Discontinued Operations

12 Months Ended

Dec. 31, 2023

Discontinued Operations

Discontinued Operations

15. Discontinued Operations

During the year ended December 31, 2022, the Company decided to discontinue all of its operating activities. Based on that decision, the Company’s board of directors committed to a plan to sell the CMCS entity operating the mine in Honduras.

In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations (held for sale) in the consolidated balance sheets.

	December 31, 2023		December 31, 2022
CURRENT ASSETS OF DISCONTINUED OPERATIONS:
Cash and cash equivalents	$	-	$	2,576
Accounts receivable		-		10,752
Inventories		-		277,106
Prepaid expenses and other current assets		-		9,698
TOTAL CURRENT ASSETS OF DISCONTINUED OPERATIONS	$	-	$	300,132
NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS:
Property, plant and equipment, net	$	-	$	680,643
Other assets		-		142,291
TOTAL NON-CURRENT ASSETS OF DISCONTINUED OPERATIONS	$	-	$	822,934
CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
Accounts payable and accrued liabilities	$	-	$	2,504,735
Finance lease liabilities - current portion		-		139,029
Note payable		-		272,418
Taxes payable		-		389,045
TOTAL CURRENT LIABILITIES OF DISCONTINUED OPERATIONS	$	-	$	3,305,227
NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS
Finance lease liabilities, net of current portion	$	-	$	23,851
Mine reclamation obligation		-		743,822
TOTAL NON-CURRENT LIABILITIES OF DISCONTINUED OPERATIONS	$	-	$	767,673

In accordance with the provisions of ASC 205-20, the Company has not included in the results of continuing operations the results of operations of the discontinued operations in the consolidated statements of operations and comprehensive loss. The results of operations from discontinued operations for the years ended December 31, 2023 and 2022 have been reflected as discontinued operations in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022, and consist of the following.

	Years Ended
	December 31, 2023			December 31, 2022
Precious Metals Income	$	-		$	1,365,387
Cost of goods sold		315,152			1,815,319
Gross profit		(315,152	)		(449,932	)
OPERATING EXPENSES OF DISCONTINUED OPERATIONS:
General and administrative		181,519			394,434
Depreciation and amortization		212			4,044
		181,731			398,478
OPERATING INCOME (LOSS) OF DISCONTINUED OPERATIONS		(496,883	)		(848,410	)
OTHER (INCOME) EXPENSE OF DISCONTINUED OPERATIONS
Other (income) expense		-			(26,508	)
Interest expense		698			151,401
		698			124,893
INCOME (LOSS) BEFORE INCOME TAXES OF DISCONTINUED OPERATIONS		(497,581	)		(973,303	)
Provision for income taxes of discontinued operations		-			(142,582	)
NET INCOME (LOSS) OF DISCONTINUED OPERATIONS	$	(497,581	)	$	(1,115,885	)

The Company recognized a gain on the sale of mine property in discontinued operations of $7,230,453. This gain was comprised of the Company’s investments in the subsidiaries and any inter-company loans that were provided to or from the subsidiaries. This gain was reported as a separate line item in discontinued operations in the consolidated statements of operations and comprehensive loss.

In accordance with the provisions of ASC 205-20, the Company has separately reported the cash flow activity of the discontinued operations in the consolidated statements of cash flows. The cash flow activity from discontinued operations for the years ended December 31, 2023 and 2022 have been reflected as discontinued operations in the consolidated statements of cash flows for the years ended December 31, 2023 and 2022, and consist of the following.

	Years Ended
	December 31, 2023			December 31, 2022
DISCONTINUED OPERATING ACTIVITIES
Net loss	$	(497,581	)	$	(1,115,885	)
Depreciation expense		4,259			64,662
Changes in operating assets and liabilities:
Trade receivables		91			1,277
Inventories		(12,981	)		19,522
Prepaid expenses and other current assets		(34,670	)		(183,903	)
Accounts payable and accrued liabilities		(294,243	)		826,208
Accounts payable and accrued liabilities - related parties		834,659			794,604
Net cash provided by (used in) operating activities of discontinued operations	$	(466	)	$	406,485
INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS
Purchase of property, plant and equipment	$	(652	)	$	(49,666	)
Net cash used in investing activities of discontinued operations	$	(652	)	$	(49,666	)
FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS
Payments on finance leases	$	-		$	(76,943	)
Proceeds from notes payable		-			403,687
Net cash provided by financing activities of discontinued operations	$	-		$	326,744