,188
Dore sales	0	57,143	76,508	57,143
Total	$ 2,180,232	$ 1,324,498	$ 3,766,859	$ 2,725,331

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4. Sales of Products (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Details
Gold sales receivable	$ 263,585	$ 264,779

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5. Related Party Transactions: Notes and interest payable to related parties (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Notes payable related parties, long term	$ 97,845	$ 117,234
Total	136,050	154,312
Current portion	(38,205)	(37,078)
Long term portion	97,845	117,234
Ophir Holdings LLC
Notes payable related parties, long term	136,050	154,312
Long term portion	$ 136,050	$ 154,312

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5. Related Party Transactions: Related party interest expense (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Details
2,133	$ 2,870	$ 4,402	$ 6,051

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5. Related Party Transactions: Related Party Lease Expense (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Details
6,210	$ 6,210	$ 12,427	$ 12,420

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6. Joint Ventures (Details)	6 Months Ended
	Jun. 30, 2021
New Jersey Mill
Equity Method Investment, Additional Information	The Company owns 65% of the New Jersey Mill Joint Venture (JV) and has significant influence in its operations.
Butte Highlands JV, LLC
Equity Method Investment, Additional Information	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.

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7. Earnings per Share: Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Details
Stock options	5,525,000	4,612,500
Stock purchase warrants	5,697,249	2,824,075
Convertible debt	6,055,556	4,916,667
Total	17,277,805	12,353,242

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8. Property, Plant and Equipment: Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Details
Mill land	$ 225,289	$ 225,289
Building	536,193	536,193
Equipment	4,192,940	4,192,940
Less accumulated depreciation	(994,446)	(914,095)
Mill Buildings and Improvements, Net	3,959,976	4,040,327
Buildings and Improvements, Gross	324,075	297,932
Equipment	4,595,193	3,250,551
Less accumulated depreciation	(1,511,325)	(1,229,136)
Total building and equipment	3,407,943	2,319,347
Bear Creek Land	266,934	266,934
BOW	230,449	230,449
Eastern Star Land	250,817	250,817
Gillig Land	79,137	79,137
Highwater Land	40,133	40,133
Land	867,470	867,470
Total	$ 8,235,389	$ 7,227,144

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9. Mineral Properties: Schedule of mineral properties (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Details
Mineral Properties 3	$ 2,371,448	$ 2,007,670
Mineral Properties 1	248,289	248,289
Mineral Properties 2	200,000	200,000
Mineral Properties 6	274,440	274,440
Mineral Properties 7	2,473,066	773,101
Accumulated Amortization of Other Deferred Costs	(55,217)	(48,267)
Mineral properties net	$ 5,512,026	$ 3,455,233

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9. Mineral Properties (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2021
Capitalized Costs, Proved Properties	$ 26,516		$ 16,330
Payments to Acquire Mineral Rights	2,063,742	$ 747,193
Alder Gulch
Payments to Acquire Mineral Rights	$ 1,699,965

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10. Notes Payable: Schedule of Debt (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Details
Notes Payable Current and Noncurrent	$ 1,929,469	$ 1,048,776
Due within one year	645,390	339,704
Due after one year	$ 1,284,079	$ 709,072

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10. Notes Payable: Schedule of Maturities of Long-term Debt (Details) - USD ($)	Jun. 30, 2021	Dec. 31, 2020
Details
Notes Payable Current and Noncurrent	$ 1,929,469	$ 1,048,776

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11. Small Business Administration Loans and Grant (Details) - USD ($)			3 Months Ended		6 Months Ended		18 Months Ended
	May 16, 2020	Apr. 10, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021
Small Business Administration grant income			$ 0	$ 10,000	$ 0	$ 10,000
PPP loan
Proceeds from Loans		$ 358,346
SBA loan
Proceeds from Loans	$ 149,900
Debt Instrument, Increase, Accrued Interest					$ 3,080		$ 6,172

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12. Stockholders' Equity (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2021	Jun. 30, 2020
Issuance of common stock for services	$ 4,200	$ 2,300
Exercise of common stock warrants for cash	50,000
Conversion of convertible debt to common stock	$ 735,000		$ 735,000	$ 0
First quarter
Issuance of common stock for services			10,000
Issuance of common stock for services			$ 2,300
Issuance of common stock for cashless warrant exercise			394,737
Issuance of common stock for cashless warrant exercise			625,000
Issuance of common stock for cashless warrant exercise			$ 150,000
Second quarter
Issuance of common stock for services	15,000
Issuance of common stock for services	$ 4,200
Issuance of common stock for cashless warrant exercise	50,000
Issuance of common stock for cashless warrant exercise	100,000
Issuance of common stock for cashless warrant exercise	$ 14,000
Exercise of common stock warrants for cash, shares	277,778
Conversion of convertible debt to common stock, shares	4,083,333
Conversion of convertible debt to common stock	$ 735,000

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12. Stockholders' Equity: Common Stock Purchase Warrant Transactions (Details) - shares	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Details
Class of Warrant or Right, Outstanding	5,697,249		5,975,027	12,900,123
Warrants issued		5,600,027
Warrants Expired		(10,816,789)
Warrants excised	277,778	(1,708,334)

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12. Stockholders' Equity: Common Stock Purchase Warrant Expirations (Details) - shares	Jun. 30, 2021	Dec. 31, 2020	Dec. 31, 2019
Details
Class of Warrant or Right, Outstanding	5,697,249	5,975,027	12,900,123

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13. Stock Options (Details) - USD ($)		3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2021
Details
Shares Issued, Shares, Share-based Payment Arrangement, before Forfeiture			4,150,000
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture			$ 604,571
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Intrinsic Value	$ 226,250
ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExercisesInPeriodWeightedAverageIntrinsicValue		$ 14,000	$ 164,000

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13. Stock Options: Share-based Compensation, Stock Options, Activity (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020	Dec. 31, 2019
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	5,525,000		2,100,000	5,262,500
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ (725,000)	$ (1,150,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period	(2,012,500)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures	4,150,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	5,525,000

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14. Asset Retirement Obligation: Schedule of Asset Retirement Obligations (Details) - USD ($)	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Details
Balance at beginning of period	$ 175,499	$ 165,724
Asset Retirement Obligation, Period Increase (Decrease)	2,537	2,390
Asset Retirement Obligation	$ 178,036	$ 168,114

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15. Convertible Debt (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2021	Jun. 30, 2021	Jun. 30, 2020	Dec. 31, 2020
Issuance of convertible debt		$ 1,750,000	$ 885,000
Note payable for equipment purchase	$ 735,000	735,000	0
Notes Payable	1,284,079	$ 1,284,079		$ 709,072
Promissory note 1
Notes Payable			$ 200,000
Shares contingently issuable		5,000,000	500,000
Promissory note 2
Notes Payable	$ 1,750,000	$ 1,750,000
Alder Gulch
Issuance of convertible debt			$ 885,000
Note payable for equipment purchase			$ 735,000
Conversion of convertible debt to common stock, stock			4,083,333

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16. Subsequent Events (Details)	6 Months Ended
	Jun. 30, 2021
Details
Subsequent Event, Description	In July of 2021 the remaining participant in the first convertible promissory note issuance converted their $100,000 note for 555,556 shares of the Company’s common stock